Wednesday 8 February 2012

MGM - Week 5: Discussion Question, IR & Responses + Assignment

Welcome to Week 5 of the MGM!

Below you shall find this week's Discussion Question (DQ) as well as my Initial Response (IR) to it followed by the Discussions had with my professor and fellow student. The post ends with my hand-in assignment for the week.


Regards,


El Tanoderno
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Week 05 Discussion Question

In working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for references you make to relevant examples from real companies.

Discuss the main problems an organisation can encounter in achieving integration. Are there successful alternatives to integration? Use examples from your own company or one you know well.

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My Initial Response to Week 5's DQ:  

Achieving Organizational Integration and it’s Problems

For an organization to perform well across all levels, layers, horizontally as well as vertically, it requires cooperating as a harmonious single system combining interdependent areas of expertise by coordinating between different roles or units to achieve integration and thus collectively creating value (Child, 2005).

According to Child (2005), due to globalization through expansion, and thus the creation of more divisions that cannot manage themselves sufficiently, and fierce competition the necessity to intensify coordination and demand to integrate is greater than ever. Areas in which achieving integration is of upmost importance, especially to a MNC such as Samsung due to what was a domestic domain has been contained into the international, are Marketing, R&D and Quality Assurance.

Their continued success requires turning awayfrom what made them successful. The tightly integrated business systems that have worked in their home markets are unlikely to secure their future in global markets. To move to the next level, they, too, must reinvent themselves in ways that may seem contradictory. And when they reach new plateaus, they will need to do so again. (Khanna et al, 2011)

Samsung has become a World leader in R&D, Marketing and Design (Khanna et al, 2011), although prior to 1996 the company was nowhere as close to where it is today as it hadn’t achieved integration due to a lack of investment into these areas (Kim, 1997). During the early 90s the parent group redirected its cost-oriented management to quality-oriented management improving business units’ relationships although Samsung's corporate R&D center (SAIT) had a difficult time to carry out its primary mission to increase competitive advantage of existing business lines and pursuing new opportunities. Further on into the 90s, the R&D management system became more efficient but it wasn’t until the break of the new millennium that SAIT developed close relationships with the business units and increased R&D performance and further achieved integration by building close relationships with business divisions by sharing business strategies as well as having their project teams collaborate with these divisions before project completions (Park & Gil, 2006).

Common problems found in achieving integration may be of a functional, operational or divisional nature, in that, functionally, roles in vital positions such as sales or in producing goods and services find themselves not integrating appropriately with the core of the organization. Operationally, problems in the method of integrating production and ancillary services affect the quality of information available to production and therefore to the standards of performance. Further operational integration may not be achieved due to the lack of using IT as a control system combining scheduling, planning, cost and quality into one (Child, 2005).

For this reason, at Richmond Events all the team leaders constantly confer with the IT department as well as Finance, in order to control aspects such as quality and budgets as well as to make sure certain information is available.

An alternative to integration, in my opinion, doesn’t really exists in the literal sense and most major companies wouldn’t be able to survive as control would be lost in very damaging ways as overall quality would drop and competition would eat one alive given the right opportunity. If anything then techniques or approaches such as team-working where teams may be created by current demand and necessity to a company such as project teams or affinity groups among others, but essentially teams that have specific tasks to focus on.



References:

Child, J. (2005) Organization: Contemporary Principles and Practice. Malden, MA: Blackwell Publishing.

Kim, Y. (1997) ‘Technological Capabilities and Samsung Electronics' International Production Network in Asia’ BRIE, November 1997, Working Paper 106 [Online] Available from: http://brie.berkeley.edu/publications/WP106.pdf (Accessed: 4 February 2012)

Khanna et al (2011) ‘The Paradox of Samsung’s Rise’ The Globe, July-August 2011 [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed: 4 February 2012)

Park, S. & Gil, Y. (2006) ‘HOW SAMSUNG TRANSFORMED ITS CORPORATE R&O CENTER’ Research Technology Management, July-August 2006 [Online]
Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed: 4 February 2012)
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My Response to Noriko's IR followed by my professor's comment


Dear Noriko,

I really liked your analogy of comparing water molecules with integration. In fact, I was going to compare the way integration works to create value with how the different body parts function interdependently to one another while the brain uses the right integration system to coordinate each part to work as efficiently as possible and creating said value which in terms of our body would be represented by optimum health and speed of thought.
Obviously the brain or Integration system requires the right leadership which is done by one-self, acting as the CEO of our body, which manages our food intake, fitness levels and education. 

This is supported by the following example of HP merging with Compaq in 2002. For several years the company merger was lacking in the right management and leadership as according to Rosen (2008) the then CEO and Chairman, Carly Fiorina, didn’t possess the right leadership skills as she failed for three years to realize the potential of the combined companies until Mark Hurd replaced her and transformed the company into a world leader in technology through strategic integration. 

Food intake represents a company’s resources, finances and wealth represented by the vitamins, minerals and other beneficial factors we take in through food that allow our brain to successfully allocate resources to the different departments of our body, whereas fitness levels represent R&D resource investments as well as up-to-date technology and machinery, and last but not least, the way we educate ourselves represents R&D endeavors, training staff and strategic organization and integration processes. 

As Child (2005) states, signs that integration is not being met is noticeable if persistent conflict between departments arises and if this keeps recurring which has far more negative influence if the agents involved accept these conditions as normal. Just as a persistent health problem which a person might get used to living with and not taking it seriously can lead to serious future health issues that may put that person in danger.

These three areas are all affected by our family, friends and teachers which have a great influence on our choices in life and therefore act as our Board of Directors and advisors.
The stomach acts as the team-leader for the Supply Chain while the brain orchestrates the Logistics and then allocates the right places the resources have to go to. 

Therefore one can see that the implementation of integration systems into organizations is as vital as our own brains orchestrating our bodily functions which are only possible through the right use and availability of information, but managed by our conscience in regards to integration approaches. The wrong way of thinking is the same as a bad leader and will therefore slow down productivity. 

The better we treat our bodies in respect to these three areas mentioned above the better we perform on a long-term basis which is effectively the same for any organizational body as it can only deliver high-performance on a long-term if all areas work together by cross-communication and effective integration. 

Integration therefore, in my opinion, is irreplaceable as once it is taken away control of the different areas break down through lack of sharing information and the failing of departments the same way organs may fail if not looked after.



References:

Rosen, B. (2008) ‘The Merger That Worked: Compaq and Hewlett-Packard’ USA: Huffington Post [Online] Available from: http://www.huffingtonpost.com/ben-rosen/the-merger-that-worked-co_b_95873.html (Accessed: 6 February 2012)

Child, J. (2005) Organization: Contemporary Principles and Practice. Malden, MA: Blackwell Publishing.
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Andrew, this is a great analogy. Thanks! Best,
Dr. L.
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Dear Andrew

Thank you for your comment.

I have very much enjoyed your posting. Your analogy which adjusting Integration to the body parts is more supportive for understanding the term “Integration” and much better examples in details than mine.  Integration in business means activities of coordination for different units or systems. The water molecules are the same but the bands are different in its status. I like your referring with body parts, functions and status. I totally agree with you but I had no idea  like that way you described nevertheless I am a medical professionals.
I would like to add the examples to your explanations.

There is a medical term “ Occult cancer “.Occult cancer is a cancer of unknown origin but presence in a metastatic region. Unnoticeable but serious issues which you mentioned like occult cancer. If it occurred in a brain ( top management ), no hope in some occasions. Therefore, external auditors for inspection are generally demanded for organizations. Unfortunately, it becomes a dead letter in some occasions.

For example, in Olympus Inc’s financial fraud scandal, Farmer British chief executives Michael Woodford was dismissed after he indicated and exposed their financial fraud which other executives had been involved. (Reuters,2012)

Noriko


Reference:

REUTERS(2012)Clear Accounting Firms in Olympus Fraud,The New York Times
Available at:
(Accessed: 07 February 2012)
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Luai's IR and followed by our Discussion


Integration is:
combining or coordinating separate elements so as to provide a an extremely good result, better profit and market share ,in consideration of leader ship ,cultural issues of any company

Case 1 ...........(irrelevant paragraph to the discussion that follows)

Case 2
Hp company integrating merger with compact company and the reason they have failed
In 1990 the HP Company which where specialized in printers had a branch to make personnel computers but unfortunately through the years they didn’t release good products and made them slip of the competition which lead to huge loss.
On September 4th 2001 the HP company announced its integration with compact company in order to make a big bang in the computer world by making the highest purchase of the computer history which cost more than 24 million dollars which will open shops in more than 169 countries and hires more than 145,000 employees providing the world with a complete set of production and services but unfortunately the integration failed and in less than a week the shares went down and the loss began
All the competitors ask the question why they did so
A company that is specialized in printings ,well known of its products from inkjet , laser printers , huge office network printers to merger with a losing company of pc
As a result it made them directly face dell completion for the pc which offered competitive prices and better quality and Lexmark which had a chance to compete HP and raise its sales and market share HP faced two companies rather than one which makes them to lose control and management rather than being a standard company in printer's specialization
Fortune, February 07, 2005.
"One bad PC business merged with another bad PC business does not make a good PC company."



References:
Burgelman, R, & McKinney, W 2006, 'Managing the Strategic Dynamics of Acquisition Integration: LESSONS FROM HP AND COMPAQ', California Management Review, 48, 3, pp. 6-27, Business Source Premier, EBSCOhost, viewed 4 February 2012.

Child, J. (2005) Organization: contemporary principles and practice. Malden, MA: Blackwell Publishing
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Luai,

As an owner of a HP Pavilion Desktop I was intrigued by your second example of HP and Compaq merging with-one-another and the quote you concluded with saying, ‘One bad PC business merged with another bad PC business does not make a good PC company’.

Your conclusion, however, made me wonder as to how HP would be able to compete on the Korean market, with Samsung, LG and various other Korean & Japanese brands, if it really was so bad. 

According to Burgelman & McKinney (2006), yes the merger posed a lot of difficulties during the first three years up until 2005 as their competitive effectiveness was a subject of debate, but, according to Rosen (2008), the merger proofed to be very successful indeed whether by market share, market leadership or increased shareholder value. 

Rosen (2008) further states that in 2005 Carly Fiorina, CEO and Chairman, was replaced by Mark Hurd who by 2008 transformed the merger by creating a growing, profitable and increasingly valuable company that became a world leader in technology. 

This is further supported by Burgelman in LaPlante’s 2007 article, where he states that Hurd managed a far better job, where Fiorina failed, at analyzing the market and thus adjusting HP’s corporate strategy by having 1500 full-time employees, including HP leaders, work on short and long term goals that helped to define the new organization and thus achieved upcoming operational and strategic integration phases.

Do you believe, even though this merger has proven to be successful, that it has gotten rid of its international problems produced by the 2002 merger or that it still has to deal with a few after-effects?

Thanks,


Andrew


References:
Burgelman, R, & McKinney, W. (2006) 'Managing the Strategic Dynamics of Acquisition Integration: LESSONS FROM HP AND COMPAQ', California Management Review, 48, 3, pp. 6-27, Business Source Premier [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed: 6 February 2012)

Rosen, B. (2008) ‘The Merger That Worked: Compaq and Hewlett-Packard’ USA: Huffington Post [Online] Available from: http://www.huffingtonpost.com/ben-rosen/the-merger-that-worked-co_b_95873.html (Accessed: 6 February 2012)

LaPlante, A. (2007) ‘Compaq and HP: Urge to Merge Was Right’ Stanford: Stanford Alumni Magazine [Online] Available from: http://www.gsb.stanford.edu/news/bmag/sbsm0711/kn-merge.html (Accessed: 6 February 2012)
 
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I can tell you defiantly the leader chip plays a great role especially for hp company changing in their leader got them to the top again but again the fault they made was a big mistake.

I can tell you something that compact as a company is nearly forgotten and the name is not mention a lot meaning that hp tried to get their name instead and solely they came back to the top checking the market now a days you can find hp is better than dell.

But still as I said that there is no existence to compact because what I think they started to change it to hp solely "brain of compact holding hp name"



References :
accessed on the 7th jan at 18:30

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Luai,

You have a point about Compaq stepping into the shadows and working from behind as some partners believe that the greatest advantage brought forth by the merger was the enterprise focus Compaq brought to HP as well as some solution providers believe it seemed like Compaq buying HP because Compaq's sales approach and enterprise focus dominated thus allowing to get into new ventures and product lines whilst sticking to a sole vendor (Wright, 2011).

The above complies with your "brain of compact holding hp name" view of the merger.
In Wright’s 2011 article, Don Richie, CEO of Sequel Data Systems, a Compaq partner prior to the merger in Austin, Texas, believes that HP acquired Compaq not solely and primarily for its PC business but to acquire Compaq’s enterprise products. 

As it was an acquisition that merged two big players together, there is always likely to be a dominant one that directs the other player while the other player’s name carries most of the fame just as a coach and number one football player or a director working with the same actor. Many organizations do not care much about being in the spotlight as long as they reap the fruits of their labor and profit substantially. In a merger only one name needs to be provided, in this case HP, although if you look around the internet for HP notebooks you will find many branded as HP Compaq or simply carrying model codes HPQ.

Regards,


Andrew



References:
Wright, R. (2011) ‘The HP-Compaq Merger: Partners Reflect 10 Years Later’ CRN [Online] Available from: http://m.crn.com/69720/show/2a57da078468e377d6ea5ae9b3b2df3d&t=e8d7b5611a6dc862ad1e1acbeb90ef2f (Accessed: 8 February 2012)

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Week 5 Hand-In Assignment:


Rolls-Royce: How it overcame technical and the cultural obstacles in successfully implementing the organization’s ERP project


A Brief History of Rolls-Royce

The idea of Rolls-Royce came about at a meeting on May 4 1904 (Madslien, 2004) but the company wasn’t founded until 1906 by Henry Royce, a successful engineer and Charles Rolls, the owner of one of the first car dealerships in London, after the selling their first batch of cars branded ‘Rolls-Royce’ (Rolls-Royce, 2012)(Susiwala, 2011). Rolls-Royce earned the name of its Silver Ghost model being the best car in the World and upon this success the company grew producing and selling the model steadily up to 1925 although its’ last ever batch was in 1927 (Susiwala, 2011). It has become one of the most recognizable brands in the world during its 107 year lifespan, manufacturing expensive vehicles and producing aircraft engines during the World War thus focusing on aviation and automotive division (Madslien, 2004), and is now owned by BMW with last year’s biggest markets being China and North America and an overall rise in sales of 30% in the Asia-Pacific region where the economy is keeps growing (Milmo, 2012).


Enterprise Resource Planning (ERP)

An ERP Systems is an advanced modern complex technology integrating and coordinating almost all functional areas, such as manufacturing, finance, procurement and distribution (Yusuf et al, 2004), in a modern organization supporting most aspects of a company’s information needs (Kholeif et al, 2008). These systems, such as the SAP R/3 selected by Rolls-Royce (Yusuf et al, 2004), may come at a cost of tens of millions of dollars but according to Ladley (2010) one major issue is that these systems are implemented the same way as their predecessors by companies and therefore, even though the right platform is provided to develop integrated data, corporate willpower to treat the data in the correct manner lacks, thus producing the same over-rides and errors as before. The latter is further supported by Yusuf et al (2004) by stating that they need to be managed well and even though many companies have benefited as expected, a good amount of other companies weren’t ready for integration or flexible enough they didn’t experience the full rewards with some companies even filing for bankruptcy due to their rigidity.  


Technical Obstacles prior to and after the ERP Project

Prior to the implementation of the ERP system Rolls-Royce used over 1500 systems which were mainly developed by the company itself and were expensive to operate and lacked the accuracy, consistency and accessibility in providing the data necessary to make timely decision-making and performance-based assessments. The latter represents the main technical problem, being the accuracy of data, as the new system required the old systems’ data in order to format it into a sensible data repository of the ERP system, although the duplication of data was a major concern and therefore tackled in three phases over three years until all of the old systems were no longer necessary. 

In the first quarter of 1998 the first phase took place which essentially assessed the situation to come up with an outline plan and the finances involved by performing a brief and intensive study and thus a committee was established for financial guidance in the project.  

The second and third quarter saw the implementation of Phase 2 and the detailed planning which lead to a prototype system based on the Rolls-Royce Allison model drawing all existing projects together and merging them whilst analyzing and customizing said prototype over a 5month testing and development period. This early deployment was an extension to the original plan in order to tackle any difficulties found with SAP and therefore ran from the last quarter of 1998 to the second quarter of 1999, whilst at the same time implementing Phase three which was so large it had to be divided into two parts lasting a total of nine quarters focusing on the physical implementation and architecture, hence up until March 2001.

The first part of Phase 3 replaced all of the old systems developed initially by Rolls-Royce whilst introducing a new system and towards its end it saw the foundations being laid down by a SAP pilot project which paved the way to fully ‘go live’. After the first part of Phase 3 was finished the second part commenced in which SAP became the executive system and the old systems became totally phased out as the system covered the whole organization by the first quarter of 2001.


Cultural Obstacles prior to and after the ERP Project

Problems faced in a cultural sense by the implementation of the ERP system were that some functions and processes would perhaps demonstrate a lack of appreciation compared to the old systems and therefore the project team had to tackle this possible outcome by highlighting the advantaged posed and improvements made to the organization as a whole. This lead to specialist and mass-user training being carried out by SAP in collaboration with EDS consultants in order to break down traditional barriers and departments to prepare all employees for the changes in working approaches.


Analysis and Conclusion

Rolls-Royce along with the help of EDS consultants systematically implemented the ERP SAP R/3 system successfully by phasing out the legacy systems and thus overcoming the problem of transferring the data of these old systems, whilst having its employees trained, prepared and adjusted to the cultural changes in the work place that would secure the right approach to integrate data into the new system. By carefully planning ahead and staying flexible to adjust and customize the pilots to create an optimum system that works for Rolls-Royce, it managed to gain the implementations' full benefits.



 

References:
Madslien, J. (2004) ‘Rolls-Royce cars enter second century’ BBC News [Online] Available from: http://news.bbc.co.uk/2/hi/business/3671029.stm (Accessed: 7 February 2012)

Susiwala, A. (2011) ‘Rolls Royce-The Ultimate Symbol of Success’ LiveO Magazine [Online] Available from: http://www.liveomagazine.com/article/rolls-royce-the-ultimate-symbol-of-success-193.html (Accessed: 7 February 2012)

Anon (2012) ‘Rolls-Royce history timeline’ Rolls-Royce [Online] Available from: http://www.rolls-royce.com/about/heritage/timeline/ (Accessed: 7 February 2012)

Milmo, D. (2012) ‘Rolls-Royce hits new sales record on Asian demand’ The Guardian [Online] Available from: http://www.guardian.co.uk/business/2012/jan/09/rolls-royce-sales-record-asian-demand (Accessed: 7 February 2012)

Kholeif et al (2008) Enterprise Resource Planning: Implementation and Management Accounting Change in a Transitional Country [Online]
Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed: 7 February 2012)

Yusuf et al (2004) ‘Enterprise information systems project implementation: A case study of ERP in Rolls-Royce’ Int. J. Production Economics 87 (2004) 251-266 [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed: 7 February 2012)

Ladley, J. (2010) ‘Making EIM Enterprise Information Management Work for Business’ [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed: 7 February 2012)


 

Monday 30 January 2012

MGM - Week 4: Discussion Question, IR & Responses

Welcome to Week 4 of the MGM!

Below you shall find this week's Discussion Question (DQ) as well as my Initial Response (IR) to it followed by the Discussions had with my professor and fellow student. The post ends with my hand-in assignment for the week.


Regards,


El Tanoderno
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Week 04 Discussion Question


Reading: Child, J. (2005) Organization: contemporary principles and practice. Malden, MA: Blackwell Publishing.

In working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for references you make to relevant examples from real companies.

Examine the implications of new technologies on organisation, using examples from your own company or another organisation you know well.
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My Initial Response to Week 4's DQ: 
Implications of New Technology on Organization

The past few centuries have seen tremendous advancements in technology that shaped the way we make business in the 21st Century, from the Industrial Revolution in the 18th Century to entering the Modern Age in the 20th Century and up until now, which has become known as the ICT Revolution, Digital Era as well as the Information Age (G15, 2008) amongst many others

Since the 1950s technology has made significant changes within organizations as organization has no longer to focus around hierarchy and the accumulation, storage and distribution of information as much as in traditional vertical organizational structures, bureaucracies, where the main focus was ‘command and control’ (Zammuto et al, 2007).
Instead of using a rainforest of files in copious amounts of file-cabinets, a company’s accumulated data is generally stored in a main computer that is kept secure, just as was the case during an internship at the IT department of Kuoni.

Compared to our forefathers we have such an array of new tools it will be difficult not to leave a good amount of these out and how they have facilitated as well as the continuous development of said tools and how they keep facilitating, not to mention impacting, on the way we work in organizations. The way these new technological advancements impact the structure of an organization and the processes within an organization is evident in both.

One aspect in which an organization benefits from technology is by reducing a company’s costs of information processing and communications by annually increasing processing power and through enterprise-wide systems that create a single database hosted on a server providing automated processing and analytical reports (Zammuto, 2007). 

How does saving costs translate into organization? Simply by saving money the organizational processes that need more focus, now, have another financial backing source. Resources can now be increased to reward, control and integrate or by focusing on customer needs and invest more into the R&D department to make that new gadget the crowd so eagerly would like to have. In a structural sense, these systems allow integration to occur across organizational boundaries, i.e. the vertical hierarchy, and by the integrative aspects these systems provide they decrease the necessity to use hierarchy to manage information flows and coordinate tasks, thus perhaps making certain positions obsolete within the chain of command. This ultimately allows people to organize around their function itself as an employee and how the information may benefit the organization as a whole (Zammuto, 2007) by increasing the speed and reliability of transaction for both business-to-business (B2B) and business-to-customer (B2C) transactions (OECD, 2005).

Another example, whilst I was Assistant-Delegate Manager at Richmond Events (RE) in London, a fellow colleague found out she was pregnant but, even though the company was to give her maternity leave, she decided to work from home using the company laptop which allows her full access to the intranet used by RE and hence the data of all clients as well as being updated in real-time. This meant RE didn’t have to find a replacement that wouldn’t perform all responsibilities as well as my colleague due to unknown terrain, thus keeping the process-based activities fully intact which wouldn’t have been able without the necessary technology.

Due to the successful integration of working from home, which has been on the rise in Europe from the 90s (Brocklehurst, 2001), she now regularly works from home although mainly from the office. This freedom relaxes and decreases stress found in the workplace thus increasing performance.

Sitting amidst this revolution and looking at the impact and implications a question might arise to some. How will our dependence on technology fare on our overall performance in an ever competitive market in which people become obsolete due to the convenience of technology?



References:
Brocklehurst, M. (2001) ‘Power, Identity and New Technology Homework: Implications for ‘New Forms’ of Organizing’ Organization Studies, 22/3 [Online]
Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 28 January 2012)

Anon (2005) ‘ICT, E-Business and SMEs’ OECD Digital Economy Papers Number 88 [Online]
Available from: http://www.oecd.org/dataoecd/6/9/31919255.pdf (Accessed 28 January 2012)

Zammuto, Raymond F. et al (2007) ‘Information Technology and the Changing Fabric of Organization’ Organization Science Vol.18 No.5, September-October [Online]
Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 28 January 2012)

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Good, Andrew. Regarding your employee who is
working from home do you know the percentage of
employees in your company  who are allowed to do
so? Has the company reviewed the data that confirms
that most employees are more productive at home, or
why do you think the company went this way?  Best, Dr. L.

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Dear Dr. Lapkoff,

Richmond Events’ London branch currently employs an estimated 30 employers, although during my time with the company and prior to the Credit crunch there were about 50 employees which were divided more or less equally by occupying two floors. 

During my three years at RE, as called by employees, I’m only aware of my colleague telecommuting on such a regular basis, although others, from time to time, were given the same privilege but on a far less regular basis. The reason as to why she enjoys the freedom of telework more than others is primarily because she is a very diligent, highly time-organized, efficient and disciplined worker that dedicates oneself to deliver no matter how stressful it might get whilst raising her first-born son by herself. 

Therefore, on the basis of trust built up through dedicated hard work instead of reviewing any data, she was given the regular privilege of teleworking. 

This complies with the following,

‘First, telecommuters may be more productive because they receive additional training and/or are selected to become telecommuters because they are already the most productive employees.’ (Butler et al, 2007).

Other employees enjoyed other privileges which were suited to their needs. My senior, for example, was given the privilege of taking her family, each entire summer, to her villa in Spain or leave early in order to pick her kids up from school. During this time I would take on her full responsibilities and report directly to the Logistics and Supply Chain Team Manager whilst maintaining contact with her by e-mail.

London’s RE Branch is rather small and with a pronounced horizontal structure due to consisting of 6 teams, Marketing, Logistics & Supply Chain, Finance, PIMS International and HR as well as IT, which all work independently from each other and therefore RE functions with low specialization and high discretion. Each team has a team leader who controls each team and reports directly to the manager of the branch whilst cross-conferring with other team managers, especially IT and Finance. 

Through this process-based approach employees are given a lot of freedom, although under one condition, which is to work diligently and to get the right results otherwise one may be made redundant. The same colleague that became pregnant was also given a one week holiday to Miami with her son as thanks for her hard work prior to becoming pregnant.
What has to be taken in consideration is that telecommuting is only performed on a short-term basis at RE and not made the principle manner of working. 

‘…many organizations offer telecommuting as an option, but are not strongly encouraging it. This is a very telling indicator that telecommuting does not deliver, at least at the level of the whole organization…’ (Westfall, 2004).

It is rather used as a strategic tool to help maintain productivity, which is even found to be sustainable whilst increasing productivity not just on a short-term but also long-term basis (Butler et al, 2007).  

Regards,


Andrew


References:
Butler et al (2007) ‘Does Telecommuting improve Productivity: Seeking solid evidence of demonstrable productivity gains’ Communications of the ACM, April, Vol.50, No.4 [Online]
Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 30 January 2012)

Westfall, Ralph D. (2004) ‘Does Telecommuting Really Increase Productivity?’ Communications of the ACM, August, Vol.47, No.8 [Online]
Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 30 January 2012)

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Dear Andrew,  

The company I work for also applies the work-from-home approach in its organisation to some of its employees, however not on an everyday basis (meaning they will stay in the office a couple of days a week). While some of them cope with their work responsibilities (largely depending on ICT), for others it is not the most suitable way to work. There was an example of my former colleague who was exceptionally allowed to work from home on a permanent basis due to her family situation and she quit after 1 month, because according to her could not bear stress of “job” and “home” at the same time in the same place.

Do you think there is a risk that applying this approach can lead to family-to-work conflict bringing negative impact on the performance of the employee who works from home?

Thank you.

Vita 
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Dear Vita,

Thank you for your interest in my post and contributing to it with a stimulating question. 

In my personal opinion, I do believe that working from home on a permanent basis may be far more productive for some people provided they have their own office area of the house to provide them with a designated workplace. 

Another condition, for this to work is self-discipline and the ability to work at times of domestic stress and the pressure of a deadline. It isn’t, most certainly, an approach to work that should be adopted on a large scale in my opinion as most people aren’t fit to handle all of the responsibilities, but there are a few that would excel in such a working environment. 

According to Standen et al (1999) Telecommuting has both positive and negative effects which directly affect family relationships and quality of life as well as one’s psychological well-being and performance as the work-family boundary is reduced.  The same paper also states that work-family conflict due to this boundary crossing is expected to happen.
If one is single, strong-minded and reliant or with family, but has things domestically under control, then this might be just what that persons needs in order to balance and manage each responsibility in a time-frame that suits the relevant situation, thus increasing productivity by the overall control of one’s life in all aspects. This control, however, may cause tension between family members if they are overly monitored (Standen et al, 1999). 

In regards to you former colleague, I believe she just wasn’t fit for such an approach on a permanent basis even though she was exceptional. Depending on what issues you former colleague had at home, maybe the reason as to why she was exceptional at the workplace is that it was her escape from whatever issues she was facing at home and hence company served as her retreat. If this was the case, then yes, at the workplace she could breathe freely and therefore perform at the level she did, but once she had to come face-to-face with her issues at home she had nowhere else to retreat anymore and thus the approach backfired in the way it did by rupturing her pressure-threshold.  

Standen et al (1999) also mentions that the home is traditionally perceived as a refuge and that telework could blur out that spatial designation, although in your colleagues case this role might have been reversed due to her issues at home, and that this overlap of roles, between home and workplace, creates new stressors that may likely to produce states such as tension, anxiety, fatigue, and depression.

Do you believe if she was perhaps allowed to come in just twice or three times a week and work the rest of the week from home on a permanent regular basis, that she might have managed better? Or perhaps her full-time telecommuting should have been introduced step-by-step to prevent ‘sudden immersion shock’?

Regards,


Andrew



References:

Standen et al (1999) ‘The Home as a Workplace: Work-Family Interaction and Psychological Well-Being in Telework’ Journal of Occupational Health Psychology 1999, Vol. 4, No. 4,368-381 [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus/ (Accessed 1 February 2012)


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Dear Moses,

I have to agree on your concluding sentence that in the modern business world the ability to stay ahead in the development and use of new technology can determine how competitive a company remains or even the company’s survival.

Samsung Electronics, for example and as I mentioned in my Initial Response last week, is currently the World’s biggest technology company by sales as of 2009 pushing ahead of HP (Song & Oliver, 2010). It continues to push forward as in the previous year Samsung overtook Apple to become the World’s smartphone leader selling an estimated 11m more phones than Apple in its third quarter (Arthur, 2001), and the world’s top maker of memory chips and smartphones, estimated its profit would jump up 73%(Kim, 2012) and thus to a lifetime high (Reuters, 2012). 

Clearly this wouldn’t have been possible if Samsung Electronics didn’t invest into its R&D department in order to maintain the pole position or strategically invested. In fact, since it was incorporated into the Samsung Group in 1969, as the group’s first venture into the electronics industry, till the early 1990s, it had done little to upgrade its capabilities in product design and development. According to Kim (1997), between 1993 and 1995, Samsung Electronics strategically invested into and acquired eight foreign firms covering a broad spectrum of technology such as telecommunications, computers and semiconductors diversifying further into the information technology sector. Kim (1997) further states that Samsung Electronics re-oriented the nature of its non-production linkages with foreign firms to help foster the development of the design and marketing capabilities it has lacked in the past, frequently through acquisition.

One might say that 1996 was the deciding year for Samsung Electronics’ success it enjoys nowadays as Chairman Lee Kun Hee launched the New Management Movement by declaring that “design would be a source of corporate competitiveness in the new century” and thus hired six professors to teach at the newly established IDS (Innovative Design Lab of Samsung) to teach design courses to Samsung’s designers resulting in winning the Industrial Design Excellence Award in 2003 for its products (Chang 2011). 

Further, according to Chang (2011), Samsung Electronics became the top-ranked firm for design excellence and created a new ‘strategic product system’ in which all business divisions work around-the-clock to develop new and better products.
‘R&D at Samsung

Innovation is crucial to Samsung's business. As new technologies are being constantly introduced to the market, speed is essential for remaining competitive in today's digital era, and new markets have to be pioneered continuously. Through the interplay of creative, imaginative people; a global R&D network; an organization that encourages collaboration and cooperation among business partners all along the supply chain; and a strong commitment to ongoing investment, Samsung has put R&D at the heart of everything we do.’(Samsung Electronics, 2012)

So yes, a business requires the aptitude and ability to invest appropriately into R&D in order to stay ahead, which in my opinion Samsung Electronics is a great example due to its problems prior to 1996 and how it flipped the coin to become the World’s leader in technology.

Regards,


Andrew

References
Song, J. & Oliver, C. (2010) Samsung beats HP to pole position [Online] Seoul: Financial Times. Available from:

Arthur, C. (2011) Samsung overtakes Apple to become world smartphone leader [Online] The Guardian. Available from:

Kim, M. (2012) Samsung to report Q4: Eyes on smartphone sales, spending plans [Online] Reuters. Available from: http://www.reuters.com/article/2012/01/26/samsung-idUSL4E8CQ2LK20120126 (Accessed 31 January 2012)

Reuters (2012) Samsung forecasts best profit ever [Online] Available from: http://www.theglobeandmail.com/report-on-business/samsung-forecasts-best-profit-ever/article2293082 (Accessed 31 January 2012)

Chang, S. (2011) Sony Vs Samsung: The Inside Story of the Electronics Giants' Battle For Global Supremacy [Online] Available from: http://books.google.co.kr/books?id=4Y5y0IpuheYC&pg (Accessed 31 January 2012)

Samsung Electronics (2012) R&D at Samsung [Online] Available from:
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Week 4 Hand-In Assignment:


Special Organization Features within Companies
The Case of Southwest Airlines and Semco

Southwest Airlines

Southwest Airlines (SWA) was founded in 1967, by Rolling King and Herb Kelleher (Muduli & Kaura, 2011), and from day one other competitors in the air-travel industry, such as Texas International and Braniff Airlines, tried to boycott SWA to take off, by using any means possible by law, as well as politically, but, to no avail as the company grew to become one of the most successful airlines in history (Child, 2005). 

In 1971 it started its operations serving the intrastate Texas cities, Dallas, Houston and San Antonio, becoming the 7th largest US airline by 1993 (Muduli & Kaura, 2011) and covering 59 US cities by 2004. Two years after it started operating, it became profitable and has been profitable until 2009 when it experienced its first ever losses (Wheelan, 2011). 

It became an $11.7billion business by 2004 (Child, 2005), with a net income of $499million in 2006, employing over 32,000 Employees (McGee-Cooper et all, 2007) without having any redundancies ever. The latter highlights one of the three main components of SWA’s policy, which are job security, minimum hierarchy and bureaucracy, as well as a consistently applied corporate culture (Child 2005). This approach to internal culture is taken seriously evident through the following two mission statements and the following examples which demonstrate these.

‘We are committed to provide our employees a stable work environment with equal opportunity for learning and personal development…above all, employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest customer.’ (Child, 2005)

One unorthodox strategic adoption at SWA is that customers come second, as Kelleher and Colleen Barrett, his legal secretary and partner, believe that employees can only serve customer with exemplary and memorable service if employers were supported in the same way (McGee-Cooper, 2011), therefore providing employees with flexibility at the work place, recognition and appreciation for outstanding performance to stress the importance of positive attitude instead of one’s skills (Muduli & Kaura, 2011).

This approach has resulted in SWA in an overall high customer satisfaction through customer friendliness, achieved by primarily focusing on its employees’ well-being, even though its departures were only 76% punctual of the time and had a higher rate of baggage loss than the national average (Wheelan, 2011).

 ‘To help create the SOUTHWEST SPIRIT and Culture where needed; to enrich it and make it better where it already exists; and to liven it up in places where it might be floundering.’ (McGee-Glover, 2011)


Semler’s Semco

Semco is a manufacturing company that extended its services to the internet (Semler, 2000), based in Sao Paulo, Brazil, and led by Ricardo Semler, who took over his father’s business in 1980, a self-proclaimed maverick as he puts more value on responsibility than pyramidal hierarchy and thus adopted several unorthodox ways since his rise to CEO (Semler, 1994). As soon as he took over, he made most top management positions redundant, by cutting 75% of corporate staff by 1982, and remodeled the structure from 12 layers (Child, 2005) to have just three layers by removing most job titles (Colvin 2001) as the company was almost bankrupt at the time (Child, 2005).

Semler himself states in his 1994 Harvard Business Review paper that he just owns the company’s capital as he doesn’t belief in control and therefore reconstructed the company to govern itself rather than him owning and controlling it. He further states that his unique and unorthodox approach is based on three principles which are employee participation, profit sharing, and open information systems.

‘Executives set their own pay, and everyone in the company knows what everyone else makes. All workers set their own hours. Every employee receives the company's financial statements, and the labor union holds classes on how to read them. Workers choose their managers by vote and evaluate them regularly, with the results posted publicly.’ (Colvin, 2001)

One might say the company’s strategic approach is run like a democracy rather than a business by giving this amount of freedom to its employees and thus doubt its success as traditionally a company is defined by boundaries and control, but this approach including the value of free-time away from the office and time for creative thought in the office has raised Semco’s profits from $35million to $160million during 1998 and 2004 (Shinn, 2004). Even the workplace environment is affected by Semler’s free-thinking vision in action as there are no private offices or any policy on office attire and neither Semler himself, or his employees share the privilege of personal assistants or extra auxiliary hands and therefore are self-responsible.

Analaysis and Conclusion 

Compared to most companies’ approaches these two companies not only stand out in their specific industries but throughout the global markets in their approach to managing a company. Southwest Airlines has its employees at the center whilst focusing on their well-being and thus produces customer satisfaction compared to the more traditional approach which focuses on the needs of the customer, and this is what makes this company so special. 

Semco also focuses on its employees although in a totally different way which reminds one more of a democratic revolution taken place and making other companies look more like military regimes. It feeds of the freedom given to its employees which is enjoyed only by a very few employed workers on the planet and this is what makes this company special.

What both share is a very humanitarian approach focused around their workers.



 
References:

Wheelan, D. (2011) All Grown Up [Online] Available from:

Muduli, A. & Kaura V. (2011) ‘Southwest Airlines Success: A Case Study Analysis’ BVIMR Management Edge, 2011, Vol. 4 Issue 2, p115-118, 4p [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)

McGee-Copper, A. et al (2008) ‘The Power of LUV: An Inside Peek at the Innovative Culture Committee of Southwest Airlines’, Reflections, 2008, Vol. 9 Issue 1, p49-54 [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)

Colvin, G. (2001) The Anti-Control Freak in Ricardo Semler's company workers pick their own hours and the CEO has a temp job. Yes, it works [Online] Available from: http://money.cnn.com/magazines/fortune/fortune_archive/2001/11/26/314107/index.htm (Accessed 31 January 2012)

Semler, R. (1994) ‘Why My Former Employees Still Work For Me’ Harvard Business Review January-February [Online] http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus  (Accessed 31 January 2012) 

Semler, R. (2000) ‘How we went digital without a strategy’ Harvard Business Review September-October [Online] http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)

Shinn, S. (2004) ‘The maverick CEO’ BizED January/February [Online] Available from: http://www.liv.ac.uk.ezproxy.liv.ac.uk/library/ohecampus (Accessed 31 January 2012)