All posts by BasemAlabbasi

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].

Management, Technology

When the ERP implementation strikes you hard!

Well the story goes like this, with top managers at Levi Strauss decided to revamp their information technology systems. So the executives decided to migrate to a single SAP system and hired a team of Deloitte consultants to lead the effort. The risks seemed small, and the proposed budget was less than $5 million. But very quickly all hell broke loose. One major customer, Walmart, required that the system interface with its supply chain management system, creating additional hurdles. Insufficient procedures for financial reporting and internal controls nearly forced Levi Strauss to restate quarterly and annual results. During the switchover, it was unable to fill orders and had to close its three U.S. distribution centers for a week. In the second quarter of 2008, the company took a $192.5 million charge against earnings to compensate for the botched project—and its chief information officer, David Bergen, was forced to resign (Source: HBR).

 

The lesson learned here: There is no such thing as an easy ERP rollout. It was and always will be a journey of discomfort and sacrifice, but with a remarkable experience and joy the moment it starts effectively running your business.

 

References:
Flyvbjerg, B., and Budzier, A., (2011), ‘Why Your IT Project May Be Riskier Than You Think‘. Harvard Business Review. Available online from: https://hbr.org/2011/09/why-your-it-project-may-be-riskier-than-you-think.

 

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].

Public Note

Barriers to Change

Visionary leadership is crucial for change; however, managers should expect to encounter resistance as they guide the organization along the curve of change. It is natural for people to resist change, and many barriers to change exist at the individual and organizational levels.

1. Excessive focus on costs. Management may possess the mindset that costs are all-important and may fail to appreciate the importance of a change that is not focused on costs—for example, a change to increase employee motivation or customer satisfaction.

2. Failure to perceive benefits. Any significant change will produce both positive and negative reactions. Education may be needed to help managers and employees perceive more positive than negative aspects of the change. In addition, if the organization’s reward system discourages risk-taking, a change process might falter because employees think that the risk of making the change is too high.

3. Lack of coordination and cooperation. Organizational fragmentation and conflict often result from the lack of coordination for change implementation. Moreover, in the case of new technology, the old and new systems must be compatible.

4. Uncertainty avoidance. At the individual level, many employees fear the uncertainty associated with change. Constant communication is needed so that employees know what is going on and understand how it affects their jobs.

5. Fear of loss. Managers and employees may fear the loss of power and status—or even their jobs. In these cases, implementation should be careful and incremental, and all employees should be involved as closely as possible in the change process.

Implementation can typically be designed to overcome many of the organizational and individual barriers to change.

Reference:

Daft, Richard L. Organization Theory and Design. Cengage Learning, 03/2012. VitalBook file.

Public Note

When you’re with someone who frets about the future, a real hand wringer and nail-biter, simply tell this childlike story

Clocks usually are calm, regular creatures, but one litter ticker worked himself into a frenzy thinking about his responsibilities for the coming year.

“I have to tick two times per second,” he said. “That’s 120 ticks per minute, 7,200 per hour, 172,800 per day.”

Continuing his calculations, the clock worried that he’d never be able to complete the necessary 1,209,600 ticks every week. And he despaired of ticking regularly nearly 63 million times in the coming year.

The more he thought about it, the more worried he became. Finally, his anxiety made his ticker go on the blink, and he consulted a psychiatrist.

“I’m afraid I just don’t have what it takes to manage all those ticks,” the clock lamented.

The doctor smiled and asked him, “How many ticks must you tick at a time?”

The clock responded, “Well, just one,”

“Then, focus your energy on just one tick at a time,” suggested the doctor, “and I think you will be just fine.”

So the little clock wound himself up, concerned himself with only one tick at a time and went on ticking happily ever after.

SOURCE: Glenn Van Ekeren. SPEAKER’S SOURCEBOOK II: QUOTES, STORIES, & ANECDOTES FOR EVERY OCCASION

Technology

SharePoint is falling behind sharply in the WCM domain

After being leaders back in 2009/2010, It is quite disappointing to see SharePoint falling behind sharply in the WCM domain.

However I don’t believe that was out of coincidence, but on contrary and pragmatically speaking, I would say that was due , but not limited to, the following:

  1. Any dedicated, focused WCM effort is disappearing as Microsoft pushes customers toward the cloud and Office 365. WCM’s greatest urgency and innovation lies in external, customer-facing scenarios, but Microsoft is focusing almost exclusively on business-to-employee scenarios.
  2. Customers wanting to use Microsoft for differentiated customer-facing Web and digital initiatives face the prospect of heavy customization. This has consistently been troublesome when working with SharePoint and will be more so in a cloud-based system.
  3. Feedback from the market suggests usability issues with SharePoint at a time when business is seeking an ever higher level of agility from WCM products. Other vendors in this Magic Quadrant provide far greater agility to marketers than Microsoft provides with SharePoint.
206900_0001_thumb Web Content Management