Photo Credit: http://www.businesswire.com/news/home/20130422006687/en/GE-Lighting-Reveals-LED-Bulb-Chief-Innovation

General Electric perhaps encapsulates the epitome of American capitalism; its embodies leadership, innovation, perpetuity, and success. Today, however, General Electric operates under tremendously different economic conditions than it did so in 1876.  What makes General Electric a great business isn’t merely some set in stone, stationary business model; in my opinion it is their ability to constantly adapt to fluctuating economic trends and technological change, altogether illustrating a much larger theme: a culture built on organizational change.

Almost every force of change imaginable has threatened General Electric: 2 financial crises, unprecedented advances in technology, dramatic changes in the composition of the workforce, and a perpetuating stream of new competitors. GE mission statement states that they aim to ““build, move, power, and cure the world.”. This connotes the very reason for their sustainability: they embrace change. They foster an organizational culture where employees represent the driving before behind change, not the restraining force. According to one GE employee Raghu Krishnamoorthy, “we have stayed competitive for more than 130 years because of our relentless quest for progress on all fronts, including culture. We believe that there is no such thing as a 130-year culture.” 

Photo Credit: http://www.brighthubpm.com/change-management/88725-tips-on-managing-the-organizational-change-curve/

In a more general sense, I believe that there is no set-in-stone culture code for any organization, rather, culture in successful organizations is contextual. That is, in order to resist the dangers of alienation which are spurred by organizational change, management should foster a culture that contextualizes itself with the pace of their business model evolving; as the business evolves, so should its culture. Thus, in my opinion, we shouldn’t view a company’s organizational culture and business model as two separate entities, but rather as a synergistic entity; a business model should be in flux with organizational culture and vice versa.
Recognizing the context in which organizational culture is symbiotically related to a company’s business model will be a crucial factor in differentiating which of today’s titans will triumph and falter.

Words: 320

Bibliography 

Krishnamoorthy, Raghu. “GE’s Culture Challenge After Welch and Immelt.” Harvard Business Review, Harvard Business School, 26 Jan. 2015, hbr.org/2015/01/ges-culture-challenge-after-welch-and-immelt.

Nancy Langton, Stephen P. Robbins, Timothy A. Judge, Robbins, S. P., & Judge, T. A. (2012, April 12). Organizational Behaviour – Concepts, Controversies, Applications.

Walker, Jack H. “Factors influencing organizational change efforts: An integrative investigation of change content, context, process and individual differences.” Journal of Organizational Change Management, vol. 20, no. 6, 2007, www.emeraldinsight.com/doi/full/10.1108/09534810710831000.

Photo Credit: http://www.quickbase.com/blog/6-ways-to-avoid-groupthink

To the extent that managers emphasize the importance of collaboration and teamwork, their decision outcomes seem to be inconsistent with that philosophy; that is, an inherent problem that faces teamwork in an organization is groupthink: a phenomenon in which there are group pressures for conformity, thus suppressing minority perspectives and resulting in a dysfunctional outcome. To many, this would seem to be paradoxical with the very essence of collaboration. This predicament bears the question: what strategies should organizations employ to overcome groupthink and empower all perspectives.

In classmate Ethan Tam’s blog, he assesses the comparative advantage teams gain from collaboration: “this statement does not imply that the results of a group is better than of an individual’s. It means that a group’s potential is always greater than one of a single person.” My discussion starts where his finishes; he acknowledges that teams have cutting edge due to their ability to empower a wide variety of perspectives and partake in integrative decision making – that is, in theory. Strategies managers could possibly adopt, in my opinion, to alleviate the inequities of groupthink would be to perhaps keep the group sizes small. For example, according to one source, smaller group sizes increase member confidence and provide more opportunities for feedback. Another possible solution, I think, would be to actively promote minority and dissenting perspectives. In this way, alternative solutions are articulated and increase the chances of reaching an equitable integrated decision.

In short, teamwork and collaboration are essential to increasing organizational productivity. As we have seen, groups have an inherent proclivity to suppress dissenting perspectives, ironically hindering the groups ultimate objectives. Managers and team members must be conscious of this problem and take into account possible remedies outlined above.

Words: 305

Bibliography

“5 benefits of learning in small groups.” Genie Tutors, Jan. 2016, www.genietutors.co.uk/5-benefits-of-learning-in-small-groups/.

Nancy Langton, Stephen P. Robbins, Timothy A. Judge, Robbins, S. P., & Judge, T. A. (2012, April 12). Organizational Behaviour – Concepts, Controversies, Applications.

Tam, Ethan. “OB POST 1: INDIVIDUALS VS A TEAM WHICH ONE IS BETTER?” UBC Blogs, Feb. 2017, blogs.ubc.ca/etam/.

Just 3 months ago, South Korea’s largest shipping company was placed under receivership due to its failure to pay its creditors. The ensuing chaos plunged the entire global shipping industry into crisis; ports were unwilling to accept Hanjin vessels in, for fear of being left without compensation; companies feared creditors would claim their products as collateral etc. This left vessels drifting out in international waters, dwindling on fuel and supplies that Hanjin could not afford to replenish. It is without a doubt that Hanjin’s bankruptcy will have lasting reverberations throughout the global supply chain. So how did such an operational catastrophe erupt?

The origins of Hanjin’s financial difficulties can be traced back to various factors from the macro environment that affected its business, such as the 2008 financial crisis, the eurozone crisis, and even China’s economic slowdown. Hanjin is inevitably prone to these sorts of macro trends because their key activities are at the heart of the global supply chain. In April of 2016, Hanjin forfeited management control to its largest creditor, Korea Development Bank, symbolizing its dire circumstances it was under. Hanjin would go onto miss interest payments to shipowners, culminating in its filing for bankruptcy on August
31st of 2016.

So what exactly are the lasting shockwaves it sends through the global shipping industry? The most imminent of consequences will be the ubiquitous lack of supply of shipping freights to cope with high demand to ship products from China. For example, Hanjin moved approximately 10% of freight from Asia to Europe; they were evidently a crucial intermediarie in many businesses supply chains. Thus it is clear how Hanjins bankruptcy demonstrates systemic risk to the entire global supply chain: Hanjin was a substantial component for many businesses, as being the crucial link between a companies value proposition and their customer segments.

How could have Hanjin avoided this catastrophe? Perhaps management could have applied useful metrics as preemptive measure against financial and operational viability. By applying various metrics, management could have attained a more accurate perspective of its position and direction, for better or worse. In Hanjin’s case, metrics could have been used to assess their current posistion and interpret the data to make meaningful management decsions that were preserving to the companys financial health. As the global economy heads into one of its busiest times (Christmas), all eyes will be kept on the operational efficiency of the global supply chain.

Word Count: 405

Photo Credit: https://www.linkedin.com/pulse/hanjin-immediate-consequences-bhargavi-s-jannu

Sources: http://www.morethanshipping.com/impacts-hanjin-shippings-sudden-collapse/

http://www.zerohedge.com/news/2016-09-02/ripple-effect-could-be-tremendous-retailers-demand-government-bailout-after-hanjin-c

With the seemingly endless stories of cloud hacking and technology malfunctions, I have become interested in what lies in the future for the technology sector. As the technology bubble burst close to 20 years ago, the technology industry has grown to exponential heights with (systematically) little getting in its way. Operationally speaking, the tech industry has significant variability; for example who would have predicted BlackBerry’s fall from grace. After reading classmate Andres Garza’s blogpost about the recent catastrophe’s of Samsung Galaxy S7, it left me wondering: how will the landscape for technology innovation pan out over the course of the next decade?

With regards to the Samsung predicament, Andres found it “perplexing that a brand as giant and well-established as Samsung went so catastrophically wrong”. I do ultimately agree; Samsung is one of the most established and stable technology brands; how could this kind of operational terror evolve. This leads into an unsettling topic about the ‘un-guaranteed safety of technology’. For example, this issue finds much attention with regards to cloud services and the ownership of the internet itself. A current debate that has sparked political controversy in the U.S. is the governments plan to “end its oversight of the internet’s master directory of website addresses”. This plan has sparked political opposition, particularly senator Ted Cruz who say that this move could give considerable influence over the internet to countries like Iran, Russia and China, jeopardizing the internets security.

Personally, I think that as globalization homogenizes the technology industry and the internet, there will be a significantly large degree of variability. Looking at precedent – companies like Nortel, RadioShack, Netscape, BlackBerry – there is a great degree of uncertainty with regards to stability. As classmate Jeremy Jersic has observed, Google has released its new phone in convenient timing with the Samsung predicament. He thinks that “Whether or not the release of the Pixel was planned by Google, it was an exceptional opportunity they capitalized on”. I think that what Jeremy pointed out is an example of an industry shakeout, and it is what will define the technology industry for years to come. An interesting observation I made while researching the technology industry is that there are low barriers to entry; anything can happen within the course of a short time. This can be seen in contrast to industries that produce staple products, and therefore are very stable. In my opinion, the future landscape of the technology industry will drastically reshaped over the course of the decade. I think we will see many firms implode as others innovatively emerge.

Words: 417

Sources:

https://blogs.ubc.ca/jeremyjersic/

Samsung Blew it, Literally

https://www.instagram.com/theonion/?hl=en

Over the past 2 years, the world has seen many behemoth enterprises amalgamate into organizations of astronomical size. Just recently, German chemical manufacturer purchased American seed maker Mosanto for 66 billion in cash; the largest cash deal ever. Despite the gargantuan sum of the transaction, these kind of takeovers are becoming a norm in the global scene of business; over the past 2 years Heinz has taken over Kraft, Anheuser Busch purchased SAP Miller and so on. This paradigm shift raises a serious question: what sort of implications do these mergers and acquisitions have on the business environment?

Mergers and Acquisitions – if executed properly – can create a vast amount of wealth for shareholders, substantially increase profits and help businesses adopt a new competitive advantage; mergers can create synergy in a business. Why do companies merge? Often for a variety of reasons: to diversify and increase productive capacity; to fend of international competition, and to increase supply chain purchasing power etc. To determine the viability of merger, executives see if the strengths and weaknesses are similar amongst the businesses, so that a merger would strengthen them in a complementary way. For example, any business with high fixed costs benefits from what is called an economy of scale, wherein by merging with another entity, the business can reduce average costs and thus is able to offer consumers a more competitive price. Overall, mergers propel companies to a more efficient and integrated business model.

Ultimately, however, there are significant economic drawbacks and risks that evolve inexorably from mergers; prices become higher, consumers have less choice and workers lose their job due to budget cuts. When firms merge, competition in that particular industry decreases which creates a monopolistic industry with high barriers to entry: less firms will be willing to enter. As a result of high entry barriers, supply chains become concentrated, Also, as seen within the 2008 crisis, firms grow to a level of being ‘too big to fail’, wherein there demise would reek catastrophic damage to the global economy.

As Megan Ruesink puts it: “Without mergers and acquisitions, many of the most well-known brands and companies would not be where they are today.” I do ultimately agree, but at current pace of mergers between large companies, caution should be taken. In my opinion, governments should adopt tighter regulations regarding mergers; in contrast to the benefits given to shareholders, innovation and entrepreneurialism suffer. In a culture where behemoth corporations dominate, entrepreneurs no longer aspire to build empires, rather they dream of selling their company to a multinational and cashing out. Entrepreneurialism is what built the greatest companies in the world; we shouldn’t lose that art.

Words: 447

Sources

Blog Cited: Megan Ruesink:  http://www.rasmussen.edu/degrees/business/blog/best-and-worst-corporate-mergers/

http://www.sauder.ubc.ca/News/2016/Q_and_A_Inside_the_Bayer-Monsanto_mega-merger

Picture: http://english-magazine.org/fun-and-leisure/english-cartoons/1473-teacher-cartoon626

An equally fascinating and bizarre topic to me is the monopolistic market for technology companies, fostered by China’s Communist Party. The recent acquisition of Uber’s Chinese business by Didi Chuxing is dismally symbolic that Silicon Valley firms don’t enjoy the prosperity throughout the globe in China. For example, dominant tech firms like Facebook, Google, Twitter and Amazon have essentially no foothold in the worlds second largest consumer market, which is utterly bizarre. This in turn questions the fundamental dynamics of the worlds second largest market.

Why do ‘imitator’ companies like Renren prosper over global tech superpowers like Facebook in China?

A large part of the reason for this can be attributed to the governments negligible attitude towards business.Ever since the 1980’s, China’s authoritative Communist Party has allowed capitalism to flourish – but with catch. Foreign investment is allowed and encouraged, some private ownership is allowed, while however, the economy is heavily scrutinized and influenced by the government. For example, the nationalistic tendencies of the government have urged them to enact regulation (high taxes) that protect local firms, to bolster the reputation of China. This inevitably causes Chinese businesses that emerge with a business model identical to those of Western firms. For example, Renren is an absolute imitation and knock-off of Facebook faces no competition. Although all is well right now, these interventions are troubling and foreshadow a dire future.

So what are the effects of China’s government intervening in markets? In my opinion, it is an impediment to the confidence of the private-sector; in the short run, local Chinese firms may prosper, but in the long-term it may deter foreign investment. Why would foreign firms invest in China if the government is actively working in favour of local firms? Without a doubt, foreign investment is essential to emerging ‘tiger economies‘, like China (A tiger economy is term attributed Asian economies with large populations that prosper exponentially with the injection of foreign capital). In addition, the absence of competition markets is vital for a firm to innovate; with the absence of competitors, firms aren’t constantly striving to improve, rather innovation stagnates. Although it is an inevitable challenge for all businesses, competition is the driving force behind innovation and strategy. Without competition, the market is unable to facilitate persistent innovation.  Furthermore, China imitating Western companies is by all means unethical, and will be damaging to their international reputation. In essence, this situation reflects government policy intervention that is justified by political rather than economic means. This is a dangerous precedent. From my perspective, if China wants to embrace free-market capitalism, they must embrace it wholly; let competition flourish, attract foreign investment and enact fair policy. This will be an interesting situation to watch unfold.

Words: 446

Photo Credit: http://www.o2-v2.com/en/blog/topic/business-in-china

Photo Credit: http://www.channelweb.co.uk/crn-uk/news/2266543/emc-to-competitors-we-are-after-the-whole-storage-market

Sources

http://www.economist.com/news/leaders/21703371-western-caricature-chinese-internet-firms-needs-reboot-chinau2019s-tech-trailblazers

http://www.investopedia.com/terms/t/tigereconomy.asp