Skilled Workers Vs. Cheap Labor

Listen to this postInternational producers, like China, are exporting  their products to sell them at or lower than the production cost (Vandenbussche & Zanardi, 2008). Local companies can compete with the low-cost labor by making the costly labor more efficient to produce the same product in less time and with less waste (time and material). Klempa (2006) states that productivity can be drastically improved when the roadblocks are removed. Productivity improve by improving management planning, making productivity a strategic initiative, aiming high, measuring progress and making changes as needed (Klempa, 2006). The same worker might cost more but he or she would produce high output with less reworks. Local business would face stiff competition from the international producers if the same quality could be produced with cheaper labor.

References:

Klempa, M. (2006). Eliminating productivity roadblocks. Financial Executive, 22(8), 32-35.

Vandenbussche, H., & Zanardi, M. (2008). What explains the proliferation of antidumping laws? Economic Policy, 23(53), 93-138. doi: 10.1111/j.1468-0327.2007.00196.x

Should We Outsource Pharmaceutical Products?

Listen to this postOutsourcing became almost a must for most of the organizations. The electronics producers are a good example for outsourcing where most of the parts are outsourced or sometimes the products is completely manufactured by a different company. If you flip you iPhone and check the writing on the bottom of the phone you will notice “Designed by Apple in California, Assembled in China”!! Outsourcing eelectronic is more acceptable than other products like pharmaceutical products. The risk in outsourcing pharmaceutical products is very high because of the products nature. Melamine-laced mile products were responsible for the death of six babies and  poison contaminants in cough syrup were responsible for the death of more than 100 people in Panama. About 80% of the prescription drugs sold in the U.S are made outside the U.S. (“Outsourcing safety,” 2009). Risk management is very important to overcome the risk in pharmaceutical products (Fiscus, 2009). Product liability lawsuit could wipe out the cost saving from outsourcing the product and have a permanent scare in the firm’s brand (Fiscus, 2009).

References:

Fiscus, P. W. (2009). Global risks for drug manufacturers. Risk Management (00355593), 56(4), 50-54.

Outsourcing safety. (2009). Editorial, Nature Medicine, pp. 221-222. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=36818298&site=ehost-live

Is NAFTA Working Well?

North American Free Trade Agreement (NAFTA) is an agreement signed by Canada, Mexico and the United States in 1994. Good argument was against NAFTA which suggested  that low wages in Mexico would reduce the wages in the U.S. and that the capital would flow from the U.S. to Mexico (Hymson, Blakenship, & Daboub, 2009). Another argument state that the free trade would not increase Mexico’s wages, and as result, high skill jobs would migrate to the U.S. (Hymson, et al., 2009).  Hymson et al. (2009) research found out that NAFTA agreement increased trade between Canada, U.S. and Mexico and the agreement was able to reduce processes and did not affect employment as feared by both countries. Alvarado (2008) confirm the same findings and state that the reason for Mexico’s poverty is because of the concentration of land and the distribution of small and unprofitable agriculture land to the farmers.

References:

Alvarado, E. (2008). Poverty and Inequality in Mexico after NAFTA: Challenges, Setbacks and Implications. Estudios Fronterizos, 9(17), 73-105.

Hymson, E., Blakenship, D., & Daboub, A. (2009). Increasing benefits and reducing harm caused by the north american free trade agreement. Southern Law Journal, 19, 219-243.

Starting New Business Ethically

Listen to this postSome of us would like to start a new business or expand their business to new geographical location. The new business owner would think of most of the business related issues but forget the soft and intangible issues like ethics and culture. Three thousand managers and employees were surveyed in the U. S., stated that ethics compliance did not change as expected after implementing ethics compliance programs (Gebler, 2006). Organizational culture had more influence on ethics programs success than any other factors (Gebler, 2006). Managers who aim for ethical culture change and target long-lasting Corporate Social Responsibility (CSR) are facing difficulty in showing the benefits of such programs to the shareholders (Grossman, 2005). The shareholders would like to see immediate results to prove the managers spending (Grossman, 2005).

The basic components for ethical decision-making are moral issues, recognition, making moral judgment and engaging in moral behavior (Ingram, Skinner, & Taylor, 2005). These components would help in setting up an ethical international operation that  account for cultural, religious, national, gender, and racial differences. We need to study the local culture and religion and how it will be affected by the new business. If the business is established in the international market then we need to assess the effect of the existing business form the environmental, religious  and cultural aspects and make sure their compliance to the findings. Deviating from the ethical standard would lead to social and economical conflict with the locals. The result would be assessed for risk before taking the action to avoid legal actions. Deviations are allowed when the deviations benefits can outweigh the losses from the ethical operation.


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References:

Gebler, D. (2006). Creating an ethical culture. Strategic Finance, 87(11), 28-34.

Grossman, H. A. (2005). Refining the role of the corporation: the impact of corporate social responsibility on shareholder primacy theory. [Article]. Deakin Law Review, 10(2), 572-596.

Ingram, R., Skinner, S., & Taylor, V. (2005). ‘Consumers’ evaluation of unethical marketing behaviors: The role of customer commitment’. [Article]. Journal of Business Ethics, 62(3), 237-252. doi: 10.1007/s10551-005-1899-0

Does Your Goals Match Your Organization’s Goals?

Listen to this postMany employees work very hard to achieve their personal goals thinking that these goals would help them to excel in the their careers. Sometimes, personal and career goals are a perfect match because the individual had planned it that way. We all have needs and wants that appeal to us. We would like to achieve them but they do not help us to climb that steep professional ladder to reach the desired promotion or salary increase. Reading the following pages would help identifying your personal strength and weakness and guiding in converting the weakness to a strength to reach your challenging goals. The last page would help the reader to compare his or her personal goals with their organizational goals. The reader is asked to match his or her goals with the career goals and try to aim for a common goal that develop him or her and to achieve the organization’s objectives.

Many employees work very hard to meet their personal goals thinking that these goals would help them to excel in the their careers. Sometimes,personal and career goals are a perfect match because the person had planned it that way. We all have needs and wants that appeal to us. We would like to achieve them but they do not help us to climb that steep professional ladder to reach the desired promotion or salary increase. Reading the attached pages (by clicking here) would help identifying your personal strength and weakness and guiding converting the weakness to a strength to reach your challenging goals.


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Top Ten Signs That You Are In A Good Hotel

Like you, I have traveled a lot and visited different countries. Dying my travel I try to select the best hotel I can offered. Most of us select the best hotels for security and safety reasons then look for comfort and  services. he following is my personal guideline to distinguish the good hotels from the bad ones.

Good Hotel Bad Hotel
10 Food come pushed into the room on a nice table. Hot food is in small hot box under the table. The food is carried in a tray and placed on your bed.
9 Telephone is answered with “Good morning Mr/Ms. John Dow, my name is ______ how can I help you”. They do not answer but if they did it will be “Yes!”
8 The room has a table and a chair that can be used as a small office for you to work from. You will be lucky if you have a chair in the room.
7 Rooms are spacious and you can add an extra bed without feeling crowded. You can nearly walk around in the room
6 Good quality paper tissue boxes are available in the bathroom and next to the bed. One box of cheep paper tissue box is available in the bathroom. The box is usually have 3-10 tissues only.
5 The shower water is cold and hot with sufficient pressure to massage your nick and back. Shower drainage is open to take all the water you can shower with. Shower water is in room temperate with pressure enough to push the water our of the shower head. Water level is building up on your feed while you are showering.
4 When you ask for direction in the hotel, the person will ask you to follow him/her until you reach the place you wanted. You will be lucky to find somebody to point his/her finger in the approximate direction of what you ask for.
3 White clean towels in different sizes are hanging in the bathroom at you arm reach On big (and sometimes another small one) is available and you are doubting if you should use the.
2 You have a quite room to sleep or work with a beautiful view from the big window. You laugh at you neighbor’s noise in the bathroom, and then you wonder if he/she is laughing at you also?
1 You need to mention the hotel name to the taxi driver and he will smile and start driving. When you mention the hotel name, the taxi driver will ask you to get out of the taxi!

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Are You Changing Your Work-Space?

Listen to this postMany companies had redesigned their office space from the traditional set up which have rooms designated for one or two office workers to cubicles or open space design. Some cultures would accept the new set up but others would like to  maintain their privacy in the office. According to Jones (2007), the main purpose of the organizational structure is “to control the way people coordinate their actions to meet organizational goals and to control the means used to motivate people to achieve these goals” (p. 7). The workspace is defined as an organizational resource and is designed to advance the organizational goals (Vaske & Donnelly, 1999). The marketplace especially the international market is influenced and segmented by religion (Wenger, 2004).

Organizations would attract workers who conform with the dominant religion in the organization and in the environment, employees with different religions may face glass ceiling and bear stereotype effect during promotions and salary increase. Wenger (2004) relates religious marketplace theory to the failure of communism to replace religion in China. Religion may have a positive effect from the point view of some (having the same religion) or seen as a hurdle by others. Many companies in the Middle East region are changing their work place set up to cubical or open-space set up similar the Western office layout. The new theories may support the open-space layout and “barrier removal” to enable workers to interact openly but not all agree. New researchers have found that such optimism does not continue when workers find that they lose privacy and independence with it (Chan, Beckman, & Lawrence, 2007). Another research found employees’ satisfaction decreased after they moved from the traditional office layout to the open-space layout (Chan, Beckman, & Lawrence, 2007).

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References:

Chan, J. K., Beckman, S. L., & Lawrence, P. G. (2007). Workplace design: A new managerial imperative. California Management Review, 49(2), 6-22.

Jones, G. (2007). Organizational theory, design, and change (5 ed.). New York: Pearson Prentice Hall.

Vaske, J. J., & Donnelly, M. P. (1999). A value-attitude-behavior model predicting wildland preservations voting intentions. Society & Natural Resources, 12(6), 523.

Wenger, J. E. (2004). Official vs. underground protestant churches in China: Challenges for reconciliation and social influence. Review of Religious Research, 46(2), 169-182.

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What is ISO 9001

Listen to this postThe ISO 9001 certification is important for the organization to ensure consistent quality control on the products. ISO 9001 certification audit is simply checking if the organizations has a procedure and that procedure is implemented and documented. The organization would insure the high quality for its products and the customers would get the same quality every time they purchase a product from this manufacturer.

ISO 9001 is a set of standards that represent a significant initial step for manufacturing organizations on the way to Quality Management, since they involve a lower first degree of commitment to their principles (Gutiérrez, et al., 2010). ISO 9001 is simply confirming that the organizations has business processes and has procedures to implement them. Gotzamani (2010) state that “(1) quality management system; (2) management responsibility; (3) resource management; (4) product realization; and (5) measurement, analysis and improvement.” (p. 688) are required to make sure that the basic processes of a well controlled organization (Gotzamani, 2010)

Many activities and processes take place to manufacture a single product. These process efficiencies should be measured to decide if the product is worth the cost it incurs on the organization (Jones, 2007). Management needs performance indicators to measure the cost of the product and aims to optimize production cost.

References:

Gotzamani, K. (2010). Results of an empirical investigation on the anticipated improvement areas of the ISO 9001:2000 standard. [Article]. Total Quality Management & Business Excellence, 21(6), 687-704. doi: 10.1080/14783363.2010.483101

Gutiérrez, L. J. G., Torres, I. T., & Molina, V. B. (2010). Quality management initiatives in Europe: An empirical analysis according to their structural elements. [Article]. Total Quality Management & Business Excellence, 21(6), 577-601. doi: 10.1080/14783363.2010.483064

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How Philips Are Doing Now?

Listen to this postPhilips started with the simple production of a light pulp and concentrated its effort on that single product to have the advantage of product specialization. Global market was a good opportunity when Holland market became too small for Philips production. Philips established production centers around the world and research and developments centers around different locations to support its expansion strategy (Bartlett, Ghoshal, & Beamish, 2008). Philips innovation produced competitive products like the color TV, stereo TV and the first TV with teletext. Philips realized that some of the products are not profitable in the existing operational setting and chose to outsource them. Most of Philips competitors moved their electronic production facilities to low-cost production sites like East Asia and south America. However, Philips licensed its innovations to other producers which made it less competitive like its decision to abandon the VHS technology. I would recommend that Philips continue downsizing its operations and re-engineer its profitable production sites but close or sell the struggling one. Philips should concentrate its budget and effort on research and development to come up with new challenging products that can be produced in the low-cost manufacturing sites in East Asia and south America.

References:

Bartlett, C., Ghoshal, S., & Beamish, P. (2008). Transnational management: Text, cases, and readings in cross-border management (5 ed.). Boston: McGraw-Hill/Irwin.

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Example of An International Expansion Strategy

Listen to this postThe color TV market boomed after the introduction of color TV in the late 1979. China opened for commercial production and the electronics manufacturing moved steadily to China up to the 1990s because of the cheap labor cost. Growth in the TV market in the past 10 years was dominated by the flat screen TV. TCL is an emerging Chinese company which bought Thomson television business and Alcatel Mobil phones in line with its main business of multimedia , communications, home appliances and electronics. This accusations moved TCL from being the 60th in the 1995 to be the number one brand in China now. TCL vision is to strengthening their foundation by reforming their basics and continuously innovating . Acquiring the Thomson television and Alcatel Mobil brings in a proven and successful technology to TCL and widen the ambitions goal of the “top 10 in 10 year” globalization vision (“Vision”, 2007-2008).

Innovations is a strong part of TCL business and part of the organization vision. TCL set up the first Research and Development (R&D) center for audio research in 1992. Currently, TCL has 18 R&D centers with 20 manufacturing bases around the world. TCL operated as separate business units in 2004. Some of the business units are multimedia, telecommunications, personal computers, consumer electronics and CD/DV distribution. Multimedia and mobile handsets generated most of TCL’s revenues at the same period. Supply chain management is a key success factor for TCL, which employed 80 people for sourcing and quality management. TCL made substantial profit because of its efficient supply chain management while its competitors lost money although all of them are sourcing their material from china (C. Bartlett, Ghoshal, & Beamish, 2008). The perfect supply chain enabled TCL to integrate its businesses and R&D centers together to move faster than its competitors in selecting the promising innovations and convert them into competitive product distributed around the world (C. Bartlett, et al., 2008).

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References:

(“Vision”, 2007-2008). Vision  Retrieved Jun 10, 2010, from http://www.tcl.com/main_en/About%20TCL/Vision/index.shtml?catalogId=13047

Bartlett, C., Ghoshal, S., & Beamish, P. (2008). Transnational management: Text, cases, and readings in cross-border management (5 ed.). Boston: McGraw-Hill/Irwin.

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