Strategy

Outline the main components of Kim and Mauborgne’s (2004) concept of ‘Blue Ocean Strategy’. Critically assess the strengths and limitations of this approach to pursuing competitive advantage. Use relevant examples to support your argument. Introduction In the contemporary hostile business environment, innovation has become part of any company’s paramount strategy for continuous survival. Nokia, despite being the world’s largest mobile phone manufacturer having a large customer base, realized how lack of innovation to compete against rivals high end smart phones threatened its market presence.

Kim and Mauborgne’s (2004) Blue Ocean Strategy is one of the major contributions in that context. Accordingly, this essay examines the Blue Ocean Strategy concept in the following order: First, the theory is explained with a real-life example. Secondly we look at few of its limitations. Thirdly, a critical appraisal of why this approach is better or worse off than other competing and value innovation theories is presented and finally the conclusion is drawn. Blue Ocean Strategy Theory

According to Kim and Mauborgne (2004) the business universe consists of two distinct kinds of space: Red and Blue Oceans. Red Oceans are the known market space where industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the market. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the ocean bloody and hence, the term red ocean.

Blue oceans, in contrast, refer to all the industries not in existence today—the unknown market space, untainted by competition. The essence of Blue Oceans is value innovation where demand is created rather than fought over. There is ample opportunity for rapid growth and profits. In Blue Ocean, competition is irrelevant because the rules of the game are waiting to be set. In contrast to Red Ocean which emphasizes either on cost or differentiation strategy, Blue Ocean suggests it is possible to attain both simultaneously. Pursuing this strategy is able to create high barriers to entry.

There are two ways to create blue oceans: one is to give rise to completely new industries and the other is by changing the boundary of an existing industry. One of the classic examples of Blue Ocean strategy was Fords invention of Model T back in 1908. At that time the automobile industry in US was saturated (Red Ocean) with 500 small car companies manufacturing few expensive cars for the rich citizens only. Ford redefined the industry by the introduction of Model T car which was more robust, affordable and had less maintenance cost.

With high demand and standardization in its product it was able to attain both differentiation and low cost. Thus instead of entering and competing on the same level Ford made the competition irrelevant by tapping into a whole new market or Blue Ocean within the existing industry. Limitations Some of the Blue Ocean Strategy limitation suggested by Bowman (2008) includes the cost associated with failed projects and innovations, the ambiguity in the industry definition and the methodology carried out for the theory. Other Strategy Theories and Approaches

Competitive Strategy Forces Porter’s five forces viewing competition as the main issue that business out to be addressing is in direct contrast to Blue Ocean’s view of value innovation and creating new market. A recent research in the retail market by Barke (2010) suggests that Porter’s view of increased firm leading to lower profitability is in fact true but it does not go down alarmingly as suggested but rather a ‘pedestrian force’. Also Blue Ocean innovation in an existing market can last for 15 years before it to go down to a basic level (Barke, 2010).

What that means is that the profit gains from innovation, in an existing market, are a lot more than previously supposed. Disruptive Innovation Kim and Mauborgne (2004) failed to identify the difficulty in adopting Blue Ocean strategy particularly for the established firms. Christensen and Overdorf (2004) spotted this issue in their ‘disruptive innovation’ model which bears similarity with Blue Ocean in that new markets can be created with the existing industry and ‘continual innovation’ is needed for survival. Broadly defining, it is a strategy which disturbs the trajectory f an industry it is heading to, instead of trying to change the whole industry and does so by targeting the so called non-consumers. Christensen argues that established firm’s strength in resources, process, and values culture can often lead to rigidity to change and adapt to threats or explore new markets. Easy jets incremental growth and rise in dominance against other airlines such as British Airways is a perfect example. British Airways tried to change its business model and copy Easy Jet’s low cost strategy but miserably failed due to its different value.

Christensen and Overdorf (2000) highlight this issue about the ‘dangers of quickly imitating by established firms’ and instead urges new ‘organizational structure, acquisition’ means to tackle the issue. They further go on to say that small disruptive startups will always have an added advantage over established firms due to less stress in ‘managing resources’ and in CEO’s ‘quick intuitive decisions. ’ Their theory, thus, provide a whole new perspective in Blue Ocean Strategy model. Experience Innovation and Co-Creation of Value

Prahalad (2004) argues that that today, customers want to be involved more and more in the production experience or become ‘co-creator’s’ instead of the ‘dominant logic’ of companies that decides which product to manufacture and sell as suggested by Blue Ocean strategy and other theories. According to him, this dominant logic fails to recognize threats, seize opportunities, growth and innovation. He suggests ‘value’ is created through experience of consuming the product rather than only measured by product, service or transaction (Prahalad, 2004: 173).

This is what terms as ‘experience innovation’ that can be created through a paradigm known as ‘DART (Dialogue, Access and Choice, Risk Assessment and Transpercy). ’ Starbucks is a good example here – where people just don’t go to drink coffee but rather to experience of the coffee shop culture. Trends in Japanese Management While Blue Ocean Strategy emphasizes on finding a new market for competitive advantage, Clegg and Kono (2002) asserts that one of the rise of Japanese companies such as Hitachi and Toshiba was ‘developing strategic alliances and co operation with other companies’ (Clegg and Kono, 2002: 278).

Further dissimilarity in Blue Ocean strategy includes Hamel and Prahalad (1989) ‘advantage of being a follower rather than a leader’ which enables companies to have a ‘strategic intent’ or a long term vision of winning and beating the biggest in the business such as Canon sought to beat ‘Xerox’ and ultimately matching global unit market share. Conclusion The competitive perspective suggests that companies should pay close attention to their existing markets when looking for opportunities for innovation; that competition is a much weaker force in terms of eroding the benefits from innovation.

Disruptive innovation highlights the obstacles faced by firms in pursuing Blue Ocean but rightly urges firms to adopt this strategy for survival. With the current IT phenomena the experience innovation’s holistic view of measuring value through consumer is a new breadth of fresh air that should be included and be a part of Blue Ocean Strategy. Lastly, the trends in Japanese Management indicates that other successful strategy theories must also be considered alongside Blue Ocean as part of companies broader business plan to remain competitive.

For more than eight decades, the name Walt Disney has been paramount in the industry of family entertainment. From humble beginnings as a cartoon studio in the 1920s to today’s global corporation, The Walt Disney Company continues to proudly provide quality entertainment for every member of the family, across America and around the world. Originally known as the Disney Brothers Cartoon Studio, with Walt Disney and his brother Roy as equal partners, the company soon changed its name, to the Walt Disney Studio, at Roy’s suggestion.

Young arrived in California in the summer of 1923 with dreams and determination. He had made a short film in Kansas City about a little girl in a cartoon world, called Alice’s Wonderland, and he planned to use it as his “pilot” film to sell a series of these Alice Comedies to a distributor. On October 16, 1923, a New York distributor, M. J. Winkler, contracted to release the Alice Comedies, and this date became the formal beginning of The Walt Disney Company.

External Environment

The examples of factors that have effected the way it has behaved are as follows.

Social

The Walt Disney Company fostered the spirit of creativity, innovation and excellence that continues to underlie all of the company’s success. It believes that quality entertainment is for all members of the family across America and around the world. It gives a chance for the whole family to sit together and have a good time.

Technological

Silent cartoons were produced in as early as 1927. He introduced the first film with synchronized sound – The Jazz Singer.

This was a huge success and later implied on Mickey Mouse, Silly Symphonies, Steamboat Willie, etc. Mickey Mouse became an immediate sensation instantly. In partnership with Pixar Animation, the company released the first computer-animated feature film, Toy Story. This was followed by a series of highly successful Disney/Pixar collaborations, A bug’s life, Toy Story 2, Monsters, Inc. , Finding Nemo and The Incredibles.

Economic

These movies were released in the theaters and people enjoyed watching them with their kids at a normal rate.These movies were not charged any differently than the Hollywood Classics.

 Political

During the war, Walt Disney made two films about South America, Saludos Amigos and The Three Caballeros, at the request of the State Department. The studio also concentrated on producing propaganda and training films for the military. When the war ended, it was difficult for the Disney Studio to regain its pre-war footing. With the advent of World War II, the company lost access to most of its foreign markets. The studio was also at some financial risk.

Legal Factors

Within a year of its existence, Walt made 26 Oswald cartoons, but when he tried to get some additional money from Winkler for a second year of the cartoons, he found out that the distributor had gone behind his back and signed up almost all of his animators, hoping to make the Oswald cartoons in his own studio for less money without Walt. Since the distributor owned the rights to Oswald, there was nothing Walt could do. It was a painful lesson for the young cartoon producer. From then on, he learned that he owned everything he made.

Later Walt with his chief animator Ub Iwerks, designed a mouse whom his wife named Mickey, and a star was born. The relationship between the Walt Disney Company and the environment according to SWOT analysis is as follows.

The Walt Disney Company’s Strengths

1. The Walt Disney Company is the second largest media and Entertainment Corporation in the world, after Time Warner, according to Forbes
2. Diversified Entertainment Company.
3. It owns media networks as well as parks and resorts.
4. It makes movies and markets consumer products.
5. Developed a very strong and well known “brand-name and image” over many years.
6. Disney Land is the top rated destination for vacation.

The Walt Disney Company’s Weaknesses

1. The idea of Disney’s frequent change in top management.
2. Broader product portfolio gains many different niches and gives them a bigger image, but it also means that there are going to be that many more workers. This means greater possibilities for miscommunication and a high chance for a bureaucracy in the company. As of September 2007, there were 130, 000 people working for Disney in some way or another.
3. According to many, the Hong Kong Disney Land Resort has yet to live up to the expectations of Disney’s resorts and parks. The $1. 8 billion theme park has only 16 attractions, only one of which is a classic Disney thrill ride (Space Mountain), compared to 52 at Disneyland Resort Paris.

A recent study of Hong Kong Polytechnic University showed that 70% of the local residents had a negative opinion of Hong Kong Disneyland Resort. The Walt Disney Company’s Opportunities The markets of today are becoming more versatile to outsourcing and globalization and The Walt Disney Company is revealing this by

• expanding outside of the United States and offering theme parks in France, Japan and China
• another expansion opportunity from U. S. soil was mentioned earlier regarding the Disney Cruise Line, a service well placed and growing in popularity.

The Walt Disney Company’s Threats

1. In Disney’s case their theme parks must meet the safety regulations of the countries in which they operate in order to stay in business and maintain their international status.
2. In the entertainment and theme park industry there are many competitors, such as Paramount Parks, Universal Studios and Six Flags Theme Parks. However, there are many other less visible competitors that one might not naturally think of when assessing the competitive market in which Disney deals. For example, there are hundreds of water parks and various funplexes that can also be considered as cheaper or more valuable competition for Disney. Competition, in any form, can diminish Disney’s market share in the entertainment industry.

Guidelines for SWOT analysis for Walt Disney

1. Keep it simple
2. Focus on your organization.
3. Look for patterns.
4. Look for action that can be taken within a year.
5. Don’t get lost in the future.
6. Be rooted in the now.

Organizational Culture of the Walt Disney Company

The Walt Disney Company has a culture based on high-quality products, optimism for the future, great storytelling, an emphasis on family entertainment and great talent, passion and dedication from the Cast Members. A good example of shared values is Walt and Roy together with their chief and loyal animator Ub Iwerks, Walt created Mortimer Mouse, which was renamed Mickey Mouse by his wife. The first cartoon with synchronized sound was released at the Colony Theater in New York, November 18, 1928.

Walt Disney won its first Academy Award for Best Cartoon in 1932 and continued to be honored with an Oscar every year for a decade. Disney appeals to our childhood. They will always be favored by kids and will surely keep a preferred spot in the minds of adults. If only they live up to meet our expectations, to visualize our common fantasies. Disney could survive on the “classics” if it needed to. They get a new audience every day. But where has the imagination gone that prevents us adding some value. Today Disney is milking their theme park business–to the detriment of their brand.

There is no argument that Disney is a pop culture icon in the U. S. However, the substance is not there. The rides, with a few exceptions, are dated and boring. It is not into reinvesting into their theme park business to keep it on top.

Create (Adhocracy) Culture

The Walt Disney Company has a Create (Adhocracy) Culture. This culture has a dynamic, entrepreneurial, and creative place to work. Innovation and risk-taking are embraced by employees and leaders. A commitment to experimentation and thinking differently are what unify the organization.

They strive to be on the leading edge. The long-term emphasis is on growth and acquiring new resources. Success means gaining unique and new products or services. Being an industry leader is important. Individual initiative and freedom are encouraged. The Walt Disney Company has all the characteristics of a Creative Culture. The mission of The Walt Disney Company is to be one of the world’s leading producers and providers of entertainment and information. They seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.

The Walt Disney Company believes that it has to stay one step ahead of the competition to be the most innovative and creative animator.

Organizational Culture and Organizational behavior of The Walt Disney Company

The Organizational Culture of The Walt Disney Company is a Create (Adhocracy) Culture. This culture invites and appreciates new, creative, innovative and exciting ideas. Walt and Roy believed that he had to stay one step ahead of the competition in order to be the most innovative and creative animator of all times.

They have a high standard of entertainment and have made people believe that animation and cartoons are not only for children but for adults as well. The implementation of these stimulating ideas with the advantage of latest technological devices and techniques and training their employees is the organizational behavior of the company. Disney has constructed its own University that employees must attend and complete before ever being allowed to work at a Disney Theme Park. Disney University believes “The front line is the bottom line,” and, “It’s 10 percent product and 90 percent service,”.

Compete (Market) Culture

Using a different culture like that of a “Compete (Market)” Culture in which job completion is main objective of the company and employees are competitive and goal-oriented, a different approach would be established by the leaders who will be demanding, hard-driving, and productive. The emphasis on winning unifies the organization. Reputation and success are common concerns. Long-term focus is on competitive action and achievement of measurable goals and targets. Success means market share and penetration. Competitive pricing and market leadership are important.

This type of organisational culture would demand a tough and strict environment where openness and creativity is limited or not required. It would have a “do as said” attitude with acute strictness and constrictiveness. All the ideas would be commanded by the producer and the animators would follow as instructed without being allowed to interrupt or magnify their imagination. This would be unsuitable environment for Walt Disney as Disney is all about magic, imagination and dreams.

Business Strategy

Four Types of Strategies

• Price Leadership – through dominating the industry – others follow your price lead
• Global – seeking to expand global operations.
• Reengineering – thinking outside the box – looking at new ways of doing things to leverage the organisation’s performance.
• Contraction/Expansion – focus on what you are good at (core competencies) or seek to expand into a range of markets.

The Walt Disney Strategy

The Walt Disney Company has adopted the strategy of Expanding. Since its start in 1923, Walt and his brother worked out their best to present and invent the best animations ever.

The Walt Disney Company is in business:

1. to produce entertaining theatrical productions that are family oriented and family friendly
2. to create products and toys that will promote their theatrical productions that are both entertaining and safe for children
3. to entertain families who are looking for a fun, interactive and safe vacation spot both with resorts and parks, and also cruise lines
4. keeping their name reputable and substantial in a growing business.
5. Benefits
6. Disney Land is Europe’s Top Destination for vacation.
7. Extremely popular among children and adults.
8. It is a global leader in the industry of entertainment. Walt Disney Company was ranked 8th in the Top 100 Global Brands ranking of the BusinessWeek Magazine and Interbrand, a branding consultancy, in 2006.
9. Exposure and variety of entertainment packages to fans by opening Resorts, launching Cruise Lines and Disney Lands in Tampa, Hong Kong and Paris, result, increased capital flow and no advertisement required.

Comparison

Disney Company worked on the Strategy of Expansion but now they work on something more of a combination of Reengineering and Expansion after the launch of many quality competitors in market.

The Disney Land especially in Hong Kong is not enjoyed by the fans as the entertainment essentials are limited as compared to the other destinations and are very dated. The Walt Disney Company is now working to expand itself by figuring out new ways of attraction and alluring to fans by opening Cruise Lines and Resorts and Fun Houses throughout their Disney Land.

Factors to Consider to change Strategy

1. Quality is imperative than quantity.
2. Dated entertainment ideas and facilities should be updated to the demands of the new generation while keeping the classic touch polished.
3. Innovative marketing, strategic investment and financial discipline should be developed to keep pace in entertainment market.
4. The Walt Disney Company had to analysis its management and employees to determine where they stood as they were losing fans and had market value.
5. Competitors like Universal Studios, Paramount Pictures have worldwide successful theme parks and funplexes. To triumph over them Disney Land had to study its new fans and keep its signature.

Business Strategy and Strategic Choice

The type of Business the Walt Disney Company wanted to have depended upon the Business Strategy it approached.

It did quite well in the beginning and won Oscar awards and achieved the most out of the market. The Brand was the most popular and demanded and nailed its name in the industry. But as time passed and new generation emerged, a new taste came into existence and therefore things had to be renewed and improved. Earlier Disney was the only animation company but, as time passed and quality competitors surfaced, larger competition and criticizers appeared. The Walt Disney Company had opened remarkable entertainment property which encouraged fans to meet and enjoy their childhood favorite character.

But the strategy they adopted was not enough for to attract the new graphics and 3D oriented generation. Therefore they had to opt for the Strategic Choice of the market and indulge in the dept of entertainment with time. They are still the leaders as they chose the right action at the right time.

The Key Issues

The Walt Disney Company should keep in account to manage its Business Strategy are:

• Latest approach of entertainment.
• Should make Sci fi Movies with a more realistic approach.
• Educational Films to be produced as well.
• Disney Land worldwide should be upgraded. Employee Satisfaction is a must and Management should take account of each department.
• Quality should be maintained.
• Competitors and Internal weaknesses are studied.

Change of Strategy

The Strategy of the Walt Disney Company had to change overtime due the increasing demand of hi-tech technology, graphics and updated modes of entertainment. The competitors rooted to attract people with the latest knowledge and entertainment techniques. Despite winning Oscars and being branded as the finest animator, Disney overlooked the need of freshness and contemporariness.

No doubt, Disney was experimenting and innovating but, using the same old but famous characters. People wanted a new character and novel themes. There Parks were attracting new crowd but couldn’t bring back the old ones. These factors intimidated Disney and it had to think over its strategy.

Social Responsibility

The urge to make people happy is stated to be the Social Responsibility of the Walt Disney Company. The main objective and goal of Disney is to impart happiness, enchantment and amusement to people. They have been very successful so far but, as times changed and new generations emerged, they had to think over their product.

Disney opened many resorts, hotels, cruise liners, but couldn’t attract the old customers. It made them happy but couldn’t keep them loyal. Getting to the root cause of this they realized that their amenities were dated and needed rejuvenation with tools of technology, graphics, new characters, new stories, new modes of entertainment in the theme parks, Disney TV channels, sports and news channels, in short, a new approach to the new generation.

Role of Management To Changes

As already mentioned there is a strategic change in the company and some new operations are introduced.

The Management already has a very good policy of providing necessary training to its employees. They can further inform their employees about the market situation. It can make the staff understand the importance and need of the new operations and changes and insist why it needs the best from their employees. It can provide customer service training and motivate them to produce the best out of their service and compete with the growing competition.

Advice to The Walt Disney Company

To analyze a change in situation the management should keep itself updated about the market situation.

It should not just look into the expansion of the Business but also keep an eye on the changing market industry and new requirements of the fans. It should study the developments of its competitors. There would be resistance to the changing market but to overcome this resistance, it can hold meetings and make its staff and managers realize the substance and requirement of the changes by providing detailed and proper explanation. Better knowledge of the market and motivation to achieve the target can help overcome the resistance to change.

Human Resource Management (HRM) is of strategic importance to all organisations. HRM do not only create competitive advantage for the organisation but is the force underpinning organisation’s success1. No wonder, the way HRM practices and policies take shape also affects the employee’s experiences of work and the employment relationship2.

Within the mainstream HRM literature, there is a long tradition of research arguing that in order to make an optimal contribution to firm performance, HRM policies and practices should be integrated both with firm strategy, so-called vertical strategic integration and with each other, so-called horizontal integration3. Paul Ilsles best fit model attached in the appendix lay emphasis on this.

In present day organization, because any discussion about how an organisation’s succeeds or fails ultimately comes back to the way individuals are managed, academics and practitioners agree that as the dynamics of competition accelerates, people are perhaps the only truly source of competitive advantage4. According to, Turner, Keegan ; Hueman (2006:317), for an organisation to be effective and successful, the human resource management functions must be integrated into the various organisational strategy.

According to this model, the HRM functions its goals and aims, need to be aligned with the strategy of the organization. Here emphasis is both on the on projects and routine products and services and where the job requirements are well defined and stable. Today, with the increasing researchers desires to demonstrate the importance of an effective human resource policy on organisation performance research has shifted from a micro level that previously dominated research interest to a more general, strategic macro level5. The term human resource management is not new.

It has been widely used by scholars and managers to refer to the set of policies designed to maximize organizational integration, employee commitment, flexibility and quality of work6. Jackson ; Shuler (2002) referred to it as an umbrella term that encompasses (a). specific human resources practices such as recruitment, selection and appraisal and (b). formal human resource policies which directs and partially constrain the development of specific practices and in all, it comprise a system that attracts develops, motivates and retains those employees who ensure the effective functioning and survival of the organisation.

Against this background this paper aims at evaluating the human resource management strategies of the Turkish Airlines. Part two of the paper presents an overview of Turkish Airlines with it human resource challenges. Part three presents the human resource management strategies of the airlines and the last section presents the conclusion and recommendation. 1. 1 Overview of Turkish Airlines According to the company corporate report (2007), Turkish Airlines, Inc is the main national airline of Turkey with head quarter based in Istanbul.

The airline operates a network of schedules services to 123 domestic cities, serving a total of 155 airports. It destination flights include Africa, Europe, Asia and the United States. In addition, as stated in the (2007) company’s report, it operates a network of scheduled services to 123 international and 32 domestic cities. According to the company’s statistics, in 2006 and 2007 it carried 17 million and 19. 7 million passengers with total revenues of US$2. 3 and US$3 billion, respectively (2007 company’s Report). To be able to serve the global market, the airline has around 12,000 employees.

Most of the employees are multilingual, coming from different countries with different ethnicity. The airline also operates scheduled services from 34 airports in Turkey though 25 of them handle domestic flights only. Turkish Airlines is the leader of domestic market with the help of its low-cost spin-off company AnadoluJet. Its rivals are Onur Air, Pegasus, SunExpress (half-owned by Turkish Airlines) and Atlas jet (Company Report 2007). 1. 2 Human Resource Problems Facing the Turkish Airways Turkey Airline is the largest domestic flight company, a market leader in the country.

As one of the market leaders in the flight industry, the company is highly reputed among customers and has established a high level of credibility and goodwill in the domestic flight market. The staff is highly competent in their respective profession and departments. However, as identified from existing research, certain issues pertaining to the human resource department to this organisation remains a puzzle. These problems include poor communication and lack of information flow between the various departments, headhunting of key staff members by competitors, weak organisational structure, weak reward strategy and organisational culture.

While the main issue of finding reputable international staff remains an issue, the company has adopted a number of human resource management strategies of late. The company has neglected the soft sides of its business, that of the organisational culture. Today, culture is a core competence of an organisation. Culture being the taking for granted assumptions used to be absent in the company’s routines, procedures, staff training and opportunities for individuals to take care of individual needs are absent.

While this has been resolved, it has created a high level of trust and commitments amongst workers. The entire business requires direct interaction with the customers, and it is through a strong culture that cost can be reduced. The recent establishment of career advancement track for workers, performance reward systems, supportive work environment, and defined duties for workers has pushed the organisation into a situation of being up to date with the market demands, though some key personnel are being head hunted by competitors. 1. 2 Human Resource Strategy of Turkish Airways

According to Sveiby (1997) a key to retaining personnel in knowledge based-organisation is ensuring that employees had the opportunities to work on interesting projects with interesting careers challenges clearly defined. At Turkish Airlines, the very first priority for the employees is making the working environment a memorable and enjoyable one. According to one of the employees, “the work place is forming a new social group, workers spend about 65% of their day at the work place, our priority is to let them enjoy, feel relax while they work”.

From a review of the company webpage, the Human Resource Department of the Turkish Airlines tends to be very goal/employee oriented and one can deduce that the management believes that conductive workplaces are an argument against competitiveness. According to Sveiby (1997), organisations under such a situation should create and incorporate healthier psychological work environments. This was the same position echoed by Gilbreath (2008) when the researcher postulates that, healthy psychological environments contribute to career conduciveness.

According to Gilbreath (2008), creating strong HRM policies requires creating a strong psychological environment in which employees can thrive. Such an environment requires conducting stress audit, monitoring the work of the environment, matching people and work environment and using teams of employees and researchers to study the work environment. The Turkish Airline should eliminate unnecessary stressors (e. g. , poor job design, ineffective supervisor behaviour, poor communication, mismatches between employee’s skills and job demands).

The Human Resource Department can also facilitate this through greater involvement, employee’s autonomy, physical comfort, organisational security and recognition. At the Turkish Airline, there is no substitute for these as security of its activities have increased with regard to terrorist treats. To be critically useful to management, Ellis et al(2007) argue that an overall HRM framework should capture and integrate various functions and also clarify how various aspect of HRM add value to an organisation.

Gilbreath supported this argument when the researcher calls for organisation facing communication and job satisfaction problems to institutes good fit between employees and their work environment. Under good fit theory, demand ability fit, suppliers value fit, self concept jobs fit and person group fit should be primary for workers integration and commitments. At the airlines, the employee’s recruitment and retention strategies lay emphasis on this. One factor that affects the implementation of HRM practices that has received significant attention is culture.

Culture can be defined at different levels that range from the group to the organization to the national level (Erez&Earley, 1994). Culture comprises values and norms that guide individuals’ behavior. Many view organizational practices and theories as culturally bound (Adler, 1997; Hofstede, 1980) which would mean that the values of a country should be compatible with a management practice for it to result in employee motivation. The company has a strong culture, defined by a hierarchy, routines, procedures values and norms (Company Report 2007)

With reference to the Honda case study and also drawing on other examples from the Critical Issues course, what are the key theoretical and methodological issues in drawing general lessons from case studies of success?

History is subject to interpretation; so are business successes and failures. However ex-post justifications of the latter have proved more profitable. This essay explores the theoretical and methodological issues in drawing general lessons from case studies of success, with particular reference to Honda’s successful penetration of the US market in the 1960s.

This essay offers a critical theory and post – modernist approach. Critical theory questions the central features of such recipes for success, the historical and social contexts from which they emerged and the purposes and functions that it may serve. Post – modernism can be seen as an extension of critical theory but has added the dimension of power to knowledge and argues that the two are no separable [Foucault].

In 1946, the Honda Technical Research Institute was established by Sochiro Honda and his partner, Takeo Fujisawa. Having succesfully established itself in the Japanese market, Honda entered the US market in 1959. By 1960, its Supercub model was highly successful. They then created a highly effective as campaign based on “You Meet the Nicest People on a Honda”. By 1964, it has dominated almost half of the US market. Later in that year, it required cash on delivery of shipments. As Pascale (1996) says, “In one fell swoop, Honda shifted the power relationship from the dealer to the manufacturer.”

Honda’s success has been analysed and three distinct explanations for its success emerged:

· The most prominent is the Boston Consulting Group (BCG) Report. The report states that Honda maximised experience curve economies – low costs at high production volumes. As a result, American and British motorcycle manufacturers withdrew from certain market segments.

· An interview with six Honda executives by Pascale, led to his conclusion that Honda was successful in Japan because superior design skills led to a better product. Honda was also seen has a ‘learning organisation’ that adapted and responded quickly.

· Prahalad and Hamel introduced the concepts of strategic ‘intent’, ‘stretch’ and ‘core competence’. These they feel were the necessary factors for success.

There are two competing views in strategy formulation: (1) the ‘planning’ school, and (2) the learning school. For the ‘planners’, strategy formulation is a deliberate, rational and linear process where ends are first specified. In this case, structure follows strategy. The ‘learning’ school takes an adaptive and incremental approach. Strategy is a non-linear and complex process. Structure and strategy formulation are intertwined.

Formulating recipes for success based on past success presumes that the future perfectly emulates the past. Common sense will tell us that this may not necessarily be true. Rhetoric will also infer the same. In a dynamic and competitive business environment, factors that affect an organisation will not be static. Consumers tastes change. In the Post-Industrial era, consumers were more affluent. Hence, they demanded more than a standardised product produced by mass-production. Firms had to change from a product oriented approach, of the ‘mass production era’ to one that is market oriented [Ansoff, 1988]. Thus as Ansoff says,

“…whenever the future environment is expected to be discontinuous, emulation of historical successes becomes dangerous…” [pp.135]

A theory is formed ideas or concepts used to describe the world to better understand it. Ideas and concepts cannot be free from bias as they are conceived by people and people possess different ideologies, values, interests and preferences. What purpose does it serve? A theory is devised to serve certain purposes and functions. Theories on strategy are formulated, to a certain extent, to keep management consultants employed. There is a need to question the validity of such theories and the methodology employed to apply them.

BCG’s business portfolio analysis makes what is widely known as the ‘experience curve’ assumption. This states that the costs of production should go down with cumulative physical output. Thus, the report reasons that because Honda has already achieved high production volumes in Japan, it had a cost advantage. But were Honda’s production costs low because of high volume or because of it employed production methods that were more sophisticated?

It also assumes that a business is a cash system, that is its cash flows depend on relative market share and industry growth rate. This allows the classification of businesses or products into four categories a ‘star’, a ‘cash cow’, a ‘dog’ and a ‘?’. It assumes that the classification is relevant and applies to all business. Under these two assumptions, its strategic analysis and recommendations will be valid.

However, as all models, it self-selects the kind of data that is compatible with it – in this case return on investment (ROI) and cash flows. The main problem with this approach lies with its narrow classification scheme, which may not capture the entire picture, such as the uniqueness and problems of a business [Mitroff]. ROI and cash flows represent only the financial dimension of a company. Other factors such as technology, reputation and life of the organisation have to be taken into account.

Discuss how an ASS can add value to an organization. 7. Explain how an ASS and corporate strategy affect each other. 8. Explain the role an ASS plays in a company’s value chain. Learning Objective One Distinguish between data and information, discuss the characteristics of useful information, and explain how to determine the value of information. Systems, Data, and Information Systems A System is a set of two or more interrelated components that interact to achieve a goal Systems are almost always composed of smaller subsystems Each subsystem is designed to achieve one or more organizational goals.

Page 1 of 9 When the Systems Concept is used in systems development, changes in subsystems Anton be made without considering the effect on other subsystems and the system as a whole. Goal Conflict occurs when a decision or action of a subsystem is inconsistent with another subsystem or the system s a whole. Goal Congruence is achieved when a subsystem achieves its goals while contributing to the organization’s overall goal The systems concept also encourages Integration, which is eliminating duplicate recording, storage, reporting, and other processing activities in an organization.

Data Data are facts that are collected, recorded, stored, and processed by an information yester Several kinds of data need to be collected in businesses, such as: 1. Facts about the activities that take place 2. The resources affected by the activities 3. The people who participate in the activity Information Information is data that have been organized and processed to provide meaning to a user. There are limits to the amount of information the human mind can effectively absorb and process. Information Overload occurs when those limits are passed. En you get more International than you can effectively assaulted, you surer Trot information overload. Example: Final exams week! When you’ve reached the overload point, the quality of decisions declines while the costs of producing the information increases. The value of information is the benefit produced by the information minus the cost of producing it. A good example of the value of information is provided on page 5 for the 7-Eleven stores in Japan. Each store uses information for: 1.

Keeping track of the 3,000 items sold in each store and determining what products are moving, at what time of the day, and under what weather conditions. Page 2 of 9 2. Keeping track of customers (what and when they buy). If their best customers are ingle men, for example, the store makes sure it has the fresh rice dishes they purchase on their lunch hour and at the end of the workday. 3. Ordering sandwiches and rice dishes from suppliers automatically. Orders are placed and filled three times a day so stores can always have fresh food.

Because food orders take as many as 12 hours to prepare, 7-Eleven allows its suppliers to access sales data in their computers so they can forecast demand. 4. Coordinating deliveries with suppliers. This allows the stores to reduce the number of deliveries from 34 to 12 a day, resulting in less clerical receiving time. 5. Preparing a color graphic display that indicates which store areas contribute the most to sales and profits. Table 1-1 on page 4 provides the seven characteristics that make information useful and meaningful for decision making. 1.

Relevant 2. Reliable 3. Complete 4. Timely 5. Understandable 6. Verifiable 7. Accessible These characteristics (except for #7 Accessible) are from the Statement of Financial Accounting Concepts #2 on the Quality of Information, which can be downloaded from: http://www. Fast. Org/PDF/ pop_CON. PDF The final characteristic (#7) combines elements of the Timely (#4) and Understandable (#5) characteristics. Multiple Choice 1 Data differ from information in which way? A. Data are output and information is input. B. Information is output and data are input. . Data are meaningful bits of information. D. There is no difference. Multiple Choice 2 Page 3 of 9 Which of the following is not a characteristic that makes information useful? A. It is reliable. C. It is inexpensive. B. It is timely. D. It is relevant. Learning Objective Two them. Key Decisions and Information Needs Using S case we can use business processes to delineate the key decisions that wall need to De made Walton can process Ana determining tense echelons, ascertaining what information will be needed to reach those decisions.

The case will help students to understand that before collecting data and processing it into information the decisions that management and other external users will be making need to be known first. Only after this is known can we begin designing and using the ASS to capture, collect, and process the correct data as needed by decision makers. Multiple Choice 3 Which of the following is not a means by which information improves decision making? A. Increasing information overload b. Reducing uncertainty c. Providing feedback about the effectiveness of prior decisions d. Notifying situations requiring management action Learning Objectives Three and Four 3. Identify the information that passes between internal and external parties and an ASS. 4. Describe the major business processes present in most companies Reorganize Business Processes Taking the list of business processes from S it is easier to group them into categories that almost every organization has. These are: 1. The Revenue Cycle? Goods and services are sold for cash or future promise to receive cash (Accounts Receivable).

Page 4 of 9 2. The Expenditure Cycle?purchase of inventory for resale or raw materials for use n production in exchange for cash or a promise to pay cash in the future (Accounts payable). 3. The Production or Conversion Cycle?Raw materials are converted into finished goods. 4. The Human Resource/Payroll Cycle?Employees are hired, trained, compensated, evaluated, promoted, and terminated. 5. The Financing Cycle?How companies acquire capital by selling shares or borrowing money and where investors are paid dividends or interest.

For each of these processes there is a basic give-get relationship that is called transaction processing. Figure 1-2 provides a description of the basic give-get exchanges. 1 . Revenue Cycle?Give goods, get cash or A/R 2. Expenditure Cycle?Give cash or A/P, get goods or raw materials 3. Production Cycle? Give labor and raw materials, get finished goods 4. Human Resource?Give cash, get labor 5. Financing Cycle?Give cash, get cash The figure also shows the relationship between these cycles and the general ledger and reporting system function.

Multiple Choice 4 Which transaction cycle includes interactions between an organization and its suppliers? A. Revenue cycle b. Expenditure cycle c. Human resources/payroll cycle d. General ledger and reporting system Multiple Choice 5 In which cycle does a many ship goods to customers? A. Production cycle b. Financing cycle c. Revenue cycle d. Expenditure cycle Learning Objective Five Explain want functions. Page 5 of 9 an accounting Interment on system s) Is Ana cradles Its DSSSL What Is an Accounting Information System?

An Accounting Information System (ASS) is a system that collects, records, stores, and processes data to produce information for decision makers. This is illustrated in Figure 1-3 on page 11 . Another definition that is not in the book: “An accounting information system is a unified structure within an entity, such as a business firm, hat employees physical resources and other components to transform economic data into accounting information, with the purpose of satisfying the information needs of a variety of users. Six components of an Accounting Information System 1 .

The people who operate the system and perform various functions 2. The procedures and instructions, both manual and automated, involved in collecting, processing, and storing data about the organization’s activities 3. The data about the organization and its business processes 4. The software used to process the organization’s data 5. The information technology infrastructure, including computers, peripheral devices and network communications devices used to collect, store, process, and transmit data and information 6. The internal controls and security measures that safeguard the data in the ASS.

These six components enable an Accounting Information System to fulfill three important business functions: 1 . Collect and store data about organizational activities, resources, and personnel. 2. Transform data into information that is useful for making decisions so management can plan, execute, control, and evaluate activities, resources, and personnel. 3. Provide adequate intros to safeguard the organization’s assets, including its data, to ensure that the assets and data are available when needed and the data are accurate and reliable.

Multiple Choice 6 Which of the following is a function of an ASS? Page 6 of 9 reducing the need to identify a strategy and strategic position transforming data into useful information allocating organizational resources automating all decision making Learning Objective Six Discuss how an ASS can add value to an organization. How an ASS Can Add Value to an Organization 1 . Improving the quality and reducing the costs of products or services. 2. Improving efficiency. A well-designed ASS can make operations more efficient by providing more timely information. 3. Sharing knowledge.

A well-designed ASS can make it easier to share knowledge and expertise, perhaps thereby improving operations and even provoking a competitive advantage. 4. Improving ten inclemency Ana effectiveness AT Its supply chain. 5. Improving the internal control structure 6. Improving decision Learning Objective Seven Explain how an ASS and corporate strategy affect each other. The ASS and Corporate Strategy Information Technology and Business Strategy Figure 1-4 on page 15 shows how IT developments can affect business strategy. Page 7 of 9 For example, the growth of the Internet has affected the way many value chain activities are performed.

The Internet makes a company’s products available almost anywhere Another technological advance is predictive analysis, which uses data warehouses and complex algorithms to forecast future events. An organization’s ASS plays an important role in helping it adopt and maintain a strategic position. Learning Objective Eight Explain the role an ASS plays in a company’s value chain. The Role of the ASS in the Value Chain [Figure 1-3 on Page 1 1] The objective of most organizations is to provide value to their customers. Five Primary Activities that directly provide value to its customers: 1 .

Inbound logistics consists of receiving, storing, and distributing the materials an organization uses to create the services and products it sells. 2. Operations activities transform inputs into final products or services 3. Outbound logistics activities distribute finished products or services to customers. 4. Marketing and sales activities help customers buy the organization’s products or services. 5. Service activities provide post-sale support to customers. Four Categories of Support Activities 1. Firm infrastructure is he accounting, finance, legal, and general administration activities that allow an organization to function.

We live in a technology-driven world, where mobile devices are an essential part of our lives. In the p of just one year (2015-16) the App Store and Play Store recorded , proving the fact that we are getting increasingly dependent on apps.

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It comes as no surprise, then, that enterprises are for their businesses in order to connect better to their target audiences, improve their bottom line and enhance their productivity. Speaking of that, a found that enterprise apps fueled mobile strategies for several firms.

An outstanding mobile strategy involves choosing an app that helps companies reach their goals, streamline their workflow, collaborate easily and securely handle communication and data sharing. Here are some of the top enterprise apps to help you achieve a stellar mobile strategy.

Susie by Zuznow

One of the best technologies we have seen in the recent past is the introduction of virtual assistants like and . Without a doubt, these make our lives easier, especially when we are on the fly and could do with some assistance.

Similarly, enterprises can do with some help from speech-recognition software. They can leverage the potential of virtual assistants to solve complexities, enhance efficiencies, reduce operational costs and increase customer engagement. The only drawback they might face is high costs and limited resources, which are required to develop an AI-based software.

Enter . This integrated Siri-like plugin for enterprises, developed by AI-based mobile app development platform Zuznow, can be used to create a conversational user interface (UI) for any enterprise mobile app within a few hours. The tool is easy to use, incredibly useful and easily adopted by any enterprise without the need for specialized resources or skills.

It’s also a great add-on for enterprises that want to give an extra edge to their existing mobile app and, therefore, enhance their customer-engagements. 

TunnelBear

Need remote access to internal networks and security assurance? Turn to , which simplifies the process of setting up a virtual private network (VPN) for free.

Available for both Android and iOS devices, the app connects you to an independent network that enables you to securely browse the internet, with privacy from hackers, ISPs etc. Even when you are browsing by using wifi hotspots, you can be assured that the data will be encrypted. Also, TunnelBear offers super speedy connections in more than 20-plus countries, so speed issues are nil.

The best thing about this app is that businesses can scale it according to their requirements. And that’s not all. The app also offers 500 MB of free data every month to users, which is a great incentive!

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Moiety

Creating customized schedules for the entire workforce becomes simplified with .

This new app on the block is helpful for seamlessly handling a number of schedules at a time. Enterprises can use it to:

• Create unlimited, customized groups or “crews” and invite people to join.
• Create custom events, tasks, contacts and locations.
• Use it without any distracting texts, calls or emails.
• Get alerts and status updates for each event.
• Keep calendars private and allow contacts access only to specific events to which they are invited.

Apart from all these features, the app offers the biometric/touch ID login option to keep all the information private and safe. It is still the early days for Moiety, but the app can be counted on to add some exceptional features in the future.

GSuite

Enterprises have been using Google’s cloud-based services and apps for a long time now. So, it’d be a tad bit unfair to the search engine giant to exclude from this list.

A part of Google’s efforts, G Suite includes apps that meet a major chunk of your enterprise needs. Divided into four major sections, these are:

• Communication — Gmail, Hangouts, Calendar, Google+
• Storage — Google Drive
• Collaboration — docs, forms, slides, sheets, sites
• Management — Admin, Vault

In essence, G Suite is an apt choice for .  The free-trial period of 30 days (no software download or credit card usage) makes it a must-try for all enterprises, large and small.

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That notwithstanding, the rationale of compound or multi-stage options (Panayi & Trigeorgis, 1998) might point to the fact that IT flexibility has the potential of having a positive effect on strategic flexibility as top management appreciate that their ability to change particular aspects of their business strategies could be influenced by the extent they are capable of using IT in supporting those changes. Three arguments arise from this analysis.

One, as organizations seek to achieve increased strategic alignment, is it that their attempts are enhanced or restricted by the need to embrace IT or strategic flexibility, more during occasions of increased uncertainty? (Tallon & Kraemer, 2003, p. 4). The other concern is the way the interaction between the strategic alignment and flexibility affect the value IT has in the organization. For instance, if IT flexibility or strategic flexibility has a complementary influence on strategic alignment, then what effect does it have on the value of IT?

(Tallon & Kraemer, 2003, p. 4). On the contrary, if organizations are faced with a choice between increased IT or strategic flexibility and stringent strategic alignment, what effect would such a scenario have on the value of IT in the business. The third and the last issue arising concerns the relationship between IT flexibility and strategic flexibility. Particularly, does more IT flexibility increase the ability of the organization to put in place critical changes in the business strategy it has?

Although strategic alignment has always been seen as an unidimensional variable representing IT support for the business strategy, appreciation of the strategic capacities of IT has permitted strategic alignment to have a multidimensional aspect, thus representing the bi-directional correlation between IT strategy and the business strategy (Tallon & Kraemer, 2003, p. 4). This has the implication that organizations which are highly flexible in terms of their IT are more likely to have tighter strategic alignment.

What is mean here is that apart from making use of IT to support prevailing business activities, the information system literature appreciates the proactive ability which IT has in creating new business opportunities beyond the prevailing business strategy. Through IT, corporations such as Frito-Lay are capable of identifying new market niches thus designing innovative marketing strategies (Porter, 1985).

Therefore for many organizations with well defined IT and business strategies, these two have a complementary effect in achieving strategic alignment (Tallon & Kraemer, 2003, p. 23). It implies that with the continued growth of business turbulence and uncertainty, organization such as Frito-Lay are presented with the choice of reviewing their business strategy in the full knowledge that the IT infrastructure they have is flexible enough to support any new business decision they are likely to make (Keen, 1991).

For instance, in 1990 January, the North American operations were reorganized into four regional officers acting headquarters by Jordan under the name of are business teams (ABTs) (Harvard Business School, 2001, p. 117). As a result of the restructuring, all operations relating to manufacturing and purchasing still reported centrally thus fewer conflicts were reported.