Monthly Archives: March 2017

It helps understand and satisfy customer’s needs of a given market, through value creation. The SDL becomes the mindset for understanding the nature and purpose of a market, society, and organization. The foundation of the logic above in each market, society, and organizations, is fundamentally concerned with service exchange. More so, the application of knowledge and skills is typically for the benefit of parties involved, which renders service of a product’s offering; far more essential than the product or service component. SDL also explains and becomes the strategic element that can be seen as two parties exchange service for mutual benefits. The underlining factor is service and service become essential since it provides more information on how we exchange knowledge across parties. In marketing application, when this logic is used in selling; the sales person works with the customer towards a common solution (Vargo and Luscg, 2004).

Price does not become the principal object of purchase, seen in comparing Apple and Samsung products; as the value becomes more important for decision-making. Although Samsung products are cheaper, consumers still buy Apple products; because of the value that can be associated with e.g. the design, the material or the product perception. In context, the marketer or sales executive are asked not to force the customer into purchasing a service, which does not create or increase value for the consumer. In an event where the sales person tries to force a customer into purchasing a service or a product that does not render value; an issue in the marketplace arises. Furthermore, since a marketer cannot eliminate competition, the marketer must recognize that competition informed by collaboration creates an advantage in a context. During sales, the marketer is to co-­create with the customer to expand the value during engagement (Vargo and Luscg, 2008).

In practice, let’s say I entered the store of a TV service provider to purchase a service. And I mentioned to the salesperson, I will love to buy a television subscription service with a decoder that has the capability to record programs while I’m away. This is because most, of the TV programs I usually watch, air when I’m at work. After sharing my needs with the sales person, he started selling the idea of buying a TV package that included more channels, and that could repeat programs on multiple channels after the initial air date. And I do not have to pay extra nor pay for a recordable decoder since there is the likely hood that programs will be repeated. And I do not have to pay more for the decoder, given this decoder is on promotion and is offered to customers free of charge. The sales person’s sole area of concentration, was to generate leads, to meet his target for the new products launch and forgot about my initial requirement. From those mentioned above, the sales person forgot what is value to me; my value was the ability to record while am away, which means I can watch the program at anytime I’m available. However, the service he was selling me will still be time-based, and I may not have the luxury of benefiting from it. More so, since I entered the store with a goal, the marketer would have recognized this and had tried to co­create. By building on my value, which was to stick to my initial requirement of wanting a decoder that could record and would have introduced more service to my request. In relation to Vargo and Luscg (2004), the sales person would have used the FP8; which is a service centered focus to create value.

Reference

Vargo, S, & Lusch, R 2008, ‘Service­dominant logic: Continuing the evolution’, Journal Of The Academy Of Marketing Science, 36, 1, p. 1­10, Scopus®, EBSCOhost, viewed 20 March 2015.

Vargo, S, & Lusch, R 2004, ‘Evolving to a New Dominant Logic for Marketing’, Journal Of Marketing, 68, 1, pp. 1­17, Business Source Complete, EBSCOhost, viewed 21 March 2015.

An effective way of handling change is through innovation in multiple areas, mainly; process, service and products to name a few. Innovation is about creating value, both internally and externally. In this blog post, I will not explicitly define the word innovation, since innovation has a different meaning to individuals and its application is not constant (Anahita Baregheh, Rowley and Sally, 2009). Although, we could all relate to Rory’s (2014) definition of innovation where he stated; “Innovation is about creating value that increases profit, and in the case of non­profit organization; it is meant to deliver quality service to end users.” And for it to be effective, it has to be simple and focused (Drucker, 1985). Drucker(1985) stated, “innovation is working, rather than genius. It requires knowledge and often requires ingenuity.” Highlighting the fact that innovation does not always mean the creation of distinct service, product or process. However, it can be seen, as a way of strategically modifying an existing framework to form something new. Companies start by looking at the internal and external factors when they are about to innovate. And Liddell (2003) mentioned, “Innovation should be hard to design, but easy to be recognizable just like pornography.”

Take the example on product innovation using Apple as a case study; a company many can relate to, when we talk about innovation. Apple was able to, first, recognize the opportunity in the changing environment and sort how it can meet those needs with more value. People love music, and can only listen to a maximum of 150 songs per CD (mp3 format) in a Walkman player. Apple created the iPod, through extensive research based on a hard design that may have cost the company a fortune. However, iPod’s as a product, naturally became recognizable by users, because of its value. From a cost perspective, users were able to store the maximum of 1000 mp3 songs in comparison to the existing Walkman player. For instance, the iPod player was efficient based on the fact that the users can play more songs without the need to buy any batteries and by charging the iPod during the night and use it during the day . Thus, the effectiveness was most seen when the iPod was not only seen as a tool for entertainment; however, also used for other purposes like education (Diana and Abigail, 2010).

Furthermore, companies are shifting from product innovation to service innovation. And this is not easily defined because it has many branches; service innovation, service, firm in innovation and service process innovation. One can readily recognize the service innovation in the banking sector. Where some years back if any customer wants to handle a request, it had to be attended to by an individual. And this case, usually causes frustration to customers and to the bank; since, there are some losses that are attributed to human errors. As a result, banks started innovating in their process by introducing technology to replace the way it services customers. For example, customers would easily now have access to the online banking applications to perform all types of transactions, from requesting cheques, paying bills, transferring funds or speaking with customer service representatives. This reduces operation cost for the bank and possible transportation costs incurred by customers who visit the bank. More so, efficiency and effectiveness are increased because the bank can serve more clients and can divert staff’s attention to other pressing matters. Also, the value is created for customers, since the Bank can meet their needs in time, thus increasing efficiency and effectiveness. Reena(2007) cited Rae when she mentioned “Service innovation simply reflects the new playing field of business.” And the product innovation like Apple iPod, also gave birth to an increasing demand for service and Apple had to create the iTunes store. Allowing consumers, to purchase music that is compatible with the iPod.

Lastly, creating business value is mostly about creating process innovation. This usually starts with organizations who think strategically, in an effort to distinguish themselves from other industry players. Take Dell as an example, when it entered into the marketplace, it had to find a way of competing with a giant like IBM. And the company innovated, starting from the product innovation by allowing customers to customize the PC they need online. Dell also altered the manufacturing process, which in turn brought about increased efficiency; by directly moving production plant to a country with a lower economy. Although, the most significant process innovation Dell made, was on the distribution method. Where other industry players had a monopoly on how they distribute products with exclusive contracts and partnerships with stores like Walmart, that prohibit stores from selling PCs other than that of IBM. Dell was able to innovate the process of distribution, by delivering directly to customers. And they used mediums, such as a mailing list and the internet to their advantage. First, this creates value to customers as the cost of buying a Dell product in comparison to others was cheaper. This is because customers, do not have to pay all the extra charges attributed to middlemen and distributors like Walmart.

References

Anahita B., Jennifer R., and Sally S., (2009) “Towards a multidisciplinary definition of innovation”, Management Decision, Vol. 47 Iss 8 pp. 1323 ­ 1339 [Online] Available: dx.doi.org/10.1108/00251740910984578 [Accessed: May 30, 2015]

Drucker, PF (1985) ‘The discipline of innovation’, Harvard Business Review, 63, 3, pp. 67­72, Business Source Complete, [Online] Available: www.ebscohost.com [Accessed: May 30, 2015]

Dianna L. H., and Abigail D. W., (2010) Effectiveness of Video Modeling to teach
iPod use to Students with Moderate Intellectual Disabilities [Online] Available: http://daddcec.org/portals/0/cec/autism_disabilities/research/publications/education_trainin538_effectiveness_of_video_modeling_to_teach_ipod_use_to_students.pdf [Accessed: May 30, 2015]

Liddell, D (2003) ‘Defining innovation’, Brand Strategy, 178, p. 30, Business Source Complete, [Online] Available: www.ebscohost.com [Accessed: May 30, 2015]

Reena Jana (2007) Service Innovation: The Next Big Thing [Online] Available: https://www.bloomberg.com/news/articles/2007-03-29/service-innovation-the-next-big-thingbusinessweek-business-news-stock-market-and-financial-advice[Accessed: May 30, 2015]

Rory M. (2014) Innovation and change: Laureate Education [Video, Online] [Accessed: May 30, 2015]

Mainly, because, as globalization increases in our society, this will prompt new discussion around pros and cons. However, we are to remember that those who are in support of globalization are doing so because it supported the connected world. Thus, opening an avenue for organization and countries to remain competitive. IMF (2008) mentioned that globalization helps in promoting “efficiency through competition and division of labor” and gaining in­ depth knowledge of culture allows economies to concentrate on their strength. For example, China currently is benefiting from its power in the human capital while one may conclude that America is benefiting from the export of intellectual property. Although, when we examined the cons of globalization, the powers can be weakened mostly, if globalization is attributed to the spread of deadly diseases like HIV or the recent Ebola crises.

The growth of diseases around the world becomes a growing concern for economies when questions like this are asked. Do we stop the importation of food, from another region because of a disease outbreak? Should the inflow, of people be rejected from a certain location, due to the threat of an epidemic Indeed, the issue of violation of trade agreement will arise (Clark, Thibodeau and Grant, 2008)? However, to combat this disadvantage of globalization countries need to expand its expenditure on public infrastructure (NCBI, 2006). More so, if globalization is an advantage and leaves poorer countries at a disadvantage. How can we now justify why we should promote globalization since many schools of taught believe it does not strengthen equality (WorldBank, 2012; FreedomHouse, nd; CGD, 2007). Nonetheless, it is said to promote the spread of violence around the world, as companies take advantage without examining the consequences (Gunther, 2007).

In the case of violence, Gunther (2007) shared a good example how globalization promotes unrest. Mostly, because companies and countries explore the disadvantage of globalization to an advantage. And attributed to the lack of ethics, of corporate leaders, who handle business dealings. The ethical investing should be part of a school of taught, of globalization and embedded into the culture of an organization doing business locally and international solely because this focuses on the investor’s views on what is right and wrong. The case of Fidelity, it is in my concluding note that the CEO made the wrong choice of investing in Sudan. However, the leader at Fidelity believes that the social and political issue in Sudan was not for them to decide” (Eric, 2007; Marie, 2007). Mainly, because wherever organization could make a profit to an advantage, there shouldn’t be any barrier.

The mentioned raises questions on factors that lead to unethical behaviors by leaders. From this week discussion, one may see that this start with when a leader is unaware of the concept of ethics. Thus, an organization should ensure to teach organizational and behaviors. In an attempt, to increase the self­-awareness of global leadership, which is part of competencies of a global leader. More so, since ethical and unethical issues are interpreted from multiple perspectives. Culture plays a significant role, in determining why some leaders may seem immoral. As Dennis, Hung­Gay and Steven (1999) stated, culture is prominent in “forming the foundation of ethical behaviors.” The mentioned, also task leaders to increase the level of cultural competencies in translating how to engage in business around the globe.

Thus, individuals are aware of possible perceptions that may lead to conflicts (Hoogervorst, De Cremer and van Dijke, 2010). Although Fidelity benefited from the economy in Sudan with an increase in revenue, the ‘corrupting influence’ wasted the lives of thousands of people (Timothy, 2014). In Inc (2000) analysis, companies remain competitive and sustainable when they are ethical from all perspectives including financial and economic. As Antonio (2012) stated, in a Global context if Fidelity examined ethics from personal, organization and social perspective i.e. the leaders at Fidelity and workers are ethical; they would examine their investment in Sudan. Also, if Fidelity as an organization act in line with the ethical code of conduct, that would have evaluated the impact of its investment in Sudan. While, if the society acts in an ethical behaviour, the leader at Fidelity would have supported and responded with humanitarian relief to people of Sudan affected. Not forgetting, this was evaluated from a theoretical perspective and how ethics affects economic and political conditions (Antonio, 2012).

References

Antonio A, (2012) Three Ethical Dimensions of Financial crises [Online] Available: http://www.iese.edu/research/pdfs/di­0944­e.pdf [Accessed: September 2, 2015]

Clark J. S., Thibodeau R. D., and Grant K. G., (2008) Diesease outbreaks and Agricultural trade: the case of potatoes [Online] Available: http://www.uoguelph.ca/catprn/PDF­WP/Working_Paper_2008­05_Clark.pdf [Accessed: September 2, 2015]

CGD, (2007) Globalization and Inequality [Online] Available: http://www.cgdev.org/article/globalization-­and-­inequality [Accessed: September 2, 2015]

Dennis A. P., Hung­Gay F., and Steven I., (1999) Ethical issues across cultures: managing the differing perspectives of China and the USA [Online] Available: http://shma.com/2007/10/unethical­-investing/ [Accessed: August 29, 2015]

Eric C., (2007) Some Unethical Investing [Online] Available: http://shma.com/2007/10/unethical­-investing/ [Accessed: August 29, 2015]

FreedomHouse, (nd) Equality Of Opportunity Under Globalization: Full Chapter [Online] Available: https://freedomhouse.org/report/todays­american­how­free/equality­opportunity­under­globalization­full­chapter#.VeZ­S_mqqko [Accessed: September 2, 2015]

Gunther, M. (2007) ‘Fidelity’s Sudan problem’ [Online]. Fortune. Available: http://archive.fortune.com/2007/01/29/news/companies/pluggedin_gunther_sudan.fortune/ind postversion=2007012911 [Accessed: August 27 , 2015]

Hofstede, G. (1983) ‘The cultural relativity of organizational practices and theories’, Journal of International Business Studies, 14 (2), pp. 75­89.

Marie Y. T., (2007) MIT Flyer Distribution Policy Raises Dispute [Online] Available: http://tech.mit.edu/V127/N21/flyers.html [Accessed: August 29, 2015]

Timothy, (2014) Economics and Morality [Online] Available: http://www.imf.org/external/pubs/ft/fandd/2014/06/taylor.htm [Accessed: September 2, 2015]

IMF, (2008) Globalisation: A Brief Overview [Online] Available: https://www.imf.org/external/np/exr/ib/2008/053008.htm [Accessed: September 2, 2015]

INC, (2000) The Importance of Being Ethical [Online] Available: http://www.inc.com/articles/2000/11/14278.html [Accessed: September 2, 2015]

WorldBank, (2012) Globalization’s impact on gender equality: What’s happened and what’s needed [Online] Available: http://siteresources.worldbank.org/INTWDR2012/Resources/7778105­1299699968583/7786210­1315936222006/chapter­6.pdf [Accessed: September 2, 2015]

However, there are debates around, the pros and cons of globalization because of its complications. There is no doubt that those, who support globalization claim it is of importance because it strengthens the connected world and helps in improving the welfare of the population by solving complex issues like poverty and unemployment. Globalization brings about the constant search for competitive advantage. And in the current market landscape, this is through the creation of disruptive, innovative products or services. Thus, competition intensifies between countries and reducing the cost of product and services. However, this does not apply in many instances, because some countries manipulate its currency for deriving competitive advantage by reduced price. And example, China as an established country, recently devalued its currency to gain an advantage on globalization (Heather, 2015). The question one may ask here is the issue of ethics and its consideration because; China devaluation may be of advantage to the Country’s economy. Although, the human capital, which leaves on the minimum wage are those affected. Mostly, because the standard of leaving would be further devaluated and the ability to buy ‘want’ and ‘needs’ is significantly reduced. Lorraine and Eva (2015) painted an excellent picture and stated China’s move to devalue its currency will hurt companies like Apple and Yum Brands Inc. Mainly, the move would expose Apple and Yum Brands Inc. to risk attributed to downward pressure.

More so, we should recognize that one of the important pros of globalization is information influx. Thinking of how possibly did China and the United States (US) can relate with each having its distinct culture. However, both countries were able to recognize ways of benefiting from each other. The US recognizes a great advantage in exploring the human capital in China. Supporting Marber (2007) point, about the purchasing power of most countries by outsourcing production bring about competitive advantage. And as Marber (2007) stated, the wealth of a country and its purchasing power. Furthermore, China benefits greatly by the import of intellectual property into its territory for economic improvement (WIPO, nd). An example, Apple’s contractor Foxconn, uses its knowledge derived from Apple product in producing its brand (Lorraine, 2014). Thus, one inflow of idea is exchanged between two countries and as a social impact is seen when US culture is widely observed in China. Furthermore, Marber (2007) illustrated how free trade is an important pro of globalization. Mainly, this is because it reduces barriers that may hinder countries to trade such as value added taxes, tariffs. For example, the Dubai government in the UAE created free­ zones to remove barriers investors faced when investing in an economy. The move by the ruler helped its economy grow economically, mostly supported by the subsidized cost of operation (PKF, nd). Mike (2015) cited the wall street journal and mentioned this is not true because G20 countries increased its restriction on import and export to over ‘1200’since 2008.

However, with the mentioned above, one can easily see the cons of globalization. Since, it is supposed to bring about free trade, by removing barriers that hinder investment between countries. Although, this is not the case when examining the value added taxes European countries have on imports. Mike (2015) stated this is higher than 21.6% in recent years and only countries like UAE and US do not have value added tax (VatLive, 2015). Also, globalization brings about inequality where international companies are looking for means to reduce the cost of production. Thus, not taking consideration of the working condition of employees. Mostly, because workers salaries are low and not on a minimum wage benchmark (Kevin, 2013). Also, companies produce a product without the consideration of the environment and thus, increases global warming. While, from a social perspective, the cons of globalization is it help spread diseases around the globe. Mainly, because of inflow and outflow of expatriates between countries increase the chances of disease transmission. And not forgetting that most multinationals are sponsoring individuals into an office for an advantage, which leads to politicians becoming a direct lobbyist for companies (Ken, 2013).

In conclusion, as globalization cannot be stopped and can be argued it provide an opportunity for improving the economy. An international organization can benefit, by reducing the adverse impacts of globalization on society, the economy and our environment. First, there is no doubt that, these starts with leadership; i.e. politicians with a great will to stand up for unethical practice. And this extends to countries leadership, to support the idea and practice of fair trade instead of manipulating its currencies. For example, as China is increasing its export, they should increase the import flow (WTO OMC, 2014). Furthermore, the trade should be balanced, to ensure deficit is reduced and as Mike (2015) said.

The deficit in trade is the highest factor that causes unemployment. Also, countries benefiting from globalization should be forced to follow the rules. For example, China forms its rule of engagement with multinationals. And they change regulations at any time because there are no consequences. The mentioned, also promote the theft of intellectual property. Mostly, as seen in cases where, China’s does not crack down on illegal activities (Susan, 2010). Lastly, as stated above free trade is pros of globalization, this would be effective when companies operating internationally can operate freely or with less restriction. Thus, the barriers such as increase value added tax or duties are reduced. For example, the trans­pacific Partnership (TPP) free trade agreement is aimed at improving trades among multiple countries in North America, South America and Asia (AFOCIO, nd).

Reference

AFOCIO, (nd) Trans­Pacific Partnership Free Trade Agreement (TPP) [Online] Available: http://www.aflcio.org/Issues/Trade/Trans-Pacific-Partnership-Free-Trade-Agreement-TPP [Accessed: August 21, 2015]

Heather S., (2015) Eight reasons why China’s currency crisis matters to us all [Online] Available: https://www.theguardian.com/world/2015/aug/16/china-currency-crisis-yuan-devaluation-why-it-matters [Accessed: August 21, 2015]

Kevin S., (2013) Chinese Workers Making iPhones Work 11­Hour Shifts, 6 Days A Week, For $1.50 Per Hour [Online] Available: http://www.businessinsider.com/china-labor-watch-apple-iphone-workers-2013-7 [Accessed: August 21, 2015]

Ken S., (2013) Enron, Ethics and Todays cooperate value [Online] Available: https://www.forbes.com/sites/kensilverstein/2013/05/14/enron-ethics-and-todays-corporate-values/#21e62d885ab8 [Accessed: August 21, 2015]

Lorraine L., Eva D., (2015) Devalued Yuan Set to Take Bite Out of Apple, Give Boost to Chinese Rivals [Online] Available: https://www.wsj.com/articles/china-moves-to-devalue-the-yuan-1439258401 [Accessed: August 21, 2015]

Lorraine L., (2014) Amid Margin Squeeze, Foxconn Designs Its Own Fate [Online] Available: https://www.wsj.com/articles/foxconn-aims-to-fashion-its-own-brands-1403907564 [Accessed: August 21, 2015]

Marber, P. (2007) ‘Globalization and its contents’. In: Maidment, F.H. (ed.). International business, 14th ed. Dubuque: McGraw­Hill Contemporary Learning Services, pp. 2­7.

Mike c (2015) The Pros And Cons Of Globalization [Online] Available: https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#2158842accce [Accessed: August 21, 2015]

PKF., (nd) Free Zones in the United Arab Emirates [Online] Available: https://www.pkf.com/media/135638/free%20zones%20in%20the%20uae%202009.pdf[Accessed: August 21, 2015]

Susan A. A., (2013) Is China Killing The WTO? [Online] Available: http://www.international-economy.com/TIE_W10_Aaronson.pdf [Accessed: August 21, 2015]

VatLive., (2015) 2015 European Union EU VAT rates [Online] Available: http://www.vatlive.com/vat-rates/european-vat-rates/ [Accessed: August 21, 2015]

WTO OMC, (2014)Reports on G20 1 Trade and Investment Measures [Online] Available: https://g20.org/wp­ content/uploads/2014/12/reports_g20_trade_investment_measures.pdf [Accessed: August 21, 2015]

WIPO, (nd) Intellectual property a powerful tool for economic growth [Online] Available: ftp://ftp.wipo.int/pub/library/ebooks/wipopublications/wipo_pub_888e.pdf [Accessed: August 21, 2015]