Transnational Corporations and Spatial Divisions of Service Expertise as a Competitive Strategy - Assignment Example

? 3M inserts his/her Inserts Part A The company’s culture of sharing and leveraging its model of technology and innovation is the fundamental factor behind its phenomenal success. Therefore, it is not surprising that according to a study conducted the company achieved the 3rd rank in the list of most innovative companies (Warc News, 2011). The company’s fundamental strength, therefore, is its access to virtually any type of technology and manufacturing capability in any corner of the world. Another strategic resource responsible for 3M’s innovativeness is its strong human resources (Warc News, 2011). The organization is structured in a way that each worker has the dual responsibility of adhering to his/her particular business unit and region as well as being a part of the global 3M network. This global nature of the company’s existence and operations is yet another factor responsible for its success. Hence, employees are encouraged to take on additional roles, move from one region to another and even rotate from one business unit to another (Warc News, 2011). Thus, 3M is flexible in terms of its human resource development and assignment of task roles which further reinforces its culture of thinking out of the box. The company further ensures that change is the only constant element. Hence, trial and error, risk taking and failure are a norm at 3M. This is reinforced by a high degree of employee empowerment such that there is a high tolerance for ambiguity and risk amongst all members. This is combined by the process of reverse thinking that allows workers to schedule their work in a flexible manner, thereby enhancing their motivation to work. However, as much as ad-hoc ideas and brainstorming is encouraged, the company is highly customer-oriented and conducts rigorous, continuous market research in an attempt to continually provide something better and valuable to the customers (Bryson & Rusten, 2008). Hence, at all times the company monitors the pulse of the customer. 2) One of the most innovative products of the recent decades has been the Apple i-phone. The company was able to rack up profits worth millions of dollars despite the global recession. The fundamental reason for it success was its superior design and aesthetic appeal. The phone combined the aspects of beauty and function in a way no other phone has. Hence, the product is labeled as iconic or a pioneer in its type of design and user interface. A significant factor has also been Apple’s sheer marketing gimmicks and campaign which was able to capture a large share of mind in its customers. Perhaps, the fact that the product was in the same line as other products in the Apple Family also favored i-phone tremendously (Denning et al., 2010). So customers who own a MAC ( by Apple) and are in search of a mobile phone would find i-phone compelling simply because of the fact that they can synchronize data easily amongst the two. This would allow them to easily transfer, retrieve and store data interchangeably since the two devices share similar technology by the same manufacturer (Apple). Another major reason behind the astounding success of i-phone is the affordability. This simply means that, faced with a choice between a laptop and a mobile phone, consumers with limited money will prefer buying the latter (Curwen & Whalley, 2011). The choice is made easier with the inclusion of software and various applications on i-phone that allow its users to obtain similar interface as that of a laptop. Perhaps, one of the distinguishing features of i-phone was its state of the art integration of internet services that were technically unmatched with its competitors. Furthermore, the time when i-phone was launched is a critical factor behind its success. i-phone was released at a time when social networking had begun operations and people all over the world were enthusiastic about using the new web platform for which i-phone provided an excellent connection (Denning et al., 2010). The convenient size of i-phone along with its ability to offer these social networking services at one click made it undoubtedly one of the best selling smartphones ever. Therefore, it is not surprising that this product was an instant hit and bet all smartphones to date. Industry experts link this phenomenon to offer something different continually. Every year or so Apple comes up with a newer version of i-phone such that it outdoes the previous version in terms of features, performance, connectivity, interface etc. 3) Commercialization involves translation of customer needs and wants into a tangible product or an intangible service which can be purchased by customers who are willing and able to pay for it (Viclink, n.d.). The ultimate aim of commercialization for companies such as 3M is to ensure that the company’s efforts at market research are en-cashed through the satisfaction of customer’s needs in a profitable manner. At all times, profit is a major consideration. Companies such as 3M invest heavily in research and development as well as in technology. Therefore, it is music to the ears of the management to generate positive cash flows and customer traffic from this investment. The higher the return, the better it is for shareholders who vie for high profits (Viclink, n.d.). Another major aspect of commercialization is the commercialization of technology. Such commercialization leads to value addition, which in turn enables companies such as 3M to charge a premium price for their products, thereby increasing their margins (Viclink, n.d.). Furthermore, commercialization also enables such organizations enhance their goodwill when they produce breakthrough innovations during this process. Such breakthrough innovations then become the norm in the industry and benefit the broader community which results in an indirect publicity for the organization responsible for it. In the long run, such commercialization also results in higher investments in the firm by outside investors as it increases the attractiveness and profitability of the firm. Hence, commercialization not just enhances the sales and revenues for such businesses but also provides some security for their continued existence. In today’s competitive world where product lifecycles are typically short and consumerism is at its peak, commercialization reaps benefits by sustaining the company’s market share and providing it a strategic advantage over its competitors. Through continued innovation and commercialization, such firms are then able to establish themselves as market leaders which can provide them with the opportunity to dictate the market price. As a general rule, the importance of commercialization rests in its ability to materialize the benefits of innovation. Therefore, doing research and development is not enough; companies need to bring the innovative outcomes to the market in a form acceptable to the consumers otherwise the innovation would simply remain an expense. To sum up, commercialization is typically important for companies that are operating in unstable markets. Such companies, such as 3M, are faced with the challenge of innovating before their competitors do. Their growth and profitability is inherently tied to a continuous process of commercialization. Part B Key performance indicators are typically defined as the metrics for gauging performance of any aspect of a business (Kazmi, 2008). They are mostly employed by organizations for the purpose of assessment and evaluation of a specific business activity. Performance is almost always defined in organizations in terms of operational, business level and strategic goals. Hence, the task of these KPIs is to measure whether or not these goals have been fulfilled. The company’s choice of KPI depends on which factors or aspects of the business it considers significant enough to be measured. Often the KPIs are based on factors that are critical to the survival of a business. This often varies from department to department. Since each department has a distinct function, it is highly likely that the relevant KPIs will be different. Several methods are used by organizations to develop KPIs of which the most important is the Balanced Scorecard (Kazmi, 2008). KPIs play an important role in acting as agents of business intelligence (Kazmi, 2008). When developed systematically, these KPIs often result in greater collaboration, co ordination and cross-functional team work in organizations. By targeting key aspects of the business, organizations then use these KPIs in order to lay down specific action plans for them. This so-called “flow effect” has the ability to streamline organizational processes in a systematic manner (Kazmi, 2008). If the KPIs are not met, the top management tends to get everyone onboard and engages in a dialogue with all stakeholders in an attempt to solve the problems pertaining to their accomplishment. Furthermore, KPIs are powerful tools for benchmarking (Kazmi, 2008). Members of the organization envision performance goals which they measure and evaluate through KPIs and by doing so enable the company follow the established best practices developed in the form of KPIs. In recent times, companies have used “performance dashboards” as effective tools for monitoring KPIs (Eckerson, 2010). The purpose of the dashboard is to monitor the rate by which the KPIs are improving or worsening (Eckerson, 2010). If the results depict little or no improvement in the KPIs, the concerned staff is alerted immediately so that corrective action may be taken. Hence, the right information is made available to the concerned users at the right time. Perhaps, the fundamental importance of KPIs rests in their ability to tell individuals in the organization exactly what is being expected out of them (Kazmi, 2008). This reduces ambiguity with respect to their task roles and responsibilities and provides them with a clear sense of direction in which to move. This reduces any time wasted on non-value adding activities and synchronizes individuals’ efforts towards those activities that have a direct relation to the attainment of particular KPIs. Hence, all in all, it translates into more efficient use of resources for organizations. Another reason why KPIs have received increasing importance in recent years is due to their ability to ensure higher levels of transparency across the organization (Kazmi, 2008). The scores on various KPIs indicate, to the entire organization, the good and poor performers. The performance of individuals and departments is accessible to all members across the organization which ensures that no aspect of performance is hidden. This helps enhance trust and motivation amongst employees. It also ensures individual accountability since it highlights who’s performing well and who is not. An important point to note here is that KPIs not only help in goal setting and performance measurement but also improves the chances of successful execution. According to Larry Bossidy, one of the major reasons behind companies failing to execute is their failure to “measure”. Furthermore, KPIs facilitate managers in the decision making process by providing them with accurate data regarding the key performance targets. An interesting case in this regard is that of the crusher industry where the mineral rock enters a crusher’s chamber in order to be refined and processed. The area of evaluation of the crusher’s performance has been a subject of deep interest to researchers in the field of production and operations management. Also, customers may use the KPIs to estimate the effectiveness and worth of a crusher over another which makes comparison a lot easier. The pre-purchase evaluation involves setting of certain performance targets (KPIs) such as the distribution of the size of output, the cost of initial setup, the cost of operations of the crusher, the service life, maintenance costs as well as the availability of the crusher’s spare equipment along with the size and weight of the crusher (Carter, 2006). This allows the production experts to monitor the effectiveness of the crusher. After, however, the crusher is purchased and put in working condition, the set of performance targets or desirable KPIs changes. These KPIs do not necessarily need to be developed out of a complex process; they can simply be developed by a quick inspection process. Garland Davis and Ivan Acevedo have provided a coherent list of KPIs for crushers from operations’ perspective. According to them, the KPIs have been grouped under four major categories, each for a different application. Under the “parameters pertaining to operations” category, the most relevant KPIs are the throughput capacity, position of the mantle and the power draw (Mular et al., 2002). Under the mechanical features, the pertinent KPIs are speed, angle of the nip as well temperature and pressure settings (Mular et al., 2002). As far as the raw material is concerned, the relevant KPIs are the type of rock (geology), energy, amount of moisture and size (Mular et al., 2002). Finally, other indicators are described as vibration and quality of lubricants (Mular et al., 2002). In another study, the significance of KPIs in treasury management was discussed. The sensitive and strategic nature of this function suggests that transparency is a key consideration in all matters concerning treasury. According to a study conducted, it was discovered that greater than 65% of organizations have already used or are using KPIs in their treasury departments (Higdon, 2012). Amongst the most popular KPIs are the estimated rates or error, visibility of cash and determination of limits for counterparties (Higdon, 2012). The need for KPIs in this area has particularly increased in the aftermath of famous accounting fraud cases such as Enron. As a result, the Sarbanes Oxley Act was introduced, which led to a substantial increase in the level of transparency and control mechanisms in organizations, particularly finance and accounting (Higdon, 2012). Nevertheless, the importance of KPIs in treasury was well-recognized even before these incidents of accounting fraud. The development of KPIs in treasury requires a holistic understanding of the organizational goals and objectives as well as the contribution that treasury can make to those goals. KPIs in treasury, however, vary from organization to organization. For instance, an organization that has high debt with a multiple securities portfolio will have KPIs different from those that rely on foreign currencies for revenue. References Bryson, J.R. & Rusten, G., 2008. Transnational corporations and spatial divisions of ‘service’ expertise as a competitive strategy: the example of 3M and Boeing. The Service Industries Journal, 28(3), pp.307-23.Print. Carter, R.A., 2006. KPIs: Keying in on Crusher Performance. Engineering & Mining Journal , 207(3), pp.38-40.Print. Curwen, P. & Whalley, J., 2011. Mobile Telecommunications in a High-Speed World: Industry Structure, Strategic Behavior and Socio-economic impact. Surrey: Gower Publishing Limited.Print Denning, P.J., Dunham, R. & Brown, J.S., 2010. The Innovator's Way: Esssential Practices for Successful Innovation. Massachusettes: Massachusettes Institute of Technology.Print. Eckerson, W.W., 2010. Performance Dashboards: Measuring, Monitoring, and Managing Your Business. 2nd ed. New Jersey: John Wiley & Sons.Print. Higdon, P., 2012. Monitoring, benchmarking and improving treasury performance: The practical application of key performance indicators (KPIs) in treasury. Journal of Corporate Treasury Management, 4(4), pp.293-310.Print. Kazmi, 2008. Strategic Management And Business Policy. New Delhi: Tata Mc Graw-Hill.Print. Mular, A.L., Halbe, D.N. & Barratt, D.J., 2002. Mineral Processing Plant Design, Practice, and Control Proceedings. Colorado: Society for Mining, Metallurgy, and Exploration Inc.(SME).Print. The Times 100: Business Case Studies, 2012. Growth through ingenuity and enterprise| A 3M United Kingdom case study: Commercialising ideas. [Online] Available at: HYPERLINK "http://businesscasestudies.co.uk/3m-united-kingdom/growth-through-ingenuity-and-enterprise/commercialising-ideas.html" http://businesscasestudies.co.uk/3m-united-kingdom/growth-through-ingenuity-and-enterprise/commercialising-ideas.html [Accessed 27 April 2012]. Viclink, n.d. The VUW Inventor's guide to commercialisation. Wellington: Viclink.Print. Warc News, 2011. Unique culture key for 3M. [Online] [Accessed 25 April 2012]. Read More