Career strategies

Interview with Dr. Richard Daft, Professor at Vanderbilt University

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Internationally renowned expert, Dr. Richard Daft has been an industry leader in organizational management. He has published 12 books, dozens of articles, and presented at more than 45 universities around the world. Being a former Associate Dean at Owen, Dr. Daft has also developed and managed the Center for Change Leadership, participated in more than $500,000 in research grants, and is a Fellow of the Academy of Management. Dr. Daft is currently professor at the Owen Graduate School of Management, Vanderbilt University. He is the author of the textbook (10 edition), Management. He shares his insight on several management topics this week:

Discuss how you got involved studying management and becoming professor at Vanderbilt University.
During my last semester of college, I met a young professor in the business school. As I learned about his work, I was intrigued, but felt that becoming a professor was too far out of reach. A couple of years later while working in Marshalltown, Iowa, I was in the library and came across a textbook on organizational behavior. I was so interested in the subject matter that I realized in that moment that I would try to be become a professor in organization studies. I came to Vanderbilt 24 years ago when a position opened up and I was ready to make a move from a large state university to a smaller private university. I applied for the position and got it.

What do you feel are the major challenges for American businesses faced with the realities of globalization?
For me, the issue comes down to qualities of both leadership and management. Globalization makes every industry more competitive. Thus businesses have to be super efficient, which is a function of management control and accountability. Businesses also have to be forward-looking and innovative, which is about employee creativity and engagement that are awakened by leadership.

What key leadership traits will be important as the world faces an uncertainty future?
I would say a certain amount of courage, vision and/or purpose, persistence, great soft skills, and knowing oneself. By knowing oneself, I mean knowing your own strengths and weaknesses, and choosing situations that take advantage of your strengths and accommodating weaknesses through others’ strengths. By great soft skills, I mean that people who genuinely care about and get along with others seem to thrive in any environment.

There are 20 million unemployed in our country. What are the positive things for these people to look forward to in 2014 and beyond?
It is hard for me to be positive about the huge number of unemployed people in our country. The trend I am most aware of is the growth of technology that is replacing the need for workers. More businesses are creating or buying technology to do work more efficiently and for less cost than hiring employees to do the work. Hence businesses are thriving while unemployment is decreasing very slowly. I also feel a personal frustration with the legislative and executive branches of our government which seem more loyal to their respective ideologies than to solving the unemployment problem. I would like to see the government focus on designing an economic system that ranks full employment as a top priority.

Any other comments:
I appreciate the opportunity to respond to your questions. I hope the Management text is working well for your students.

Best regards,

Dick Daft
Professor
Vanderbilt MBA Program 

Please share your comments on this topic.

Richard-Daft

ABOUT THIS EXPERT

Byline

Professor Daft is among the most highly cited academics in the fields of economics and business. Richard Daft is studying high performance mental models – which include cognitive models of high performing managers – and examining high performance management systems. He has been involved in management development and consulting for companies and organizations such as the American Banking Association, Bell Canada, Bristol-Myers Squibb, J.C. Bradford & Company, Ford Motor Company, Pratt & Whitney, USAA, First American National Bank, the Tennessee Valley Authority, Central Parking Systems, Performance Food Group, the National Science Foundation, Northern Telecom, State Farm Insurance, the United States Air Force, the United States Army, and Vanderbilt Medical Center.

Education:
B.S., University of Nebraska, 1967
M.B.A., University of Chicago, 1971
Ph.D., University of Chicago, 1974

Opting Out: How to Increase Worker Satisfaction

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Many managers are clueless.  Some bosses think because employees have a job despite the  financial crisis, employees should be happy.  When the pressures of globalizations are upon American businesses, companies need workers to achieve high performance.

In my book, Breaking Organizational Ties: How to Have a More Fulfilled Life in Your Current Job, I researched and tracked the growing discontentment of some employees about their job situation. In fact, U.S. employee satisfaction is at a 20 year low.

Most employees do not trust their senior leadership to guide the  organization with their employees in mind.  Furthermore, cost cutting of  professional training and education and the lack of vertical advancement in organizations are creating a growing number of unhappy workers. Given these organizational constraints, employees seek to opt out by giving the organization the least amount of performance in order to keep their jobs.

Since the economic downturn, some employees are dissatisfied  with professional growth and career advancements in their jobs.  Gareth Jones and Jennifer George, authors of Contemporary Management, note that managers need to be mindful how they make decisions that affect employees.

Downsizing and outsourcing are a way of life for most organizations.  However, many times low morale in these organizations is  attributed to how employees are treated in this process.  Jones and George further suggest that managers should show compassion and empathy for layoff victims, by providing  employees with as much advance notice as possible about the layoff, and giving  clear information about severance benefits.

After the layoff, they can  also assist layoff victims in their job search efforts. These are a few of the ways in which managers can humanely manage a layoff. Richard Daft, author of Management, explains the importance of motivating employees:  “One secret for success in organizations is motivated and engaging employees. Most people begin a new job with energy and enthusiasm, but employees can lose their drive if managers fail their role as motivators.”

Therefore, managers need to inspire followers to minimize the number of individuals who ‘opt out’ in organizations.  Employees play a critical role in determining if they will ‘opt out.’ Marsha Sinetar, author of Do What You Love, The Money Will Follow, notes that the lingering consequences of employees who only work to obtain a paycheck: “Most of us think about our jobs or our careers as a means to fulfill responsibilities to families and creditors, to gain more material comforts, and to achieve status and recognition. But we pay a high price for this kind of thinking.”

Yet, if organizations are to be successful, they can’t afford their workers to be ‘opting out’ and providing less than superior performance against the backdrop of global forces. 

Discuss how managers can inspire employees toward greater job satisfaction.

© 2013 by Daryl D. Green

 

Leveraging Talent Advantages During Disrupted Change

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talent-management-photo

In his book 32 Ways to Be a Champion in Business, Earvin “Magic” Johnson notes how he developed his entrepreneurial spirit, took advantage of business opportunities, and used his economic power as a force for social change.

As a megastar with the Los Angele Lakers in the 80’s, Magic soon established himself as one of the best to ever play in the NBA.  Unlike other super-athletes who failed to make the transition from superdom after their prime, Magic used his athletic platform to give him access to some of the most successful business leaders in the world.

Loaded with the internal business drive he inherited from his father, Magic began to use his athletic instincts to his advantage in the business world.  Magic found power in building on his core strengths, not being consumed with his weaknesses:  “Rarely can you turn a weakness into a strength. Greatness is achieved by building on strengths and managing your weaknesses so they do not matter.”

Sadly, many professionals are also succumbed by their weaknesses too.  Rev. Joe Tolbert, a dynamic motivational speaker, warns about how culture influences our personal perceptions:  “The world teaches us to focus on weaknesses rather than strengths.” Given the tremendous financial turbulence in the world, today’s leaders need to focus on their talent management if they are to survive.  In this blog, I will examine the concept of talent management.

Talent management is a critical asset for high-performing organizations in a global economy. In fact, finding the best talent and retaining the best people in a business will eventually overtake many other advantages such as technology and capital.  Talent power will rule the future economy.

Talent management is defined as the process through which employers anticipate and meet their needs of human capital.  Yet, employees cannot dismiss talent management as only an employer’s duty.

Since the post-World War II era, workers have enjoyed a lifetime employment model where workers were assured of financial stability.  That is not the case today where younger workers can expect to change jobs frequently.

https://www.youtube.com/watch?v=gRjNHIGlykk

Peter Cappelli, author of Talent on Demand, outlines the dangers of poor talent management. In the past, with a good economy, American businesses could afford to mismanage their talent pool.  Today’s businesses often are short-sided and do not want to develop internal talent; instead, they are depending on others for their talent.

Cappelli explains, “Relying on outside hiring seems to fly in the face of the imperative that organizations should be engaged in knowledge management practices that capture and organize what they know about their operations to improve performance.”  However, these failures in managing this talent pool are often negative.  For example, having too many employees leads to layoffs and restructuring, while having to too few talented people leads to talent shortages.

John Wiedmer, Robert Wiedemer, and Cindy Spitzer, authors of America’s Bubble Economy, wisely forecasted the bursting of America’s bubble in 2008 while other economists were predicting economic fortune for all.  In fact, the authors now predict that an even bigger financial cliff is ahead for the world.  However, they advocate the importance of talent management: “The fall of America’s Bubble Economy will shake up many industries, drive businesses into bankruptcy, derail countless careers, and force dramatic numbers of workers into temporary unemployment.  It will also create thousands of successful companies that don’t currently exist, lead all sorts of people to rethink their life’s work, and make many entrepreneurs and investors fabulously wealthy.”

Most firms would prefer to invest in technology and automation to reduce their labor cost or outsource their labor needs abroad to obtain cheaper resources.  In the case of talent management, these short-term gains can be fatal.  Cappelli further argues for strengthening talent management in organizations: “Growing competition in product markets further weakens the traditional talent management model by sharply increasing the uncertainty associated with planning.”  Therefore, talent management becomes a vital component of corporate strategies for businesses that desire sustainable growth.

Discuss the concepts of talent management for today’s businesses.

© 2013 by Daryl D. Green

Writing for Greater Employability

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Sadly, I see too many people who feel that are helpless in life.  It is easy to see how some folks could be discouraged due to the current economic crisis.  There are more than 15 million individuals unemployed.  Good jobs are going abroad. 

Today’s companies view outsourcing as part of their daily operations.  Consequently, many working professionals are concerned about keeping their jobs.  Being viewed as a valuable asset to an organization is critical for sustainable employment. 

Gaining more influence can help working professionals with more job opportunities, increase their wealth power, and give them the confidence they need to be successful. In my new book, “Writing for Professionals”, I share advice with professionals looking for a tool to improve their employment prospects.  

In fact, people who are become recognized writers bring added value to their organizations, often measured in notoriety. There is nothing more powerful as being an industry expert. Prolific writers are often perceived as authority figures.

Therefore, professionals across the country can use the power of the written word to build their careers. In my new book, I provide a step-by-step guide needed to write for the recognition that results in better employment opportunities. 

 

We live in a media crazed world where communicators are highly valued and often the first to be hired. For many working professionals, the path to a better job, more authority, and greater peer respect is being published. Professionals across the country are discovering the power of writing for more influence. Therefore, it’s never too late for individuals to benefit from their insight and experience by putting their views on paper.  

Please share your thoughts on this subject.

 @ 2012 by Daryl D. Green

 

Job Creation Model for America

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Things are getting tougher at home. I run into a former neighbor who stated he was looking for work. He was a corporate manager for a Fortune 500 company. Sadly, the company had made some bad business decisions that left it with the decision of laying off staff. My neighbor was one of these causalities of downsizing. 

He had been earning over $80K. He stated that he was getting many job offers because of his experience that were offering him about $40K. He could not understand his plight. I explained the employment research I had been doing over the years. It is a buyer’s market with companies being the buyers. 

Therefore, my neighbor was part of the blue plate special for businesses. These companies were searching for highly qualified workers at the fraction of the cost while staying away from recent college grads or inexperienced prospects. Unfortunately, this is the reality of employment in a financial crisis. 

Last week, the Labor Department reported job growth had slowed and thousands of Americans were giving up on their job search. Of course, these results received attentions on all political fronts in America because it is a presidential election year.  

On the campaign trail, President Barack Obama explains how the economy is improving but slowly. His opposition, Republican Presidential candidate Mitt Romney, attacks the Obama administration for failed policies on the economy. Both presidential candidates set an interesting discussion on the role of the federal government in the economy. However, the most underpinning issue is who is best suited for job creation to 23 million unemployed Americans. 

The global economy is struggling even in emerging markets like China. Why would America be different? According to the Labor Department, the economy added only 96,000 jobs in August, which was down from 141,000 jobs in July. Additionally, unemployment fell to 8.1%, from 8.3%. This is not a positive statistic. The unemployment rate fell largely because 368,000 people stopped looking for work.

 

In fact, 64% of the working–age population was either unemployed or actively seeking work which was a record 30 year high. According to some economists, at least 150,000 jobs are needed each month to simply keep pace with population growth.

Job creation is a difficult concept. According to the financial dictionary, job creation is a “process by which the number of jobs in an economy increases.” In this partisan political environment, job creation is a hot buzzword without much practical application.

Some people may argue that the government is a job creator. Yet, the federal government, being bureaucratic and having a host of mission-oriented functions, is not equipped to handle this responsibility alone.

Others folks taunt businesses as the ultimate job creators. However, businesses were never started to be job creators as its primary mission. Ricky Griffin and Michael Pustay, authors of International Business would argue that businesses were designed solely as job creators: “The fundamental reason for the existence of a business is to create value (usually in the form of profits) for its owners.”

Therefore, a multinational company’s business strategy may not be in tune with job creation in America. Outsourcing relates to pulling various tasks from within an organization and getting this particular service outside of the organization.  Outsourcing continues to be a major tool for businesses.

Thomas Friedman, author of The World is Flat, makes a distinction between outsourcing and offshoring: “Offshoring, by contrast, is when a company takes one of its factories that is operating in Canton, Ohio, and moves the whole factory offshore to Canton, China. 

Therefore, it produces the same product in the very same way, only with cheaper labor, lower taxes, and subsidized energy, and lower health-care costs.” Countries search the globe for cheaper labor without considering the long-term perspective of their business strategies. I think you need to give the definition of outsourcing here to complete the comparison. 

Consequently, shipping more jobs abroad has a rippling impact across the globe. Globalization creates a more equitable average wage across the world while reducing the earning power of developing countries and increasing the living wages for emerging countries.

According to the United Nations’ Millennium Development Report, more than1 billion people on the globe live on less than $1 a day.  Ironically, as most Americans have watched their wages decrease, most other workers across the globe sees a significant increase.

The world’s middle income class earns between $700 to $7,500 per family member. Therefore, job creation has a different meaning on a global level because it produces a variety of winners and losers. Consequently, Americans must understand that the jobs that are created may not be fully realized in their own country. 

How do you define job creation in a global environment? What team arrangement (if any) can U.S. government and U.S. businesses create to help the 23 million unemployed in our nation? 

© 2012 by Daryl D. Green

Spotlight on Industry Expert – Caesar Andrews

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Periodically, NuLeadership Revolution discusses emerging trends with an industry expert.  We are happy to talk with Caesar Andrews this week.

Tell our audience a little about yourself.

My current adventure is in journalism education. Teaching ethics, writing and editing courses. Most recently at the University of Nevada, Reno. My transition to the classroom follows years of work in newsrooms.

 How did you start your career in this industry?

Interest in news goes back to high school. I majored in journalism at Grambling State University in Louisiana, with many hours spent working on the campus newspaper – great experience.

When first hired as a staff writer in Cocoa, Fla., I figured I would report for a few years, then move on to some other field of interest. Well, “a few years” turned into about 30 with the same company.

I did not start out feeling journalism was some kind of lifelong destination for me. But I ended up loving the work and the challenges (most days) and the many ways journalists get to witness so much of the world.  

Discuss your experience working in your industry.

I was fortunate to work with many talented people. I was fortunate to be part of newsrooms covering major events –launch of the first space shuttles, national political conventions, the Sept. 11 attacks, sports championships, and more. I likewise appreciated the impact of covering local community news.

I was able to work in markets big and small, from a weekly in Florida, where I was first promoted to manager, to the start-up staff at the national daily USA TODAY.

Other career stops were Lansdale, Pa., suburban New York, a news bureau in Washington, D.C., and Michigan, where I completed my Gannett Co. career in 2008 as executive editor of the Detroit Free Press. 

I enjoyed the improvisation found in newsrooms. Even during calm periods, breaking news was always on the verge of happening at any moment. A major project or something small but meaningful was always working its way toward publication.

Journalism is a great match for those with an appetite for constant learning. Lessons can be found all over. From sources. From an often critical public. From many wise souls who populate newsrooms.

And certainly from mistakes – the most painful ones can end up making you stronger. Even the knuckleheads encountered can play an educational role. An awful lot can be learned by observing what not to say, what not to do, and how not to be. 

What are some industry challenges over the next several years?

For traditional news media gatekeepers, the old iron grip on access to information and on steady growth in ad dollars is gone. For most consumers, unending streams of words, images, audio and video on almost any conceivable topic are just a click away.

Large portions of this information come from providers who do not label themselves professional journalists. But the impact on those who are journalists is unmistakable.

News organizations as well as individual news professionals are forced to sharpen their sense of purpose. The smart ones concentrate on making what they offer even more distinct. They specialize in content that extends beyond what readers, viewers and listeners can easily get elsewhere. 

Mastering the right delivery technology is one challenge, as more and more people bypass printed news pages and traditional network newscasts.  

Managing the clash of company motivations is another big challenge. Serving the civic good AND making a profit that sustains the business have to be reconciled. 

Tension between noble purpose and profit margins is not new, just more painfully apparent in this period of economic turmoil for traditional media. 

What steps are market leaders in your field doing to address these problems to ensure sustained success?

Media companies are fiercely rethinking how to thrive under new rules of the road. Not all will survive, as is the case in other fields disrupted by massive shifts in revenue, technology and other marketplace fundamentals. But there is no shortage of initiatives:

  • Every serious media organization is rewriting strategies. They are rethinking news content for digital users, refining their pitches to advertisers, and pushing to charge users for information consumed online.
  • Newsrooms are seeking workers who help identify and connect with targeted audiences. The best job applicants come armed with digital awareness.
  • Media organizations are consolidating, collaborating and remaking themselves in ways unimaginable not long ago. This is all driven by the need to reconsider traditional boundaries, especially as audiences, and therefore advertisers, dramatically change their patterns of media consumption.
  • Newsrooms are making use of more citizen contributors. Modern consumers expect wide-ranging interaction through media, not just old-style, one-way presentation of news. Citizens’ blogs, reviews, commentary and ubiquitous public comments online have altered the community conversation.

 What tips would you give individuals interested in getting into your industry as a new prospective employee?

Treat development of skills as if mining for gold. Place high value on curiosity.

Prepare to take on different opportunities, whether with established companies, or innovative start-ups, or as a freelancer, or in some other customized role you choose to create.

Any additional insight you would like to discuss?

The finest journalists hold on to some timeless principles that do not go out of style. They tell compelling stories that ought to be told. They practice the art of personal credibility.

Please share your comments with this industry leader.

(c) 2012 by Dr. Daryl D. Green

Caesar Andrews is a visiting professor in the Reynolds School of Journalism, University of Nevada, Reno. He holds the Paul A. Leonard Distinguished Visiting Chair for Ethics and Writing in Journalism at UNR. 

Previous visiting professorships were completed at Washington and Lee University in Lexington, Va., Arizona State University, Phoenix, and at  his alma mater, Grambling State University, Grambling, La. 

Andrews worked as a senior editor for the Gannett Co. for nearly 30 years, most recently at the Detroit Free Press and previously at newsrooms in Washington, D.C., New York, Pennsylvania and Florida.  He is a former president of the Associated Press Managing Editors and was an officer in the American Society of Newspaper Editors. 

He serves on the boards of directors for the Council for Higher Education Accreditation and for the Student Press Law Center.

Noriko Connects With Japanese Workforce

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Reiko Farr & Noriko Chapman pose for new Japanese book.

 There is nothing more flattering to a professor than a student taking his academic advice and being successful.  This situation played out for me with one of my own MBA students this year. However, this week she took it to a different level.  

 For Noriko Chapman, it has created an international collaboration between a local U.S. nonprofit organization and a global leader in the automobile industry which led to the empowerment and economic independence of disabled workers.   

Chapman, who is a DENSO production manager, had worked with the Tennessee Rehabilitation Center (TRC) in Maryville to help increase its operations efficiency as part of her MBA project. In 2009, the Maryville TRC was ranked at eighth in contract sales in Tennessee.

Its mission is to provide services that help lead individuals who have a physical and/or mental disability to employment and are designed to meet individual needs.

However, Chapman’s goodwill had many unintended consequences. She has had four versions of her first book published in one year, which is impressive for a beginning writer. She pledged 30 percent of the book proceeds to this organization. Chapman also helped to restore $75K of government funding to the Center. Chapman became connected to this organization.  She observed, “I was inspired by the staff and by individuals with disabilities who were trying very hard to learn work skills and seek permanent employment.” 

Through her first book, she was able to bring more attention by the media and the public in general to this disability cause. In fact, it landed the TRC’s director an expense-paid visit to DENSO in Japan.

DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier with customers that include all the world’s major carmakers. With more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan), DENSO had worked to assist the nonprofit organization with a contract that allowed disabled workers to earn income.  In reality, DENSO was offering these workers a second chance. Chapman had made this relationship possible.

For the month of December (2011), Chapman is on an international book tour in Japan with her new Japanese version of her book. She hopes her new book and tour will help women in Japan too: “Japan is a male-dominated society.  Even though the culture is gradually adopting to accommodate female workforce, the career advancement for women in Japan is still limited. The changes are not quick enough to satisfy thousands of bright, hard-working Japanese women.”

Chapman hopes to other corporations and organizations follow in DENSO’s footsteps and help provide second chances to those who need it around the world.

 Please provide your insight on this topic.

 © 2011 by Daryl D. Green                                    

 

Sustaining Employability

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When my job as human resource manager was eliminated in September of 2010, I felt a sense of gloom and doom for exactly two days. It happened on a Tuesday, one day after my six-year anniversary.

(At least they allowed me the mandatory six-year vesting period for my 401k.) By Thursday I was reminded of six years of morning prayers to be free of the job that caused me heart palpitations and migraines.

The entire management team was eliminated between July and the end of the year.  When I look back at what transpired, I realize the basic principles I was taught in business school were overlooked. Human capital was not an asset, thus, how could the business sustain?

The general manager used to say if we didn’t have to work or deal with customers, our jobs would be easy. The same rings true with human capital.  Looking back, a common thread my company seemed to have was they disposed of their assets too quickly.

If an employee needed help in a certain area, the answer was to terminate their employee. I always challenged the managers to invest in the employees.

After all, the employees were to provide a service for the company, right? Likewise, the company should provide a service to the employee by investing time into making them a more valuable asset.

Sharing is essential in business—big business. It is hard to assume not sharing what’s going on with business will foster a sense of well-being among employees. It is true you can’t share everything, however, keeping employees involved and in the loop on things, aid in the overall pulse of the organization.

Employees who know what’s going on are empowered, tend to work smarter, more efficiently and want to do a good job over all. In my case, morale was always low, thus making my job difficult.

As a result, before us managers met our ultimate demise, sales were dropping due to the failing US economy. Customer satisfaction ratings continually dropped during the last three years due to inconsistencies in product quality which I know were in part due to the incredibly high turnover rates we had.

# # #

What’s an HR Manager to do when she’s the one laid off? Thankfully, my husband has a job, and unlike many Americans who find themselves in the same situation, we are able to make it on one income.

I reinvented myself. My first love is writing and that’s what I aspired to do while working. I moonlighted as a novelist—touring, speaking and writing inspirational novels while holding down my full time job. Once I cooled off after my position was “eliminated,” there’s a new HR Manager now, I dug deep and found some freelance writing gigs that helped to build my almost nonexistent writer’s resume.

I’m a novelist, not a journalist—although I have a college degree that would say otherwise. The last year has been interesting: I’m encouraged one day and discouraged the next.

How am I sustaining? I’m pushing through on the days when I’m discouraged. I search for writing jobs and have had a few that paid me a little. I reach back into my skill bag and offer resume writing services. I write articles on effective management policy, write company manuals, or whatever is trending.

During a time that seems tumultuous, the only thing to do is to stay encouraged. For me, it’s the right thing to do. If my position hadn’t been “eliminated,” I’d still be trying to help someone else achieve their dream—not my own.

Please share your comments with this blogger.

                                            About the Blogger                                               

Daphine Glenn Robinson

Daphine Glenn Robinson acquired a Bachelor’s Degree in Mass Communications with a minor is Sociology from Winthrop University in Rock Hill, SC. She worked in administrative positions at the Rock Hill Herald and the Charleston Post & Courier newspapers before going to graduate school to pursue a Master of Business Administration Degree.

Robinson worked as human resource manager for more than ten years where she was responsible for employee relations, safety, benefits, and worker’s compensation.

Sustainable Job Creation

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Several weeks ago, I was exercising at the YMCA downtown.  I was starting my workout at the bench press and noticed a young man lifting a lot of weight (not typical for this recreational area).  He asked me to spot him with this heavy weight. I learned that he was a new professor at Lincoln Memorial University Duncan School of Law. 

I mentioned I was serving as an adjunct professor for the same school in the School of Business. We talked about various issues—as we both tried to complete our workout at the same time.  As I walked him through my strategy of giving MBA candidates practical application for studies, he asked me a question that stopped me in my tracks. He asked me what would I advise President Obama about the current financial crisis.  I didn’t have an immediate answer. I have always tried to deal with this economic crisis at the local level.  Yet, I knew what worked locally might not have the same results nationally.  Therefore, the answer was very complicated, especially regarding job creation.

We are in troubling times. In August of 2011, our nation posted no job gains.  This economic slump is historical since it’s the first time since World War II that the economy has had precisely net zero for job creation for a month. Retail, manufacturing, information services, and construction all lost jobs.

Furthermore, government employment fell by 17,000 as state government begun their budget exercises which included downsizing government employees including teachers and policemen.  According to some financial experts, the economy must add 13.7 million jobs over the next three years (381,000 each month) to bring unemployment from a current rate of 9% to 6%.

 With over 15 million people unemployed in our nation, worried U.S. citizens look to their government and/or business leaders for job creation. Is this faith misplaced?   The concept of job creation is a hot buzz word among politicians and media pundits.  Last week (September 8, 2011), President Barack Obama announced a ‘job creation jumpstart’ plan before a Joint Session of Congress.  A $447 billion American Act proposal, consisting of infrastructural upgrades, was proposed.  Yet, partisan politics make this job creation initiative an uphill struggle. Furthermore, many people doubt that the government can create any sustainable jobs. 

 

Other individuals look to businesses to create millions of jobs because they are considered commensurate with job creation.  They argue that giving businesses major tax breaks and other financial incentives will encourage them to create millions of jobs. However, anyone taking a basic course from the School of Hard-knocks understands that businesses primary mission is making profit for their investors.  

Financial experts applaud major outsourcing initiatives and layoffs by corporations because they feel it will lead to greater profitability for shareholders.  However, John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, suggest that a low cost strategy can backfire on a business. 

They note, “Perhaps, the biggest pitfall of a low-cost provider strategy is getting carried away with overly aggressive price cutting and ending up with lower, rather than higher, profitability.”  Despite an economic crisis, many U.S. corporate profits hit all-time highs at the close of 2010.

According to the Federal Bureau of Economic Analysis, corporations reported an annualized $1.68 trillion in profit in the fourth quarter. The previous record (without being adjusted for inflation) was $1.65 trillion in the third quarter of 2006.  For example, General Electric posted worldwide profits of $14.2 billion, while JPMorgan Chase’s profits went up 47%.  The financial firms were some of the biggest winners.

While the federal government provided aid during the economic downturn to save many of these ‘too big to fail’ institutions, these firms did not return the favor.

They found little incentive to provide loans to struggling U.S. businesses to assist in job creation. Their investors applauded their actions since it moved toward greater profitability. Yet, the public frowned on their self-servicing actions which were interpreted as market driven.

Given this financial crisis in America, there are two concepts at odds with each other.  They are economic viability and one’s quality of life.  Economic viability relates to creating jobs that are necessary for a business.  One’s quality of life involves an unwritten standard of living for a citizen to live reasonably comfortable given his or her work effort.   

This reality for many organizations has meant outsourcing high-cost activities such as manufacturing, to countries abroad like India, China, and more underdeveloped countries. 

If it costs $20 an hour for customer service in the U.S., would a business give up sending that work abroad for $1 per hour?  Therefore, companies that have a focus on a low cost strategy will continue to search for the newest lowest labor market to be competitive. 

Yet, this reality drives down the wages for US workers and the quality of life for U.S. citizens.  Therefore, the concept of job creation as it relates to sustainability is a difficult problem for any nation to solve.

As U.S. businesses deal with globalization and hypercompetition, is it possible to achieve economic viability and a good quality of life at the same time for U.S. citizens? If so, how?

© 2011 by Daryl D. Green

Guest Blogger – Career Opportunities in Operations Management

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Prof. Green had asked me if I could write something for the upcoming MBA graduates. I am happy to oblige because, in my opinion, a career in operations management is very exciting and full of opportunities.

There are a few important things to keep in mind as you start searching for a job in the field of operations management. Don’t be hasty Aim to find a job that will give you most responsibility. While the position will come with a learning curve, it will also make you a more valuable employee in the long run.

Let’s examine the following charts from Career Builder to give you a further look into the career of operations management:

Please take a look at the charts, before you read any further. Try to absorb the meaning behind the numbers.

Ask yourself the following questions:

Does education plays a large role in compensation? 

Does experience plays a large role in salary?

What is notable about the industry and compensation graph? 

Take a few minutes to think about these questions and see what hidden information those numbers hold. The ability to read between the lines is one of the most important things that an operations manager can do. This is something you will need to do on a daily basis.

Now that you’ve done the exercise. Let’s delve into it.

First, let’s notice how education gives you a large edge in salary compared to experience in this field. If you are getting MBA or Masters in operations management, you can pat yourself on the back. It would take you 20 years of experience to get a slightly lower salary just by working. This is of course a rough, aggregated date, but what it really says is: education will get you a higher position that will give you a higher salary compared to just getting experience in the field.

Under the ‘Compensation based on Industry’ chart, you can see that between the #1 industry (Health care) and the #6 industry (Aerospace and Defense), the salary gap is $30,000 a year (or  approximately 36% less), just based on one factor: field. All fields are not equal. Making a proper selection of what you want to do in the ops career and focusing your job search on one or two specific fields, is not only smart thing to do, but mandatory.  

I have good news for all of the aspiring operations managers. There’s a very high demand for your services. It is one major in business schools that a lot of people and even students don’t think about or even know about and yet almost every business has a need for it.

 This results in a high demand for operations managers. Unlike finance majors who continue struggling after the crash, demand for operations managers is still growing due to the increasing complexities of supply chain, online logistics, international trade and a number of other factors. The higher the complexity, the more there is a need for a person to make sure that everything runs smoothly.

According to Career Builder’s current statistics, for every 87 job seekers, there are 100 openings in operations management field.  This is a huge discrepancy in supply and demand; especially in the economy we are in, where in some fields there are hundreds of candidates for one position.

As operations managers entering the workforce, you have one of the best job opportunities available to you. This is why you should focus on the field that can get you further, give you the most experience, and will give you the most room to grow. Be aware of what’s happening in the job market.

Follow where the new trends are moving, keep your fingers on a pulse and you will not be disappointed with a payoff in terms of great job and bright career path.

Please comment on this topic and provide the guest blogger with meaningful feedback. 


Artyom Malkov is the author of “Interviews with Masters of Operations Management.” He is one of the founders and the current CEO of OperationsManager.com.

 Artyom has an MBA in Operations Management from New York’s Zicklin School of Business.  When he is not handling the day-to-day business at OperationsManager.com, he consults companies on the best practices and trends in operations management.