LABRST 3H03 Study Guide - Efficiency Ratio, Skilled Worker, Data Center

42 views20 pages

turquoisesnail804

10 Dec 2014

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

The focus of this research paper is to examine how the internet plays a key role in affecting and enabling the productivity and growth of businesses. This study"s purpose is to illustrate how the internet acts as an important tool that helps companies communicate globally in order to expand their markets and reach economic success. The research question looks at not only the big picture of the internet aiding in the economic growth of industries, but also at how it does this. By looking at the wide variety of valuable functions the internet provides; efficiency, accessibility, convenience, these factors benefit the workers who use the. Internet in the diverse occupations that they do. The internet has been a central tool for businesses to grow economically and has proven to be highly effective when it comes to the productivity of various companies (manyika & roxburgh, 2011; brynjolfsson & hitt, 2000).

Related Questions

Hello, could you please assist with this discussion question for the Economics course? Thank you.

5) Go to the internet and find an article that discusses the problems of income inequality in the U.S. economy, summarize key points, and post in the Discussions area.

http://neweconomics.org/2014/12/why-inequality-is-an-economic-problem/

Why Inequality Is An Economic Problem

Rising economic inequality was a major driver of the financial crisis. With the OECD recently debunking âtrickle-downâ economics, our new report sets out the links between inequality, the growth in scale and influence of the financial sector, and the dangers for financial stability.

A fragile recovery

A return to growth in economies such as the UK and USA has been welcomed as a sign of recovery from the 2008 financial crisis. But as GDP picks up, so too has the widening gap between rich and poor.

The crisis may be over for the wealthy but the aftermath for ordinary workers depressed wages and growing debt is only getting worse.

Most nations have mustered only negligible growth and this has failed to benefit the vast majority of those nation's populations.

In the seven years following the crash, the UK has suffered the longest sustained decline in real wages since records began.

This decline hasn't has been shared equally across the income spectrum latest annual data up to the end of 2013 shows real earnings for the top 10% increasing by 3.9% and a 2.4% fall for the remaining 90%.

Households are once again piling on risky personal debt at a rate of almost $1billion a year.

Globally, wealth grew by 8.3% last year to $263 trillion, even as living standards stagnate for the majority. Income inequality has seen a sharp return the top 1% of earners have reaped 95% of the USA's economic gains since the crash.

Inequality increases as economies are financialised

Over the past four decades, financial sectors have been extensively deregulated and have expanded enormously as a result, particularly in the UK and USA.

This deregulation produced two systemic outcomes: finance has been freed to become the motor of the economy while the pursuit of greater equality of citizens, as was the focus after the second world war, has been abandoned.

Instead, the notion that unrestrained pursuit of wealth would trickle-down from rich to the poor has been embraced in the mainstream political and economic arenas.

Financial markets, products, and firms now play a much larger role in many areas; from pensions and social insurance to homes and public infrastructure.

Privatization and the doctrine of maximizing value for shareholders have increased the amount of economic activity focused on extracting the largest possible short-term profit. These trends are referred to collectively as âfinancialisationâ.

Until now the connections between this increasing prevalence of financial activities and the steady increase in economic inequality have not been clear. But when these two trends reached a boiling point in the mid-2000s they fuelled a global collapse of financial systems.

The polarization of wealth and incomes fed asset bubbles, risky financial activity,, and necessitated vast levels of household debt â resulting in the 2008 financial crash. With little done since to address these interconnected drivers, the threat of another crisis is very real.

This diagram lays out the seven indicators of economic instability, each fuelled by rising inequality and increasing financial sector activity:

Our report describes how these indicators laid the path for the 2008 crash, and threaten to do the same again:

Increasing inequality depresses demand since consumption levels depend more on the wages of those at the lower end of the income scale than the profits of the wealthy

In the face of stagnating wages, households rely increasingly on debt to maintain their lifestyles with rising asset prices, especially in residential housing, worsening this.

Financial liberalization allows money to flood into countries with trade deficits, such as the USA and the UK, providing the funds for debt-led consumption.

Snowballing wealth at the top increases risky financial speculation.

Inequality doesn't bring growth, it brings economic instability

In recent years there has been a marked slowing of growth across the world's wealthiest economies, with none returning to the growth trends experienced before the crisis. Many have begun to speculate that this stagnation could, in fact, be a permanent development meaning that wealthy economies are fundamentally unable to create enough demand to keep growing.

The mainstream political consensus has for decades now suggested that inequality is a price worth paying for economic growth.

But new research from the Organisation for Economic Co-operation and Development (OECD) shows definitively that this inequality/growth trade-off is false adding to a growing body of research showing that inequality actually prevents economies from growing. This points to a fundamental structural flaw in the economy: if the proceeds of growth are not shared, the pie stops growing.

The pursuit of higher returns for the already wealthy within this dwindling pie cannot persist forever. With wealth refusing year on year to trickle down, debt has been used to plug the wage-consumption gap for the rest.

The signals are showing quite plainly that this pursuit of growth, via inequality, is ineffective and unsustainable.

violetbuffalo377

After reading the case that is below, how can a foreign company entering China ensure that it tackles the most important little things that end up being huge barriers to success as we approach the year 2020 when China is expected to have significantly increased purchasing power among its middle class? Write your opinion, as a manager, on how to face cultural issues like those described in the case, when entering foreign markets.

The People's Republic of China opened up to foreign investments in the late 1970s. Since that time, numerous companies have tried to establish operations and sell their products to customers in China. Many more companies will try in the years to come China is expected to have some 190 million people in the middle- and upper-income categories by 2020. This is an increase from only about 17 million people in these income brackets as recently as in 2010. China's purchasing power for virtually all products and services has strong potential, and foreign companies will seek these market opportunities. What have we learned culturally that can help Western-based companies in China's marketplace?

Some background on China can serve as a starting point for a better understanding of the culture in China and what some well-known companies such as Best Buy and eBay have done to target the Chinese marketplace. The motivation for many foreign companies to enter China beyond those that have been there for a few decades for reasons of low-cost production was the triple growth of the Chinese economy that was seen from 2000 to 2010. China overtook Japan to become the second-largest economy in the world behind only the United States, and its large population makes for an enormous target market. Investment from foreign companies was the largest driver of China's growth in the decade from 2000 to 2010. However, many companies also increased their exports to China. The United States, for example, saw its companies increase exports to China by 542 percent from 2000 to 2011 (from about $16.2 billion to $103.9 billion), while total exports to the rest of the world increased by only 80 percent in the same time period.

Interestingly, while foreign investments grew, domestic consumption as a share of the Chinese economy declined from 46 percent in 2000 to 33 percent in 2010. This consumption declineâcoupled with slower growth globally and, ultimately, the worldwide economic downturn that started in 2008âraised questions about China's momentum. Right now, around 85 percent of mainstream Chinese consumers are living in the top 100 wealthiest cities. By the year 2020, these advanced and developing cities will have relatively few customers who are lower than the middle- and upper-income brackets by Chinese standards. The expectation is that these consumers will be able to afford a range of products and services, such as flat-screen televisions and overseas travel, making the Chinese customer much more of a target for a wide variety of consumption. This begs the question, can the unprecedented Chinese growth really continue, and would it come from increased consumption?

The resounding answer is yes according to research conducted by McKinsey & Company. McKinsey found that barring another major economic shock similar to what we saw in 2008, China's gross domestic product (GDP) will continue to grow, albeit not at the historic levels seen between 2000 and 2010 when it grew about 10.4 percent annually. The growth from 2010 to 2020 is expected to be about 7.9 percent per year, which is still far above the expected growth for the United States (2.8 percent annually), Japan (1.2 percent annually), and Germany (1.7 percent annually) the three countries among the top four worldwide economies along with China. And, the key is that consumption will now be the driving force behind the growth instead of foreign investment. The consumption forecast opens up opportunities for foreign companies to engage with Chinese consumers who are expected to have more purchasing power and discretionary spending. But culturally translating market success from one country or even a large number of countries to the Chinese marketplace is not necessarily as straightforward as it may seem. Often, a combination of naivety, arrogance, and cultural misunderstanding has led many well-known companies to fail in China. Lack of an understanding of issues such as local demands, buying habits, consumption values, and Chinese customers' personal beliefs led to struggles for companies that had been very successful elsewhere in the world. Let's take a brief look at Best Buy and eBay as two examples.

Best Buy, the mega-store mainly focused on consumer electronics, was founded in 1966 as an audio specialty store. Best Buy entered China in 2006 by acquiring a majority interest in China's fourth-largest appliance retailer, Jiangsu Five Star Appliance, for $180 million. But culture shock hit Best Buy, best described by Shaun Rein, the founder of China Market Research Group. He pointed to a few reasons for this culture shock and lack of success. First, the Chinese will not pay for Best Buy's overly expensive products unless they are a brand like Apple. Second, there is too much piracy in the Chinese market, and this reduces the demand for electronics products at competitive market prices. Third, like many Europeans, the Chinese do not want to shop at huge mega-stores. So, these three seemingly easy-to-understand cultural issues created difficulties for Best Buy. Solving these issues, Best Buy believed that it would have to develop and implement a different business model for the Chinese market than it has used, for example, in the United States. Now, how far should a company go outside its normal business model to adhere to the cultural values and beliefs of a new market? Strategically moving forward, Best Buy opted to close all of its Best Buy branded stores in China and focus on its wholly-owned local Jiangsu Five Star chain of stores. But will this new strategic business model be successful with the new makeup of customers in China expected by 2020?

eBay, the popular e-business site focused on consumer-to-consumer purchases, was founded in 1995. The company was one of the true success stories that lived through the dot-com bubble in the 1990s. It is now a multi-billion-dollar business with operations in more than 30 countries. But China's unique culture created problems for eBay in that market. Contrary to the widespread cultural issues that faced Best Buy, one company in particular (TaoBao) and one feature more specifically (built-in instant messaging) shaped a lot of the problems that eBay ran into in China. Some 200 million shoppers are using TaoBao to buy products, and the company accounts for almost 80 percent of online transaction value in China. Uniquely, TaoBao's built-in instant messaging system has been cited as the main reason for its edge over eBay in China. Basically, customers wanted to be able to identify a seller's online status and communicate with them directly and easily function not seamlessly incorporated into eBay's China system. Clearly, built-in instant text messaging is a solvable obstacle in doing business in China. It sounds easy now when we know about it, but may not always be the case when we take into account all the little things that are important in a market.

brownox314

TOPICS: Corporate Culture

SUMMARY: Kimberly Clark was a company characterized as paternalistic. It was a place where you could have a job for life. The company paid above market salaries and avoided layoffs. Low performers didn't face consequences and could hide "in the weeds." That's changed as the company significantly overhauled how it evaluates and tracks employees' progress. The company uses performance management software which can quickly recognize those who are performing well or expose those who are not. The company was proud of its low turnover, but now turnover is twice of what it was a decade ago. The company doesn't view this as a problem because the culture changed. These changes are designed to help the company generate more revenue and profit. Companies are moving away from annual performance reviews to continuous oversight and feedback. The goal is to create continuous improvement. Software lets managers track the progress of workers with dashboards that display goals, accomplishments, attendance, peer feedback and other data. The performance culture which requires setting goals and holding workers accountable seems to result in faster growth, higher profitability and a lower likelihood of bankruptcy. Change can be difficult at a company like Kimberly-Clark because it requires a cultural shift.

CLASSROOM APPLICATION: Instead of focusing on the financial performance of a company, this article focuses on the role of culture and management. As times changed, Kimberly-Clark changed its culture. The company had low turnover because employment was for life. The company had to change to become more competitive. The company now tracks, evaluates and communicates with employees using performance management software. The company culture was paternalistic and avoided conflict. Like many other large companies, Kimberly-Clark moved from annual performance reviews to continuous reviews. The company made changes beginning in 2008. It now recognizes the relationship between its human-resource innovations and the stock price. Changes in human resources practices are mostly invisible to analysts and investors. Other factors including lower commodity prices, cost-cutting and growth in emerging markets also likely explain performance. The company no longer promises employment for life and has reduced its workforce by 2,900. The company has gone from a conflict-averse culture to one where "I care enough to tell you the truth."

QUESTIONS:
1. Explain in detail what the term "corporate culture" means?

2. Describe the culture at Kimberly-Clark prior to the changes it instituted starting in 2008.

3. Review the characteristics of performance management software and how it is used at Kimberly-Clark to improve employee performance.

4. How would you describe the current culture at Kimberly-Clark?

5. Why do you think many larger companies are using or plan to use performance management software?

Corporate Culture Change at Kimberly Clark

Diaper and tissue maker shifts from a paternalistic company to one focused on pushing workers to constantly improve, closely tracking progress and shedding laggards

Not long ago, when Kimberly-Clark Corp. employees gathered for interdepartmental meetings, they prefaced their comments with their names and years of service at the company.

These days, âno one cares,â said Scott Boston, vice president of human resources. The attitude in meetings is â âletâs get moving,â â he said.

For generations, having a job at Kimberly-Clark meant having a job for life. The maker of household products such as Huggies and Kleenex paid its employees above-market salaries and avoided layoffs.

Even low performers rarely felt pressure. âA lot of people could and would hide in the weeds,â said Rick Herbert, a sales director who retired in 2014 after more than three decades with Kimberly-Clark.

Thatâs over. One of the companyâs goals now is âmanaging out dead wood,â aided by performance-management software that helps track and evaluate salaried workersâ progress and quickly expose laggards. Turnover is now about twice as high it was a decade ago, with approximately 10% of U.S. employees leaving annually, voluntarily or not, the company said.

Armed with personalized goals for employees and large quantities of data, Kimberly-Clark said it expects employees to keep improvingâor else. âPeople canât duck and hide in the same way they could in the past,â said Mr. Boston, who oversees talent management globally for the firm.

It has been a steep climb for a company that once resisted conflict and fostered a paternalistic culture that inspired devotion from its workers.

The changes mirror what is happening inside many large companies, where âperformance managementâ reflects the conviction that a sharpened focus on creating a high-performing workforce is a vital tool to generate revenue and profit.

Some of Kimberly-Clarkâs best-known products are decades old, including Kotex sanitary napkins, above in 1949, Kleenex tissues and Huggies diapers. Photo: Kimberly-Clark

In the past year, firms including Accenture PLC and General Electric Co. have dropped annual performance reviews in favor of more continuous oversight and feedback from managers, all meant to drive constant improvement.

Coca-Cola Co. in June approved pushing its new performance-management process from the pilot stage to a global rollout. The new system encourages managers to conduct a monthly âreflectionâ on every direct report, answering five questions that include âGiven his/her performance, would you assign this associate to increased scale, scope, and responsibilities?â and âIs this associate at risk for low performance?â

Adobe Systems Inc., which was one of the first big companies to home in on performance management, scrapped its annual review in favor of frequent âcheck-insâ in 2012.

Performance management shifts companies away from backward-looking, once-a-year reviews framed largely as compliance requirementsâa paper trail for potential job cuts and salary decisionsâto a process that is real-time, continuous and focused on helping people meet ambitious goals, or move out of the company faster.

The last recession led many employers to rethink the nearly automatic merit raises they had been doling out, forcing them to do a better job identifying high and low performers when giving raises and bonuses. Millennial workers, meanwhile, demand more feedback, more coaching and a stronger sense of their career path.

Companies spend $14 billion a year on products to help manage employees, including human-resources software from Workday Inc., SAP SE âs SuccessFactors and Cornerstone onDemand Inc., with about $2 billion of that dedicated to performance management, according to human-resources advisers Bersin by Deloitte.

Those systems let managers track workersâ progress via dashboards that display their goals, accomplishments, attendance, peer feedback and other data.

The company was founded in 1872 by Charles B. Clark, Frank C. Shattuck, Havilah Babcock and John A. Kimberly, clockwise from top left. It initially specialized in top-quality newsprint. Photo: Kimberly-Clark

Executivesâ use of phrases like âperformance cultureâ in conference calls with analysts and investors has doubled in the past five years, according to a review of transcripts in the Factiva news database. Firms that set goals and hold workers accountable âclearly outperform,â said Nicholas Bloom, an economist at Stanford University and co-author of a recent paper that used Census data to examine more than 32,000 U.S. manufacturing plants. He said they have faster growth, higher profitability and are less likely to go bankrupt.

Some academics say constant monitoring can feel intrusive and threatening to workers, especially those who value stability. But human-resources experts largely agree that the traditional review process is a waste of time and needs an overhaul.

The shift to a performance focus, which requires consistent oversight and sometimes uncomfortable feedback, can be bumpy.

At Kimberly-Clark, CEO Tom Falkâhimself a 33-year veteranâpushed the Dallas-based company onto its new course. âWe all talk about how having the best team is the most important difference-maker in your results,â said Mr. Falk, who became chief in 2002. âBut we didnât have the supporting processes to make that sustainable.â

In 2008, with the companyâs shares stagnant, few innovations in the pipeline and a belief that costs were bloated, the CEO added human-resources executives to the team putting together the firmâs long-term business plan for the first time.

Holding workers close through good times and bad is ânot sustainableâ any more, said Liz Gottung, the companyâs human-resources chief. âIf you look at when we started implementing the big pieces of the companyâs people strategy, when you map that to our stock price and our business results, you can see the clear correlation.â

Shares closed at a high of $138.13 in April, and its quarterly dividend, which it has raised every year for more than four decades, hit a high of 92 cents a share in February. The share price has more than doubled since 2008.

Engineers in 1948 worked on product development at a company mill in Neenah, Wis. Photo: Kimberly-Clark

Behind-the-scenes changes to human-resources practices are largely invisible to analysts and investors. Analysts attribute Kimberly-Clarkâs rising stock price to declining commodity prices, aggressive cost-cutting, growth in emerging markets and a generous dividend payout.

Big cuts

Since 2009 Kimberly-Clark has laid off around 2,900 mostly salaried workers world-wide, some of the first big cuts in the companyâs 144-year history. It currently employs about 43,000.

Remaining employees are expected to work âsmarterâ and meet regularly raised targets. âWe have to routinely shuffle the resources and say, whatâs the most important thing we need to do today, this week, this month, to drive this objective?â said Stephanie Martin, an engineer who analyzes new product ideas.

Using the Workday tool, Kimberly-Clarkâs salaried employees set goals and report their progress, record accomplishments or mistakes, and solicit and send feedback. (Hourly workers donât use the system.)

The system collects and archives feedback, which can be seen by employeesâ managers. It also holds data on staffersâ strengths and development needs, their performance ratings and the risk they might leave the company.

âItâs certainly more challengingâ for employees, said Mr. Herbert, the retired sales director. âIf you really donât have the mettle, youâre asked to get on with your lifeâs work [elsewhere].â

In 2015, Kimberly-Clark retained 95% of its top performers. Among the employees whose work was rated âunacceptableâ or âinconsistent,â 44% left the company voluntarily or were let go. Ms. Gottung said she is âpretty pleasedâ that low-performer turnover has been rising.

Retired sales manager Jeanne Sanders remembers executives boasting about the firmâs low turnover when she interviewed at Kimberly-Clark in 1987. Stories are told about how during the Depression and in more-recent production interruptions, mill managers reconfigured shifts to avoid layoffs.

These days, leadership has communicated to employees that turnover is a good thing, said Chris Luettgen, a senior research manager who left in 2014 to join the engineering faculty of Georgia Tech. âI saw it as a good move in that we could get some new thinking and innovation into our pipeline,â he said.

Mr. Falk, the CEO, reviews 100 senior managersâ performance plans every year to make sure their goals are ambitious and reflect company priorities. Managers are instructed to begin every meeting with a story about how someone demonstrated one of the six behaviors the company promotes, such as âbuild trustâ or âthink customer.â

Training sessions

Regular âculture of accountabilityâ sessions train employees in giving and receiving difficult feedback. When a colleague suggests improvements, âthe proper response was âthank you for the feedback,â not defensiveness,â Mr. Luettgen said. Employees also practice reinforcing positive behaviors, such as praising a colleague who had given up a weekend to solve a customer complaint.

More than 10,000 of Kimberly-Clarkâs workers used the feedback feature in Workday in 2014, and about 25% of the comments were considered âconstructive,â while the rest were positive or neutral, said Sandy Allred, a senior director on the talent management team. Staffers can send feedback to peers or workers above or below them.

Making paper for Scott paper towels at the companyâs Chester, Pa., mill in 1917. Photo: Kimberly-Clark

An earlier, unpopular system required managers to rank employees in a nine-box grid according to strict percentages, and then put the lowest performers on mandatory performance improvement plans, often the first step to a termination. In 2013, the company switched to the current, more-flexible system, which uses four ratings, with percentages that are suggested for each rating.

Around that time the company trimmed some salaries and put more workers on a bonus plan, to tie pay more closely to performance.

Dave Bernd, a 33-year veteran whose father was a senior executive at the company, said that when he walked on the Roswell, Ga., corporate campus a few months ago he found the old warmth missing. âIt doesnât feel like the family it once was.â

The former manufacturing director, who retired in 2013, said a decade ago, âwhether you knew anyone or not,â employees said hello in the parking lot and engaged in camaraderie typical of a smaller company. Even so, he said he approves of the recent management changes.

One of the firmâs core values is still âcaring,â said Ms. Gottung, who joined Kimberly-Clark in 1981. âWhen I started with the company, we were very conflict-averse, very oriented towards consensus,â she said. âAnd now itâs âI care enough about you to tell you the truth.â â

CEO Tom Falk, left, at a volunteer event to clean donated furniture, electronics and appliances for needy families in Ventura, Calif., in April. Photo: Michael Kovac/Getty Images for Viva (Kimberly-Clark)

One former employee said he was initially glad that the company was identifying those who werenât pulling their weight. Then, after earning top reviews over his decadeslong career, he said he was given a low rating and placed on a performance-improvement plan after missing a project deadline. After that, âno one would talk to meâ about other positions, he said.

He said the situation eventually improved with a new supervisor, but he still decided to leave the company last year.

In that instance, âdid the system work or not? I donât know,â said Ms. Gottung. With thousands of performance reviews happening every year, âI wish we had 100% satisfaction, but thatâs unrealistic. Overall, our employees think this is a fair and equitable process.â

Basma Osman a 27-year-old product-development engineer, considers herself a beneficiary of the new system. Tapped early in her career as a high-potential employee, she was working on health and wellness products but told her manager she was interested in industrial safety. He soon asked her to oversee a $30 million project in that area. âI was terrified,â she said, but she was also grateful that her manager âunderstood what I wanted and what Iâm good at.â

LABRST 3H03 Study Guide - Efficiency Ratio, Skilled Worker, Data Center

Document Summary

Get access

Related Documents

ITM 350 Chapter Notes - Chapter 7: Disintermediation, Outsourcing, Remoteaccess

MGMT 100 Study Guide - Final Guide: Program Evaluation, Lean Manufacturing, Iso 14000

THST 2450 Lecture Notes - Lecture 12: Stoping, Net Neutrality, Cultural Imperialism

Related Questions