What do you do when your business is no longer profitable and is essentially at a crossroads? Would the words of management gurus like Peter Drucker, Philip Kotler, Porter and others still show you the light? As an article in the July-August 2015 issue of Harvard Business Review, “Break your Industry’s Bottleneck” discusses, a business may need to look beyond established management theories and past experience to break through the different hurdles that they face.

The concepts discussed in the above article have already been implemented in many business models. To illustrate: The citizens of Clifton in the United Kingdom, who had traverse 20 kilometres to the nearest grocery store after their local store shut down now have a giant vending machine in their town that saves them the time and effort.

This aspect of business is undoubtedly important

Adapting by innovation is not a new concept. Henry Ford’s assembly lines for the Model T were revolutionary for that era. The Toyota Production System and Just in Time inventory systems were adapted by many industries to survive the vagaries of business. Thus, the key to survival stills seems to be in thinking “out of the box” and innovating to tread new paths.

Successful Principles can even lead to successful books!

Bibliography

Ersek, Barett, Eileen Weisenbach Keller, and John Mullins. “Break Your Industry’s Bottlenecks.” Harvard Business Review. Harvard Business School, 01 July 2015. Web. 04 Oct. 2015.

“Toyota Production System.” Toyota Global Site. Toyota, n.d. Web. 04 Oct. 2015.

“Management Gurus.” BBC World Service. BBC, 11 Oct. 2001. Web. 04 Oct. 2015.

“Vending Machine Replaces Grocery Stores in English Town.” NBC Bay Area. NBC, 23 Mar. 2014. Web. 05 Oct. 2015.

Images

Breaking the Bottleneck. Digital image. Quality Digest, n.d. Web. 04 Oct. 2015.

Digital image. Above the Crowd. N.p., n.d. Web. 04 Oct. 2015. <http://abovethecrowd.com/wp-content/uploads/2012/03/innovation.jpeg>.

The Toyota Way. Digital image. Matthrivnak, n.d. Web. 04 Oct. 2015.

Automation has helped mankind reach thresholds in industry, medicine and various other fields by speeding up repetitive tasks, performing tasks that are dangerous if performed by humans, intricate tasks that are impossible to perform by human hands and so on. In many instances humans have been replaced by automation causing unemployment, offset by human labour being employed in other functions. Today, businesses flourish by striking the right balance between human labour and automation. However, there are increasing concerns of automation replacing human capital entirely.

Robots in action

In the evolving job environment, it is important to take the following fact into account; humans are unique. Even in the future, there will be tasks that robots will be unable to execute, such as being able to use past experiences to improve workflow. A robot will be limited to certain experiences, which allow humans, who constantly evolve based on their experiences, to be more multifaceted. Some functions need human performance or intervention. Computers are unlikely to replicate the human aspects of entrepreneurship, salesmanship, etc.

As technology continues to develop, some jobs will undoubtedly be lost. Nonetheless, by pacing ourselves with changing technology, individuals and corporations can ensure that human capital will still be a pivotal aspect of industrial processes.

A unified approach will result in greatest efficiency

Bibliography

Davenport, Thomas H., and Julia Kirby. “Beyond Automation.” Harvard Business Review. Harvard Business School, 01 June 2015. Web. 04 Oct. 2015.

Ford, Paul. “Our Fear of Artificial Intelligence.” MIT Technology Review. The Massachusetts Institute of Technology, 11 Feb. 2015. Web. 04 Oct. 2015.

“On the Origin of (robot) Species.” Research. University of Cambridge, 12 Aug. 2015. Web. 04 Oct. 2015.

“Out of Control AI Will Not Kill Us, Believes Microsoft Research Chief.” BBC News. BBC News, 28 Jan. 2015. Web. 04 Oct. 2015.

Images

Digital image. Metal Working World Magazine. N.p., n.d. Web. 04 Oct. 2015.

Digital image. Shutterstock, n.d. Web. 04 Oct. 2015. <http://ak7.picdn.net/shutterstock/videos/4963025/preview/stock-footage-shake-hands-with-a-robot.jpg>.

Investors look on as the SCI drops

To add to the woes caused by slumping oil prices, a knife has now been wedged into the sides of investors: A massive Chinese driven investment and securities rout that resurrects fears of global recession.

On June 12, 2015 the SCI (Shanghai Composite Index) reported record high numbers of 5166 points. This was short-lived. The stock market bubble popped and the SCI index value evaporated, with the Index closing at 3507 points on July 8. Nearly 2.7 trillion dollars of securities dissipated into thin air and the Chinese Central Bank moved in with measures to stem the rout.

Foreign investment only accounts for 1.5% of Chinese stock holdings and thus, we won’t be affected, right? However, China is today an economic behemoth and a key market catalyst. China’s steady yoy (year over year) growth has increased global investor confidence. The beacon of hope China shone amidst the Eurozone decline, and rising US debt levels, has dimmed.

Also bigger the economy, greater is the ripple effect. The current Chinese rout and economic slowdown is predicted to cause prices of commodities such as gold and copper to slump. Resource based nations such as Canada (already hit by low oil prices) could be severely affected by China’s chronic condition.

Dropping Copper Prices Increases Fear

Bibliography

AFP. “As China Growth Flags, Analysts Weigh Alternative Indicators – The Economic Times.” The Economic Times. The Economic Times, 04 Oct. 2015. Web. 04 Oct. 2015

Bloomberg News. “Chinese Stocks Resume Rout on Economy, Capital Outflow Concerns.” Bloomberg Business., 19 Aug. 2015. Web. 04 Oct. 2015.

Bradsher, Keith, and Chris Buckley. “China’s Market Rout Is a Double Threat.” The New York Times. The New York Times, 05 July 2015. Web. 04 Oct. 2015.

Gough, Neil. “Slowdown Continues for China in Factories.” The New York Times. The New York Times, 30 Sept. 2015. Web. 04 Oct. 2015.

Riley, Charles, and Sophia Yan. “China’s Stock Market Crash … in 2 Minutes.” CNNMoney. Cable News Network, 27 Aug. 2015. Web. 04 Oct. 2015.

“What’s Ahead for China’s Economy?” Bloomberg.com. Bloomberg, 01 Oct. 2015. Web. 04 Oct. 2015.

Images

Copper Price. Digital image. Info Mine, n.d. Web. 04 Oct. 2015.

Kwn-fleckenstein-762015. Digital image. King World News, n.d. Web. 04 Oct. 2015.

Running Scared. Digital image. Thomson Reuters, n.d. Web. 04 Oct. 2015.

I am sure that by now, many readers are aware of the rock bottom oil prices and concerns of a looming global recession.

Oil producing countries like Russia, Iran, Nigeria and Venezuela with high oil production costs and major economic dependency on oil exports have been badly hit.

In Canada, the effects are job losses and slower economic growth. U.S strength in varied sectors has softened the economic impact of low oil prices.

Oil importers, particularly the emerging economies share the joy of low oil prices with the myriad individual oil consumers and oil-consuming industries. Oxford Economics and IMF estimate that falling oil prices are offset by global growth.

Saudi Arabia is determined to maintain current oil prices by not reducing their oil output, by relying on their large cash reserves. However, since the cash reserves are not the equivalent of the proverbial “Goose that lays Golden Eggs”, sooner or later Saudi Arabia will be forced to cut-down production and supply, and oil prices will go up again. But this time round other oil-producers will likely have learnt a lesson and would better prepared not to let a future repeat performance happen by putting their “innovation shoes on” and have more cost-effective techniques and equipment in place for cheaper oil production.

Saudi Arabia FOREX reserves

Bibliography

Critchlow, Andrew. “Oil Price Slump to Trigger New US Debt Default Crisis as OPEC Waits.” The Telegraph, 14 Nov. 2014. Web. 02 Oct. 2015.

Giles, Chris. “Winners and Losers of the Oil Plunge.” The Big Read (Financial Times). Financial Times, 15 Dec. 2014. Web. 04 Oct. 2015.

Harrison, Virginia. “Canada Slips into Recession as Oil Slump Bites.” CNNMoney. Cable News Network, 01 Sept. 2015. Web. 04 Oct. 2015.

Shenk, Mark. “Oil Bulls Lose Faith in Recovery as Russia Adds to Global Glut.” Bloomberg.com. Bloomberg, 02 Oct. 2015. Web. 04 Oct. 2015.

Solomon, Jesse. “These Countries Are Getting Killed by Cheap Oil Prices.” CNNMoney. Cable News Network, 30 Oct. 2014. Web. 02 Oct. 2015.

“Sheikhs v Shale.” The Economist, 06 Dec. 2014. Web. 04 Oct. 2015.

“The Sticky Superpower.” The Economist. The Economist Newspaper, 03 Oct. 2015. Web. 04 Oct. 2015.

Images

Breakeven Prices. Digital image. The Economist, n.d. Web.

Saudi Arabia Foreign Exchange Reserves. Digital image. Trading Economics, n.d. Web.