Monthly Archives: November 2019

How to Be the Best New Manager – A Simple Management Training Guide

Management positions come with surprisingly little guidance. Whether you were promoted internally or brought in from outside, you were probably expected to hit the ground running, toward the vaguest of goals. As a result of observation from my work experience at a popular pizzeria in the food industry, I have observed, reflected and decided that new manager’s need proper training in order to get their daily tasks done efficiently and effectively. It was observed that employees were promoted to management positions based on the length of time working within the organization and not based on managerial qualifications. Pfeifer et al. (2013) in their article states that promotions are important from the point of view of both employer and employee. Employees benefit from promotions by monetary gains and higher reputation, and employers can use promotions to make efficient job assignments. On the one hand, training might increase individual productivity by teaching skills and knowledge that are important to fulfill tasks at higher job levels. On the other hand, training can serve as a screening device without increasing individual productivity, i.e., the firm learns about abilities and skills of workers and can promote the best fitting (i.e., the most productive) worker to the next job in the hierarchy. The following are key points to consider for businesses as a result of my research.

Pre-shift meeting with staff

Hosting a pre-shift meeting with staff gives them information about what to expect during their shift in terms of the preparation that needs to be done. This is the best time for managers to express to the employees what their expectations of them are and what goals need to be accomplished by the end of the shift. In the article titled (Make the Most of Meetings, 2009), the author gives five simple tips on how to make a pre-shift meeting productive. The first tip is to set an agenda. This will let employees know what to expect, especially if the meetings are held at a regular time every day. Then it is suggested that managers make the meeting goal- oriented, which allows the managers to examine immediate challenges and determine the best way to meet them. Allowing everyone on the team to have an input will keep the employees useful, involved and motivated. It is important to get feedback from the team and ask for advice when making decisions. And lastly, remind the team of the vision you have for the organization and incorporate it into the weekly goals.

Proactive vs. reactive management

Being prepared before the busy period is very important especially in the food industry. After meeting with the staff, it will make it easier for them to prepare for the day as they now have an idea of what the day will be like. Reacting to the busy period will slow down productivity while being proactive makes the organization run more smoothly. Larson et al. (1986) posits in their article that a proactive manager takes charge, initiates action, seeks out others and spends time planning and pursuing a logical, long term agenda. On the other hand, a reactive manager responds to the initiations and requests from others. They wait until the busy period hits and then they run around like a headless chicken, not knowing where to start to make the shift run smoothly. Their study reveals that more proactive managerial behaviors are better in smaller organizations. Proactive managers prevent chaos in the organization. This management style focuses on breaking down systems and processes so as to identify flaws and control issues before they get out of control.

Creating and maintaining a professional organizational culture

Organizational culture is the behavior of management and the meanings that employees attach to their actions. It is a pattern of collective behaviors that are taught to new organizational members and affects the way employees interact with each other and with stakeholders. A professional organizational culture is an important aspect in the success of most large companies. When managers and supervisors portray an image of professionalism on and off the job employees will be motivated to do the same. Ardiccvilli et al. (2012) found in their research that if organization leader’s actions are consistent and positive then overtime these values will be imparted onto the other employees and build their commitment to the organizations culture. Therefore, management does have an impact on the business culture and how the other employees behave within the organization. It is important that professional behavior is the norm within the organization whether the company is large or small. This culture can affect the productivity and profitability of the organization.

Conclusion

In summary, the article demonstrated that there are steps that new managers need to take in order to run successful business operations on a daily basis. Hosting a pre- shift meeting to make the staff aware of how the day will unfold is of top priority. Taking on a more proactive style of management will aid in a more productive day on the job. Creating and maintaining a professional culture within an organization is the best way for managers to lead by example within an organization. Prahalad (1983) suggests that managers should strive to build the strategic capabilities in the organization instead of looking for easy solutions. In order to operate in a decision making culture, managers must go beyond formal organization structure. The road is long and hard, but the journey is rewarding.

References

Ardichvili, A., Jondle, D., & Kowske, B. (2012). Minding the gap: exploring differences in perceptions of ethical business cultures among executives, mid-level managers and non-managers. Human Resource Development International, 15(3), 337-352. doi:10.1080/13678868.2012.687625

Larson, L. L., Bussom, R. S., Vicars, W., & Jauch, L. (1986). PROACTIVE VERSUS REACTIVE MANAGER: IS THE DICHOTOMY REALISTIC?. Journal Of Management Studies, 23(4), 385-400.

Make the Most of Meetings. (2009). Journal of Accountancy, 207(3), 22.

Pfeifer, C., Janssen, S., Yang, P., & Backes-Gellner, U. (2013). EFFECTS OF TRAINING ON EMPLOYEE SUGGESTIONS AND PROMOTIONS: EVIDENCE FROM PERSONNEL RECORDS. Schmalenbach Business Review (SBR), 65(3), 270-287.

Prahalad, C. K. (1983). Developing Strategic Capability: An Agenda for Top Management. Human Resource Management, 22(3), 237-254.

What is Strategic Human Resource Management?

In Human Resource (HR) and management circles nowadays there is much talk about Strategic Human Resource Management and many expensive books can be seen on the shelves of bookshops. But what exactly is SHRM (Strategic Human Resource Development), what are its key features and how does it differ from traditional human resource management?

SHRM or Strategic human resource management is a branch of Human resource management or HRM. It is a fairly new field, which has emerged out of the parent discipline of human resource management. Much of the early or so called traditional HRM literature treated the notion of strategy superficially, rather as a purely operational matter, the results of which cascade down throughout the organisation. There was a kind of unsaid division of territory between people-centred values of HR and harder business values where corporate strategies really belonged. HR practitioners felt uncomfortable in the war cabinet like atmosphere where corporate strategies were formulated.

Definition of SHRM

Strategic human resource management can be defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation, flexibility and competitive advantage. In an organisation SHRM means accepting and involving the HR function as a strategic partner in the formulation and implementation of the company’s strategies through HR activities such as recruiting, selecting, training and rewarding personnel.

How SHRM differs from HRM

In the last two decades there has been an increasing awareness that HR functions were like an island unto itself with softer people-centred values far away from the hard world of real business. In order to justify its own existence HR functions had to be seen as more intimately connected with the strategy and day to day running of the business side of the enterprise. Many writers in the late 1980s, started clamoring for a more strategic approach to the management of people than the standard practices of traditional management of people or industrial relations models. Strategic human resource management focuses on human resource programs with long-term objectives. Instead of focusing on internal human resource issues, the focus is on addressing and solving problems that effect people management programs in the long run and often globally. Therefore the primary goal of strategic human resources is to increase employee productivity by focusing on business obstacles that occur outside of human resources. The primary actions of a strategic human resource manager are to identify key HR areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity. Communication between HR and top management of the company is vital as without active participation no cooperation is possible.

Key Features of Strategic Human Resource Management

The key features of SHRM are

  • There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment
  • There is some organizing schema linking individual HR interventions so that they are mutually supportive
  • Much of the responsibility for the management of human resources is devolved down the line

Trends in Strategic Human Resource Management

Human Resource Management professionals are increasingly faced with the issues of employee participation, human resource flow, performance management, reward systems and high commitment work systems in the context of globalization. Older solutions and recipes that worked in a local context do not work in an international context. Cross-cultural issues play a major role here. These are some of the major issues that HR professionals and top management involved in SHRM are grappling with in the first decade of the 21st century:

  • Internationalization of market integration.
  • Increased competition, which may not be local or even national through free market ideology
  • Rapid technological change.
  • New concepts of line and general management.
  • Constantly changing ownership and resultant corporate climates.
  • Cross-cultural issues
  • The economic gravity shifting from ‘developed’ to ‘developing’ countries

SHRM also reflects some of the main contemporary challenges faced by Human Resource Management: Aligning HR with core business strategy, demographic trends on employment and the labour market, integrating soft skills in HRD and finally Knowledge Management.

References

  1. Armstrong, M (ed.) 192a) Strategies for Human Resource Management: A Total Business Approach. London:Kogan Page
  2. Beer, M and Spector,B (eds) (1985) Readings in Human Resource Management. New York: Free Press
  3. Boxall, P (1992) ‘Strategic Human Resource Management: Beginnings of a New Theoretical Sophistication?’ Human Resource Management Journal, Vol.2 No.3 Spring.
  4. Fombrun, C.J., Tichy, N,M, and Devanna, M.A. (1984) Strategic Human Resource Management. New York:Wiley
  5. Mintzberg, H, Quinn, J B, Ghoshal, S (198) The Strategy Process, Prentice Hall.
  6. Truss, C and Gratton, L (1994) ‘Strategic Human Resource Management: A Conceptual Approach’, International Journal of Human Resource Management, Vol.5 No.3

The Importance of Project Closeout and Review in Project Management.

Description

The well known English phrase “last but not least” could not better describe how important the project closeout phase is. Being the very last part of the project life-cycle it is often ignored even by large organizations, especially when they operate in multi-project environments. They tend to jump from one project to another and rush into finishing each project because time is pressing and resources are costly. Then projects keep failing and organizations take no corrective actions, simply because they do not have the time to think about what went wrong and what should be fixed next time. Lessons learned can be discussed at project reviews as part of the closeout phase. Closure also deals with the final details of the project and provides a normal ending for all procedures, including the delivery of the final product. This paper identifies the reasons that closeout is neglected, analyzes the best practices that could enhance its position within the business environment and suggest additional steps for a complete project closeout through continuous improvement.

Project managers often know when to finish a projects but they forget how to do it. They are so eager to complete a project that they hardly miss the completion indicators. “Ideally, the project ends when the project goal has been achieved and is ready to hand over to customer” (Wellace et. al, 2004, p156). In times of big booms and bubbles, senior management could order the immediate termination of costly projects. A characteristic example of that is Bangkok’s over investment in construction of sky-scrapers, where most of them left abandoned without finishing the last floors due to enormous costs (Tvede, 2001, p267). Projects heavily attached to time can be terminated before normal finishing point if they miss a critical deadline, such as an invitation to tender. Kerzner (2001, p594) adds some behavioural reasons for early termination such as “poor morale, human relations or labour productivity”. The violent nature of early termination is also known as ‘killing a project’ because it “involves serious career and economic consequences” (Futrel, Shafer D & Shafer L, 2002, 1078). Killing a project can be a difficult decision since emotional issues create pride within an organization and a fear of being viewed as quitters blurs managerial decisions (Heerkens, 2002, p229).

Recognition

The most direct reason that Project Closeout phase is neglected is lack of resources, time and budget. Even though most of project-based organizations have a review process formally planned, most of the times “given the pressure of work, project team member found themselves being assigned to new projects as soon as a current project is completed” (Newell, 2004). Moreover, the senior management often considers the cost of project closeout unnecessary. Sowards (2005) implies this added cost as an effort “in planning, holding and documenting effective post project reviews”. He draws a parallel between reviews and investments because both require a start-up expenditure but they can also pay dividends in the future.

Human nature avoids accountability for serious defects. Therefore, members of project teams and especially the project manager who has the overall responsibility, will unsurprisingly avoid such a critique of their work if they can. As Kerzner (2001, p110) observe, “documenting successes is easy. Documenting mistakes is more troublesome because people do not want their names attached to mistakes for fear of retribution”. Thomset (2002, p260) compares project reviews with the ‘witch hunts’ saying that they can be “one of the most political and cynical of all organizational practices where the victims (the project manager and the team) are blamed by senior management”. While he identifies top management as the main responsible party for a failure, Murray (2001) suggest that the project manager “must accept ultimate responsibility, regardless of the factors involved”. A fair-minded stance on these different viewpoints would evoke that the purpose of the project review is not to find a scapegoat but to learn from the mistakes. After all, “the only true project failures are those from which nothing is learned” (Kerzner, 2004, p303).

Analysis

When the project is finished, the closeout phase must be implemented as planned. “A general rule is that project closing should take no more than 2% of the total effort required for the project” (Crawford, 2002, p163). The project management literature has many different sets of actions for the last phase of the project life cycle. Maylor (2005, p345) groups the necessary activities into a six step procedure, which can differ depending on the size and the scope of the project:

1. Completion

First of all, the project manager must ensure the project is 100% complete. Young (2003, p256) noticed that in the closeout phase “it is quite common to find a number of outstanding minor tasks from early key stages still unfinished. They are not critical and have not impeded progress, yet they must be completed”. Furthermore, some projects need continuing service and support even after they are finished, such as IT projects. While it is helpful when this demand is part of the original statement of requirements, it is often part of the contract closeout. Rosenau and Githens (2005, p300) suggest that “the contractor should view continuing service and support as an opportunity and not merely as an obligation” since they can both learn from each other by exchanging ideas.

2. Documentation
Mooz et. al (2003, p160) defines documentation as “any text or pictorial information that describe project deliverables”. The importance of documentation is emphasized by Pinkerton (2003, p329) who notes that “it is imperative that everything learned during the project, from conception through initial operations, should be captured and become an asset”. A detailed documentation will allow future changes to be made without extraordinary effort since all the aspects of the project are written down. Documentation is the key for well-organized change of the project owner, i.e. for a new investor that takes over the project after it is finished. Lecky-Thompson (2005, p26) makes a distinction between the documentation requirements of the internal and the external clients since the external party usually needs the documents for audit purposes only. Despite the uninteresting nature of documenting historical data, the person responsible for this task must engage actively with his assignment.

3. Project Systems Closure
All project systems must close down at the closeout phase. This includes the financial systems, i.e. all payments must be completed to external suppliers or providers and all work orders must terminate (Department of Veterans Affairs, 2004, p13). “In closing project files, the project manager should bring records up to date and make sure all original documents are in the project files and at one location” (Arora, 1995). Maylor (2005, 347) suggest that “a formal notice of closure should be issued to inform other staff and support systems that there are no further activities to be carried out or charges to be made”. As a result, unnecessary charges can be avoided by unauthorized expenditure and clients will understand that they can not receive additional services at no cost.

4. Project Reviews
The project review comes usually comes after all the project systems are closed. It is a bridge that connects two projects that come one after another. Project reviews transfer not only tangible knowledge such as numerical data of cost and time but also the tacit knowledge which is hard to document. ‘Know-how’ and more important ‘know-why’ are passed on to future projects in order to eliminate the need for project managers to ‘invent the wheel’ from scratch every time they start a new project. The reuse of existing tools and experience can be expanded to different project teams of the same organization in order to enhance project results (Bucero, 2005). Reviews have a holistic nature which investigate the impact of the project on the environment as a whole. Audits can also be helpful but they are focused on the internal of the organization. Planning the reviews should include the appropriate time and place for the workshops and most important the people that will be invited. Choosing the right people for the review will enhance the value of the meeting and help the learning process while having an objective critique not only by the team members but also from a neutral external auditor. The outcome of this review should be a final report which will be presented to the senior management and the project sponsor. Whitten (2003) also notices that “often just preparing a review presentation forces a project team to think through and solve many of the problems publicly exposing the state of their work”.

5. Disband the project team

Before reallocating the staff amongst other resources, closeout phase provides an excellent opportunity to assess the effort, the commitment and the results of each team member individually. Extra-ordinary performance should be complemented in public and symbolic rewards could be granted for innovation and creativity (Gannon, 1994). This process can be vital for team satisfaction and can improve commitment for future projects (Reed, 2001). Reviewing a project can be in the form of a reflective process, as illustrated in the next figure, where project managers “record and critically reflect upon their own work with the aim of improving their management skills and performance” (Loo, 2002). It can also be applied in problematic project teams in order to identify the roots of possible conflicts and bring them into an open discussion.

Ignoring the established point of view of disbanding the project team as soon as possible to avoid unnecessary overheads, Meredith and Mandel (2003, p660) imply that it’s best to wait as much as you can for two main reasons. First it helps to minimize the frustration that might generate a team member’s reassignment with unfavourable prospects. Second it keeps the interest and the professionalism of the team members high as it is common ground that during the closing stages, some slacking is likely to appear.

6. Stakeholder satisfaction

PMI’s PMBoK (2004, p102) defines that “actions and activities are necessary to confirm that the project has met all the sponsor, customer and other stakeholders’ requirements”. Such actions can be a final presentation of the project review which includes all the important information that should be published to the stakeholders. This information can include a timeline showing the progress of the project from the beginning until the end, the milestones that were met or missed, the problems encountered and a brief financial presentation. A well prepared presentation which is focused on the strong aspects of the projects can cover some flaws from the stakeholders and make a failure look like an unexpected success.

Next Steps

Even when the client accepts the delivery of the final product or service with a formal sign-off (Dvir, 2005), the closeout phase should not be seen as an effort to get rid of a project. Instead, the key issue in this phase is “finding follow-up business development potential from the project deliverable” (Barkley & Saylor, 2001, p214). Thus, the project can produce valuable customer partnerships that will expand the business opportunities of the organization. Being the last phase, the project closeout plays a crucial role in sponsor satisfaction since it is a common ground that the last impression is the one that eventually stays in people’s mind.

Continuous improvement is a notion that we often hear the last decade and review workshops should be involved in it. The idea behind this theory is that companies have to find new ways to sustain their competitive advantage in order to be amongst the market leaders. To do so, they must have a well-structured approach to organizational learning which in project-based corporations is materialized in the project review. Garratt (1987 in Kempster, 2005) highlighted the significance of organizational learning saying that “it is not a luxury, it is how organizations discover their future”. Linking organizational learning with Kerzner’s (2001, p111) five factors for continuous improvement we can a define a structured approach for understanding projects.

This approach can be implemented in the closeout phase, with systematic reviews for each of the above factors. Doing so, project closure could receive the attention it deserves and be a truly powerful method for continuous improvement within an organization. Finally, project closeout phase should be linked with PMI’s Organizational Project Management Maturity (OPM3) model where the lessons learned from one project are extremely valuable to other projects of the same program in order to achieve the highest project management maturity height.

References

1. A Guide to Project Management Body of Knowledge, 2004, 3rd Edition, Project Management Institute, USA, p102

2. Arora M, 1995, Project management: One step beyond, Civil Engineering, 65, 10, [Electronic], pp 66-68

3. Barkley & Saylor, 2001, Customer-Driven Project Management, McGraw-Hill Professional, USA, p214

4. Bucero A, 2005, Project Know-How, PM Network, May 2005 issue, [Electronic], pp 20-22

5. Crawford K, 2002, The Strategic Project Office, Marcel Dekker, USA, p163

6. Department of Veteran Affairs, 2004, Project Management Guide, Office of Information and Technology – USA Government, p13

7. Dvir D, 2005, Transferring projects to their final users: The effect of planning and preparations for commissioning on project success, International Journal of Project Management vol. 23, [Electronic], pp 257-265

8. Futrel R, Shafer D & Shafer L, 2002, Quality Software Project Management, Prentice Hall PTR, USA, p1078

9. Gannon, 1994, Project Management: an approach to accomplishing things, Records Management Quarterly, Vol. 28, Issue 3, [Electronic], pp 3-12

10. Heerkens G, 2002, Project Management, McGraw-Hill, USA, p229

11. Kempster S, 2005, The Need for Change, MSc in Project Management: Change Management module, Lancaster University, [Electronic], slide 16

12. Kerzner H, 2004, Advanced Project Management: Best Practices on Implementation, 2nd Edition, Wiley and Sons, p303

13. Kerzner H, 2001, Project Management – A Systems Approach to Planning, Scheduling and Controlling, 7th Edition, John Wiley & Sons, New York, p594

14. Kerzner H, 2001, Strategic Planning For Project Management Using A Project Management Maturity Model, Wiley and Sons, pp 110-111

15. Lecky-Thompson G, 2005, Corporate Software Project Management, Charles River Media, USA, p26

16. Loo R, 2002, Journaling: A learning tool for project management training and team-building, Project Management Journal; Dec 2002 issue, vol. 33, no. 4, [Electronic], pp 61-66

17. Maylor H, 2005, Project Management, Third Edition with CD Microsoft Project, Prentice Hall, UK, p345

18. Mooz H, Forsberg K & Cotterman H, 2003, Communicating Project Management: The Integrated Vocabulary of Project Management and Systems Engineering, John Wiley and Sons, USA, p160

19. Murray J, 2001, Recognizing the responsibility of a failed information technology project as a shared failure, Information Systems Management, Vol. 18, Issue 2, [Electronic], pp 25-29

20. Newell S, 2004, Enhancing Cross-Project Learning, Engineering Management Journal, Vol. 16, No.1, [Electronic], pp 12-20

21. Organizational Project Management Maturity (OPM3): Knowledge Foundation, 2003, 3rd Edition, Project Management Institute, USA

22. Pinkerton J, 2003, Project Management, McGraw-Hill, p329

23. Reed B, 2001, Making things happen (better) with project management, May/Jun 2001 issue, 21, 3, [Electronic], pp 42-46

24. Rosenau & Githens, 2005, Successful Project Management, 4th Edition, Wiley and Sons, USA, p300

25. Sowards D, 2005, The value of post project reviews, Contractor, 52, 8, [Electronic], p35

26. Thomset R, 2002, Radical Project Management, Prentice Hall PTR, USA, p260

27. Whitten N, 2003, From Good to Great, PM Network, October 2003 issue, [Electronic]

28. Young, 2003, The Handbook of Project Management: A Practical Guide to Effective Policies and Procedures, 2nd Edition, Kogan Page, UK, p256

Change-Management in the Twentyfirst Century – Best Practices

Dell’s organizational fortitude requires a vigilant, agile, and fluid approach to change. Historically, management teams throughout this successful organization have accurately identified those change initiatives that ultimately brought about competitive advantage. Identifying goals, goal specifications, metrics for accomplishing the goal, and metrics specifications propels organizations towards their strategic objectives. The critical challenges Dell’s leadership faces today require innovative thinking and integration to create an agile infrastructure. Such a process can also help organizations more proactively sense and react to the volatile changes in their competitive environments.

To manage effectively across the computer industry, acute awareness regarding the interdependency of departments, partnerships, culture, and subcultures is critical. Amplified global competition, rapidly developing advancements in technology, and the fluctuations of customer demand have produced shorter product life cycles, thus creating the need for faster product development. “One can easily relate to the rapid obsolescence of products in many industries, notably the computer and electronics industries.” (Kessler, E., 1996). Dell, Inc., as a result of escalating technological advancements, has increased the number of potentially lucrative product niches while creating more diverse product lines.

Competition and substitute availability are significant factors in the race to capture and maintain competitive advantage. “Moderate competitive pressures simultaneously provide sufficient motivation, ample resources, and the opportunity for a firm’s fast innovation to undercut the market positions of competitors.” (Kessler, 1996)

“Today global markets and global sources are more accessible for many reasons: better technology (such as Internet communications), cheaper transportation, and reduction of legal-entry barriers to most international markets.” (Anderson, 2000) Dell’s strategic development of its direct marketing agenda has resulted in phenomenal growth. Based on many defining financial ratios like, gross profit, net revenue, ROI, ROE, etc. it is apparent that Dell is financially superior and a leader within its industry. As competition has expanded and the computer industry overall has struggled to survive, this company has remained profitable. The trends are clearly indicative of a strong economic system, which are supported further by a comparison of industry averages. Additionally, Dell not only stands on a firm financial foundation, they continue to support superior customer service and a pre-eminence with their internal employees. Dell’s implementation of leadership training throughout all managerial levels will assist in the support of the staggering financial growth and help eliminate the potential erosion of the infrastructure in the future.

Dell has set the standard concerning diversity. Michael Dell’s leadership in the company’s commitment to diversity proves that it is both the right thing to do and a key business performance strategy. Dell recently stated that, “To compete, the company must attract and retain talented men and woman who represent a range of background. Further, Dell realizes that its diverse workforce fosters innovation, creativity, and new solutions that help the bottom line.” (Fry, 2003) Dell goes well beyond a diversified employee-base, it is also “committed to a diverse supplier base that includes small businesses and minority-women – and veteran – owned businesses.

High performing organizations, such as Dell are alert to the acceleration in the continuing global rate of change, developing trends, and economies. Dell instinctively recognizes the changes and acts on it to achieve competitive advantage. Dell is expeditious in its decision-making and execution of goal-directed change that is in alignment with its organizational goals and objectives. “In today’s fast-changing business environment, responsiveness – quickness, agility, the ability to adapt to changing demands – is more vital than ever to a firm’s survival.” (Bateman-Snell, 2003) Enhancing Dell’s competitive advantage and strategy is a result of strategic management, technological innovation and express decision-making.

Dell’s strategy is; survival, sustainability, revenue generation, and profitability through innovation and speed.

Dell’s efforts remain focused on four strategic initiatives:

” Driving global growth
” Attaining product leadership
” Superior customer service
” Embracing Dell’s corporate culture

Dell’s survival depends on remaining alert to developing trends and economies. Dell’s rapid innovation and resourcefulness has helped maintain its ranking amongst the top PC producers. Dell’s strategic focus on the business and educational markets has resulted in a significant market share in each of those segments. The organization was the leading supplier of computer systems business for two years running. Dell’s strategic development of its direct marketing agenda has resulted in phenomenal growth.

Dell consistently delivers swift strategic response to match customer needs to products and service. In addition to a full line of desktop and notebook PCs designed for consumers, Dell offers network servers, workstations, storage systems, and Ethernet switches for business customers. “Electronic commerce is now allowing global customers in some industries to connect directly and reveal their preferences, such as Dell Computer’s strategy of assembling computers in-house to customer specifications.” (Anderson, 2000) Such tactical maneuvers have allowed Dell to remain the world’s premier direct-sale computer vendor.

Dell’s strategic alliance with the voices of the customer and stakeholders to accurately project and exploit trends and make prompt decisions by reassessing strategies, continually adds competitive advantage by leveraging and enabling the latest process concepts. Dell’s strategy to incorporate customer and stakeholder feedback in process innovation and product design ensures customer loyalty. This integration serves to prevent misinterpretation between perceived and actual customer needs. Dell purposely “forms linkages, upstream and downstream, lateral and horizontal” (Kessler, 1996) through all phases of research and development. These alliances reduce time and cost as they minimize or remove steps in the research and development process. It also provides motivation for its employees. Research has shown “that direct contact with customers triggers quicker action and helps employees to pay attention to new ideas, solutions, and opportunities.” (Kessler, 1996) Rapid product development increases the learning capacity of employees while strengthening their technical, conceptual, and interpersonal competencies.

In Dell, Inc.’s 2004 annual report, Founder, Chairman of the Board, and Chief Executive Officer Michael dell stated, “Dell product shipments grew 26%, nearly three times the average of other companies. Our revenue increased 17 percent, to $41.4 billion; total sales by the rest of the declined. Operating expenses or just 9.7 percent of revenue, the lowest full-year in our history.” (mergentonline.com, and product category. Dell’s full-year product shipments, revenue, operating profit, and earnings per share broke all previous records. Dell was the leading supplier of computer systems business for two years running. The business was profitable in every geographical market, customer segment, and product category. Dell, Inc. is a company on the leading-edge.

Although financial data confirms Dell’s success, it does not fully disclose their achievement. Dell is world renown for its customer service. Last year Dell earned more than 100 awards for product and service quality and reliability. Dell turns their inventory, on average, 107 times per year. Quality is another hallmark of Dell, Inc. “Dell’s PowerEdge servers are being selected more and more for critical applications within the data centers if businesses and other organizations.” (www.dell.com) The Dell website is one of the world’s highest-volume Internet commerce sites.

“International Business Machines Corp. (IBM) is dropping out of the personal computer (PC) business. Oracle Corp. is acquiring PeopleSoft Inc. Outsourcing, offshore and otherwise is looming large as an option in the computer industry.” (Hayes, 2004) Dell’s persistent innovation and greatest strength seems to be in the uncompromising philosophy of do what the customer asks for and do it right.

Dell is the world’s premier direct-sale computer vendor. In addition to a full line of desktop and notebook PCs designed for consumers, Dell offers network servers, workstations, storage systems, and Ethernet switches for enterprise customers. Dell faces fierce competition from Hewlett-Packard, whose market share improved significantly following its acquisition of perpetual PC leader Compaq.

In Dell’s annual report, Michael Dell asserts, “We again demonstrated the fundamental competitive advantages of our high-quality, low-cost business model and the great discipline with which it’s applied worldwide by an outstanding Dell team. For us, that discipline takes the form of identifying a small number of priorities, directing resources to them, then measuring and holding ourselves accountable for significant progress toward them. ” (www.dell.com )

There are several government-imposed regulations that affect most industries at some level. There is regulation and deregulation that is specific to particular industries. Organizations are guided by city, county, and state regulations, consumer, employee relations, environmental issues, financial and globalization regulations. Regulations regarding employee relations and globalization significantly impact the computer industry.

“The promises and perils of globalization take many forms. The most commonly experienced manifestations are in the realms of economics and culture, but much of what shapes the causes and consequences of globalization today, in any form, is its less glamorous regulatory underpinnings. Whether and how certain interests prevail during trade negotiations depends not only on the quality of the product, service, or idea being promulgated, but the strategic leverage their advocates enjoy (or the coalitions their different types of advocates are able to assemble) in the international forums established to manage the global economy.” (Woolcock, 2001)
There are several potential challenges inherent to Dell’s strategy. Collaborative efforts can be inadvertently sabotaged because of differing divisional or departmental goals. Maintaining project focus through corporate lenses will reduce departmental myopia. The reverse is also a possible challenge, becoming overwhelmed by the length and the breadth of the new process or product. Dell could compromise itself by engaging in too many technological fields and innovations. Having too many irons in the fire could result in spreading its resources too thin.

Dell, Inc. is understandably one of the leaders of the information technology industry. The company has found their product niche and raised to the challenges faced in the computer industry, in a word, Innovation. Upon review of the company financial’s, annual report, and extensive research, it appears that there are few problems that are currently plaguing Dell. However, based on the annual report ‘Dell servers are being clustered together into virtual supercomputers that can be expanded over time, as customer needs require and resources permit, at a cost as much as 90 percent lower than for proprietary mainframe computers.’ The potential problem is the ability to internally support these supercomputers. Additionally, the ‘Dell Effect’, where prices drop and value increases, potentially undervalues the system through competition. In an effort to remain ahead of competitors Dell is adding value and reducing costs. This could eventually introduce long-term dilemmas, which would become catastrophic to correct.

There are potential ethical conflicts associated with Dell’s competitive methods. “If formal techniques, such as quality function deployment, are not used to explicitly focus innovation efforts on consumer demand, quality can become lost in the firm’s narrow pursuit of speed as an end in itself, rather than an instrumental end to the success of the project.” (Kessler, 1996) “Friendly fire” or healthy competition amongst colleagues for idea generation or innovative solutions could result in faulty thinking, resistance, dangerous shortcuts, or liability issues. At a global level this strategy must be well thought out and carefully implemented in order to avoid cultural faux pas that could lead to misinterpretation of the customers true needs.

Kevin Rollins president and chief operating officer at Dell stated that the organizational goals are to increase market share position 10 to 20 percent while pricing 20 to 30 percent below the competition. He asserted, “You’ve got companies with 60 percent gross margins, so if we drop the margins to 30 percent, they aren’t geared to compete.” (Briody, 2001) Dell proves that it is not the big that eat the small, rather the fast that eat the slow.

Dell’s recent business “Latitude” notebook, desktops and mobile workstations were developed with enhancements based on direct customer feedback. These enhancements have increased performance, reliability, usability and environmental friendliness. These innovations reflect Dell’s ability to incorporate direct customer feedback into every product. National brand manager, Dell Canada Mobile Products, Peter McNeil exclaimed, “They enhanced the performance, usability and reliability that our customers demand.” (Hoovers, 2005) Dell’s fourfold strategic initiatives to drive global growth, attain product leadership, provide superior customer service, and embrace Dell’s corporate culture are permeated in everything it does.

Organizational objectives and goals must be in strategic alignment with the Dell’s mission, vision, and values statements. The right indicators will aid in monitoring performance, identifying potential obstacles to optimal performance while increasing the organizations ability to anticipate and spot trends, and make express decisions by reassessing strategies. Identifying goals, goal specifications, metrics for accomplishing the goal, and metrics specifications will propel Dell towards its strategic objectives. Evaluation of organizational performance measurement systems is qualitative in nature. Such a process can also help Dell more proactively sense and react to changes in their competitive environment.

Similar to performance measurement are milestones. Milestones target time-based objectives, instill a sense of urgency, and maintain focus. Milestones “structure the process by separating an otherwise formidable task into manageable parts. This segmentation further aids in translating overarching project goals into concrete, achievable ends that can increase workers’ task motivation during product development.” (Kessler, 1996)

Dell needs to be mindful of what it does best. Deviating from its own best practices has had expensive consequences. “The $340 million purchase of ConvergeNet proved that acquiring companies is not Dell’s strength. The acquisition has been roundly criticized by analysts for not producing results sooner. U.S. Bancorp Piper Jaffray’s Ashok Kumar characterized the debacle as “an expensive lesson.” Company executives even admitted that they had not done enough due diligence, and major delays in product rollouts occurred. Richard Watts, the former CEO of ConvergeNet and now the head of privately held Scale Eight, even sued Dell, claiming wrongful termination when he was pink-slipped weeks after the acquisition.” (Briody, 2001)
Dell, first and foremost needs to emphasize innovation into its manufacturing and marketing process, not just its products. “Innovation is where the money is in 2005. That’s why Dell will still be in the PC business in 2005 and IBM will not.” (Hayes, 2004)

Organizational survival is reliant on its capacity to project and maximize trends, make express decisions by reassessing strategies, continually adding competitive advantage by leveraging and enabling the latest process concepts. Organizations must be responsive, agile, and capable of adapting to change quickly, as change is inevitable. Historically, management teams throughout highly successful organizations, such as Dell, have correctly identified those change initiatives that ultimately brought about competitive advantage and how they might evolve. The critical challenges managers of the twenty-first century face today require innovative thinking and integration to create an agile infrastructure.

References

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