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

Decision Making With Unintended Consequences

criticism1

As the clock strikes midnight, the world once again brings in another new year with anticipation.  For many people, the last several years have been filled with financial crisis and personal turmoil. 

With the realities of globalization, one country’s misfortune can have negative consequences for other countries across the world.  Therefore, a new year brings a lot of uncertainty for the future.

Furthermore, today’s businesses must be ever on guard for market turbulence and global threats.  Given this reality of personal consequences, individuals must be more mindful of effective decision making. In fact, bad decision making can hurt an organization as well as an individual. 

Denis Collins, author of Business Ethics, notes that the prevalence and costs of unethical decision making at work can be substantial for businesses. Therefore, good decision making can dilute a competitor’s advantage. In this discussion, we will examine how decision making can carry unintended consequences. 

Today’s leaders must consider the aftermath of their poor decision making. Sadly, many folks fail to understand the consequences of their decisions. For example, Vanessa Williams was one of these fallen Hollywood icons. In 1983, Williams became the first African-American woman to be crowned Miss America. 

However, her immediate success was short-lived due to a scandal. Consequently, Williams was forced to relinquish her title; she probably did not think her youthful deed would come back and wreck her dreams. Yet, the consequences not only damaged Williams but her family, friends, and millions of her fans. Nobel Prize author Albert Camus once noted, “Life is the sum of all your choices.” In spite of all wise counsel, some people seem to have a knack for making poor decisions. 

Sadly, many poor decisions have unforeseen impacts.  Nancy Cavender and Howard Kahane, authors of Logic and Contemporary Rhetoric, argue for better decision making under this financial crisis: “Now, more than ever, we need to think critically about the world we live in and the decisions we make.”  They point to the dire consequences of poor decision making.  In fact, these circumstances often can be traced back to a root cause. 

The Law of Unintended Consequences relates to any purposeful action that will generate unintended consequences. This law can be categorized into several areas: (a) a positive unexpected benefit called serendipity, (b) a negative effect which is contrary to the original intention, and (c) a potential source of problems which is commonly referred to as Murphy’s Law. 

Like Murphy’s Law, some decisions may appear to afflict some people as if their lives are cursed. Making the right decision is a difficult process. No one will applaud your many good decisions; however, you will probably catch heat over the bad ones. 

In fact, every person, regardless of their background or social standing, can benefit from good decision-making techniques. In this life, most people make decisions to the best of their abilities. When various things happen, especially bad ones, individuals must be ready to deal with them. Therefore, understanding unintended consequences can assist in helping us make better decisions for the future.   

 Discuss your understanding of the Law of Unintended Consequences as it relates to effective decision making.

 © 2014 by Daryl D. Green

Personal Stress – Awaiting Uncertainty in 2014

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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

Sustainable Customer Value

Using Credit Card at Register

Senior executives should build value creation in their business strategies. To act otherwise is only asking for trouble. In the infancy of a business’ existence, a good value proposition for customers is essential.

Mark Johnston and Greg Marshall, authors of Relationship Selling, argue that value-added selling changes much of the sales process.[1] Value is defined as “the perceived experience and worth gained from a product or service.”

Phillip Kotler and Kevin Keller, authors of Marketing Management, maintain that it is important for businesses to understand customer perceived value: “Buyers operate under various constraints and occasionally make choices that give more weight to their personal benefit than to the company’s benefit….Consumers have varying degrees of loyalty to specific brands, stores, and companies.”[2]

Customer-perceived value is related to the difference between benefits the customer gets and costs the customer assumes for different choices. Yet, customer-perceived value often is a graded approach.

For example, if an individual wants a cheap, fast-food option, he or she may select McDonald’s. In this case, the buyer’s expectation for quality food is lower than eating at a five star restaurant. Customers are very understanding when the seller’s value proposition is clear.

Given that market framework, perceived value is in the eyes of the customer and varies from business to business. Kotler and Keller further note, “The marketer can increase the value of the customer offering by raising the economic, functional, or emotional benefits and/or reducing one or more costs.” [3]

Therefore, organizations are challenged by selling value. Consequently, managers must better align themselves strategically to provide long- term value for customers, rather than focusing only on short-term profitability.

Being strategic conscious about these business relationships is not simple. Ken Favaro, author of Put Value First, further explains that putting value creation consistently first requires leadership skills, discipline, and perseverance.

He further challenged organizations to demand higher standards from managers who could jeopardize these business relationships. Favaro further adds that sharing information widely within the management team builds a shared sense of commitment toward building value for customers and shareholders. 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. Yet, all good business transactions start with trust.

Johnston and Marshall argue that customers expect and deserve consistency in the way an organization’s value-added message is put forth.  When a customer begins a relationship with you, he or she already has a specific set of expectations.[4]

Sadly, unproductive firms put little strategic thought in the matter of value creation. Nat Martin, III, Director of Purchasing and Concept Support, Darden Restaurants, Inc. notes: “If the value exceeds expectation, the customer is highly satisfied. If the value falls short of expectation, the customer is dissatisfied.”

Value creation can be considered the powerful engine that energizes sustainable growth. Therefore, value creation for businesses must be strategic and deliberate for any sustainable growth.

Please discuss your professional experience with company’s value creation initiatives.

© 2013 by Daryl D. Green


[1] Relationship Selling by Mark Johnston and Greg Marshall

[2] Marketing Management by Phillip Kotler and Kevin Keller

[3] Marketing Management by Phillip Kotler and Kevin Keller

[4] “Customer expectation vs. customer need” by Ray Miller

Locking on the Value Proposition for Customers

bazaar-selling

In my office, I hung a newspaper article prominently on my wall.  This 2010 article showcases the top 100 government officials in my area.  Surprisingly, the university basketball coach was the top official, at over $2 million.  Following suit was a short list of athletic coaches followed by highly noted professors and administrators.

This amazing list furthered stimulated my interest in determining the value of individual skill sets.  In some other areas of the country, region, or state, someone would probably determine that these same jobs did not warrant the same financial worth.  In fact, individuals within the same organization with the same title and similar professional backgrounds can be found making significant differences in salary.   Given these realities, it is easy to see that customer value propositions differ.

Today’s companies must become adapted at determining customer value. However, all customers are not the same.   In fact, globalization has created all types of problems for businesses.  One of the issues is how to stay ahead of the competition by exploring new markets while keeping the same customer base.  This action is not easy.

Many businesses build their profitability on this simple equation. Companies seek to reduce their inputs (outsourcing labor, better technologies) to obtain greater profitability. Yet, the process is often pretty self-serving with little regard to the customer and lesser value on employees.

Therefore, many people might insist that some business simply stumble on what customer value actually is and how it affects their business.  For this discussion, value is defined as the net bundle of benefits the customer derives from a product of service.

Mark Johnston and Greg Marshall, authors of Relationship Selling, state that the starting point for learning about relationship selling is to understand the customer. A value lesson is learning that the customer is the center point for creating value.

Paul Peter and James Donnelly, authors of Marketing Management, suggest that the starting point in the buying process is the consumer’s recognition of an unsatisfied need. Therefore, the focus must go back to the customer for any sustainable business success.  They must be deliberate with their connections with customers and value.

Being strategic conscious about these business relationships is not simple.  Ken Favaro, author of Put Value Creation First, further maintains that putting value creation consistently first requires leadership skills, discipline, and perseverance.

He further challenges organizations to demand higher standards from managers who would jeopardize these business relationships. When organizations place value creation as a high priority, organizations will beat their competition.

Given the complexity of customer value, how do businesses stay connected with customers and their ever changing wants and needs?

© 2013 by Daryl D. Green

The Human Factor

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Businesses that don’t under the value of their human capital resources are in error.  In spite of the power of technology and automation, it takes people power to make business operations work.  Failing to understand this reality will leave an organization vulnerable to their competition. This week we will cover human factor buy-in, the last element in socio-technical systems.  

Organizations must shift their paradigm to viewing workers as more than mechanical parts for their organizational objectives. Gareth Jones and Jennifer George, authors of Contemporary Management, maintain that managers have a responsibility to effectively oversee their human resources which includes the people involved in the creation and distribution of goods and services. [1] Given this reality, the ability of managers to leverage their talent is crucial.  

Talent management is the process through which employers anticipate and meet the needs for human capital.[2]  Peter Cappelli, author of Talent Management, explains how mismanaging employees in organizations is problematic for an organization’s sustainable success:  “The failures in talent management includes mismatches between  supply and demand on the one hand, having too many employees, leading to layoffs and restructuring, and on the other hand, having too little talent, leading to talent shortage. [3] 

In the United States, talent management miscues fall into the following categories:  (a) Do Nothing Mode – makes no attempt to anticipate human resource needs and develops no plans for addressing them and (b) Reactive Mode – relies on outside hiring to meet human capital needs, but this approach has begun to fail now that the surplus of management talent has eroded. 

 https://www.youtube.com/watch?v=jTMs3hp-LFU

Trust is the cornerstone of any meaningful relationships in organizations.  Yet, many employees do not trust their organizations due to the lack of employment security in most companies.  According to a USA Today poll, nearly half of those interviewed said that corporations can be trusted only a little, or not at all, when it involves looking out for the best interest of employees.[4] 

Michael Hackman and Craig Johnson, authors of Leadership: A Communication Perspectives, argue that a leader’s credibility is directly related to the quality of his relationship with followers.[5] Marios Katsioloudes, a researcher specializing in Socio-technical analysis, explains that as profitability of mechanization increases, the importance of technology is implied while there is a devaluation of the workers. U.S. businesses cannot point to the lack of employee performance on a global front for mismanagement errors.[6]

Japan, a long-time benchmark for American companies, is being defeated by American employees; today, the average U.S. worker puts in 36 more hours per year than Japanese workers (1,825 vs. 1,789). 

Over the last two decades, balancing work and home life have been difficult since Americans have added 200 hours to their annual work schedule.[7] Employees want to be valued. 

Jeffrey Pfeffer, author of The Human Equation, acknowledges that organization success is directly related to implementation, and this capacity comes from the workers, how they are treated, their skills, and their efforts as it relates to the organization.[8] 

Leaders should see followers as more than mechanical parts for their organizational objectives. Managers assume that giving employees new technology is enough to keep them happy. Likewise, leaders should view followers as a vital component of the socio-technical system. 

Discuss the concept of human factor buy-in for today’s organizations.

 © 2013 by Daryl D. Green                                    

 


[1] Contemporary Management by Gareth Jones and Jennifer George

[2] Talent Management by Peter Cappelli

[3] Talent Management by Peter Cappelli

[4] “Leading others while supporting organizational values” by Daryl D. Green

[5] Leadership: A Communication Perspectives by Michael Hackman and Craig Johnson

[6] “Leading others while supporting organizational values” by Daryl D. Green

[7] “Leading others while supporting organizational values” by Daryl D. Green

[8] The Human Equation by Jeffrey Pfeffer

 

Technology Relevancy

Components of Technology

We can’t survive without technology.  Are we too dependent on it?  When the computer network is down in our office, it’s a pretty wasted day because we are paperless.  Yet, you won’t find many modern organizations that can operate when their technology malfunctions. 

This week we will focus on technology relevancy as part of the three practical applications (i.e. value modeling, technology relevancy, and human factor buy-in) in socio-technical systems.  

Organizations must understand that technology needs to be relevant as it relates to benefiting the whole socio-technical system.  Technology relates to the combination of skills and equipment that managers use in the design, production, and distribution of goods and services.[1]   

Gareth Jones and Jennifer George, authors of Contemporary Management, argue the significance of technology forces on organizations:  “Technological forces can have profound implications for managers and organizations. Technological change can make established products obsolete….”  The graveyard of many businesses is littered with numerous failed opportunities of senior executives to understand market shifts and technology opportunities.   

As an engineer myself, we are taught to use theory in order to build, design, and operate technical systems, whether mechanical, digital, or otherwise. Sometimes this creates a technical superiority over the other components of this socio-technical system. 

Organizations should obtain input from employees to ensure that the organization has not only the best technology for its operations but the right technology.[2]  This sharing of information can only come with mutual trust of leaders and followers.  Gary Yukl, author of Leadership in Organizations, notes, “Empowerment is more feasible when there is a high level of mutual trust…Leaders can affect the psychological employment of followers in many ways, and participative leadership and delegation are only two of the relevant behaviors .”[3] 

There have been numerous cases where organizations have purchased new technology to solve a problem or to become more efficient when a simple conversation with impacted employees would have produced better results at a lower cost. Therefore, organizations should invest their time in identifying the relevant technologies for their socio-technical system in a participatory manner.    

Discuss the concept of technology relevancy for today’s organizations. 

© 2013 by Daryl D. Green                                    


[1] Jones, G.  & George, J. (2009). Contemporary Management

[2] “Leading others while supporting organizational values” by Daryl D. Green

[3]Leadership in Organizations by Gary Yukl

 

 

Value Modeling

justice-symbol

Last week, we started the discussion about socio-technical systems and its impact on today’s organizations.   In the next few weeks, we will address three practical applications (i.e. value modeling, technology relevancy, and human factor buy-in).  Understanding value modeling is a critical attribute that managers need to acquire in times of uncertainty and high risks.  Effective leadership becomes the hallmark of high performing organizations. 

Organizations must model its values to both first-line supervisors and managers in a socio-technical system.  However, it won’t happen without good leadership.  Leadership is defined as the ability to influence others toward a shared objective or goal. 

Dr. Richard Daft explains that today’s employers are looking for authentic leaders who understand them, act consistent with high ethical standards, and empowers others with their openness and candor.  Dr. Daft argues, “To be authentic means being real, staying true to one’s values and beliefs, and acting based on one’s true self rather than emulating what others do.”

 https://www.youtube.com/watch?v=A2SKTP43oRQ

Yet, some organizations expect employees to understand its culture, its values, and its principles by attending new employee orientation or by reading a company brochure. This is simply not the case. Vince Adams, who has over 20 years as an environmental manager, understands delicacy of balancing a socio-technical system.

Adams has extensive experiences with both government and private organizations that are finding themselves neglecting to outline and demonstrate its value systems to employees.[1] Adams states, “Companies must build values into their employees so that employees know what the expectations are for that organization.”

James Kouzes and Barry Posner, authors of The Leadership Challenge, have researched several thousand businesses and government executives and they outline setting the example as a critical attribute of an effective leadership.[2] Kouzes and Posner argue, “Once people are clear about the leader’s values, about their own values, and about shared values, they know what’s expected of them and can better handle the conflicting demands of work and personal affairs.”  Therefore, employees expect leaders in organizations to model these values in their organizations, and this is also true for socio-technical systems. 

Discuss the concept of value modeling for today’s leaders. 

© 2013 by Daryl D. Green                                    

 


[1]“Leading others while supporting organizational values” by Daryl D. Green

[2] The Leadership Challenge by James Kouzes and Barry Posner

 

Mapping Out Socio-Technical Systems

human-vs-robot-09

Another problem is presented. A worker gets injured on a subcontractor’s project. We gather around the table to dish out the blame. Everyone wants to point fingers. The project manager blames inadequate funding while the safety engineer cites an ineffective preplanning process. Nothing gets resolved. The issue moves up the line for a senior management decision. There’s a meeting to discuss the matter.  

Someone leads out and says, “What can be done to prevent this problem?” Numerous technical recommendations are offered. Standing up, I state, “Why don’t we ask the workers about this problem? Let’s get them involved so that they can help find the solution.”

The room gets quiet. Finally, one senior manager suggests that we should take money away from the subcontractor, buy new technology, and fire the worker’s supervisor. Everyone agrees. After dealing with this same problem every month, I was hoping for a different answer. I was disappointed again.[1] 

Why do we see managers make the same mistakes over and over and never want the day-to-day workers involved in the process? Executives are then shocked when their employees don’t buy-in on their latest management initiative. One of the reasons organizations do not reach peak performance is because managers do not create socio-technical systems to support organizational values.

With fierce global competition and a need for a market advantage, I found it surprising that managers move toward the quick fixes like downsizing for short term gain without analyzing the organization over the long-term. I am not suggesting that this approach is easy; however, I am declaring that over the long haul, an organization will become a stronger institution in the process. [2]  

The concept of socio-technical systems is very important in a highly competitive environment. Socio-technical systems relate to the reciprocal interrelationship between humans and machines. In fact, the idea explores how both the technical and the social conditions of work interact with efficiency and the human condition.[3]

This interaction satisfies each, but does not compromise the other.  Since the industrial age, researchers have recognized that both technical and social factors impact organizational performance.

 https://www.youtube.com/watch?v=GOePJH7LYZ4

Daniel Wren, author of The Evolution of Management Thought, concludes that analyzing a social system gives management an avenue to measure conflict between the “logic of efficiency” demanded  by the formal organization and  the “logic by sentiments” by the informal organization.[4]

In profit hunting, many businesses lose focus of the importance of socio-technical systems. Given precepts, the questions for most managers becomes how to use this scholarly perspective in the practitioner’s avenue where time is money and money is time.  In the following weeks, we will address three practical applications (i.e. value modeling, technology relevancy, and human factor buy-in) so that socio-technical systems within organizations can support its organizational values. 

Discuss the concept of socio-technical systems in today’s organizations.

 

© 2013 by Daryl D. Green                                                       

 


[1] “Leading others while supporting organizational values” by Daryl D. Green

[2] “Leading others while supporting organizational values” by Daryl D. Green

[3] “Philosophy of socio-technical systems” by Gunter Ropohl

[4] The Evolution of Management Thought by Daniel Wren