Better Decision Making for a Better Life

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Have you ever wondered why some people continue to make bad decisions? You see million-dollar celebrities doing it. You can see this action in government officials and business leaders. There are no discriminators. From the very rich to the poorest of the poor, we see people caught in a vicious cycle of bad decision making. Sadly, we see it much closer than that. We witness relatives making those bad decisions. Despite all the wise counsel, the poor decisions continue.

 Why is it important to teach people how to make better decisions? Anthony Robbins, author of Awakening the Giant Within, attributes good decision-making as a key attribute to a happy life. Bestselling author Brian Tracy argues, “The further you think into the future, the better decisions you will make in the present to assure that future becomes a reality.” Making better decisions improves the quality of one’s life.

 

As a young advisor and college professor, I constantly hear students proclaim, “I’m grown.” This statement implies I don’t have to listen to anyone. I know best. Therefore, I can make my own decisions. Through series after series of bad decisions, the youth continues on merry ride of worsening consequences. Two things generally can stop this dead-end trap.

One lies in becoming more mature with age, and the other is experience. In going through a series of bad decisions, a wise person gains insight on the consequences of a bad decision. Every person, regardless of their background or social standing, can benefit from good decision-making techniques. Here are some methods to use: (a) define the problem or issues, (b) conduct research on the matter, (c) discuss with respected individuals with similar circumstances, (d) consider at least two alternatives, (e) select best decisions, based on your value system, and (f) move on and accept any consequences.

Making the right decision is a difficult process. No one will usually applaud your many good decisions; however, you will probably catch heat over the bad ones. Les Brown, author of How to Become the Person You Always Wanted to Be-No Matter What the Obstacle, explains, “Your values are not set by government or church leaders. Your values give you consistency in the way you approach life…By holding to your beliefs, you can always stay on track toward your dreams.”  By making better decisions, individuals can look forward to a better quality of live.

 

© 2014 by Daryl D. Green

 

Disruptive Technology in Today’s Business

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In life, sometimes it is the simple things that count, despite modern technology. In the next few months, I will be able to see 3-4 of my books published. Traditionally, it takes most large publishing houses 12-18 months before their books are published. As an independent publisher, I learned that the speed of products to the market place is a good way to beat a large competitor.

In fact, my success relates to a simple website called Elance.com, a freelance website that allow customers to solicit work from a variety of outsourcing services, which include programmers, designers, office support, translators, marketers, researchers and many other disciplines.

Elance.com allows a business to post a job opening and invites freelance workers who believe they have the requisite skills for the job to make a bid. The company charges a $10 fee to each business to post a job and also takes a small portion of what gets paid to contractors. Through this website, I have found some of the most talented individuals from across the world. For these services, it is a buyer’s market. Some people would argue that it is all about buying cheap labor for profitability.

In this scenario, developed countries appear to be exploiting underdeveloped countries. This is not always true. I have paid more in the past for the best talent. With that said, potential employers see a website that attracts over 500,000 talented freelancers. For the freelancer, there is an opportunity to bid on 48,000 jobs, worth $480K.[1] Therefore, a differentiating strategy can defeat a low-cost strategy on a global playing field.

Technology must be a management tool that is used strategically. Clayton Christensen, author of The Innovator’s Dilemma, provides a framework for understanding the interrelationship between technology changes and a business success. Christensen demonstrates how successful companies have been overtaken by small disruptive technologies.

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The cell phone, undermining the profitability of the established communication networks such as AT&T, further showcases the impacts of disruptive technology. Sadly, more executives are unwilling to think strategically due to the wrath of their investors and financial pundits.

For example, Amazon’s revenue grew in 2012, but the details were lacking. Amazon.com’s revenue rose to 17.4 billion (35% increase) in the fourth quarter. However, it fell short of Wall Street predictions. According to VentureBeat, Amazon sold as many as 6 million Kindle Fires and its older tablet prototype.

Given this reality, the Fire would move ahead of Android tablets from Samsung and Motorola, making it only second to Apple’s iPad. Analysts were concerned that the $199 Fire would not make a profit. Additionally, Amazon.com is spending capital on clouding technology.

Maximizing profits on Fire as an industry leading tablet is a near-term strategy. However, CEO Jeff Bezos appears to have disappointed Wall Street with a long-term perspective instead of sacrificing shareholders with profits in the near term.

Innovators take note of disruptive change as positive turbulence in the market. John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, explain, “Understanding the nature of competitively important resources allows managers to identify resources or capabilities that should be further developed to play an important role in the company’s future strategies.” Therefore, organizations which do not understand the importance of making sustainable growth by being more efficient will not be successful over the long-term.

Please discuss application of this topic in your organization and industry.

© 2014 by Daryl D. Green

 

[1] Elance.com

Scientific Management in Organizations

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Scientific management has many advantages for today’s organizations, including a systematic approach. Fredrick Taylor is credited with being the Father of Scientific Management. He transformed the Industrial Revolution. In fact, this approach brought a lot of productivity. However, the difficulty with Scientific Management is that it requires sales managers to select employees that fit the job and train them effectively. Additionally, it increases the monotony of work. This reality could cause some salespeople to be uninspired in their jobs. 

Whereas the Scientific Management approach was a focus on tasks, the Behavioral Management approach was a focus on people. Historically, Fredrick Taylor didn’t disregard the importance of workers. In fact, the study of behavioral science and organizational behavior resulted from a criticism of the human relations approach as ‘simplistic’ and ‘manipulative’ in addressing the relationship between worker attitudes and productivity. Therefore, each management approach has its weakness.

Yet, Scientific Management has a lot of drawbacks if you want to build personal relationships with people. One of the sticky points about Scientific Management is its impersonal approach to managing people. People are a resource, but not machines. There are several other issues associated with this classical approach of managing workers, which include: (a) heavy reliance on experience and unproved assumptions, (c) failure to consider informal operations, and (d) operations assumed under static conditions. 

There are no magical bullets when you are dealing with employees as human beings. The Scientific Management approach was built on the shoulders of the Industrial Revolution. Behavioral Management followed suit later. Both approaches have their shortcomings. I suggest taking the best from both worlds. Some aspects of Scientific Management can be used to further develop and standardize an organization’s operations. Employees then understand what’s expected of them. 

With the Behavioral Management approach, sales managers can push performance by understanding what motivates each employee intimately. Quality expert George Peeler argues that the task of personalizing and communicating product value through interactive discussion is the task of the sales organization. Therefore, the best scenario would be to use all of the best management practices, including Scientific Management and Behavioral Management, for enhanced relationship customer relationships.

  Organizations may look to a Theory Y environment for creating the right manager’s mentality that builds trust in people to do the right things. When managers demonstrate they believe in their people and set clear expectations, most individuals will work harder. Management expert Stephen Covey explains that having trust fosters confidence. Salespeople are then motivated to go the extra mile for the organization (i.e. work longer hours, work harder, etc.). Therefore, Scientific Management has its own share of problems when discussing relationship selling.

Please discuss application of this topic in your organization and industry.

 

© 2014 by Daryl D. Green

Living With Criticism

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No one wants to be criticized. Dr. William Watley, Senior Pastor of the St. Phillip African Methodist Episcopal Church observed, “Criticism’s certainly something that you can’t be delivered from…From the womb to the tomb, you can’t escape it.”

Criticism can be defined as ‘the expression of disapproval of someone or something based on perceived faults or mistakes.’ No one can avoid criticism if they are active in an organization or serve in a leader’s capacity.

Yet, individuals can also be criticized because of lack of action. Dr. Watley argues that criticism is all that some people know how to do, which indicates to him that ”these people need to get a life.” Perhaps, actress Ava Gardner summed it up best about critics: “Hell, I suppose if you stick around long enough, they have to say something nice about you.” 

On the contrary, a Constructive Critic points out things that will assist in the personal or professional development of a person. A Petty Fault Finder can always locate some short coming in an individual that is not helpful and a fault that he or she does not have a problem with.

In fact, no matter how hard you attempt to correct a problem noted by a Petty Fault Finder, he or she will not be satisfied; a Petty Fault Finder will seek to only locate another problem in this individual’s life.

Great leaders know how to use criticism in a way that can transform an organization. Most people are unwilling to change even when it is out of necessity or survival. Richard Daft, renowned author of Management, notes that change can be problematic for organizational growth.

Employees and managers often resist change. Dr. Daft explains, “Yet most changes will encounter some degree of resistance. Idea champions often discover that other employees are unenthusiastic about their new ideas….People typically resist a change they believe conflicts with their self-interest.”[1] Most managers understand how to control and oversee their organizations.

Few managers have the innate ability to inspire their employees from mediocre to extraordinary performance. That position description requires a leader, not a status quo manager. All great leaders, from President George Washington to Albert Einstein, had their own share of criticism and a merry band of Petty Fault Finders.

Sadly, some individuals never are effective in their positions because they can never seem to manage because of fear of negative criticism. Gareth Jones and Jennifer George, authors of Contemporary Management, explained how bad leadership damages an organization: “When leaders are ineffective, chances are good that their subordinates do not perform to their capabilities, are demotivated, and may be dissatisfied as well.”[2] Consequently, it is important that leaders develop strategies for managing criticism effectively in order to move their organizations to exemplary performance. 

Please discuss criticism from your professional experience.

 © 2014 by Daryl D. Green

 

 

[1]Management by Richard Daft

[2] Contemporary Management by Gareth Jones and Jennifer George

 

Performance Measures in Today’s Businesses

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Finding the right performance measure in today’s organizations is like trying to determine for each swimmer the right temperature of the water to swim in the Gulf of Mexico (a great place to vacation).  There are many variables to consider. Certainly, the amount of revenue produced for each customer would speak to the bottom-line of most organizations.  In relationship selling, you have the personality factor.

In fact, Mark Johnston and Greg Marshall, authors of Relationship Selling, maintain that customers pick up on a salesperson’s attitude. Does good chemistry exist between the salesperson and the customer? That’s an important performance measure. When developing performance measurement with relationship selling in mind, good chemistry between the salesperson and customer should be a factor.

The amount of customer referrals can be an extremely good indicator, because this friendly act speaks to the issues of customer trust.  Quality expert George Peeler argues that the key to designing and using systems that will build the traditional product source relationship in the Quality Era will be the creativity and commitment of management and customer insight provided through empathy.  Successful organizations understand the attitudes and emotions of their customers. Therefore, connecting with customers would be a vital performance metric.

In being effective, businesses need to understand what to measure.  Many times, organizations are measuring the wrong objectives or doing the analysis incorrectly. Johnston and Marshall argue for designing an effective measurement system which includes (a) what do we want to measure, (b) when do we want to measure, and (c) how do we measure. Therefore, it’s important that organizations create effective performance measures.

Yet, performance measures are very difficult.  Management expert Stacey views performance measures as a process rather than an event, involving a series of specific activities for creating, implementing, and using performance metrics. Organization must be careful about using the right data collection tool to measure performance. For example, most people hate doing surveys.

Given this reality, organizations must carefully analyze the survey data for bias. Are they truly getting a picture of their customers?  I found focus groups more useful. Peeler further explains that management must facilitate the processes of quality innovation through prompt action, removing barriers to employee performance by continually attending to process improvement. Regardless, management must establish a reliable performance measurement system for organizations. The bottom-line is that there is inherent risk with customer surveys.

Finally, businesses should be strategic and focused in their performance measures. If an organization wants to spin its wheel and go nowhere, having unclear direction is a great pathway.  It’s important to have clear objectives and desired outcomes.  The transformation process from where an organization is to where an organization wants to be is a clear application for performance measures.

Johnston and Marshall argue that specific, realistic, and measurable objectives are essential to a sales training program. They further acknowledge that salespeople exist in a highly competitive environment where a great deal of information must be assimilated for effective customer sales.

Please discuss organizational performance measure from your professional experience.

© 2014 by Daryl D. Green

Value Perceptions Among Customers

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Organizations should think strategically when creating value perceptions of their products or services.  In fact, they should seek to establish a formal tiered system where possible. Strategic leaders have a long view on value creation.

Strategic thinking is defined as ‘the generation and application of business insights on a continual basis to achieve competitive advantage.’ In fact, strategic thinking focuses on value creation by enabling a provocative and creative dialogue among people who can affect a company’s direction.

Marketing expert Ken Favaro maintains that putting value creation first gives businesses two advantages over their competition in driving for profitable and sustainable growth: the first is capital and the second is talent. In fact, he argued that successful value creators never suffer from capital shortage. 

Yet, this process shouldn’t be done in a vacuum. Customers and all members of the supply chain should provide input so that the expectations are clear. Businesses that pay more would get more benefits (i.e. certain perks, discounts, etc.). Therefore, the value proposition would be enhanced.

However, being strategically conscious about these business relationships isn’t simple.  Value must be understood and sought out.  Value is viewed as the perceived experience and worth gained from a product or service.  Organizations should make their product clear to customers; some businesses need to introduce a tiered system, based on value-added services.

For example, if I want cheap fast food, I go to McDonalds. Therefore, my expectations are lower than going to a five star restaurant.  Customers are very understanding when the seller’s value proposition is clear. Favaro further suggests that putting value creation consistently first requires leadership skills, discipline, and perseverance. He further challenged organizations to demand higher standards from managers who would jeopardize these business relationships.

Mark Johnston and Greg Marshall, authors of Relationship Selling, discuss that perceived value is in the eyes of the customer and varies.  They further argued that customers expect and deserve consistency in the way an organization’s value-added message is put forth.  Therefore, sales professionals’ biggest challenge is selling value.

Please discuss value perception of customers from your professional experience.

© 2014 by Daryl D. Green

 

Time Management for Professionals

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As I teach working adults at the university level, the biggest complaint is the lack of time to fulfill academic requirements.  Of course, many working professionals must juggle their jobs, family obligations, and other priorities. It’s very difficult to be successful with these priorities. However, being successful is possible. 

Everyone can benefit from good time management.  Let’s examine professionals in the retail business. Professionals who interact with customers must be good stewards of their time.  Yet, most people have so much trouble with time management due to conflicting priorities in their lives in a busy society.

For salespeople, life can be pretty demanding; attempting to connect with customers often means taking away from one’s personal life. Understanding how to navigate one’s time is essential in managing our priorities. 

Salespeople are no exception. Mark Johnston and Greg Marshall, authors of Relationship Selling, maintain that the ability to manage time and territory is essential for salespersons for three reasons: (a) increase productivity, (b) improve customer relationships, and (c) enhance personal confidence.  Therefore, good time management assists salespeople and other business professionals in mapping out their priority obligations. 

Successful people distinguish the trivial from the important.  This reality is true in sales, as well as other industries. In my technical field, I see many people operating in crisis mode because they are engulfed in trivial matters. Working only on trivial matters is unproductive when an individual is ignoring the important things. Time management speaks to what is really important to you.

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Stephen Covey, author of Seven Habits for Highly Effective People, argued that highly successful people know how to manage their time (aka ‘Put first things first’).  He notes, “Effective management is all about putting first things first. While leadership decides what the ‘first things’ are, it is management that puts them first, day by day, moment by moment.

Management is the discipline carrying it out. The successful person has the habit of doing the things failures don’t like to do.”  Therefore, distinguishing the important from the trivial is part of good time management.

Developing effective time management skills is not a simple or short process. When a salesperson is young and single, he or she has different priorities. The individual may be willing to make huge concessions, such as long hours, to move ahead or make additional income.

Yet, the individual may transition into a different stage, where he is married and has children.  This reality can shift his priorities. Some people balance this strategically. Therefore, different life stages can impact an individual’s time management. 

Discuss your professional experience on this topic. 

© 2014 by Daryl D. Green

The Nature of Effective Problem Solving

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Our youth program continues to grow at my church.  Of course, it is a simple formula as our church is one of the biggest in the area.  Church going parents make it mandatory for their children to attend church and participate in church services.  However, when the children graduate from high school and became young adults, their attendance becomes very low or non-existent. 

At that time, Velma Biddles was the youth leader and fairly new to the position.  She and her youth advisors have seen the shift of young people’s attitude.  If churches want to be effective with youth, they must change their underpinning message of: “Children are to be seen and not heard.”  Our youth advisors started to deal with the root causes of matters concerning our youth. Sadly, many businesses are spending millions on symptoms. What about you? 

Good problem solving can be an asset in an organization.  Some organizations find themselves solving the wrong problems and getting less than desired results.  Other managers assume that good technical staff members are naturally good problem solvers.  However, this observation is not necessarily true.  Effective problem solvers often have an intuitive skill set or enough training in problem solving for finding the right problems and making the best decisions.  

 John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, outline the importance of filling key managerial slots with people who are good at figuring out what needs to be done and possess skills in effective implementation and in producing desired results.  They note, “No company can hope to perform the activities required for successful strategy execution without attracting and retaining talented managers and employees with suitable skills and intellectual capital.”  A problem can be defined as ‘an obstacle that stands in the way of achieving a desired goal.’ In fact, problems are divergences from the preferred outcomes.  

The basic problem solving stages include: (a) Identify the problem, (b) Gather information, (c) Clarify the problem, (d) Consider possible solutions, (e) Select the best option, and (f) Make a decision and monitor the solution. High performing organizations move beyond superficial problem solving in order to get to the root causes.  Good businesses realize that uncovering the real problems can be beneficial in many ways, such as reduced risks, cost savings, and greater efficiencies.  

Jeff Butterfield, author of Problem Solving and Decision Making, argues about the benefits of talented problem solvers: “People who can identify, define, and solve problems are valued members of an organization.” 

 

Like our youth advisors recognizing the problem and adapting appropriate solutions, today’s managers must be willing to move beyond their own bias to discover the real causes of problems.  Too many managers seek to major in the minors.  High performing organizations cannot afford to let this happen. 

In general, effective problem solving can be a great competitive advantage for organizations.  Formulating better decision making happens with more effective problem solving.  Businesses with talented problem solvers will have a greater capacity for sustainable success. 

Discuss your professional experience with problem solving in your industry or organization.

© 2014 by Daryl D. Green

Value Creation for Customers

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Customers determine the value of a product or service.  In today’s competitive environment, value creation is a corporate advantage.  However, building this value is often difficult.  People have different ways to assess value.  Some folks use traditional ways based on some established reference point, such as a company’s price guide. 

Yet, some ways are informal.  In many countries, haggling is an acceptable practice of transactional selling.  Philip Kotler and Kevin Keller, authors of Marketing Management, explain how businesses must understand customer decision making processes for purchases. They note, “They [customers] tend to be value maximizers, within the bounds of search costs and limited knowledge, mobility, and income.” 

Here’s a personal example. My family visited Mexico and began the great American tradition of haggling sellers to get the price of merchandise down. Radio host Dave Ramsey believes everything is negotiable. Anything that is worth the effort of negotiation must have passed the value threshold to the consumer. Paul Peter and James Donnelly, authors of Marketing Management, note that culture, social class, and reference group influences play an important role in consumer behavior. 

Some risks are involved with purchasing.  This reality has a bearing on value for customers. If decisions involve low risk, they are often done quickly with little thought.  Yet, major purchases normally require more risks, like buying a house. Therefore, having a good relationship with the seller is important.

The buying decision stages are (1) recognition of need or problem, (2) determination and description of the traits and quality of the needed items, (3) research for qualified buyers, (4) acquisition and analysis of proposals or bids, (5) evaluation of proposals and selection of suppliers, (6) selection of an order routine, and (7) performance evaluation and feedback.

Mark Johnston and Greg Marshall, authors of Relationship Selling, maintain that many organizational purchases are motivated by the requirements of the firm’s production processes, merchandise inventory, or day-to-day operations. Therefore, customers are very value conscious on high priced items, such as cars. 

Customers use varying methods to reduce their buying risks. Negotiation expert Carleen Hawn recommends five common sense approaches for effective negotiations, which are: (a) don’t bargain over positions, (b) separate the people from the problem, (c) focus on interests, (d) invent options for mutual gain, and (e) insist on using objective criteria. In most cases, haggling at a specific retailer involves a one-time transaction. Johnston and Marshall further suggest that value creation is what ultimately gets customers to come back.  Therefore, businesses that allow haggling must build relationship selling components for repeat value to customers. 

Discuss your professional experience with value creation in your industry or organization.

© 2014 by Daryl D. Green

Corporate Social Responsibility: Toyota – Guest Blogger

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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

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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.