Is it realistic that a commitment to continuous improvement could actually replace operational controls?  Strategic controls?

I don’t believe this would work because continuous improvement such as lean management practices do not seem to work in all industries. There are situations where Six Sigma and other strategies do not work well. In the last 50 years, there has been a trend in operations and production management to utilize the lean management, specifically Sigma Six. This management system is considered to be a model of operations management. Although originally designed for auto manufacturing and developed from the Toyota Production System (TPS), lean management concepts are often applied to a variety of operations management systems in different industries and production systems.  The problem with this approach is that Six Sigma is not a perfect fit for many companies and in many instances this system fails. The eagerness of many industries to adopt a successful operations management system has led to poor outcomes. These outcomes have been documented with companies that implement systems such as Six Sigma:

Many companies have embraced Six Sigma, a quality-control system designed to tackle problems such as production defects, and lean manufacturing, which aims to remove all processes that don’t add value to the final product. But many of those companies have come away less than happy. Recent studies, for example, suggest that nearly 60% of all corporate Six Sigma initiatives fail to yield the desire results (Chakravorty, 2010).

 

The problem rests more in the fact that lean management systems were implemented in companies that diverged from manufacturing environments. As well, many of these companies altered the Six Sigma approach or TPM approach radically from its original form in order to fit the a particular work environment.  An examination of the lean management/Six Sigma system shows that the choice of system for a company may need to be more specifically designed rather than trying to use a one-size-fits-all approach.

Bibliography

Chakravorty, S. S. (2010, January 25). Where Process-Improvement Projects Go Wrong Six Sigma and other programs typically show early progress. And then things return to the way they were. Retrieved from The Wall Street Journal:

Who should be responsible for monitoring and controlling strategic plans? Why?

I would disagree the control function is a management domain. The control function of management is the process of monitoring activities to ensure that they are being accomplished as planned and for correcting any significant deviations.  The control function ensures that activities are completed in ways that lead to the accomplishment of organizational goals. The control function also provides the organization with indications of how well the company is performing in relation to its goals. This indication can be seen through the comparison of standards to performance.  The control function also provides a mechanism for adjusting performance to keep organization focused on its plan and strategic objectives.

 

How can human capital be leveraged to allow businesses to thrive doing periods of economic downturns?

The key to leveraging human capital is to view it as a resource rather than as a transactional system. What I mean by this, is that human capital is often thought of in terms of labor and its skills but when we consider labor or the workforce in terms of a creative force or resource we can look at it and utilized it in a different way. For example, when the economy takes a tumble many companies end up laying off workers. This is often unavoidable but there may be ways to reduce the need to take this action. For instance, if the company has a system of using employee suggestions and can capitalize on creative thinking, there may be a way to reduce layoffs during the down economic period by having other methods of saving or increasing revenue. For instance, I once worked for a company that had a suggestion system that allowed employees to suggest changes that could save the company money. These suggestions created many basic changes to processes over time that allowed the company to operate profitably, even during poor economic conditions. The key, I believe is to leverage, creative thinking prior to the economic downturn, in order to be prepared for it.

 

Participation

The triple bottom line is a strategy with a three-pronged approach. The triple bottom line refers to the integration of social (people), economic, and environmental goals. By tying each of these goals together, policies and decision making become more practical and more effective because they take into account the different outcomes and ramifications.  For instance, creating blanket environmental policy that requires an entire company to begin recycling does not take into account the economic or social ramifications.

 

Participation

There are a few causes for groupthink. One cause is the group itself.  Groups are especially vulnerable to groupthink when the members are from similar backgrounds or share many of the same views. Another cause of group think stems from when the group is insulated from outside opinions (Chadwick, 2014). A group is also prone to groupthink when there are no clear rules and there is a lack of leadership. In these situations, groupthink will often occur as the result of a stronger personality taking control. In these situations, weaker personalities will often succumb to the suggestions of the stronger personalities rather than argue (Chadwick, 2014). This problem can occur within any group when there is a lack of mediation and rules that allow for everyone to participate equally.

References

Chadwick, P. (2014). Groupthink. Retrieved from Oregon State University:

 

In your opinion, how often should a mission and or vision statement be reviewed?

Because the mission and vision are key to describing the function and purpose of the company, changing or updating them should be kept to a minimum or under certain circumstances. For example, if the mission and vision are not working, because they were written too narrow or broad, then they should be altered. Another situation for change might be a massive change in the core competency of the company. For example, if Google decided to switch from search engines to application selling as its primary market focus, then this would dictate changing the mission and vision of the company. The mission and vision might also be changed if the company has achieved them. If the vision of a company is to be the largest seller of retail goods in the world and they achieve this end; then they may need to update their vision in order to maintain their motivation and goals. Because the vision and mission are key to explaining the direction and goals of the company, there are few instances in which the should be changed.

Class, do you think management should vary their communicational strategies depending upon the change? When would face-to-face communications be necessary? When are e-mail announcements sufficient?

Communications strategies should vary depending upon the circumstance or type of change being sought. More personal strategies such as face-to-face should be used when delivering negative impacting messages. For instance, if news that cutbacks must take place as a point of change than this should not be done through email or other impersonal means. By using an impersonal method management could cause resistance and other negative situations within the workplace.

Email messages are meant for delivering messages of an informative nature. In this manner they should be used to communicate work related information such as meeting times or customer issues. Again email should not be used to relate negative impacting news that affects employees since this can instigate other issues such as insubordination and resistance.

From these examples one can see that communications methods should vary in accordance with the form of change being presented. As well, some communications should be delivered by key personnel in order to avoid negative consequences. This would include upper management delivering companywide news (whether good or bad.) In this way, the company can create a positive culture for change. This positive culture is important because negative workplace cultures are resistant to changes.

Has your organization’s strategic plan been communicated to you? If so, how and by whom? If not, how would such communication improve your organizational effectiveness? Is it important for employees to know the strategic plan of a company? Why or why not?

In my current organization leadership communicates the strategic plan in top down manner. Specifically, executives communicate to the management tier and management talks to front line employees. This is a common way to structure communication of the strategic planning. One of the benefits of this structure is that it allows the manager to customize communication to their particular team or department. Also it allows them the opportunity to filter out any sensitive information. As such the strategy is disseminated in a manner that is focused on individual functional areas.

This method of communicating the planning works well because it focuses the functional areas on their specific tasks. However, this method also fails to unify the company in a cohesive manner. While the mission and vision may be accessible, the objectives are compartmentalized. This means that individual areas may not understand fully how their tasks contribute to the overall strategy.

How does the concept “translate thought into action” bear on the relationship between business strategy and operating strategy? Between long-term and short-term objectives?

The operating strategy operationalizes the business strategy. This is performed by linking short and long-term objectives with specific tasks and processes. For example, if the business plan is to begin selling new products, then the operating strategy must reflect these goals. As such, the operating strategy translates the thinking or ideas of the business strategy into action. This is an important element to the strategic plan because implementation is needed to actualize goals.

 

Define risk and how it affects the strategy planning process. In relation to innovation, sustainability, and the global market, how would you decide whether a risk is worth taking the chance on when to create a strategic plan? 

Risk refers to the amount of loss that a person is willing to chance in business situation. The relationship between risk and return is defined through what is known as the risk-return relationship or tradeoff. The Risk-return tradeoff is the level of risk that must be incurred to making a return on an investment. This relationship is understood in terms of lower risk creating lower returns and higher risk creating higher returns (Cornett, Adair, & Nofsinger, 2016).  This relationship is best understood from an investment standpoint. Some investments are low risk but typically yield small to moderate returns.  This can also be seen in the global market. Operating or entering a global market widens the market for a company but it also presents increased risks such as currency exchange risk, regulations, and many other factors that can create loss for a company.  Choosing whether to take a risk in this market is often based on the potential for return. For example, in China there is low exchange risk but high potential for profit when manufacturing goods. This would make entering the market enticing for many companies.

References

Cornett, M., Adair, T., Nofsinger, J. (2016). M: Finance (3rd ed.). Irwin Mcgraw-Hil

Participation

Arbitrage generates what is known as arbitrage profits. Arbitrage profits are the riskless profits made without investing funds.  These profits are generated when certain assets are not priced according to an equilibrium relationship.  For example, arbitrage profits are possible in the spot and forward exchange markets if the indirect quote or cross quote relationships are out of line.  The respective arbitrage processes are called simple and triangular arbitrage.  Arbitrage opportunities exist if the money market rates differ from the forward market rates.  This is referred to as:  Covered Interest Arbitrage.

 

In terms of human resources management, how does an organization recruit and retain the best qualified employees?

College recruitment is a strong recruitment method that provides means to hire personnel with the proper education. The problem with this method is that personnel often lacks experience which requires some form of internship or training period. For a human resource manager, this might be a good selection process if there is time to groom and train the potential worker. This process would provide an experienced and properly trained worker but it would also increase the cost of recruitment and training.

 

Another recruitment strategy is internal hiring which involves choosing an existing employee to move into the management position. This can be beneficial for several reasons.  An existing employee would already be familiar with the nuances of the company and would not have an extensive training time. However, this type of recruitment can also be problematic if the company is suffering from issues such as negative culture. Recruiting from within the existing pool of workers may create issues such as maintaining the status quo and could create conflicts of interest. For example, if a person is promoted to a manager, he or she will need to have access to more personal data with employees and this can be problematic with working with the same individuals that he or she was once their peer.

 

Another method of recruiting a manager is to use a professional recruiter.  This method is beneficial because it allows the company to continue working and has an objective party perform the selection process in so far as the choosing of a qualified candidate but this method is also expensive. There is also an issue that the recruit will not fit the company profile and this can be costly if the person is not carefully selected.

 

Retention is also determined by benefits and other perks that can be offered. Companies that have strong benefits packages and professional development programs can retain employees more effectively than companies lacking these options.

 

Participation

Technology has been a large factor in the change in HR. Today, many of the functions of HR have been automated such as benefits and payroll management. This has allowed the field of HR to evolve into a more strategic role because it can now concentrate on HR functions such as retention and performance strategies which ultimately improve the organization. Despite this change, there are still many companies that still do not utilize HR to its full capacity. There is also the problem that small companies cannot affords HR departments and managers must still perform many of these functions.

 

Participation

I think SWOT is useful but I also think it can be prone to bias. When managers utilize SWOT they must identify the different elements and I am not sure that this process is always objective when dealing with strengths and weaknesses. For example, I worked at a company that really thought it was great at quality of service but in reality the company was terrible. Saying that you are not good at something sort of cuts against the grain of being a manager because you have to admit something is not being managed properly or that there is a problem in your organization. I think this is an issue with SWOT that often goes unnoticed because it is difficult for managers to assess their operations in a ruthlessly honest manner.

Why is an understanding in ethics important to the overall strategy process, and how does an understanding of ethics affect the strategy process as it pertains to the organization’s stakeholders? 

An understanding of ethics is important to the overall strategy process in that it provides the connection between proper behavior and the corporate functioning. The ethics of an organization serves more than just a window dressing and actually helps guide and focus the mission by removing unwanted behaviors. The importance of this connection cannot be overstated as the evolution of business since the Sarbanes/Oxley Act of 2002 has been moving towards the installment of ethical codes to remove corporate corruption. I think it is however, important to understand that ethical guidelines are a top down responsibility for management to enforce and to provide a strong example for the organization.

Companies without some form of ethical oversight seem to devolve into corruption (Ermann & Lundman, 2002). One can see from cases such as Enron and WorldCom that valuing solely the bottom line can lead to disaster. The problem of having an ethical organization is that it is a top down problem. Whether a small business owner or a corporate CEO, the ethics standards are started at the top. This means being the example and also making leaders culpable for unethical behavior. While this idea seems simple in theory it is often difficult to implement. This is because unethical behavior by its nature is an abuse of a system or authority. This means that corruption is a top down problem in that leaders are the ones responsible for outlining and enforcing ethical standards. When seen from this approach ethics become an important facet of the company for all stakeholders in order to keep the company focused properly on its mission.

References

Ermann, M. David & Lundman, Richard J. (eds.) (2002). Corporate and Governmental

Participation

I always thought that the Netflix problem was due to lack of marketing data. Netflix going into October 2011 announced that it would be dividing its streaming video service from the DVD rental service. Customers would receive two bills (both with substantial increases to cost) one from Netflix and from its streaming video organization Quickster. The decision to divide these services came after three months of $800,000 in losses from the DVD rental business (Wingfield and Stelter, 2011). The decision to do this was quickly reversed as customers began retaliating by closing accounts. In fact the figure was so large that Netflix is expected to make a revised report for the number of subscription later the month.

As a result of lack of assessing the market for DVD rental and streaming video, Netflix was forced to kill its plans to divide the DVD and streaming businesses. As well, the company has taken heavy losses from loss of subscriptions and from the cost involved in preparing for startup of Quickster. In November with the retraction of its plan and losses of subscriptions, company stock fell 25% (New York Times Stock Report, 2011). It seemed to me that the Netflix rushed to raise prices after taking losses without any form of marketing analysis. Had the company performed even an informal analysis of the market they might have realized that there were already competitors offering substantially lower cost for movies and television. This may have helped them alter their plan to be more realistic.

References

The New York Times Stock Report November 18, 2011 Retrieved from

Wingfield, N. Stelter, B. (2011) How Netflix Lost 800,000 Members, and Good Will  The New York Times Retrieved from