Category Archives: Business

Business, Digital Transformation, Leadership, Management, Technology

Change Management

Change must be effectively articulated, passionately owned, and persistently driven to completion (Tichy & Charan, 1989). Employees must be part of the change, know exactly where the company is heading, why it is going there and what is in it for them once they get to the final stop.

People usually hate the change. Thus they shall be encouraged and enlightened about the overall journey the company is willing to take (JWMI, 2015). Change management is the course that helps employees embrace new practices of doing business, and it is certainly not an easy path.

References:

JWMI (2015) What is the role of a leader? [Online]. Jack Welch Management Institute. Available at: https://goo.gl/BNanBL.

Tichy, N. & Charan, R. (1989) Speed, Simplicity, Self-Confidence: An Interview with Jack Welch [Online]. Harvard Business Review. Available at: https://goo.gl/5OCc24.

Business, Digital Transformation, Innovation, Leadership, Management, Operations Management, Technology

Business Digitization

Business digitization is not just the concern of the IT executives; it is strategically significant and serious to business leadership that should take a strong stand through adjacently running both the operations and technology. Considering this, once things are concerned with digitizing business processes, company’s leadership is generally accountable for managing and controlling the transformation.

As a result, digital transformation is becoming more of a management concern, which where it should be. Digital transformation at the same time shall consider agility and speed as fundamental factors whenever business processes are being evaluated and re-engineered. Business operations and processes are supposed to be transformed radically and operate faster, become more secure, and more resilient (Hottges, 2017).

References:

Hottges, T. (2017) ‘Digital Transformation Is a Management Issue’, Abolhassan, F. (ed.) The Drivers of Digital Transformation. Switzerland: Springer, p. 8. (Accessed: 8 November 2018).

Business, Leadership, Management, Operations Management, Supply Chain

Just in Time, Lean Manufacturing and Manufacturing Resource Planning

Just in Time and Lean Manufacturing:

JIT enables companies to uplift efficiency standards, enhance quality and boost productivity through decreasing materials’ waste, improving production efficiency in addition to decreasing production’s associated time and effort. Accordingly, and in order to execute this philosophy, then Kanban system shall be presented to guarantee that the company is operating its SC both expertly and efficiently. The part taken care by Kanban is to bond diverse manufacturing procedures jointly, decrease work in progress, maintain low cost of operations in addition to minimize lead and setup times (Wang & Sarker 2004).

Manufacturing Resource Planning:

MRP as a core module within ERP systems helps in substituting complicated and manual connections amongst diverse corporate functions and systems, with the main benefit is in decreasing the headcount in finance and the operating capital. Moreover, the entire business data is assembled for one time throughout the preliminary initiation, then saved centrally, to be consequently amended on instant basis. By that, business can guarantee that all stages of scheduling are grounded on the exact data, and that the subsequent procedures accurately replicate the dominant operating circumstances of the company. Additionally, system generated reports offer executives with a holistic sight of business’s health in different areas of the company, which can be utilized to recognize required enhancements and take benefit of market prospects (Hendricks et al. 2007).

My Position from Both Approaches:

Following the earlier discussion, MRP can be positioned as a technology that permits for an astonishing level of progressive planning for cases that can be found in companies with high-volume production or even with relatively average inventory (Aggarwal 1985). However, is seen by many as a standout amongst the most costly methods for gaining zero or at least a negative ROI. The execution is quite expensive; signaling one of the top issues with the MRPs’ rollout. Where every implementation is subject for medium to heavy levels of customization, which will go in parallel with recognizing its consequences on the company, in addition to the exhausting part of training the employees to effectively use it (Slack 2014).

While on the other hand, JIT preserves low inventory expenses and includes workforce, yet necessitates excellent structure of supply lines and supportive employees (Aggarwal 1985). Nevertheless, there is a general observation concerning a major hindrance towards JIT’s full adoption in the SME organizations, which is usually due to their less accessibility to needed assets. While in the case of giant corporations, then the case is different, due to their better positioning in terms of their financial status as well as the volume and skills of their workforce (Bayo-Moriones et al. 2008).

Possibility of Forming a Hybrid Setup:

Some studies can be found describing the connection between JIT and ERP as so close leading to consider JIT as part of some ERPs. In line with that, (Cagliano & Spina 2000) and through their review to the subject, realized that companies with desire to gain the most possible improvement out of their business operations are highly advised to consider the hybrid adoption between both, the ERP (technology) and JIT (philosophy). Their justification was built on studies that proved where sole dependence on technology, or excessive usage of it, would most likely not improve the overall performance, but rather with the combined usage of technology and process enhancement that will eventually end up with bigger influence. Where the technology can bring operational discipline and relatively better handling of process changes. While the philosophy will offer a reliable and robust supporting framework (Bayo-Moriones et al. 2008).

References:

Aggarwal, S.C. (1985) ‘MRP, JIT, OPT, FMS?’, Harvard Business Review, 63, 5, p. 8, EBSCOhost, [Accessed on April 29 2017].

Bayo-Moriones, A., Bello-Pintado, A. & Merino-Díaz-de-Cerio, J. (2008) ‘The role of organizational context and infrastructure practices in JIT implementation’, International Journal of Operations & Production Management, 28 (11), pp. 1042-1066, [Accessed on April 29 2017].

Cagliano, R. & Spina, G. (2000) ‘Advanced manufacturing technologies and strategically flexible production’, Journal of Operations Management, 18, pp. 169-190, ScienceDirect, EBSCOhost, viewed 29 April 2017.

Hendricks, K., Singhal, V. & Stratman, J. (2007) ‘The impact of enterprise systems on corporate performance: A study of ERP, SCM, and CRM system implementations’, Journal Of Operations Management, 25, pp. 65-82, ScienceDirect, EBSCOhost, [Accessed on April 29 2017].

Slack, N., Brandon-Jones, A. & Johnston, R. (2014) Operations management. 7th ed. Harlow: Pearson Education.

Wang, S. & Sarker, B. (2004) ‘A Single-Stage Supply Chain System Controlled by Kanban under Just-in-Time Philosophy’, The Journal of the Operational Research Society, 5, p. 485, JSTOR Journals, EBSCOhost, viewed 29 April 2017.

Business, Leadership, Management

Corporate Sustainability

Sustainability in general is accomplished through consuming resources for the sake to fulfill present demands without jeopardizing future needs. In line with that, there are several connections amongst the domains of Operations Management (OM) and Sustainability Development (SD), with the intersection amid the two fields establishes a triggering point for undertaking a comprehensive integration between both. However, the main variance of significance is that SD commonly depends on a wider range of consideration compared to the OM. Yet, attaining such integration would be deemed as a great achievement, since it will positively impact the sequence of business operations and design, in addition to its influence on improving all dedicated resources in the process of transforming inputs into services and products (Peter & Magnus 2011).

Following the earlier discussion, sustainability is taking a major part in integrating several operational aspects, with the product life cycle and supply chain management being one of the most imperative elements that gets associated via multiple techniques. Starting from the assessment of product life cycle through which the company can estimate resources’ consumption along with any negative environmental impact, moving all the way to adopting lean and quality production techniques that can assist in eliminating unnecessary consumptions, decreasing the waste and recycling the products. Additionally, companies can consider the extension of product lifetime, which can help in avoiding resources’ depletion when manufacturing new products. While concerning the supply chain, then it should be clearly stretched to reflect the whole lifespan of the product, in addition to enhancing the product from two standpoints, present as well as total cost (Linton et al. 2007).

Another relevant subject in maintaining a sustainable trend of operations is through business’s contribution to its social obligation, which is commonly known as Corporate Social Responsibility (CSR). It can be defined as business’s moral contribution and behaviour towards economic growth, while taking into the consideration its commitment towards local, national or global communities, in addition to the working conditions of its employee along with the quality of life being offered to their families (Slack et al. 2014). Nevertheless, undertaking socially responsible resolutions will predominantly lead to economic significances; especially that investment returns have neither financial nor timeframe guarantees, but will have higher chances of influencing the public opinion and consequently on business’s reputation (Albino et al. 2013).

Finally, the necessity for protecting our environment that goes adjacently with the growing requests for consuming natural resources are obliging organizations to reexamine their operational models and reform their supply chain processes. Nevertheless, and despite the fact that pollution and waste decrease are associated with the classical targets of operations management, yet not every green procedure will guarantee savings, with some might even increase the operational cost. Therefore, the primary challenge for businesses out there would be to finding operational answers for the ways to maintain a sustainable business today without affecting the environment for future demands (Wu & Pagell 2011).

References:

Albino, V., Carbone, P. & Taticchi, P. (2013) ‘Corporate Sustainability’, Berlin: Springer, eBook Index, EBSCOhost, [Accessed on May 13 2017].

Linton, J., Klassen, R. & Jayaraman, V. (2007) ‘Sustainable Supply Chains: An Introduction’, Journal Of Operations Management, 25, Supply Chain Management in a Sustainable Environment, pp. 1075-1082, ScienceDirect, EBSCOhost, [Accessed on May 13 2017].

Peter, F. & Magnus, P. (2011) ‘Integrating Sustainable Development Into Operations Management Courses’, International Journal Of Sustainability In Higher Education, 3, p. 236, Emerald Insight, EBSCOhost, [Accessed on May 13 2017].

Slack, N., Brandon-Jones, A. & Johnston, R. (2014) ‘Operations management’. 7th ed. Harlow: Pearson Education.

Wu, Z. & Pagell, M. (2011) ‘Balancing Priorities: Decision-Making in Sustainable Supply Chain Management’, Journal of Operations Management, 29, pp. 577-590, ScienceDirect, EBSCOhost, [Accessed on May 13 2017].

Business, Leadership, Management

The Good, The Bad, And The Ugly Side Of Globalization !

Globalization and for decades was considered as an eminent thing for several 2nd and 3rd world countries who had the opportunity to gain entry to world’s strong and established markets, in addition to the possibility for them to export back their relatively cheap merchandizes. While from global corporations’ perspective, then they had the opening to widen their international presence through penetrating new developing markets and consequently boost their operations and revenue streams. Nevertheless, globalization was not that helpful for both white and blue collar, since it had its share in deindustrializing heavyweight economies similar to the U.S. Accordingly, and since globalization is a complex subject, it is essential to assess both the advantages and disadvantages prior jumping into any conclusions (Ghemawat 2017).

Proponents of globalization debate that it includes the prospective to transform this world into a greater living place and to resolve world’s irritating concerns similar to poverty and unemployment. Thus, the pro-globalization groups argue that it helps in sustaining the foundations of free trades that will consequently decrease obstacles similar to VAT, tariffs and subsidization, in addition to promoting growth of global economy through making new jobs, inspiring competitiveness levels and lowering the prices (Collins 2015).

From the social perspective, then globalization can encourage cultural intermixing; with every nation can become better positioned to grasp more knowledge and understanding from other cultures, which will help in promoting tolerance, respect and acceptance of others. Additionally, workforce can relocate from a nation to another for the sake to promote their talents and seek for better opportunities (Manolică & Roman 2012).

The opposing groups of globalization perceive it differently, with their claims are grounded on several standpoints. Initially, they argue that in a time globalization is hypothetically meant to encourage free trade through eliminating all barriers, a rising contrasting trend by G20 to earlier claim is being noticed through imposing nearly 1,000 obstructive import and export measures (WTO 2014). In addition to the fact that the counter of VAT global club members is on constant increase and has surpassed 160 members (USCIB 2016).

Moreover, one of the perturbing issues for developed nations similar to the U.S. and Western Europe is the gradual loss of jobs and having them offshored to countries with less operational cost. Not just that, where developed nations are even threatening their workers to slash their wages and to happily accept that, unless they are willing to see their jobs ending up somewhere else overseas (O’Meara et al. 2000). Furthermore, international companies are blamed for social unfairness, unjust working circumstances, in addition to the absence of environmental sense of concern, biological damage and natural resources’ abuse. Besides, and amid the latest time of fast worldwide expansion of trade between the 60s and late 90s of late century, UNDP reported that inequality rates have got worse both domestically and internationally. The same report highlighted that 86% of global consumption is done through world’s wealthiest 20%, leaving the remaining population of 80% to consume just 14% (Bigelow & Peterson 2004).

References:

Bigelow, B. & Peterson, B. (2004) ‘Rethinking Globalization: Teaching for Justice in an Unjust World’, Harvard Educational Review, 74, pp. 347-348, British Library Document Supply Centre Inside Serials & Conference Proceedings, EBSCOhost, [Accessed on June 8 2017].

Collins, M. (2015), ‘The Pros and Cons of Globalization’. Forbes. Available online from: https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#34e6de16ccce, [Accessed on June 8 2017].

Ghemawat, P. (2017) ‘Globalization: Myth and Reality’. Harvard Business Review. Available online from: https://hbr.org/ideacast/2017/02/globalization-myth-and-reality. [Accessed on June 8 2017].

Manolică, A. & Roman, T. (2012) ‘Globalization: Advantages And Disadvantages From The Perspective Of The Manufacturer’, Centre For European Studies (CES) Working Papers, 4, 4, p. 747, Complementary Index, EBSCOhost, [Accessed on June 8 2017].

O’Meara, P., Mehlinger, H.D. & Krain, M. (2000) ‘Pros and Cons Of Globalization’, The Economist. Available online from: http://www.economist.com/node/393331, [Accessed on June 8 2017].

USCIB (2016) ‘Value Added Tax Rates (VAT) By Country’. United States Council for International Business. Available online from: http://www.uscib.org/valueadded-taxes-vat-ud-1676/, [Accessed on June 8 2017].

WTO (2014) ‘WTO report says restrictive trade measures continue to rise in G-20 economies’. World Trade Organization. Available online from: https://www.wto.org/english/news_e/news14_e/trdev_05nov14_e.htm, [Accessed on June 8 2017].

Business, Innovation, Management

Innovation Portfolio Management (IPM) at 3M

The notion of Innovation Portfolio Management (IPM), is primarily correlated with the process of provisioning corporate’s resources through its portfolio of new services and products that are aligned with the business strategy (Meifort, 2016). Thus, and to ensure superior control of growing rivalry, corporates must have an efficacious IPM in place that would safeguard a constant pipeline of innovative and quality products (De Maio et al., 1994).

In this article, I will be addressing 3M company, with a target to grow into the most innovative company across the world, through utilizing an extensive variety of Knowledge Management Systems (KMSs), facilitating a suitable working environment, as well as effectively motivating its people (Brand, 1998).

In line with preceding objective, 3M realized that its structure should be a reflection of company’s portfolio management, that is principally built on two main verticals: acquisitions and restructuring. Therefore, in terms of restructuring, the company decided back in 2013 to be divided into five divisions. And through that move, it facilitated the path for 3M to attain significant reductions in terms of operational cost by improved effectiveness, throughput and scale. Moreover, it has as well assisted the company to effectually recognize industries that actually boost development and innovation. As a result, 3M disclosed a recent statement that it is stripping its business in the static control domain, in order to pay extensive consideration to further innovative and profitable business opportunities (Forbes, 2015).

While regarding acquisitions, then 3M and through its strategy is considering them as an essential move for progression, growth of products’ portfolio and reinforcing its global presence, with a target to allocate a hefty budget of as high as $10 billion on acquisitions through the year 2017 (Forbes, 2015). And with that regards, I will bring two recent examples. The first one goes back to July 2014 when 3M secured a large presence in the Japanese market, through buying 25% of Sumitomo Electric in a move that helped the company to fully acquire the joint venture enterprise Sumitomo 3M, and eventually have a bigger control in world’s third largest economy (Reuters, 2014). Speaking of the second example, then 3M realized the high potential in the healthcare IT segment with a potential to reach $66 billion by the year 2020. Accordingly, they have acquired back in February 2014 Treo solutions, a company that is specialized in providing comprehensive business intelligence systems for healthcare suppliers and users (3M News, 2014).

Speaking of the R&D and it is impact on 3M’s portfolio and products growth, then the company announced in its last year’s sustainability report (3M, 2015), that 30% of company’s sales are generated out of the products that were developed over the course of last 5 years. As a result, and due to company’s belief in R&D’s significance in market dominance, 3M’s management decided to allocate almost 5.6% of company’s profit on R&D activities, and to increase the allocated ratio to 6% by the year 2017 (Forbes, 2015).

Conclusion:

After considering the foregoing elements of 3M’s portfolio management, that is accompanied with a set of innovative and distinguished range of products, we can realize how 3M managed to maintain its competitive edge and even dominate a substantial pricing power, that helped the company to sustain growth and maintain a significant influence in the market.

References:

3M (2015), ‘Sustainability Report’. Available online from: http://multimedia.3m.com/mws/media/1064170O/3m-2015-sustainability-report.pdf. [Accessed on November 12th 2016].

3M News (2014), ‘3M to Acquire Treo Solutions‘. Available online from: http://news.3m.com/press-release/company/3m-acquire-treo-solutions. [Accessed on November 12th 2016].

Brand, A., (1998), ‘Knowledge Management and Innovation at 3M‘, Journal of Knowledge Management, Vol. 2, Iss 1, pp.17 – 22. Available online from: http://dx.doi.org/10.1108/EUM0000000004605. [Accessed on November 12th 2016].

De Maio, A., Verganti, R., and Corso, M., (1994), ‘A Multi-Project Management Framework for New Product Development’. European Journal of Operational Research, 78, 178–191. Available online from: https://goo.gl/3DkGj7. [Accessed on November 12th 2016].

Forbes (2015), ‘3M’s Key Growth Levers: Portfolio Management, R & D, Business Transformation‘. Available online from: https://goo.gl/XKGa83. [Accessed on November 12th 2016].

Meifort, A., (2016), ‘Innovation portfolio management: a synthesis and research agenda‘, Creativity and Innovation Management, 25, 2, pp. 251-269, PsycINFO, EBSCOhost. Available online from: https://goo.gl/L3dFdc. [Accessed on November 12th 2016].

Reuters (2014), ‘3M to buy Sumitomo stake for $885 million to control Japan business‘. Available online from: http://www.reuters.com/article/us-3m-japan-idUSKBN0FL1XU20140716. [Accessed on November 12th 2016].

Business, Innovation, Management

Innovative Culture at Google

The principal foundations of Google’s corporate strategy were always connected to diversification. Google accomplished its diversification strategy over a series of acquisitions, innovations as well as corporate entrepreneurship. Which subsequently empowered Google to extend its contributions and reduce its rivalry. Therefore, and as industry front-runners, Google utilized aggressive strategies that were reinforced by continuous innovation of its product lines, in addition to its growth into other businesses like mobile, blogging, news, phones, maps and health (Finkle, 2012).

Furthermore, Google supplied internet users with the top significant search results on as many subjects and themes as possible. This comprised outsourcing attempts of international professionals and penetrating new markets through delivering its services and range of products in foreign languages. Moreover, Google’s strategy on the business level was as well a comprehensive recognition strategy, since it presented characteristics that were not available by other search engines, such as translating from one language into another, while still providing the most relevant search results (Finkle, 2012).

From the management end, Google’s organization model was close to other companies in the high technology domain. Google acquired many of the buildings surrounding its main head office. The location, culture, and make-up of the company were very close to that of a university or college. It was not exceptional to see many personal activities undertaken in the campus, like cycling, or playing basketball. And according to the former CEO who said in an interview few years back: “I looked at Google as an extension of graduate school; similar kinds of people, similar kinds of crazy behavior, but people who were incredibly smart and who were highly motivated and had a sense of change, a sense of optimism” (Schmidt, 2009).

The organization structure along with the associated management attitude is another evidence of Google’s policy of entrepreneurial innovation. Externally, Google is structured and managed like many other companies. It has several domains and group, with having its own dedicated hierarchy of leads, managers and directors. Nevertheless, the secret recipe for success is in its very flat management hierarchy, that has continuously tried to retain the proportion of staff to managers as high as possible. Therefore, it is not uncommon for 40 personnel to fall directly under the supervision of one executive or manager. Another distinguished characteristic of Google’s culture, is originated from its fundamental principles from the famous 20 percent time policy, which permits engineers to spend nearly a day every week following projects outside their prime zone of accountability. The maximum imperative thing about 20 percent time is not how much employees are allowed to utilize on side projects, as much as that the company inspires them to think and be innovative (Copeland and Savoia, 2011).

References:

Copeland, P., and Savoia, A., (2011), ‘Entrepreneurial innovation at Google‘. Available online from: https://static.googleusercontent.com/media/research.google.com/en//pubs/archive/41469.pdf. [Accessed on November 20th 2016].

Finkle, T.A., (2012), ‘Corporate Entrepreneurship and Innovation in Silicon Valley: The Case of Google, Inc.‘, Entrepreneurship: Theory & Practice, 36, 4, pp. 863-884, Business Source Complete, EBSCOhost. Available online from: http://eds.a.ebscohost.com.liverpool.idm.oclc.org/eds/pdfviewer/pdfviewer?sid=57893a60-6fc8-4a59-8eaf-a1364cccd309%40sessionmgr4006&vid=1&hid=4210. [Accessed on November 20th 2016].

Schmidt, E., (2009), ‘Inside the mind of google‘. CNBC Interview. Available at http://www.youtube.com/watch?v=u02h9LYYmuc. [Accessed on November 20th 2016].

Bureaucracy, Business, Holacracy, Management

Bureaucracy vs. Holacracy

As an MBA student and a close observer to general market dynamics, I can categorize the types of business changes under three main groups: 1) Episodic, 2) Continuous and 3) Disruptive (Daft 2013), with the third one being substantially critical due to its direct ties with immediate and sudden changes in market constraints, that would severely impact any business that is not well equipped for radical changes. That said, companies that are yet heavy dependent on strict bureaucracy as an internal governing system, will have a very tough time in merely surviving the growing magnitude of competitive rivalry.

Employing large number of officials in order to strictly and carefully follow the roles is a guaranteed recipe for failure. Now it might work in limited government sectors and non-profit organizations, but definitely it will not function for companies that operate on profit and loss basis. And in line with that, I can bring a very relevant example from the large pharmaceutical company, Pfizer, that exponentially inflated in terms of human resources over the course of successive mergers and acquisitions, leading to excessive increase in managerial hierarchies, and significant drop in delivering new drugs, despite the fact that R&D budgets were tripled.As a result, pharmaceutical companies are now adopting a different concept, that is based on small biotechnology setups (Daft 2013).

While speaking of companies that successfully managed to overcome bureaucracy, then Chrysler (under its flagship are both Jeep and Dodge) stands out like a very good example. Where from a company that filed for its bankruptcy and participated in the bailout program from the US government back in 2009, it miraculously turned into a profitable one in only two years after repaying its financial obligations fully to the US government. And the credit behind that success goes to the genius CEO of FCA (Fiat Chrysler Automobiles) Mr. Sergio Marchionne. So what he did was remarkably brilliant, while in the same time quite simple in principle. Where he believed in the flat organizational structure, and for that he put all of his power to fight centralization of decisions along with bureaucracy, to end up with a new setup where 25 of senior Chrysler executives are reporting to him directly, that enabled him to drastically make quicker and better decisions compared to previous failing structure that used to take weeks or even months. However, that didn’t happen without losses for some and gains for others. Where for those who resisted the change and fought to keep the company as it is, were shown the door. While others who expressed eagerness, got promoted and become official members of the new management team (Daft 2013).

Alternatives:

Since ultimate organic or mechanistic structures are going to be accompanied with several side effects, a number of alternative setups have been proposed which happen to be based on a hybrid concept, in order to get the best out of both. In line with that, I thought to briefly refer to this study published by Washington Post, which explains the possibility of operating in a hybrid operational spectrum, between holacracy and bureaucracy, through which higher levels of freedom is given to certain volume of employees, while greater level of control is being imposed on others (Washington Post 2015), which relatively sounds like a reasonable and practical blend.

References:

Daft, R. L., (2013) ‘Organization Theory and Design’. 11th edition. Mason. OH: Cengage Learning.

Washington Post (2015), ‘How to build a great company by blending bureaucracy and holacracy’. Available online from: https://www.washingtonpost.com/news/innovations/wp/2015/09/03/how-to-build-a-great-company-by-blending-bureaucracy-and-holacracy/ [Accessed on November 21st 2016].