GLOBALIZATION !!

                                       GLOBALIZATION

The literal definition of globalization is about the entire world becoming a one single market, basically suggesting the businesses of say one country to be able to move across international borders and trade in markets of different countries. As a result of which characterizing the whole world into a single market. Therefore globalization can also be expressed as a process of deeper economic integration between countries involving certain factors, such as expansion of trade in goods and services, an increase in the transfer of financial capital including the expansion of foreign direct system (FDI) by trans national companies (TNC's). The development of global brands and division of labour are also some major factors leading to globalization, some other things aiding these factors could be the migration of labor and the world trade organisation (WTO). For example Russia joined the WTO in 2012. As a result of the WTO over the last few decades trade openness has risen from 25% to around 40% for industrialized economies and from 15% to 60% for emerging economies. 

Below shown are some reasons that have majorly contributed to the cause of globalization.

Globalization when talked or thought about is a very complicated topic, as every one has a different opinion about it. Like every change taking place it also has its pros and cons, however in my opinion the benefits definitely outweigh the detriments. 

Globalization a blessing or a source of corruption. Globalization as stated earlier is the making of the world into one single market. Meaning different businesses from different countries can trade in several countries around the world. An everyday example of such businesses are Coca Cola or Nestle, companies like these can be found all around the world. With the expansion of such companies to such a wide scale, alot of changes occur which could be for the better or the worse. For instance when Nestle moved into Pakistan which is still a developing country with an ever increasing unemployment rate, it employed thousands of people. Other then this when such big companies move into new markets they increase competition. Increase in competition can cause prices to reduce, it may cause better quality standards. Moreover such multi national organisations have a reputation to maintain so would have certain job securities, safety measures, motivational techniques e.t.c. Due to which other domestic companies inorder to survive would have to meet up to the standards. This technique to reduce unemployment is also used quite deliberately by some countries. for example the British government did so by allowing certain Japanese car manufacturing to manufacture and operate in the UK,  in order to create jobs in small towns in the North of England. While on the other hand this expansion may cause major difficulties for the domestic market. For instance the expansion of Coca Cola into Scotland caused very old and already practicing brands like Iron bru not to stand a chance. As Coca Cola had alot of capital to invest, it was able to pay more, advertise more, produce more. As a result of which such small businesses could not stand a chance.

 International trade allows for developing countries to continue to develop by increasing national incomes to fund modernization. Globalization can benefit all countries, rich or poor, if that country is willing to be open to international trade.  Not only do they have to be open to the world market, but they would have to do it in such a strategic way based on how their country is run in order to gain from trade.  Globalization significantly led to higher incomes is in China over the past several decades.  They have mastered the concept of globalization in their own way far from the Western norms.  In an article by Dani Rodrik China has averaged almost 8 percent per annum per capita by opening up to the world economy.  By taking part in globalization China has been able to fund modernization by selling its products on the world market.  Another remarkable fact as a result of opening up to free trade is that in 1960 China’s life expectancy was only 36 years of age and by 1999 reached 70 years.  These statistics prove that with a strategy most fit to a country, globalization can be achieved successfully. 

However still those against this topic argue that globalization has caused cultural loss, It makes the rich richer and the poor poorer. Where as i believe that  people who are anti-globalization are merely blind to the actual facts.  Poorer countries do what they can to survive, and globalization helps them obtain higher incomes and improve living conditions.  Just because wages are significantly smaller in poorer countries does not mean exploitation is present.  Countries with lower incomes, poor literacy rates, and poor health care cannot become wealthy and efficient over night.  Globalization is a slow process, but it is working.  It is allowing for more techniques and methods to be shared around the world.  A country closed to the rest of the world will not learn to better themselves, and continue to do things they way they have been doing.  As a result there will not be as much room for improvements and new opportunities to countries that do participate in globalization.

The fact is that globalization is here to stay and that we will become increasingly connected, hence we must work to learn about the world we live in and how it functions.

SWOT ANALYSIS

              THE SWOT ANALYSIS





A SWOT analysis is a very effective way of recognizing what the strengths and weaknesses of an organisation are and also what opportunities might be available, along with the threats it might have to face. Therefore a Swot analysis helps the organisation to carve a sustainable niche in the market. Strengths and weaknesses suggest the internal environment of the organisation. For example, factors relating to products, pricing, costs, profitability, performance, quality, reputation, infrastructure e.t.c. All these factors usually tend to be in the present. While on the other hand Opportunities and Threats suggest the external environment within which the business operates. For example, factors relating to markets, sectors, audience, fashion, trends, competition e.t.c. All these factors however tend to be in the future.

The main advantage of conducting a SWOT analysis is that it has little or no cost, any one who understands the business can perform the analysis. A SWOT analysis concentrates on the most important factors affecting the business, therefore using SWOT a manager can understand the business better, address the weaknesses of the business, avoid the apposing threat to the business, work according to the opportunities going to be available, therefore develop business goals and strategies in order to achieve them.

When conducting a SWOT analysis the following limitations should be kept in mind. A SWOT analysis only covers issues that can definitely be considered as a strength, weakness, an opportunity or a threat. As a result it is difficult to assess uncertain factors, that are factors could be a strength or a weakness or maybe even both. As a result making the SWOT analysis not of much use in making complex decisions. As the analysis may be limited because it does not priorotise issues , or ot does not provide solutions for alternative decisions e.t.c.
Below can be seen a SWOT analysis for Apple;

Apple SWOT analysis 2013
Strengths	Weaknesses
Customer loyalty combined with expanding closed ecosystem Apple is a leading innovator in mobile device technology Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt) Brand reputation Retail stores Strong marketing and advertising teams	High price Incompatibility with different OS Decreasing market share Patent infringements Further changes in management Defects of new products Long-term gross margin decline
Opportunities	Threats
High demand of iPad mini and iPhone 5 iTV launch Emergence of the new provider of application processors Growth of tablet and smartphone markets Obtaining patents through acquisitions Damages from patent infringements Strong growth of mobile advertising market Increasing demand for cloud based services	Rapid technological change 2013 tax increases Rising pay levels for Foxconn workers Breached IP rights Price pressure from Samsung over key components Strong dollar Android OS growth Competitors moves in online music market

 Therefore through this example it can be seen and clearly understand what Apple has to do to avoid the threats that might be coming the companies way and get a grasp of the opportunities. For instance a rapid change in technology would man that the company would have to design new products accordingly, before its competitors do so. Like wise an opportunity such as a strong growth expected from the mobile advertisement market suggests that Apple should invest more towards its advertisement, which is expected to therefore increase sales automatically.  Such steps essential to be taken by a firm in order to do well or survive in the future can easily be projected through the SWOT analysis.

PESTLE ANALYSIS

                                   PESTEL ANALYSIS

The PESTEL analysis, that is the political, environmental, social, technological, economic and legal analysis of a business organisation describes the frame work of macro environmental factors and is a major part of strategic management. Pestle analysis is basically an external audit of an organisations environmental influences and therefore using the information from this audit to make strategic decisions. The purpose of this analysis, as a result is simply to make the organisation aware of its current environment and assess potential changes in the future, due to which the organisation would be in a better position to respond to these changes then its competitors. Hence by understanding the Macro environment in which the organisation operates, makes it possible for the business to take the advantage and opportunities to maximize opportunities and minimize threats for the future.

Further more the PESTEL analysis is important for the following main reasons.Firstly it helps the organisation to spot business opportunities and gives an advanced warning of any significant threats. Secondly it reveals the change in direction within the business environment, this as a result helps the managers organize what they are doing, so that they work with change rather then against it. Therefore the managers can avoid starting new projects that are likely to fail due to external changes in the environment.

For example, opportunities can come from new technologies that help you reach new customers such as the internet, using eCommerce, or maybe a new government policy that lowers the barriers to entry into a market full of potential. While on the other hand threats can include deregulation that exposes the company to competition for instance a shrinking market, or an increase in interest rates can cause problems if an organisation is burdened by debts.

More over now we can see how a PESTEL analysis may be done on a company like APPLE;

Political Factors: Apple used to obtain 52% of its business from outside the US, due to the bad international relations, wars and terrorism Apple might be influenced in a huge way, however the organisation has no control over these factors. Apple also manufactures a number of its product parts from outside the US, for instance China, Ireland, Korea e.t.c. The bad political relation between US and the other world may have extremely bad outcome for the company.

Economic Factors: The global economic crisis had a huge impact on Apple, the inflation rate went high and so did the unemployment rate in the country and since Apple products were viewed as luxury products, the customers started spending less on them. Even the fluctuation in the value of the US dollar has a great impact on Apple as a fall may decrease Apples revenue in the global market.

Social Factors: Apples unique selling point has always been the quality and the designs of its products, thus globalization plays an important role. Due to globalization which is making the world economy a single economy, Apple has been able to mark its self in the world market and hence making customers wanting to spend on its products. Apples products with time have become a product to have for social acceptance, therefore social factors being of much importance to the company.

Technological Factors: Apple has invested largely in its products research and development field and thus, Apples products are at the top of the world market. Due to the drastic change in technology over the years, this factor has become of most importance to the company as the change in technology has decreased the life cycle of the products, therefore newer and better ones are to be made with change in order for the company to succeed in the ever competitive world market.

Legal Factors: Nokia has filed various law suites against Apple, claiming the violation of certain patents, also in China apple is fighting for its right to the ipad trademark.

Therefore if all these factors kept in mind Apple can work according to the changes in these factors and keep moving towards success as it already is.

.

Management Theories

Management Theories







Management is the process of coordinating people and other resources to achieve the
goals of an organization. As can be understood from this definition there are different ways for this process to be carried out. Therefore over the century people with different prospectives have explained through various management theories how the goals of an organisation can be met effectively. Which as a result are explained as follows.
One of the first management theory to be brought forward was a theory of scientific management made by Frederick Taylor, this theory was also known as 'Taylorism'. As the name suggests, this theory is a very technical or scientific way of managing an organization. It stresses mainly on improving economic efficiency and labor productivity, according to Taylor both these things could only be achieved by choosing the best way and the best person to do the job. This means that the managers were to choose the best way and the best people for a specific job and hence all other workers not having control over their own jobs had to follow. As a result through this practice wastage could be minimized as all workers in the organization would be working in the most efficient way. This practice suggested by the theory is further supported by the thought made by Taylor that motivation could only be achieved through financial means. Therefore Taylor believed that the performance of the workers could be measured if they work according to his theory.
However Taylors theory had its pros and cons, his theory was and still is considered as one of the most efficient and quantifiable means to get the job done, while on the other hand this theory was and still is thought to be very demotivating for the workers. The reason to this is that with time people realized that only financial rewards were not enough for workers to be motivated, that they needed a good work place to work in and needed a friendly, safe e.t.c environment. The theory did not comprise of job enrichment, job satisfaction or any such motivational technique. Which as a result lead to the formation of other more recent and improved theories, such as Henry Foyls theory of management principles , Henry Fords theory of management or one of the most recent theory supporting this motion Elton Mayo's 'Hawthorne effect'.




                          ----------------->  




                                   TO        

TAYLORISM                                                                                        THE HAWTHORNE EFFECT         

Therefore through the centuries it could be said that peoples opinions on how to run an organization changes from Taylorism which was a very centralized and a rather strict management style towards a more i would say relaxed way of management which was the Hawthorne effect. The Howthorne effect stated that social and interactive motivation was the most effective ways of improving productivity rather then financial motivation or through improving physical conditions.The Hawthorne effect also had some drawbacks, however stated a more recent and somewhat effective way of management.
Even though Taylorism was accused with not being a sufficient or more appropriately a more demotivating theory, many leading organisations in the world today believe in Taylors theory being much effective and hence operate according to its facts. For example Googles Silicon Valley head quarters, and much of the telecommunication and cyber industry develop an approach similar to that suggested by Taylor as in such an industry perfection and precision is needed, therefore the managers select the way to perform a task and also the expert relating that task is appointed, while all other workers are to follow.
Hence through the debate above it can be seen how and why different management theories have been made through out the century.

Porters Forces

This week our main focus has been about Porter and his theory, which is the five forces analysis. Porter five forces analysis is a framework for industry analysis and business strategy development, the forces mainly consist of

1) Bargaining power of customers ( buyers ) which is the ability of customers to put the firm under pressure which also affects the customers sensitivty to price changes. This is likely to be high if he supplier purchases a large part of a suppliers output or many substitutes are available for the product.

2) Threat of substitute products or services: According to Porters model, this means finding a product that could perform a similar function to the other yet the substitute may be from another industry meaning using a plane instead of a ship.

3) Threat of new entrants: According to Porter, these are the problems faced by companies while entering industries which may include access to distribution, brand equity or capital requirements.

4) Bargaining power of suppliers: This is the power that a supplier has which could be influenced by factors such as the number of suppliers or the switching costs followed by product types.

5) Intensity of competitive rivalry: This is how competitive the firms are within the industry and is likely to be high if there are many firms within an industry, the products being similar or slow market growth taking place.

These are the five forces and I'd like to explain them with the help of the telecommunications industry. The threat of new entrants, would be high as there are high costs to buy the machinery and finance would be one of the biggest barriers. The fixed costs are likely to be high as well and a lot of cash would be required.

For the power of suppliers, telecom equipment suppliers do have bargaining power over operators. As without high tech broadband equipment and other materials the operators would not be able to transmit voice and data from place to place.

As for the power of buyers, there has been an increased choice of telecom products and the power is rising. This is because data services and telephone do not vary much.

Coming forward to the availability of substitues, there are threats of substitution as internet services can substitute for high speed business working needs. Applications such as Skype or OOVOO could be used to replace telephones.

Competitive Rivalry being the last factor, is high, There is new technology plus many entrants and as everybody pays for services, the only thing that could make a company more attractive would be lower prices which may lead to lower profits. Other than this the exit barriers are also high due to its specialized equipment

Porters Forces

This week our main focus has been about Porter and his theory, which is the five forces analysis. Porter five forces analysis is a framework for industry analysis and business strategy development, the forces mainly consist of

1) Bargaining power of customers ( buyers ) which is the ability of customers to put the firm under pressure which also affects the customers sensitivty to price changes. This is likely to be high if he supplier purchases a large part of a suppliers output or many substitutes are available for the product.

2) Threat of substitute products or services: According to Porters model, this means finding a product that could perform a similar function to the other yet the substitute may be from another industry meaning using a plane instead of a ship.

3) Threat of new entrants: According to Porter, these are the problems faced by companies while entering industries which may include access to distribution, brand equity or capital requirements.

4) Bargaining power of suppliers: This is the power that a supplier has which could be influenced by factors such as the number of suppliers or the switching costs followed by product types.

5) Intensity of competitive rivalry: This is how competitive the firms are within the industry and is likely to be high if there are many firms within an industry, the products being similar or slow market growth taking place.

These are the five forces and I'd like to explain them with the help of the telecommunications industry. The threat of new entrants, would be high as there are high costs to buy the machinery and finance would be one of the biggest barriers. The fixed costs are likely to be high as well and a lot of cash would be required.

For the power of suppliers, telecom equipment suppliers do have bargaining power over operators. As without high tech broadband equipment and other materials the operators would not be able to transmit voice and data from place to place.

As for the power of buyers, there has been an increased choice of telecom products and the power is rising. This is because data services and telephone do not vary much.

Coming forward to the availability of substitues, there are threats of substitution as internet services can substitute for high speed business working needs. Applications such as Skype or OOVOO could be used to replace telephones.

Competitive Rivalry being the last factor, is high, There is new technology plus many entrants and as everybody pays for services, the only thing that could make a company more attractive would be lower prices which may lead to lower profits. Other than this the exit barriers are also high due to its specialized equipment

Organisational structures!!

     






                        CENTRALIZED
                               &
                   DECENTRALIZED \
       ORGANISATIONAL STRUCTURES

This week we focused on the nature of different organisational structures, for instance whether they are centralized or decentralized, tall or short e.t.c. The picture above is a short but precise definition of a centralized.The arrows in the diagram represent the direction of command.For instance, the arrows pointing towards the person in the center demonstrates a centralized structure as this refers to the power of command and decision making lying solely in the hands of this one person ,who passes them on to the others who are to do as told. This in other words is a very autocratic leadership style.
A living example of a company operating with a centralized structure is APPLE. Apple's large size is one of the main reasons for it being a centralized company as with large size there usually comes an idea of the superior staff of the company to make the decisions and rely on the others to implement on those decisions.For 2012 Apple planned a capital investment of $8 billion, which is a very big investment, therefore such companies making such huge investments do not want to risk there money in the hands of the workers, as a result of which tend to be centralized.However this practice may have a few draw backs as due to centralization through out the company, problems of motivation may arise, or the company may not be able to focus on the market demand for the product in different regions as this demand would vary from place to place. All these problems can lead to inefficiency and may even lead to failure.

While on the other hand as shown in this other picture organisation A is the one with a decentralized structure. In such a structure there are more layers added to the hierarchy, therefore the decision making power is not only in the hand of one person but is spread through out.. An example of an organisation with such a structure is the famous super market TESCO. Each supermarket has a store manager who can make certain decisions concerning areas like staffing, sales promotions. The store manager is responsible to a regional or area manager. Firms following such a strategy are much closely linked to their customers, as they are able to focus on and meet the needs of the customers and give better service to their customers.Also efficiency is increased as the staff stays motivated due to the somewhat decision making authority they are given. However even organisations with such a structure have problems as at times a problem of who the actual leader is may arise , people may not know who to answer to e.t.c.
 As a result neither of the two styles of leadership are perfect on there own as both have there pros and koans. As a result most of the most successful organisations in the world use a mixture of the two and practice a style in which they can get the best out of the two and work accordingly.

        Organisational structures and how they are
                              Managed!!









Above shown is a classic example of what i learnt through out this week, as the picture showing a man pyramid not only reflects to an example of an organisational structure but also shows the importance of group work. As even if one man losses his balance the whole group will collapse. More importantly for a basic organisation to be formed, the first step is for there to be a group of people working together to achieve a goal or objective. That is exactly what we did this week.

We were given a group presentation we had to choose a firm of our choice, identify the management of the organisation is structured, figure how they add value to there products e.t.c.Me and my group chose Samsung as the organisation, we found out that Samsung being a multinational organization operates with a fairly autocratic leadership style as the main decision and orders are made by the chairman, who is the figure head of the organisation. Where as orders when passed down the hierarchical structure and given to the functional workers, are to be carried out with somewhat authority given to the workers to do their jobs. Secondly value addition being a key objective of every business, is carried out very carefully and strategically by Samsung, they do this by focusing on a very vast target market, as they aim there product in on all genders, age groups e.t.c, giving them a higher chance of adding value.Samsung also spends a lot of finances and effort on its promotional activities and advertising, for example to focus on a niche part of there target market such as the teen agers,they would market there product for instance the galaxy s4 by using a famous celebrity to use it in an appropriate movie.There fore our presentation explained all these aspects along with a few difficulties they may be facing due to such a managerial structure and a few improvements we thought they can make.

Working on this presentation as a group enabled us to cover a very wide view about what this organisation was dealing with and how it was operating. We were able to make the presentation much quicker and better, which i do not think any one of us would have been able to do by our self.

What i used to think an organisation was before working on this presentation was something like this;

Where as now i understand that it actually is something more similar to this ;

Therefore i would say that while working in this group i actually felt that i was part of a small organisation. Something i could have never experienced back at home.

Innovative Ideas !!

Last Friday i have to say, i saw innovation at its best.When you enter the class and you see Wish standing there with a dozen of random things in front of him, like he always says you really do think for a moment "Am i actually spending soo much much to be playing with toys??" Well eventually when i sat there along with people i had never met, i realized that this is what you really need to learn. How to interact with people, How to learn from them , basically i was learning things which would actually help me in real life. I mean yaa sure you need to study and all but along with that, self confidence is something that can not really be taught. 

So we were given a shaving brush, inflatable arm bands and a hammer products that had nothing to do with each other, we started telling each other anything that came to our minds. We ended up designing a sort of an under water cleaning system. Honestly by the end of it i thought to steal the idea and try selling it in Pakistan! It could make me a billionaire. Ask yourself who would not want something that they could drive around by a remote control to clean there swimming pool! Smart right?

Well not smart enough for the teachers i guess! So we were given a few more totally random things,this time a scarf, a shoe on and some sort of a belt. This one was pretty challenging as we spent about 20 min thinking on what could be made of these three odd items. After a while we started exchanging ideas, my group mates started drawing stuff, half way through and i was still not sure of what we were doing. Ultimately we ended up making a sport wear protection gear, for people who tend to hurt themselves while playing sports. The product we designed was something that could actually be used as kids do end up getting hurt very often while playing sport. Also with the increasing awareness on safety cautions the product could actually work.On top of that all, the guy from our group who presented the product was an excellent spokesperson. So i think we did pretty good on that one.

There fore i thought that all this group work and you actually using your brain for once was not only fun to do but also a very knowledgeable. As we hardly ever used to do anything similar in Pakistan.