LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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CHAPTER 2 Environment and Diversity
1. ENVIRONMENT AND COMPETITIVE ADVANTAGE ¦ What is competitive advantage? ¦ The general environment ¦ The specific environment ¦ Environmental uncertainty
2. CUSTOMER DRIVEN ORGANIZATION ¦ Who are the customers? ¦ What customers want? ¦ Customer relationship management
3. QUALITY-DRIVEN ORGANIZATION ¦ Total Quality Management ¦ Quality and continuous improvement ¦ Leadership and organizational culture
4. INTERNAL ENVIRONMENT AND ORGANIZATIONAL CULTURE ¦ What strong cultures do? ¦ Levels of organizational culture ¦ Leadership and organizational culture
5. DIVERSITY AND MULTICULTURAL ORGANIZATION ¦ What is a multicultural organization? ¦ Organizational Subcultures ¦ Challenges faced by minorities and women ¦ Managing diversity .
1. ENVIRONMENT AND COMPETITIVE ADVANTAGE ¦ What is competitive advantage? o Using the firm’s core competency that clearly sets an organization apart from its competitors and gives it (the organization) an advantage over the competitors in the market place. § Product § Pricing § Customer service § Cost efficiency § Quality
o Performs consistently and difficult to replicate.
¦ The general environment o The general environment is comprised of cultural, economic, and educational conditions. § Economic conditions § Social-cultural conditions § Legal-political conditions § Technological conditions § Natural environment conditions
¦ The specific environment o Specific environment consists of the actual organizations, groups, and persons with whom an organization interacts and conducts business.
o Specific environment is often described in terms of stakeholders. Stakeholders are the persons, groups, and institutions who are affected in one way or another by the organization’s performance. § Customers § Suppliers § Competitors § Regulators
o Task environment is another name for specific environment.
¦ Environmental uncertainty o There is a complete lack of information regarding what development will occur in the external environment, i.e. the inside people don’t know what is going on or going to happen in the outside world.
2. CUSTOMER DRIVEN ORGANIZATION ¦ Who are the customers? o External customers § These are the people who buy the goods and services provided by the firm. The firm is a seller. Customers are buyer.
o Internal customers § These are the people within the organization. People or group of people depending on the work or information § Customers have the right to expect high quality and on-time inputs from earlier point in the workflow. Suppliers in turn, have the responsibility to deliver high-quality and on-time inputs to the next point.
¦ What customers want? o High quality Enjoy German standard o Low cost Buy at Chinese price level o On time delivery Live in America o It is difficult to gain customer. Once you get them, you want to retain them. § Protect your reputation § Treat your customer right
¦ Customer relationship management – CRM o Operating a business or other types of organization with a customer-centered focus that strategically tries to build relationships and adds value to customers. Strategically try to build lasting relationships and add value to customers. § Use technology to gather information about customer needs and fulfill those needs.
¦ Supply chain management o Strategically links all operations dealing with resource supplies. This is the relationship between the firm (company) and the supplier, not between firm and customer. The goals of SCM are: § Efficiency § On-time availability § Quality resource
3. QUALITY-DRIVEN ORGANIZATION ¦ Total Quality Management ""TQM is a management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction,and benefits to all members of the organization and to society." www.wikipedia.org
In Japanese, TQM comprises four process steps, namely: o Kaizen – Focuses on Continuous Process Improvement, to make processes visible, repeatable and measureable. o Atarimae Hinshitsu – Focuses on intangible effects on processes and ways to optimize and reduce their effects. o Kansei – Examining the way the user applies the product leads to improvement in the product itself. o Miryokuteki Hinshitsu – Broadens management concern beyond the immediate product.
TQM requires that the company maintain this quality standard in all aspects of its business. This requires ensuring that things are done right the first time and that defects and waste are eliminated from operations." See www. wikipedia.org.
¦ Quality and continuous improvement o Always looking for new ways to improve operations quality and performance. Use following measures: § Quality circle: a group of employees meet regularly and periodically to discuss ways to improve the quality of their products and services.
§ W. Edwards Deming "Deming offered fourteen key principles for management for transforming business effectiveness. In summary: 1. Create constancy of purpose for the improvement of product and service, with the aim to become competitive, stay in business, and provide jobs.
2. Adopt a new philosophy of cooperation (win-win) in which everybody wins and put it into practice by teaching it to employees, customers and suppliers.
3. Cease dependence on mass inspection to achieve quality. Instead, improve the process and build quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost in the long run. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
5. Improve constantly, and forever, the system of production, service, planning, of any activity. This will improve quality and productivity and thus constantly decrease costs.
6. Institute training for skills.
7. Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspiration. The aim of leadership should be to help people, machines, and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers.
8. Drive out fear and build trust so that everyone can work more effectively.
9. Break down barriers between departments. Abolish competition and build a win-win system of cooperation within the organization. People in research, design, sales, and production must work as a team to foresee problems of production and use that might be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets asking for zero defects or new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate numerical goals, numerical quotas and management by objectives. Substitute leadership.
12. Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job. Seven Deadly DiseasesThe Seven Deadly Diseases: 1. Lack of constancy of purpose. 2. Emphasis on short-term profits. 3. Evaluation by performance, merit rating, or annual review of performance. 4. Mobility of management. 5. Running a company on visible figures alone. 6. Excessive medical costs. 7. Excessive costs of warranty, fueled by lawyers who work for contingency fees.
A Lesser Category of Obstacles: 1. Neglect of long-range planning. 2. Relying on technology to solve problems. 3. Seeking examples to follow rather than developing solutions. 4. Excuses such as "Our problems are different". "
See www. wikipedia.org.
¦ Leadership and organizational culture o A system of share beliefs and values that develops within an organization and guides the behavior of its members.
4. INTERNAL ENVIRONMENT AND ORGANIZATIONAL CULTURE ¦ What strong cultures do? o Strong culture is one that is clear, well-defined and widely shared among members. It discourages dysfunctional work behaviors and encourages positive one. Commit to and do things for the organization; reinforce those habits.
¦ Levels of organizational culture o Stories o Heroes o Rites and rituals o Symbols
All these elements form the core values. Core value is defined as the beliefs about the right way of doing thing.
¦ Leadership and organizational culture o Leadership of the organizational culture involves establishing and maintaining appropriate core values. At any level, these values should meet the test of three criteria: § Relevance § Pervasiveness § Strength
o Symbolic leader Someone who can use symbols well to establish and maintain a desired organizational culture. Symbolic managers and leaders talk the “language” of the organization.
5. DIVERSITY AND MULTICULTURAL ORGANIZATION ¦ What is a multicultural organization? o Multiculturalism refers to pluralism and respect for diversity in the workplace. The organizational cultures should be inclusive. They value the talents, ideas, and creative potential of all members. Have the following characteristics: § Pluralism § Structural integration § Informal network integration § Absence of prejudice and discrimination § Minimum inter-group conflict
¦ Organizational Subcultures § Subcultures are common to group of people with similar values and beliefs based on shared work responsibilities and personal characteristics. 1. Functional subculture 2. Ethnic or national subculture 3. Generational subculture
¦ Challenges faced by minorities and women § Discrimination § Prejudice
¦ Managing diversity
§ Building an inclusive work environment that allows
everyone to reach their full potential.
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