Decision Making
Business Research Methods
Question 1
- What is the purpose of the literature review? Bring examples to support your answer.
Answer 1
Initially, the literature review is the source of and the means by which research studies are identified and pursued. Commonly called research gaps, these serve as trigger mechanisms that provoke the curiosity of researchers into conducting a more thorough system of inquiry and investigation to seek the truth and facts about a certain problem statement or topic. Scanning and reviewing available literature enables the researcher and the reader to appreciate the conduct of a study based on the latest information available and comprehensively as possible.
This ensures that the researcher is updated in terms of theoretical as well as empirical background of the topic of the research. Here, the review of literature represents the medium by which the latest scientific inquiry on the research problem is disclosed. A form of qualitative analysis may help clarify certain issues and practices used as literature sources. (Bogdan & Biklen, 1992)
The literature review also examines recent and historically significant research studies, company data or industry reports that serve to act as basis for the proposed study. (Schindler & Cooper, 2008; p. 641). Usually, starting from a comprehensive and general perspective, modern literature review goes to the more specific studies called empirical literature considered directly related to the research problem.
Thus, this part may be used to explain the need for the proposed work to appraise the shortcomings or informational gaps in secondary data sources. Here, the research process is sustained in the chain of scientific inquiries resulting to more studies and new researches.
Further, the literature review ensures the reader whether the researcher is directly citing both theoretical literature and empirical literature through direct quotations. paraphrasing using the writer’s own opinions and analyses. (Johnson, 1987; p. 134) Thus, the reader is well-guided in evaluating the experiences of other researchers in relation to the emergence of a new form of literature review.
The literature review and the accompanying analysis may go beyond the availability or conclusions of past studies and their data, examining the accuracy of secondary sources as well as the credibility of these sources including the appropriateness of earlier studies. As a matter of conclusion, the literature review is ended by summarizing the important components of the literature and interpreting them in terms of the problems at hand.
Further, the literature review explores published history of the research topic based on the identified variables of the study. Here, the specific environment of the study is scanned, scrutinized and correlated to identify as well as appreciate the relevance and depth of the topic under study. A literature review, like in any research paper, is systematically organized around ideas, not just as the secondary sources in the form of a relevant annotated bibliography being organized.
Here, the researcher does not just list down his sources or go into detailed discussions but explores out each one of them, one at a time. As the topic area is read widely and selectively, considers instead what themes or issues connect one’s sources together. Do they present one or different solutions? Is there an aspect of the field that is missing? How well do they present the material and do they portray it according to an appropriate theory? Do they reveal a trend in the field as a raging debate?
An example of a literature review follows:
“…Anthony & Govindarajan (2003) asserts that the principle of management control systems also applies to the aspect of requiring the organization to enforce the rules and guidelines of compliance to avoid resource wastage as well as deviation from planned opertions, but Kaplan and Norton (2004) cautions managers that imposing too stiff controls may turn out to be unproductive in the long run and negate the very goals the organization wish to achieve. Nevertheless Simons (1997) warns that management control systems must be tempered with relationship value with all organizational stakeholders to ensure that there is a sustainable equilibrium or leverage between controls and pre-set goals and objectives.
Question 2.
“The problem definition stage is perhaps more critical in the research process than the problem solution stage”. Discuss this statement in depth.
Answer 2.
Indeed, identifying the research problem is considered more pivotal than solving the problem itself. Here, pinpointing the problem requires correctly identifying and conceptualizing the related sub-problems that will fully address the main issue. As soon as the problem is identified, the means to resolve it becomes moot and academic. Thus, identifying the target is the first stage before solving it. Any form of solution to address the problem would depend on the main issue being resolved. (Schindler & Cooper, 2008)
For instance, for a company to adopt a strategic plan to resolve a business issue over the long term, it is necessary to identify the main problem of the entity so that the planned strategy would revolve around the main issue identified and focus on the measures that will effectively and directly address the issue. Thus, if a business performs poorly in terms of profitability, it is necessary to identify what areas are causing the substandard performance: here, the major issue could be traced to the marketing and product competitiveness or lack of adequate financial resources or its accompanying high cost or even errors or lack of skills in human judgment.
In addition, properly conceptualizing the problem statement is critical in convincing and capturing the reader’s attention to sustain and continue the interest in addressing the dilemma: if it is business, the management dilemma should be properly identified, its background and its consequences including the areas that are not being addressed. Problem statements that are broadly or improperly defined can hardly be addressed adequately in a single study. Clarity in the problem statement is critical in delineating other related problems. (Schindler and Cooper, 2008; p.640-641)
Question 3
Below are two scenarios namely A and B. For each, indicate how the researcher should proceed with the following, giving reasons:
- The purpose of the study
- The type of investigation
- The extent of researcher interference
- The study setting
- The time horizon for the study
- The unit of analysis.
Scenario A
Ms. Joyce Lynn, the owner of a small business (a woman’s dress boutique), has invited a consultant to tell her how she is different from similar small business within a 60-mile radius, in regard to her usage of the most modern computer technology, sales volume, profit margin, and staff training.
Scenario B
Mr. Paul Hodge, the owner of several restaurants is concerned about the wide differences in the profit margins of the various restaurants. He would like to try some incentive plans for increasing the efficiency levels of those restaurants that are lagging behind. But, before he introduces this, he would like to be sure that the idea will work. He asks a researcher to help him with this issue.
Answer 3.
Scenario A.
In this scenario, the research problem will focus on the competitiveness of Joyce Lynn’s boutique business within the 60-mile radius. In the process of analyzing the competitive edge of the business, the sub-problems could be charted through the effects of using modern technology and skilled labor resulting in increased volume of sales, target costing and bigger profit margin and, in addition, possibly even due to lower prices at good quality products during a specific period of time.
Here, the purpose of the study could be sustaining business profitability in the local market through use of technology and skilled labor with the 60-mile radius as the limiting market factor. The type of investigation could be quantitative and descriptive using questionnaire for key respondents within the company to determine and identify company operational drivers along use of technology and the corresponding skills that complemented the production process. Here, documentary analysis is necessary to determine the profit margin through data from the financial and management accounting reports.
The extent of researcher intervention or interference is considered deeper as he is tasked to conduct financial analysis on confidential information to measure the revenues, the cost structure to arrive at the accurate profit margin. Using possibly percentages and cost analysis and the computational support, the setting of the study could be the production area where the skilled labor and modern technology are being utilized.
The time horizon of the study could be a period representing a fiscal year or an accounting period of about one year or depending on the purpose of the researcher which could be shorter than one year or longer as in two or three years. Thus, a period long enough to determine the average cost or profit margin and correlated with the trend in the volume of sales over a consistent period can be used as the basis of analysis to support competitiveness of the small business. Here, the aspect of consistency will be helpful in achieving a more relevant comparability of year-on-year results of operations.
Likewise, the unit of analysis could be individuals represented by the internal respondents which can be composed of the key decision makers and skilled personnel as well as customers within the market coverage area of 60 miles radius and who can validate the market competitiveness as a result of increased volume of sales, profit margin or the high quality of production output. (Trochim, 2008).
Scenario B
For this scenario, Mr. Paul Hodge could possibly conduct a form of descriptive, quantitative and qualitative research that will analyze the probable causes of varying profit margins in the other restaurants. A survey that can be conducted among employees and customers and even key decision makers as a required triangulation approach will objectively compare the performance of every restaurant and is considered necessary to zero-in on the primary cause of the low profit margin scenario in the other restaurants.
Research will confirm or indicate that low profit margins can be traced to various causes such as poor cost management, unrealistically low selling price, uncontrolled product spoilage, poor customer service resulting to unsatisfied clientele without hope of repeat business, among others. (Anthony ; Govindarajan, 2003) These conclusions and the corresponding implications can be generated through quantitative survey and qualitative interviews with respondents considered critical to the decision processes.
Thus, Mr. Hodge can assure himself that with an in-depth quantitative-qualitative research, the resulting indicators will pinpoint which factors are considered primary reasons and with possibly a number of secondary factors of inefficiency resulting to low margins. Here, the scientific inquiry may include documentary research detailing the cost components of the non-performing restaurants taken from the financial reports submitted by the other branches.
Any component of cost such as materials, labor and overhead can be specifically pinpointed as being the direct cause of the performance issue; hence, measures along this line can be instituted to answer the research problem. Here, the technique is to identify the culprit and zero-in from there.
However, it is to be noted that whether the measures as per research findings will effectively work or not will depend on the serious views and comments of the respondents insofar as the causes of variances are concerned. Appropriate analysis of the results of the surveys and interviews will somehow lead the research to its ultimate solution. (Babbie, 2002) Thus, thinking about the incentives that may be offered ahead of the research findings may preempt the results of the research and may not solve the research problem especially if it turns out that the primary cause of the low profit margin are not incentives-based but are to be attributed to other factors besides the incentive issues..
From here, the researcher can assist Mr. Hodge by undertaking an empirical study that describes, quantifies and evaluates the operational status of those low-performing restaurants based on surveys, interviews and documentary analysis. Thus, in this case research becomes a problem-solving routine that carefully evaluates the findings, analyzes the data into useful information and recommends measures to elicit appropriate decisions to finally and objectively resolve the issues. (Hayes, 1992)
Thus, in Scenario B, the purpose of the study is to explore an incentive plan to motivate its people to become more efficient and thus contribute to an increased profit margin for many of its restaurants. The type of investigation can be descriptive, quantitative and qualitative with data gathering more intensive in terms of interviews with people critical and pivotal to the attainment of goals and objectives. The study settings could be the entire restaurant network as means of comparability, for about one year or less. Here, the unit of analysis is the individual, employee as well as the customers.
Reference list
Babbie, E. (2002). The basics of social research. 2nd edition. Wadsworth Publishing.
Bogdan, R.C. ; Biklen, S. K. (1992). Qualitative research for education. An introduction to theory and methods. 2nd edition. Boston, MA Allyn and Bacon.
Glatthorn, A.A. (1998). Writing the winning dissertation. A step-by-step guide. Thousand Oaks, CA. Corwin Press/a Sage Publication Company.
Hayes, B. E. (1992) Measuring customer satisfaction. Development and use of questionnaire. Milwaukee Wi. ASQC Quality Press.
Johnson, J. (1987). The Bedford guide to the research process. New York. St. Martin’s Press.
Schindler, P.S. ; Cooper, D.A. (2008). Business research methods. 10th International Edition, New York, McGraw-Hill/Irwin.
Trochim, W.M.K. (2008). Units of analysis. Research methods Knowledge Base. Viewed July 21, 2010 at website: http://www.socialresearchmethods.net/kb/unitanal.php
CEOs and business professionals
Several years have passed, since CEOs and business professionals have been trying to produce a single and the most relevant answer regarding the issues regarding ethical and unethical conduct in large and small corporations. The case of Enron seems to have resolved the major ethical uncertainty, and has proved the need to promote sound ethical atmosphere and ethical principles in accounting and financial decision-making; and while firms and health care organizations were seeking the means to improve their ethical codes, the Sarbanes-Oxley Act has come as the urgent response to the ethical failures in corporate America.
Nevertheless, healthcare facilities across America remain extremely vulnerable to the major ethical controversies and frequently find it impossible to resolve them in ways that would benefit both them and the patients. In her article, Marriane M. Jennings (2003) writes about the role, which ethics plays in leading business giants to financial failure. She examines the tragic experiences of Enron, WorldCom, Tyco International, FINOVA and HealthSouth Corp.
Jennings (2003) is confident that the three essential factors need to be analyzed, before we are able to evaluate the scope and the consequences of an ethical failure and its impact on financial decision-making in firms: first, the systemic failures which ultimately reach the levels of fraudulent financial reporting; second, the common traits of ethical collapse; and third, the ways these collapses can be prevented in future through ethics and valued-based decision-making (Jennings, 2003).
In each of the recent corporate scandals, the six essential elements had to fail: accountants, auditors, the board, the business analysts, the business press, and the investors’ minds (Jennings, 2003), but beyond that, Jennings (2003) underlines the four common traits of ethical collapse that lead to fraudulent financial decision-making – pressure to maintain numbers; fear and silence; inexperienced senior management team; and a culture of social responsibility.
As a result of the detailed analysis, readers are offered an insight into the complex (or even complicated) picture of an unethical conduct that starts from below and leads to higher levels of organizational performance, where financial decisions are usually taken. Does that mean that there is not a single chance to improve the situation? Certainly, that does not. The Sarbanes-Oxley Act has been designed to facilitate the development of sound ethical policies in all organizations, including healthcare entities.
Besides the need to set and implement Public Accounting Oversight Bodies, the Act is expected to create “a tone at the top’ that promotes ethical conduct and permeates the corporate culture” (Koestenbaum, 2005). In healthcare, where the effectiveness of medical services largely depends on the quality of all accounting procedures, ethics is of particular importance. One of the hospitals I used to work for tended to over rationalize its commitment to profitability.
In other words, the senior management lacked an insight into the major financial decisions that were taken in the hospital. Jennings (2003) confirms that “most failed companies continued their activities rationalizing their conduct with such trite sayings as “that’s the way they do it”; in other words, failed organizations tend to take the examples of other fraudulent corporations without being able to learn from them.
I believe that rationalization may be an appropriate approach to accounting, but in hospitals where the lives of patients depend on whether we are able to use our financial resources effectively, over rationalization is not always the best solution. The visible commitment to patients’ welfare does not also mean that the hospital’s financial reports are accurate; that is why hospitals and healthcare facilities should be particularly responsible towards the ethical standards of their financial conduct.
In this situation, the best the hospital can do is to review the impact of its overrationalized decisions on the quality of financial reporting. Financial reporting should go in line with the moral absolutes, which hospitals and healthcare facilities determine prior to making strategic decisions. These simple ideas will always work to prevent healthcare organizations from major financial failures. Conclusion Ethics is one of the pillars on which high quality medical care rests.
Ethics in accounting and financial decision-making is one of the critical components of quality medical care. Despite the growing healthcare facilities’ commitment to ethical conduct, they tend to overrationalize the role of profitability and replace the need for accurate financial reporting with the need to care for patients’ welfare. In this situation, and prior to taking strategic decisions, hospitals and healthcare organizations should develop a set of moral absolutes, which will govern them in their striving to promote ethical conduct in accounting and financial decision-making.
References
Jennings, M. M. (2003). The critical role of ethics: recent history has shown that when individual ethics are compromised, corporate ethics fail and financial disaster is not far behind. Internal Auditor. Retrieved February 21, 2009 from http://findarticles. com/p/articles/mi_m4153/is_6_60/ai_111737942 Koestenbaum, P. (2005). Integrating Sarbanes-Oxley, leadership, and ethics. The CPA Journal. Retrieved February 21, 2009 from http://www. nysscpa. org/cpajournal/2005/405/perspectives/p13. htm
AT Consumer Products: The Decision to Outsource
Part 1. Introduction
The business organization to be studied for this thesis will be the American Telegraph and Telephone Consumer Product, or AT&T CP, which is 1 of the 2 sectors under the bigger AT&T organizational structure. AT&T CP is the telephone manufacturing sector of AT&T, and this case study will analyze the decision-making involved in AT&T CP’s decision to outsource its telephone manufacturing facility to Singapore.
The case study analyzed for this paper will be “AT;T Consumer Products” by Badaracco and White (1993), Harvard Business School Case # 392-108 (see Appendix for full copy of the case study).
Section a. Nature of Work
Prior to its decision to outsource, the nature of work AT;T CP is involved in is the manufacturing of electromechanical telephones in the US. Starting from the 1980s, however, the department started to experience serious competition from Asian companies like Taiwan, Hong Kong, Japan, and Korea, which all offered telephone models at much lower costs than the US-manufactured electromechanical telephone units.
The onslaught of such competition meant trouble for AT;T CP since before 1983, it had never even sold as much as a telephone cord. Ironically, AT;T’s telephones were never designed to be marketable. The department had a “we make it, you take it” approach with regard to the telephone models they offered their customers. This has resulted in the sector’s declining revenues and unacceptable profit levels (Badaracco and White, 1993).
Thus, AT;T CP decided to explore the idea of off-shore manufacturing operations in Asia, where their major competitors came from. The site they selected for this endeavor was Singapore.
Section b. Nature of Interaction with Other Departments
AT;T has an organizational structure built around the lines of business in which the company is engaged in. There are two sectors created within AT;T for the overall management of resources to support the lines of its business: 1) AT;T Communications – for its long-distance service; and 2) AT;T CP – for its telephone manufacturing services. Each line of business is responsible for its own profitability and its contribution to AT;T revenues (Badaracco and White, 1993).
Section c. Major Actors and Processes Involved
For this case study, the following major actors are involved:
- Jim Bercaw, AT;T vice president for manufacturing during the time AT;T CP made the decision to outsource.
- The AT;T workers at its Shreveport Western Electric plant in northwestern Louisiana (who were directly affected by the company’s decision to outsource to Singapore).
The following major processes involved in this case study are:
- The use of the process of outsourcing as strategic implementation of the AT;T business strategy of improving its telephone manufacturing facility.
- The basis of behind management’s decision to outsource to Singapore, and the impact of such decision-making on its workers in the US.
Section d. Nature of Systems and Processes Used
A business strategy is concerned with the overall purpose and scope of the business to meet stakeholder expectations. It involves managing to business to increase profit and to survive in competitive environments, as well as to build capabilities to provide superior customer value. The business strategy is a key factor in an organization since it is often heavily influenced by investors in the business and serves to guide strategic decision-making throughout the business (Tutor2U, 2006; The University of Michigan, College of Engineering, 1999).
Creating an effective business strategy necessarily involves strategic planning, which is a dynamic process involving a complex pattern of actions and reactions. It is divided into two important segments: strategy formulation and strategy implementation (Moncrieff, 1999). Strategy formulation involves three steps (Markides, 1999, 1997; Wikipedia, 2007a; Moncrieff, 1999):
1) Determining where you are now
This involves performing a situation analysis wherein both internal and external situations were examined.
2) Determining where you want to go
This step involves setting objectives, assessment, and crafting vision statements (for the long term), mission statements (for the medium term), overall corporate objectives (both financial and strategic), strategic business unit objectives, and tactical objectives.
3) Determining how to get there
The last step involves drawing up a business plan. The objectives set should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to obtain these goals.
The next phase in strategic planning is strategy implementation which involves, but is not limited to, the following activities: resource allocation; managing cross-functional teams; assigning responsibility of specific tasks or processes to specific individuals or groups; managing the process; and implementing specific programs (Markides, 1999, 1997; Wikipedia, 2007a; Moncrieff, 1999).
In the case of AT;T CP, the business strategy is to maintain a competitive advantage over its Asian competitors by improving its telephone manufacturing facility. To implement this strategy, AT;T CP decided to make use of the process of outsourcing.
Outsourcing refers to the delegation of the non-core operations of an organization from its internal production to an external entity which specializes in the management of that particular operation (Wikipedia, 2007b). Simply put, outsourcing means paying another company to provide services which a company might otherwise have employed its own staff to perform (Learnthat.com, 2004).
The decision to outsource may be due to any or all of the following: lower operation costs, redirect or conserve energy directed at the competencies of a particular business, or to make more efficient use of the organization’s worldwide labor, capital technology, and resources (Wikipedia, 2007b).
Part 2. Theme
The theme selected for this paper is Decision Making. Specifically, it will study the processes and reasons behind the decision of AT;T CP in outsourcing its telephone manufacturing facility to Singapore. In doing so, the paper will examine not only the processes involved behind the decision-making, but will also examine the impact of the decision to outsource on the AT;T workers in the US.
Section a. Evidence of the Decision Involved in Carrying Out Operations
AT;T CP’s AT;T’s decision to relocate a telephone manufacturing facility in Singapore was premised on the fact that all its competitors came from Asia, especially from Japan. It thus decided to contract out the remainder of its manufacturing requirements to Asian original equipment manufacturers (OEMs). The logic behind choosing Singapore as its off-shore site was based on several factors:
1) Singapore had a strategic position in lieu of its Asian neighbors and had an excellent natural harbor, with a third of its labor force employed in manufacturing; 2) Singapore was an English-speaking country, and its Economic Development Board provided a kind of one-stop shopping for foreign companies who wanted to do business there; 3) The Singaporean government was known to be squeaky-clean, so corruption and bureaucracy would not be a problem; and 4) There was an existing building immediately available for lease at the time AT;T was looking into venturing its operations off-shore (Badaracco and White, 1993). These four elements form the elements around which AT;T CP focused its strategic formulation to outsource. They formed the basis for its decision to outsource to Singapore.
The plan to move to Singapore was also intended to save 10,000 jobs in the AT;T facilities in the US, although it entailed sacrificing 500 jobs in the US as operations were moved to Singapore (Badaracco and White, 1993).
Based on the case study (see Appendix), the relocation to Singapore appeared to be a good move, since it reduced AT;T CP’s labor costs by 90%, and its overhead costs by 40%. Overall, it saved 30% of its manufacturing costs by relocating to Singapore, even after accounting for tariffs and transportation costs (Badaracco and White, 1993).
Section b. Interaction/Focus on Main Groups Affected by the Decision
Unfortunately, the decision to outsource to Singapore had some internal side effects for AT;T CP, and directly affected certain groups or individuals within the sector. In 1985, AT;T laid of 875 workers at its Shreveport Western Electric plant in northwestern Louisiana, 100 of whom made residential phones. The remaining 650 residential telephone workers were eventually phased out through subsequent layoffs, transfers, or attrition. At the time of the layoff, AT;T announced it was shifting its manufacturing operations off-shore to Singapore to cut costs and remain competitive, with the announcement coming in the second year of the company’s three-year contract with the union International Brotherhood of Electrical Workers (IBEW).
According to IBEW, AT;T did not attempt to discuss or negotiate alternatives to moving off-shore with the union (Badaracco and White, 1993). AT;T workers who were let go received Trade Readjustment Payments, the benefits outlined in their union contracts (which included severance pay based on years of service and extended medical benefits), and Enhanced Training Opportunity Programs which re negotiated by the union to help its members prepare for life after AT;T (Badaracco and White, 1993).
Part 3. Analysis
The theme of this thesis is the analysis of the Decision Making process behind AT;T CP’s decision to outsource its telephone manufacturing facility to Singapore. This section will analyze whether AT;T CP’s decision has proven to be successful in implementing its business strategy. It will also examine the impact of the two elements of strategic planning – namely, strategy formulation and strategy implementation – within the entire organization, particularly from an operational and human resources perspective.
From an operational point-of-view, without considering the impact of the relocation to Singapore on AT;T’s US labor force, the AT;T CP decision to move was a sound strategy. The hourly compensation of production workers in manufacturing in Singapore is only $ 2.67, based on Exhibit 8 of the case study (see Appendix). It is does not, by far, offer the cheapest hourly compensation rate of all the other countries surveyed in Exhibit 8 – Hong Kong paid $ 2.40, while Malaysia paid $ 1.60 hourly rates on its production workers in manufacturing.
Yet even though Singapore does not offer the lowest or even one of the lower compensation rates for its workers, relocating to Singapore had many other benefits that would make it a logical choice, particularly for a US company that is venturing to an off-shore location for the first time. As mentioned, the government in Singapore is squeaky clean – the company would not have to struggle with corruption, red-tape, and bureaucracy which are quite prevalent in Third World countries. In addition, Singapore has not had a history of religious or civil wars, like Malaysia, even though the latter also offers a one-stop-shopping opportunity like Singapore.
However, unlike Thailand and Malaysia, Singapore is an English-speaking country, which is important in helping to launch the off-shore plant according to the US strategies and mission visions. Even though AT;T’s vice president of manufacturing at the time, Jim Bercaw, stated that they did not want to build an American factory in Singapore, but eventually wanted a plant run solely by Singaporeans, the fact that the labor force could speak English at the initial launch of the plant is crucial.
All training materials, and most importantly, company communication materials pertaining to AT;T’s CP business foundation (“Business Passion” and “Shared Values”) are most likely in English. To impart these values to the Singaporeans would be easier if they spoke English as well.
Based on the Exhibits, particularly Exhibit 8, Singapore appears to be the best off-shore location, especially since this is the first time the company ventured into non-US manufacturing operations. From an operational perspective, thus, the decision to outsource to Singapore was a good strategy. However, a different opinion is present with regard to the impact of such a decision to AT;T CP’s labor force.
The problem with AT;T CP’s approach was that it was simply reactive. It did not prepare or anticipate thoroughly the impact of such a decision on its workers – many of whom have built their lives around the company and have been loyal to AT;T for many years. CP implemented its decision without seriously considering the impact on its US work force and without consulting or at least briefing and negotiating with the union.
Even though from an operational perspective, the move to Singapore drastically reduced manufacturing costs, the operations in the US still remained a vital element in AT;T. And operations in the US was strongly linked with the morale and human resources management of its workforce. I believe AT;T should have first considered their options in the US – there was a US Greenfield site in Texas or the AT;T “factory-within-a-factory” (Badaracco and White, 1993, p. 19) plant available.
The company should have thoroughly exhausted their options domestically, and should have conducted business plans or feasibility studies of containing their operations within the US. As their executives themselves admitted, the jump to Singapore was literally a jump, and “iffy” situation that merely reacted to intense competition. Their main premise, after all, for moving to Asia was simply because their competitors were Asian.
AT;T should have considered the possibilities of replicating the quality of work and operations of their competitors in domestic territory first. Feasibility studies of developing a manufacturing plant to rival their competitors could have considered the cost and length of time required to re-train their current workforce, to determine the kind of training they needed, and to determine their trainability. In other words, it should have first exhausted all remedies available within the US before shifting its operations outside the country.
Part 4. Conclusion
In conclusion, even if it more cost efficient and profitable to simply shift their operations to Asia, AT;T should have still prepared its internal workforce for the impact of the decision to outsource. It took great pains to redevelop a company strategy that is all about “Business Passion” and “Shared Values” but in failing to prepare their people in the decision to outsource, and to allow them to participate even in a small way in the decision, completely belies this mission and vision of the company of putting people first.
Laying-off is always a painful process, and AT;T should have been prepared with the impact of lay-offs on worker morale and on its organizational culture as a whole. Negotiating with the unions, open forum discussions with the unions, members, and workers, and a thorough review of performance evaluations should have been in order. Workers should have also been given advanced notice, should they prefer to consider seeking employment elsewhere, or should they want to at least prepare themselves and their families financially on the prospect of an impending lay-off.
The reactive measures taken by AT;T – on offering severance packages and retraining programs, among others – were commendable, but they do not account for the impact on morale especially of the workers who were retained. The workers who were left behind would still be in constant fear of losing their jobs should the company decide to launch yet another offshore operation that may threaten or endanger their jobs. And the loss of their colleagues does not exactly make for a happy and motivating work environment.
What the AT;T CP case study clearly shows that Decision Making has a tremendous impact on all aspects of an organization, and as such, strategic planning before actual implementation of a business decision is crucial. In both formulating and implementing the strategies needed to implement a decision made, management or the decision-makers in the organization must carefully analyze and prepare the impact of such a decision throughout the entire organization.
BIBLIOGRAPHY
Badaracco, J. and White, W. (July 7, 1993), AT;T Consumer Products, Harvard Business School Case # 392-108, Boston, MA: President and Fellows of Harvard College, Publishing Division, Harvard Business School.
Learnthat.com. (2004), outsourcing Definition, [Online], Available from:
;http://www.learnthat.com/define/view.asp?id=685; [13 May 2007]
Markides, C. (1999), A dynamic view of strategy, Sloan Management Review, 40: 55-63.
Markides, C. (1997), Strategic innovation, Sloan Management Review, 38: 31-42.
Moncrieff, J. (1999), Is strategy making a difference? Long Range Planning Review, 32(2): 273-276.
The University of Michigan College of Engineering. (1999), What is Strategy? [Online], Program In Manufacturing, Available from: ;http://www.engin.umich.edu/class/mfg501/mfg501_1999_dist/tsld003.htm; [13 May 2007]
Tutor2U. (2006), Strategy – what is strategy? [Online], Available from: ;http://www.tutor2u.net/business/strategy/what_is_strategy.htm; [13 May 2007]
Wikipedia, The Free Encyclopedia. (2007a), Strategy dynamics, [Online], Available from: ;http://en.wikipedia.org/wiki/Strategy_dynamics; [13 May 2007]
Wikipedia, The Free Encyclopedia. (2007b), Outsourcing, [Online], Available from:
;http://en.wikipedia.org/wiki/Outsourcing; [13 May 2007]
Evidence- Based Decision Making and Discovery
There is a history of information that has been compiled by health care professionals and sets guidelines for decision making done by health care professionals today. I Research Methods I Qualitative and quantitative research are two selecting research methods seed by scientists to collect and analyze date. Quantitative research is focused and objective research based on mathematics. Qualitative research looks at the whole picture, is subjective and collects data non-mathematically usually using symbolic representations.
I Manuscript Organization I An organized manuscript allows the readers to understand and to be Informed of the Information In the easiest and clearest way possible. Manuscripts follow a general format that Includes an abstract, introduction, background, methodology, results and discussion, conclusions, acknowledgments, references, appendices, and tables and figures. The abstract is a summary of what the paper is about and discusses the processes and methods used. The introduction allows the reader to know what the paper is going to be about and why It Is important.
The background fills the reader In on previous research and the study. Results and discussion is the part of the manuscript that discusses what the research found and what it means. The conclusion sums up the paper and recognizes advancements that have made because of the research done. The references portion of the paper is where all sources used are cited to give proper credit to publications that aided in the research. The appendices are additional methodologies that weren’t included in the main paper but are important. Tables are used to show large amounts of dare and figures show illustrations.
I Patients need to be provided the best care by their health care providers. Two aspects of providing this type of care focuses on evidence-based decision making and effective business planning. Evidence is so important in scientific discovery. Scientific ideas are tested based on evidence. The acceptance or rejection of an idea is based on the evidence that it relevant, not based on an opinion, or tradition. In order to have a scientific coverer the idea must be testable and actually be tested; evidence is what is used to test the ideas.
With no evidence to a scientific idea be rejected and a discovery will not occur. Effective business planning is also a key in the process of scientific discoveries. Business planning needs to be centered on the evidence. Qualitative and quantitative research are two scientific research methods used by scientists to collect and analyze date. Quantitative research is focused and objective research based on mathematics. Qualitative research looks at the whole picture, is subjective, and elects data non-mathematically usually using symbolic representations.
This evidence that the researchers gather is needed so that a discovery can be done by proving and disproving different hypotheses. It that the research stays within the budget available and for this to be done effective business planning needs to be done as well. For the best care to be provided evidence-based decision making and business planning need to continue in order for advancements in the medical field to continue. There are numerous examples of evidenced based decision making and business planning throughout the history of the medical field.
One example of a scientific discovery using evidence resulting from the experiment is Ernest Rutherford labs test to see if an atom’s positive mass is spread out diffusely by firing an alpha particle beam through a piece of gold foil (Caldwell, 2008). In this experiment the evidence showed that the majority of the alpha particles bounced back in the opposite direction as if they struck something dense. If the alpha particles were not dense then they would have passed through the foil, so the evidence showed that the atoms positive charge was actually dense and located in its core or nucleus.
Lean Accounting
Essay Question 1 What are the main benefits and challenges of implementing a lean accounting system in a lean manufacturing environment? Do you anticipate interest in lean accounting will grow, the methods will change, or the concepts will fade out and be replaced with another ‘flavor of the month’? How do you perceive lean principles affecting your career? Justify your answers. I. Lean Accounting Lean accounting often refers to more simplified accounting practices that focuses on eliminating waste, reducing production lead time, and producing products on customer demand.
But Lean accounting does not stand alone. It is enabled by lean thinking and lean production methods. And lean accounting not only needs lean manufacturing, it also facilitates lean manufacturing. 1 That’s why lean accounting is always related to, but not necessarily have to be associated with lean manufacturing. Here are some specific positive reasons that lean accounting is important. 1. Reduces time, cost, and waste by eliminating wasteful transactions and systems. 2. A better way to understand costs, product costs and value stream costs. 3. Provides information for better lean decision making. 4.
Identifies the potential financial benefits of lean manufacturing improvements. 5. Frees up the time for finance people to work on lean improvement. 6. Focuses the business around the value-added activities created for customers. 2 II. Benefits of Implementing a Lean Accounting System in a Lean Manufacturing Environment According to the positive reasons that addressed above, companies can be benefited from implementing a lean accounting system in a lean manufacturing environment in several different ways. 1. Eliminate Waste One of the most important objectives of lean improvement is to eliminate waste from the non-value-added . Chapter 2, “Maturity Path to Lean Accounting”, Practical Lean Accounting. 2. Chapter 1, “Why Is Lean Accounting Important? ”, Practical Lean Accounting. activities and processes of the company. Companies can save costs, free up capacity and improve product quality through eliminating waste. Generally, most of the reduced waste translates into available capacity. Then, companies can make good use of the freed up capacity to generate financial benefits. If the reduced waste saves costs, companies can reinvest the saved working capital into the business and make improvements in production. 2.
Better Lean Decision Making Lean accounting methods for decision-making revolve around an understanding of the flow of production through the value streams, and the effect of these decisions on the value stream profitability and contribution. Why we need to manage the business through the value streams? It was repeatedly stressed that the primary importance in lean is the focus on the flow of the product from the customer order to its final delivery. 3 We can clearly analyze the performance of the company through three parts on a box score, i. e. , operational performance, capacity usage, financial performance.
Then, it’s easy, clear, and quick to make decisions upon the specific information we need. Especially, the advantages are that we can change some of the information to see how they will affect the profitability and margin, like some of the exercise we did with the outsourcing decision, and the financial information is up to date, often to the current week. 4 3. Time Freed up Employees are often categorized into different value streams so that the time of employee has been freed up by lean accounting, meaning that companies produce the same level of product or services with fewer employees.
And finance people do not have to spend a lot of time preparing the financial statements, because it’s simpler and straightforward, forecasting and budgeting. Another way to conclude is employees’ work efficiency has been improved. Companies will save money if labor cost is reduced, as labor cost is usually the highest expense in the companies. The freed up time not only saves cost, but also can be devoted to lean improvements to pursue the goal of continuous improvement. In addition, companies can use the available time to cross-train employees and create them more skilled. . Chapter 7, “Managing by Value Stream”, Practical Lean Accounting. 4. SMA (2) _Lean Accounting, Decision Making, P23. III. Challenges of Implementing a Lean Accounting System in a Lean Manufacturing Environment Although there are more benefits from the implementation of lean accounting, the challenges do exist. There are always two sides to a thing. And we can’t avoid some challenges during the implementation process. 1. Senior Management Initiative This is the most critical part when implementing lean accounting in a lean manufacturing environment.
Lean implementation across the company will not be successful if senior management is not fully committed. The same situation in Who’s Counting? , the company won’t achieve anything if the executives are not fully supportive. And there will be conflicts between different departments, because they are not on the same boat. 2. Short-term Profitability Companies may find out that there is no short-term financial improvement after implementing lean. And this causes comments such as: “We see wonderful results in operations, but they don’t show up in the financial statements.
If lean is so great, why doesn’t it hit the bottom line? ”5 So lean accounting faces with the challenge that how to present and convince the executive team with different perspective and make sure they don’t give up transforming into lean in the very beginning formation of lean. 3. Traditional Accounting System Stand in the Way For those companies who have already on the right track, it’s harmful for companies to still use the traditional accounting methods. There is a very common example of this problem. Using the traditional accounting methods do not show the financial benefit of lean manufacturing, especially hen there is a sudden reduction in inventory level which has a negative effect on company’s profitability. IV. Future of Lean Accounting Before this course, I didn’t even hear about lean accounting. But, after learning this new concept via different channels, I personally prefer the idea of lean accounting than traditional accounting. Now, people desperately find ways to make things simpler, and easier to understand and use. So, in my opinion, the future for lean accounting is promising in that it saves time and energy, provides understandable information for all others besides the finance . Chapter 4, “Financial Benefits of Lean Manufacturing”, Practical Lean Accounting. people, and is value-added. Lean production is a model for the future—it may well become an essential element of a sustainable global strategy. As Henry Ford so aptly noted, “Customers cannot be expected to pay for waste, nor can a worker be paid very much for producing waste. ”6 Lean is all about eliminating waste and creates value for both customers and the companies. But there are some problems when it comes to the time needed to completely transform into lean.
Recall this issue from Who’s Counting? , it takes time to implement lean accounting and see the anticipated outcome from it. And a most critical problem is that lean accounting requires proper environment, i. e. , a lean manufacturing environment, to work out. However, everything takes time and has its disadvantages. Maybe some changes will be added to it and make it happen without these problems. In a word, the best future for lean accounting will be figured out through more and more companies joining the implementation of lean accounting and those companies wanting the change.
V. Lean Principles Affect the Career The five lean principles, to be simplified, are 1) Customer value; 2) Define the value stream; 3) Create flow; 4) Create pull; 5) Continuous improvement. From my understanding, I think these principles can be concluded by a concept in lean thinking, i. e. , PDCA (Plan-Do-Check-Act). First of all, there should be a short-term or long-term plan for my career. And the core objective is to create value for the work and the company.
Second, implement those plans instead of just thinking; find the root cause to solve problems instead of running away from them; be proactive in work, that is to say, don’t wait others to push me move forward. Third, constantly check whether I am on my way towards the ultimate goal in my career and make changes accordingly. Fourth, be strict with myself. The organization should continuously strive itself to become better and better. So do I. I have to make progress every day in order to adapt to the changing environment. Seeking perfection can be the ultimate goal both in career and in life. 6.
SMA _Lean Enterprise, Conclusion, P28. Bibliography [1] Tyler Lacoma, Demand Media, Accounting Differences with Lean vs. Traditional Manufacturing [2] Dan Antony, Demand Media, Benefits of Lean Accounting in a Lean Manufacturing Company [3] Dan Woods, Lean Accounting’s Fat Problem, 07/28/2009 [4] John Cleveland, Benefits of lean in the accounting department, Feb, 2005 [5] Brain Maskell; Bruce Baggaley, Practical Lean Accounting [6] SMA _Lean Enterprise; SMA _Lean Accounting [7] Karen M. Kroll, The Lowdown on Lean Accounting—A new way of looking at the numbers, Journal of Accountancy, July 2004
SYSCO Case Study
The existence of ERP (enterprise resource planning) application quickly becomes the integrated information solution across the entire organization that allows companies to understand their business. With ERP software, companies can standardize business processes and more easily support best practices. Instead of treating these transactions separately, an ERP system considers functions to be the part of the inter-linked processes that make up the business. By conducting this kind of effective process, companies can concentrate their efforts on serving their customers and maximizing profit.
Concerning the use of attractive software in, this paper will discuss about business intelligence software at SYSCO. The analysis will employ Harvard Business School Decision Method prove-and-state model.
1. Decision options According to the case study, there are three options in how SYSCO would want to purchase the licenses and software components and get the Business Intelligence system up and running. As mentioned in the case study, there are logical reasons of preparing three options in a decision-making session, rather than any other number.
Having only three options narrows your view so it will prevent you from loosing perspective about the goal of the program. The first and last options are usually the first ‘real’ choices because it represents the extreme polars of the consideration. The middle option is generally used as a buffer and a comparison to let people know what would happen if a moderate position is taken. In many decision-making processes, the middle option is surprisingly often becomes the option of choice because it contains the value of both the other options.
This is not always the case in all decision-making activities. Sometimes, the middle option becomes one of those solutions who do not have real value inside it, something people do just to prove that they have in fact ‘do something’ about their conditions. In the case of SYSCO , the three options are:
• The ‘bare bones’ scenario The basic idea of this scenario is to save money by spending as little as can be in the short term. Thus, if SYSCO does not want to spend too much money on initial basis, this bare bones scenario is the right choice. Also read D esperate Air case analysis
In this scenario, it is suggested that SYSCO purchase the minimum number of licenses and software components. SYSCO could provide performance dashboards only to 10 people at each of its broad line operating companies, which sum-up to 830 licenses. At each operating company, only three people would also been given the right to do analysis. From corporate IT on the other hand, five people would be given the right to analysis. Another license is required for a person from every operating company to create specialized reports.
For the corporate IT groups, SYSCO would need to purchase 3 licenses to generate companywide reports. The company would also need to purchase 1,000 licenses for companies who might need to access the reports. SYSCO however, would not license new customer intelligence analytical module as offered by Business Objects, their IT vendor, but instead it would work together with Business Objects consultants to perform more calculations.
• The ‘Middle of the Road’ scenario The basic idea of this second scenario is to create a middle way between the two extremes in terms of initial investments.
In this scenario, SYSCO would buy somewhat more software components and licenses to provide a broader access to business intelligence information all around SYSCO. For instant, 10 instead of 15 user licenses shall be bought to provide for each operating company. Instead of 1,000 basic licenses, Sysco would purchase 1,300 basic licenses for their employees.
• The Volume Discount Scenario In the third option, SYSCO would take advantage of the volume discount offered by Business Objects and purchase a lot more licenses and software components for its IT structure. Read
eliminate the middleman case study solution
The effect of such a move is of course SYSCO must make a larger initial investment, but SYSCO would have provided a broader group of people at the company that would be able to access the business intelligence data. After the installation phase is completed, SYSCO would be able to take advantage of the customer intelligence module and the supply chain module along with 1,300 basic licenses. Within all these scenarios, SYSCO have decided to use three Business Objects consultants for nine months, which would cost about 1 million in consultant fees, In addition, SYSCO would also like to purchase a basic software maintenance package.
Market Competition Terracotta Guides
Terracotta management failed to respond to competition in its market. Although competitor introduced a new GAPS with satellite imagery to the market, Terracotta team dismissed the threat and decided not to take a responsive action. However, quickly the new GAPS succeed and gained a significant market share. Eventually, Terracotta president decided to pursue a development of a directly competing product, and named the project Aerial. Unfortunately, the projected high costs of this project questioned its profitability and doubt its wisdom.
The key managers of the company were not able to decide whether to execute the project or not, and Emma Richardson, the new executive vice-president, needed to push the group toward a decision. The analysis we have done indicates that Terracotta case is an outcome of two major problems. The first problem is the existence of a poor decision making process, and the second is the lack of departmental cooperation and harmony. Alternative Courses of Action: We believe that Richardson should postpone the launch of Aerial, and focus on creating a more efficient decision making process and increasing departmental cooperation.
Since time is crucial in this case, we see a need to decrease the time of decision making process and re-defining communication channels between the departments. We also argue that the size of this team as well as the fact that the teammates came from four different departments created complex communication channels that slowed down decision making. In this case, small groups can undertake better the urgent tasks. Hence, we think that Richardson should break the complex process of launching a new product into micro-processes.
We believe that by brainstorming with the heads of every department separately, defining criteria and performance tankards, and listening to each team’s requirements and reservations, Richardson will be able to clarify for the teams their importance to the company and motivate them to act toward the company’s goal. Commitment to a common goal is more easily achieved if the number of team members is small (Essentials for an Effective Team, To keep the work on track and to increase departmental cooperation, 2006).
Richardson should conduct update meetings every other week with all the departments’ heads. The agenda of these wide department meetings should be clear and exclude decisions making. The different decisions should be made within smaller groups that include only the relevant teams. To increase harmony among the departments, Richardson can open department wide meetings with a short speech about similar past experiences of the company to remind the teams how they worked well together and performed successfully when they cooperated.
Recalling past experiences may increase sense of belonging and help to put the big picture in mind before discussing current issues. Moreover, Richardson can invite the teams’ mangers to have lunch together before department wide meetings. Socializing with each other right before getting to business can cool things down, ease the tension, and increase departmental cooperation. We believe that if the heads of the different departments will understand the importance and the needs of other departments, working together will become easier and more efficient.
Another way to increase departmental cooperation is by sharing information on the processes each department went through. For example, while discussing the price of a new product, Tony could provide specific details regarding production’s costs to explain why further lowering of costs is impossible. While this alternative might be time consuming, sharing information can help the teams to understand better the different points of view of the different departments. Recommended Course of Action: We believe that a combination of the alternatives above would be the best way to address the situation in this case.
First, we recommend postponing the launch of the current prototype. Launching Aerial on its current form will damage the company’s reputation and can lead the company to a big loss. We assume that if Aerial wont provide its users a significant advantage, customers wouldn’t pay more than the Bird’s price to buy it. Second, in order to accelerate the decision making process, Richardson should redesign the current communication channels in the company. Decisions need to be made in smaller teams, and wide department meetings need to be designated for updates only.
Third, to increase departmental cooperation and harmony, Richardson should establish a process of sharing information between the departments. Furthermore, structuring time for socializing can ease the stress and increase harmony among the departments. We believe that this alternative course of action will lead to minimum damage in Terracotta position, ND allow the company to improve its productivity and ability to respond faster to competition in the future. Implementation: First, Richardson should invite all the people who were present in the last two meetings to announce her decision.
This meeting should be friendly and short, and most important, clear and motivating. Richardson should open the meeting with demonstrating an appreciation for the hard work done by all the departments. Then, the announcement of her decision to postpone the launch of Aerial should be followed by a short explanation about the upcoming changes: From now on, once a week, every department should email a rife description of the progress they made at the past week to the entire company.
This weekly update emails will enable an efficient way to share information between the departments. In addition, wide department meetings will take place every other week, and once a month these meetings will include a friendly lunch prior to the meeting. After the meeting, Richardson should meet with the heads of design and development department. In this meeting, they need to agree and define the requirements to develop a product that is superior to the Birds, on minimum costs and time, and draw a realistic schedule to move forward.
Now, when the new product is in its first stages of creation, and there is a general idea of what specifications and characteristics it will have, as well as an expected time for launching, Richardson should meet with the UP of Sales, to create marketing plan for the new product. The production team will work alone on costs estimating for the new product, and the sales team in consultation with finance department will determine a pricing and develop a “go- to market” plan. Moreover, Richardson should set clear limits to the continuance of commitment to the project for every department.
Determining what criteria and performance standards Justify continued investment in the project can help the team avoid escalation of commitment (Team Decision Making Pitfalls and Solutions, n. D). Whenever disagreements on to what level the teams should commit to a specific task will arose, they could refer to the performance’s standards and make a decision accordingly. The process will be managed by Richardson from the top, and the heads of every department will make decisions that are relevant to their departments’ areas of knowledge and responsibility, and report to Richardson, who ill manage the whole process.
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