An Uncertain World: Mapping Out Trump-Kim’s Nuclear Challenge

We live in a world riddled with risk and uncertainty. If you don’t believe this statement, please check the news. For example, President Trump increased global tension by canceling the US-North Korea summit in Singapore. Too many, canceling the historical meeting between the two countries were no surprise. Columnist Zach Beauchamp put it bluntly, “From the get-go, the Trump administration wanted something North Korea was never going to give: the North handing over its entire nuclear arsenal before the United States gave it anything tangible…there’s a fundamental flaw with America’s approach to North Korea that preceded Trump. That’s the fantasy that the US can somehow convince North Korea to voluntarily give up its nukes.”

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President Trump and North Korea’s Leader Kim Jong Un have hurdle insults at each other (especially through social media) for months. President Trump proclaimed about Kim: “The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea. Rocket Man is on a suicide mission for himself and for his regime.” Kim fires back to Trump: “If the American imperialists provoke us a bit, we will not hesitate to slap them with a pre-emptive nuclear strike. The United States must choose! It’s up to you whether the nation called the United States exists on this planet or not.” This rhetoric between the two leaders have many citizens worried about a nuclear war. Continue reading

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Cultural Intelligence: How Leaders Can Navigate the Racial Divide in America

Racial Divide-2017

In June of 1995, the Jury in the OJ Simpson trial announced a verdict of not guilty. The aftermath of dismal reactions highlighted significant conflicts and diverging views in America’s workplaces. In fact, white and black people had a different perspective on the OJ Simpson Trial and life in general. Eighty-three percent of whites stated that Simpson was “definitely” or “probably” guilty while only fifty-seven percent of blacks agreed with this assessment. Rather than carefully assessing one’s own viewpoint when evaluating a different culture, most individuals make assumptions about other cultures definitely.

Sadly, we still have not learned this lesson in the United States. The last several days have been very hectic as I try to answer students’ questions and address my own concerns about a recent Southwestern Baptist Theological Seminary gaff that has provided another headwind for others sharing the Good News. Let me say that we have all done foolish things and have suffered the consequences. Most of us have had to debase the impacts of this photo on our popular culture to our students and others.

In the Southwestern Baptist Theological Seminary in Fort Worth (TX), five seminary professors, including the dean of the School of Preaching, put on gangster-style clothing (perhaps dressing like urban rappers), flashing their gold chains and one holding a handgun. Written above the photo were the words “Notorious S.O.P,” which was a reference to the seminary’s School of Preaching and to the black rapper, Notorious B.I.G.

the Southwestern Baptist Theological Seminary-photo

Continue reading

Leading Change in a Global Environment

Change-agent

Global affairs are often unstable. This month, Japanese stock market falters again, capping its worst single-week performance since the global financial crisis in 2008. Japan is not alone in its underperforming markets. Yet, globalization has connected countries through various elements. Financial markets are not an exception. This article explores issues of change in a global environment and discusses the merits of change agents in today’s organizations. Continue reading

The Great Global Talent Search: Retooling for Greater Employability

sustainability-boy-worldI watch and listen. Industry leader Yasir Abulrahman was sharing with my undergraduate class an overview of cross-cultural interests as they related to operating a business in the Middle East. Yasir, who has Middle Eastern roots himself, explained how some U.S. managers went abroad on work assignments without understanding cultural sensitivity.

Sadly, these managers underestimated the problems associated with continental differences.  Yet, most companies cannot afford to make these international debacles.  Can you? This article examines how individuals can position themselves with greater employability by acquiring the necessary global competencies for the future. Continue reading

The Great Global Talent Search

sustainability-boy-world

Globalization is a reality that’s not going away. Having the right management strategy can elevate a country’s financial well-being. India and China flex their mighty muscle due to the dominance of their outsourcing efforts. Thus, globalization provides a disruptive change to established paradigms. The National Intelligence Council’s Global Trends Report has been monitoring global trends across two decades.

In the Global Trends 2030: Alternative Worlds report, the study outlines the global landscape ahead for millions of unsuspecting international participants. For example, individual employment will accelerate due to poverty reduction, growth of the global middle class, greater educational attainment, widespread use of new communications and manufacturing technologies, and health-care advances.

Yet, power will shift to networks and alliances in a multipolar world. The U.S., European, and Japanese share of global income is projected to fall from 56% today to well under 50% by 2030. Asia will have surpassed North America and Europe in global power; China will probably have the largest economy.

Countries coming into prominent include India, Brazil, Columbia, Indonesia, Nigeria, South Africa, and Turkey. Leadership consultants Ernest Gundling, Karen Cvitkovich, and Terry Hogan understand the challenges faced by organizations attempting to go global:  “…the years ahead will most probably bring discontinuous events that cannot be accurately predicted based strictly upon extrapolations from the present, as with unanticipated and transformative events of recent years such as armed conflicts, terrorism, financial crises, piracy, epidemics, and environmental disasters precipitated by either natural or human causes.”

Going global is not an easy process. Countries attempt to invest more into their education system in order to better manage their own talent management system. Countries seek to find strategic gaps. For example, foreign countries now hold more than $12 trillion in U.S. assets, including stocks, bonds, real estate, and more financial elements. In fact, Japan and China are very motivated to support the American dollar so that Americans will continue to buy their goods, thus keeping their citizens working. However, some executives feel that going global is the same as domestic business. It isn’t.

In the 2012 Quarterly McKinley report, author Pankaj Ghemawat pointed out the weaknesses of global competency for business. According to a research study of senior executives, 76% believe their organizations needed to develop global leadership capabilities; yet, only 7% of them thought they were currently being effective. At a low scale, companies attempt to search for this talent with a lens of also attracting more cheap labor.

In fact, multinational businesses search the world for the best talent to fill their vacancies; some executives hope they can find the next Steve Jobs of Apple. Therefore, professionals need to equip themselves with the necessary skills to be marketable in a global environment. American companies realize they can ensure future profitability by marketing products and services abroad.

Global competencies will better secure the future for many.  Thirty percent of U.S. companies acknowledged that they had failed to exploit their international business opportunities fully due to insufficient internationally competent staff. Peter Cappelli, author of Why Good People Can’t Get Jobs, explains that even with over 23 million people unemployed, companies argue they cannot find qualified workers. Cappelli further notes that employers are looking for specific talent.

Moreover, Marshall Goldsmith, Cathy Greenberg, Alastair Robertson, and Maya Hu-Chan, author of Global Leadership: The Next Generation, utilized a 2-year accenture study of over 200 global organizations to produce a general framework for global leadership. The five global competencies included global thinking, appreciation of diversity, technological savvy, a willingness to partner and an openness to sharing leadership. In the past, CEOs did not consider the importance of global leadership competencies. The reality of globalization has changed this mindset. In order to build these necessary competencies, the following strategies are provided:

  • Obtain global awareness (i.e., daily environmental scanning).
  • Become fluent in a foreign language.
  • Seek coaching and/or mentoring with global leaders.
  • Participate in study abroad programs or find cultural immersion opportunities.
  • Search for international job assignments.
  • Take global leadership/global management at a local university.
  • Participate in diversity training in your local community.
  • Treat individuals fairly and with respect.
  • Seek ways to work with a diverse team/organization.
  • Conduct research, writings and publications on global issues.

Uncertainties and high risks will continue to plague businesses that seek to conduct business abroad. As the article has demonstrated, executives are in a quagmire due to the lack of sufficient international experience among current employees. Management Strategist C.K. Prahalad notes, “This world is one beset with ambiguity and stress.…Managers have to deal with these often conflicting demands simultaneously.” Rather than panic, employees and the unemployed should view international turbulence as unfiltered, innovative opportunities. Therefore, individuals who are prepared can position themselves with greater employability by acquiring the necessary global competencies for the future.

© 2015 by Daryl D. Green

 

Corporate Social Responsibility: Toyota – Guest Blogger

Toyota_Logo_Newes

Introduction

In late spring 2013, I was able to witness an interesting example of a company promoting philanthropy and community relations.  Shoichiro Toyoda, Toyota’s honorary chairperson, donated $2 million to help build the Howard H. Baker Jr. Center for Public Policy at the University of Tennessee.  As you may know, the Toyota Motor Corporation, a multi-national automaker, was established in 1937 and founded by Kiichiro Toyoda.  Toyota employs more than 330,000 people around the globe by 509 consolidated subsidiaries.  

The University of Tennessee reported that Toyoda made a trip from Japan to the campus because he wanted to see his good friend, Sen. Howard Baker, and the new facility.  Toyoda also visited Denso Manufacturing Tennessee, Inc. to tour their manufacturing facilities and then Eco Park to which Denso Manufacturing Tennessee had donated land, trails, trees, and other resources to the community for environmental education on litter prevention, recycling, and pollution prevention.  Toyoda voluntarily took a seat right next to local school students and was fascinated watching a hazardous material disposal simulation.  Toyoda appreciated Denso Manufacturing Tennessee for contributing to the community.  It was Toyoda’s genuine gesture to care about children and education, communities, and environmental issues.  

Pless (2007) pointed out that “a strong values base is also a characteristic of the role of the steward.  The metaphor of the leader as steward makes references both to being a custodian of values, a stronghold to protect professional and personal integrity” (Pless, 2007, p. 445).  I value the opportunity to meet the leader who passionately led Toyota Motor Corporation to contribute to efficient manufacturing systems, strive to produce automobiles with safety and environmental conscious concepts, and set the tone at the top to enhance corporate social responsibility. 

Change Management 

Adjusting business strategies and practices in a quickly changing global environment is a key subject.  As an automotive industry leader, Toyota has been tactfully changing management to adjust and adapt to constantly changing business environments.  Aspirations and principles found in Toyota’s Code of Conduct is influenced by the Japanese cultural characteristic that emphasizes harmonious business relationships with customers, suppliers, dealerships, and local or global communities while focusing on providing lively, safe workplaces to employees. 

The Code of Conduct guides Toyota’s business strategies such as human resources or environmental protection activities in accordance with fundamental ethical policies.  Toyota focuses on multiple subjects to operate fairly in the global marketplace in and communities where different cultures and diversities exist.  Toyota strives to utilize labor diversity while supporting equal employment opportunities including promoting a women’s workforce and people with disabilities. 

They also invest heavily in Research and Development (R&D), not only to produce quality cars and trucks, but also to promote safety activities and environmental preservation globally.  For instance, Toyota’s sustainability report focuses on improving traffic safety and car quality, contributing to a low-carbon society, and supporting global communities while they thrive to comply with safety and environmental laws.

R&D is not limited to a car’s safety features but also to accommodate workforce changes in production systems.  Recently Toyota announced that one of their assembly plants is dedicated to the employment of retirees.  The plant is designed to produce only one model at a slower cycle time to be easier for the senior employees’ level of physical fitness.  This activity is Toyota’s quick response to the government’s amendment to the senior citizen’s employment promotion law to provide a friendly work environment (Sankei Digital, 2013, para. 2).  It helps older workers to be able to operate machines and work at assembly lines at a slower pace. 

The Toyota Manufacturing System (TMS) is known as a socio-technical system, based on their management philosophy and practices to reduce unnecessary moves or inventories, to achieve the just-in-time and lean-manufacturing concepts.  TMS is designed to set up efficient and effective assembly lines for profitable production systems while quality fundamentals are met.  On the contrary, accommodating the aging work population has become a focus rather than excelling profitability.  Even if the assembly plant may not operate as efficiently as they would wish, Toyota found the initiative to solve the social challenge.  Toyota is often known to lead the industry in Japan by addressing social issues and initiating systems for improvement.  

Profitability vs. Sustainability 

The 2011 Tohoku earthquake and tsunami in Japan were nobody’s fault.  Over thousands of years, on the small island country, the Japanese have learned to find ways to live in harmony and help each other to survive from environmental threats.  This harmonious society was harshly tested by the earthquake and tsunami to survive. 

The Tohoku region in northern Japan is known for its fishing industry, severe winter weather, and is often being threatened by earthquakes.  On the contrary, the locations are convenient for manufacturing sites to transport products to Tokyo and large metropolitan areas, consequently, many Japanese automotive components companies or heavy-duty industries located their manufacturing facilities in this area.

Severe damages by the earthquake and tsunami paralyzed water and power supplies, roads, or telecommunication systems.  Infrastructure damages kept products from being transported out of the area.  Manufacturing plants could not resume operations for weeks, and automotive component inventories were exhausted before the global supply chain was restored. As a result, automakers in Japan and the United States were forced to suspend operations or reduce production hours due to a parts shortage.  The disaster tested the vulnerability of the global economy affected by the major disaster and left us with many questions on how we can best prepare for unexpected catastrophes such as hurricanes, tornados, floods, wildfires or a financial crisis, such as the Great Recession.

One isolated country’s disaster can have a huge impact on the global economy. If organizations want to be better prepared for disasters, they must establish an effective risk management program and find the best investment options or contingency plans to minimize operational interruptions.  Furthermore, governments and corporations can collaborate to assist victims and develop unfortunate areas.  It requires a national strategy to coordinate social responsible activities to provide immediate reliefs and rescue a nation. 

In order to distribute electricity to the affected Tohoku areas, manufacturing companies in metropolitan areas modified their work schedule and implemented a rotational blackout.  Within six months, the Toyota Motor Corporation initiated regional revitalization plans in the Tohoku region, including the establishment of the Toyota Motor Tohoku Corporation to support post-quake reconstruction. 

It is also equally important for corporations to protect the natural environment while being profitable.  Steiner and Steiner explained the increasing interest in sustainable development by corporations to support non-polluting economic growth that raises standards of living without depleting the net resources of the earth (Steiner & Steiner, 2012, p. 442).  It is a corporation’s social obligation to prevent pollution and provide safe workplaces for communities. 

Michael Porter defines pollution in his book, On Competition, as a sign of resources being used incompletely, inefficiently, or ineffectively when scrap materials, harmful substances, or energy forms are discharged into the environment.  Porter feels pollution is also as sign of mismanagement.

For instance, Toyota’s environmental philosophy is to reduce environmental impact at all stages of vehicle development from production, use, disposal, and recycling while undertaking environmental activities in all business areas on a global scale (Cortez & Penacerrada, 2010, p.124).  The Toyota Manufacturing System emphasizes eliminating wasteful resources, unnecessary conveyance, and excessive inventory to achieve efficiency, increase profitability, and reduce costs. 

Porter also stresses that pollution reveals flaws in the product design or production processes (Porter, 2008, p.350).  Cardboard or plastic bag packaging is a truly wasteful material because it requires so much labor and time to unpack, flatten, gather, and transport it to landfills.  Toyota recognized and corrected this flaw in processing by replacing cardboard packaging with rigid, plastic reusable containers.  Thousands of suppliers are required to use reusable boxes to protect parts from being damaged during transportation, and at the same time, eliminate packaging waste. 

Setting up the returnable container system required an initial investment to purchase boxes; however, this cost is usually amortized during the program life of two to four years.  After their use, the plastic boxes can be sold to other companies for further recycling.  In 1999, Toyota Motor Engineering & Manufacturing North America (TEMA) created an initiative to become a zero-landfill company.  Since 2012, thirteen manufacturing plants have been recognized as true zero-landfill plants.

I believe that profitability does not always have to suffer while corporations are trying to be responsible for social issues.  There is a way to attain both objectives at the same time.

Can you share other good corporate examples?  Who drives the social corporate responsibility in the organization? 

© 2014by Noriko Chapman

Noriko-professional-web

About Noriko Chapman:

Noriko Chapman, who is a native of Japan, is an international traveler and a role model to millions of women looking to overcome extreme obstacles in life. She is a production control section leader for DENSO Manufacturing, TN.                                        

DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier of advanced technology, systems and components in the areas of thermal, powertrain control, electric, electronics and information and safety. Its customers include all the world's major carmakers. Worldwide, the company has more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan) and employs approximately 120,000 people.

A mother of two, she has over 20 years of experience in the automobile industry and is a cancer survivor. Noriko led a successful campaign to assist the Tennessee Rehabilitation Center (TRC), which works with disabled adults to secure employment. Her book co-authored by Dr. Daryl Green, Second Chance, was inspired by the TRC. For more information, you can visit her on Facebook.com.

References

Cortez, M.A., & Penacerrada, N.T. (2010).  Is it beneficial to incur environmental cost? A case study of Toyota Motors Corporation, Japan.  Journal of International Business Research, 9, 113-140.

Pless, N. (2007).  Understanding responsible leadership: Role identity and motivational drivers.  Journal of Business Ethics, 74(4), 437-456.

Porter, M. (2008). On Competition. Watertown, MA: Harvard Business Press.

Sankei Digital. (2013). Toyota, line and post-established retirement age dedicated to veteran employees for reemployment opportunity.  Retrieved from   http://www.sankeibiz.jp/business/news/130504/bsa1305040806000-n1.htm

Steiner, J. F. & Steiner, G.A. (2012). Business, government, and society (13ed.).  New York, NY:  McGraw-Hill.

Quality of Life & Corporate Responsibility

depression-business-women

Life keeps getting tougher for folks to survive.  While politicians and media pundits seize the opportunity of each life-changing event, families seek to make the best of a struggling economy.  According to the latest government job report this month, just 74,000 more people were employed in December versus 205,000 expected by USA Today’s survey of 37 economists.[1] 

Life will become tougher for job seekers as globalization sweeps down on country after country.  For some countries, they will become industry leaders while others will fade into the night of obscurity.  Many Americans are retreating from the workforce, causing the unemployment rate to fall to 6.7% in December. 

In fact, only 62.8% of the adult population is participating in the labor market now; participation rates relate to those individuals who have employment or those actively seeking employment.[2]  Heidi Shierholz, an Economic Policy Institute economist, explains: “We’re going to have a long-term unemployment crisis for a long time.” 

This current low participation in the job market matches the lowest level since 1978.  According to USA Today business reporter John Waggoner, the economy could be puzzling to the average American: “…corporations have plenty of cash in their coffers to expand and meet future demand.  But the job numbers don’t reflect that yet.”[3]  

Companies taunt their corporate responsibility to the community with such public relationship activities as sponsoring local events.  Yet, more workers wish these companies would renew their social contracts with American employees to ensure them of a decent wage.

 

Consequently, some workers often become victim of their company’s good fortune.  Thomas Friedman, author of The World is Flat, explains, “The best companies outsource to win, not to shrink.  They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists—not to save money by firing more people.”   

The world’s poor stands at more than 1.1 billion people, mostly rural Africans, Indians, and other South Asians.  In fact, the poorest fifth of the world’s people earn just 2% of the world’s income.[4]  With companies moving into emerging markets, they can raise the standard of living for millions.   

Today world’s middle class earns an average of $700 to $7,500 per family member according to the United Nations’ Millennium Development Report.  Many companies would argue that their global reach has improved the quality of life for millions around the world and this is a small price to pay for the loss of a few jobs domestically.  

Discuss if American businesses must deal with the search for cheaper labor and the consequences on the quality of life for millions of individuals locally.                                                                              

© 2014 by Daryl D. Green


[1] “Weak jobs report is not all bad for investors” by John Waggoner

[2] 2013 ends with weakest job growth in years by Annalyn Kurtz

[3]“Weak jobs report is not all bad for investors” by John Waggoner

[4]How Much Is Enough by Alan Durning

Personal Stress – Awaiting Uncertainty in 2014

depression-business-women

Do you know what the future holds in 2014 for you?  Are you now dreading the holiday season with more demands on the job, an unconcerned boss about your personal welfare, and new threats of pending layoffs?  All of these things create stress and anxiety for working professionals as the holiday season approaches.  

Sadly, our standard of living is eroding.  Families cannot make ends meet despite working multiple jobs.  Companies are demanding more.  It is no surprise that folks are stressed out.  According to the third annual Work Stress Survey, conducted by Harris Interactive on behalf of Everest College, more than eight in 10 employed Americans are stressed out by at least one thing about their jobs. 

Additionally, the study showed poor pay and increased workloads were top sources of concern for many employees (1,019 surveyed by phone).  The results produced a significant increase (73% to 83%) from last year’s survey, which found that more employees were stressed at work.

Another holiday season has come and gone.  After the presents have been given out and the year comes to a close, many people will reminisce about the past year.  Unfortunately, some people’s lives will be filled with many defeats, broken relationships, and unfulfilled dreams.  

These many setbacks may be relatively minor in nature.  Pastor Richard S. Brown of Knoxville notes, “For many people, the holidays season bring great pressure and stress…We stress that we can’t get everyone something for Christmas?” or they may be much more serious.

 

Depression can happen to anyone.  Christian Maslach and Michael Leiter, authors of The Truth about Burn-out, explain how stress can burn out people and impact their mental state.  In fact, many professionals are succeeding in the corporate environment while failing miserably at their own personal relationships.  If you are human, you will experience some disappointments.  It does not take a genius to understand how someone can get depressed.  Some call it a “Pity Party.”

With the ongoing global crisis and individual financial struggles, more and more Americans need to find better coping tools for survival.  2014 and beyond are full of a lot of uncertainty.  You can spend the holidays in despair or you can take control of some things to have a more successful life.  This does not happen by chance.  

For millions of individuals, a pity party is a regular affair.  However, individuals must be persistent during the current economic crisis and a good outlook goes a long way.  Your attitude will greatly impact how you retool your life so that you can be successful in the future. 

Please discuss how you plan to deal with those uncertainties in 2014. 

© 2013 by Daryl D. Green

Visibility for Professionals

Questons

In our society, which makes many determinations about a person’s character from his or her actions, high visibility is important to position oneself to success.

Philip Kotler and Kevin Keller, authors of Marketing Management, argue the importance of branding for individuals as well as for products to help them stand out among the crowd: “For branding strategies to be successful and brand value to be created, consumers must be convinced there are meaningful differences among branding in the product or service category.”[1]  Therefore, professionals need to distinguish themselves from their competitors.

Sadly, most workers are invisible to their management.  Some employees believe that if they work hard and are loyal to their organizations, they will be promoted and rewarded accordingly.  However, these individuals often see less qualified and less talented people get promoted ahead of them.

Renowned Pastor Richard S. Brown Jr. underlines this misunderstanding of this current culture:  “Everyone wants to be outstanding but no one wants to stand out.”  Today’s organizations promote individuals who know how to shine.  From a marketing perspective, these individuals understand how to use visibility to promote their personal brand.

 https://www.youtube.com/watch?v=o3fMQ1SWDU4

In the book, High Visibility: The Making and Marketing of Professionals into Celebrities,  Irvin Rein, Philip Kotler, and Martin Stoller examined the  role that celebrities play in society and the fact the everyone is involved in either producing or consuming celebrities.[2]  Yet, when you discuss this reality openly to others, most managers and executives would argue that it is the individual technical performance or merit of their work that gets them ahead.

However, most folks will not take advice from a ‘no named’ or unfamiliar expert, given the choices between an unrecognized and a celebrity expert.  Therefore, high visibility can open doors to opportunity.

Rein, Kotler, and Stoller note:  “Today for the visibility-conscious professional, fame is the ultimate accomplishment.  Well-knownness has evolved into celebrity, and in today’s society, that means power and money – not just to its possessor, but also to businesses, institutions, political parties, causes, entrepreneurs, and charities.” [3]

For the savvy professional, gaining visibility goes to understanding what’s important to his or her organization or targeted institution.  This task requires doing the necessary research to determine the organization’s priorities and goals.  Furthermore, this matter requires understanding the personal characteristics of the key decision makers and looking for opportunities for high visibility.  The rewards of high visibility can be great.

Rein, Kotler, and Stoller further explain: “Our society is generally quite willing to pay this ‘celebrity premium,’ to reward those who take the risks to become the highly visible people we so love to revere or revile.” Of course, high visibility normally requires a great amount of sacrifice on an individual’s part.  Often, it can mean taking a job that no one wants because odds of success are slim.

As in many stories highlighted in the magazine tabloids about celebrities, relationships can also be a casualty of high visibility.  As society searches for more heroes and fulfilled fantasies, celebrities and fame will forever be a part of our society.  Consequently, high visibility will afford opportunists with more fortune than the Average Joe.  Therefore, working professionals need to understand how high visibility can be used in order to provide them with advantages that are more competitive.   

Please discuss the visibility for professionals based on your own work experience.

© 2013 by Daryl D. Green

 


[1] Marketing Management by Philip Kotler and Kevin Keller

[2] High Visibility: The Making and Marketing of Professionals into Celebrities by Irvin Rein, Philip Kotler, and Martin Stoller

[3] High Visibility: The Making and Marketing of Professionals into Celebrities by Irvin Rein, Philip Kotler, and Martin Stoller

Transformational Properties of Operations Management

Manufacturing-factory-China

Last week, I ran into an old friend at the Oak Ridge Post Office. He was a retired professional who I had played noon basketball with in my early years in Oak Ridge. He mentioned that most of the guys had retired from their jobs.

However, he also mentioned that one of the most seasoned professionals had been laid off from this prestigious firm after working for this organization more than 20 years. It was noted that the work had dried up. In fact, most of the local businesses are seeing the budget tightening in the government sector which is critical to the survival of most businesses in the area. Sadly, the financial crisis is not over.

Globalization will continue to drive down prices and force businesses to make hard decisions which impact the basic quality of living. Companies will look to operations management to gain greater efficiency and effectiveness in their systems.

The underpinning thread is how they understand value creation and what it means to customers. In this context, value can be defined as the perceived experience and worth gained from a product or service.[1] Creating value is not easy. Creating value across an international base is almost impossibility for most companies. Therefore, understanding operations management and supply management is a necessity.

Global markets continue to shift the direction of today’s businesses. Companies must be astute to the ever changing value perspectives of customers. According to KPMG 2013 Global Manufacture Outlook, companies should be optimistic. This international report surveyed 335 senior executives in five industries: Aerospace and Defense, Automotive, Conglomerates, Engineering and Industrial Products, and Metals.[2]

KPMG notes, “Global manufacturers’ ability to optimize performance and cost in their entire supply chain will be key to helping them become more competitive and resilient…Global manufacturers are building closer relationships with their customers, who in turn expect more due to advances in manufacturing technology.” These organizations are seeking a competitive advantage in several ways:

  1. Increasing transaction activity to take advantage of growth opportunities in global markets, while reassessing operations and product portfolios to control costs.
  2. Viewing their ‘channel partners’ as more of a network and building closer working relationships with their suppliers and other partners to maximize responsiveness to changes in the market. More effective and efficient collaboration enables them to optimize inventory, logistics, and other operational costs.
  3. Improving visibility in supply chain optimization provides a major opportunity for many companies to boost performance, agility, and resilience.
  4. Increasingly placing the supply chain at the center of their strategies to innovate, as they begin to look at suppliers not just as a source of production and logistics but also of ideas.
  5. Investing in breakthrough and incremental innovation to stay competitive. Nearly a third of respondents whose firms are stepping up R&D say their company will invest in breakthrough innovation.

Individuals as well as organization must understand the transformation properties of operations management.  Transformation processes relate to utilizing resources to convert inputs to desired outputs.

For example, automobile manufacturers convert primary inputs (i.e. sheet metal, plastics, engine parts) into a desired output (i.e. high quality cars). Yet, products are not the only thing that has a transformation process. Services also follow this paradigm. In the hospital industry, primary inputs (i.e. patients) create a desired output too (i.e. healthy patients).

Robert Jacobs, Richard Chase, and Nicholas Aquilano, authors of Operations & Supply Management, argue the merits of well-constructed organizational systems, especially during global competition: “Transformation processes are used in all types of businesses…Operations and supply management is about learning how to design these transformation processes.” Companies that understand what customers want and the intrinsic value desired by them will need to effectively retool their transformation processes in a cost effective manner.

 

According to the Economic Policy Institute, there are roughly 5.1 fewer American manufacturing jobs than at the start of 2001.[3] In fact, organizations argue that American worker’s wages have tumbled due to China’s cheap labor (i.e. primary input in the transformation process).

Global competition demands that organizations focus on the ‘small stuff’ as well as the big picture and embrace the attractive properties of operations managements.

Discuss the concept of operations management for today’s organizations.

© 2013 by Daryl D. Green


[1]Relationship Selling by Johnston & Marshall

[2] KPMG 2013 Global Manufacture Outlook

[3] “Report: America lost 2.7 million jobs to China in 10 years” by Danielle Kurzleben