Reverse Logistics Supply Chain Management

Creating Competitive Advantage through the Application of Reverse Logistics in the Supply Chain Management

In every company, it is very important to attract new customers and retain the current customers on viable conditions. These actions cannot be accomplished in any single company without creating a competitive advantage. The main technique of creating a competitive advantage that a company can adopt is creating quality products or services than their competitors. They can also create products that the target customers would prefer than their alternatives. Many companies across the world have adopted reverse logistics as a strategy to increase competitive advantage. This is because this technique lowers supply cost in the supply chain.

Companies using reverse logistics can also reduce the opportunity cost of outdated products. Companies can also gain additional revenue and finally reduce the cost of operation. This is due to the fact that companies can be able to manage the flow of their products through the supply chain. Reverse logistics is also advantageous as it expands the global economy. Thus, reverse logistics can be defined as a process of controlling the flow of finished goods from their final destination back to the manufacturer for value addition so as to enable recycling or reuse or for proper disposal. Reverse logistics can be used to explain environmental externalities resulting from increased production and supply. The following essay will be on the theories that have been put in place in regard to creating competitive advantage through reverse logistics and evidence of the theories.

Theories in Reverse Logistics

The theory of reverse logistics has been gaining significant popularity for the organization across the world. This theory is essential for the cost-effective flow of the commodities that had been previously providing in the markets for the use by the consumers back to the organization. The theory of reverse logistics ensures that the organization can consider recycling and reuse of the previously supplied commodities as well as learn more about the market (Dowlatshahi, 2000: 1). This theory is used together with the theory of supply chain management. The theory of supply chain management ensures that the products flow from the point of production to the consumers is steady and maximized (Vural, 2015: 262). The theory of reverse logistics, therefore, can be used to ensure that the process of supply chain management is helpful to the organization. Supply Chain management theory helps the organization understand the methodologies that can be sued to maximize supply for the commodities through increase the demand and looking for new markets that have not be accessed before (Touboulic, and Walker, 2015: 3)

Reverse Logistics Concept in Supply Chain Management

The supply chain management deals with the flow of goods and services from the point of manufacturing to the point of consumers. The consumers are limited which make the organization selling a similar commodity to create a competitive advantage in order to outdo other fellow competitors (Mohamed and Omwenga, 2015: 45). The supply chain management requires an organization to apply various models in order to win the market. Some of the models that can embrace include the use of reverse logistics in the management of the supply chain and create a competitive advantage. The reverse logistics as defined in the introduction deals with the management of goods and services after they reach the market (Stănciulescu, 2011: 1). This idea means that the goods flow back to the organization for further management which ensures that the losses are minimized as well as optimizing the usages of the defective commodities (Menachof, et Al., 2009: 145).

In the market environment today, the consumers have a wide variety of goods and services providers. Therefore, the companies cannot sell all of their products at once. This means that the reverse logistics helps the company to manage the flow of goods from the flow of commodities from the manufactures to the consumers and managing those commodities that do not end up in the final consumers’ ownership. Reverse logistics can help the organization create a competitive advantage in that the commodities that are not sold will be managed for possible re-use (Stănciulescu, 2011: 2). On the other hand, the practices involved in the reverse logistics ensures that the organization minimizes the cost when some of the goods are recycled and reused in the organization’s activities (Vural, 2015: 265). This means that reverse logistics help the organization overcome the burden of surplus production wastage.

Moreover, management of the flow of goods and services enables the company to hire good and qualified staffs who are able to maintain the competitive advantages of the organization. Therefore, the reverse logistics practices can guide an organization to attract more consumers since the management of the flow of commodities from the manufacturer to the consumer is professional. Management of the surplus supply also requires professionalism hence the acquisition of qualified people in the supply chain management who can effectively apply reverse logistics can help an organization defeat the competitors in the markets.

Reverse logistics also refers to the process of ensuring the flow of raw materials is minimized. The low of these raw materials are from the consumers where they had maybe used the products of the organization and did not manage the waste properties. On the other hand, the management of the flow of goods from the consumers to the manufacturer can help the organization disposes of the waste properly hence helping the communities go green. Management of waste can be a good thing for the organization. This is because the environment which highly polluted with commodities and materials from a certain company, for example, the fast-food organization, can lead to discouragement from the potential consumers.

The efforts of keeping the environment clean can help the organization also minimize the cost wastage in dealing with problems associated with the dirty environments such as lack of clean water and raw materials due to global warming. In this regard, the consumers will not be happy with the company which is not managing the waste properly (Stănciulescu, 2011: 3). Therefore, the use of reverse logistics can help the organization acquire significant clean environment through recycling and reuse of the raw materials originating from the consumers.

Roles of Reverse Logistics

Through reverse logistic company can become efficient environmentally through recycling used products, reusing and minimization of the number of products used. Reduction of materials used in forwarding flow is one of the vital modes by which reverse logistics can work on. This reduces backflow of unused products and also reduces the damage of products as a result of over clumping when being transported (Mohamed, 2016:1). Recycling and reusing materials are very vital in the reduction of pollution it also allows products to move in reverse in the supply chain for the manufactures to reuse recycle and resells in subordinate markets. Many are the times when reverse logistic is confused with waste management but, there is a great difference between the two. In reverse logistic the materials that are recovered are revalued but waste management involves the collection of waste materials and treatment but these products are not assigned new roles. Reverse supply chain it entails all the activities that are involved in reusing, recycling, and final disposal of waste materials

Considering the entire word Europe has a waste management board which has directed all the firms to address their waste disposal in a manner that will cause little or no harm to the environment. The United States also has encouraged her firms to recover used products as this will minimize wastage and pollution in the country. In countries found in the Middle East which is an emerging market collection of waste products which is advised to be done by professionals sorting and transporting them is very much needed. In the third world countries which are also referred to as developing countries reverse logistic is known to add very low value to the recovered products this is as a result involvement of low reprocessing techniques. Reverse logistics if properly managed can lead to reduction of transport, disposal and procurement costs (Fleischmann et al, 2004:1). Due to increase in globalization and industrialization reverse logistic is expected to accelerate after some years especially in developing countries which in turn will lead to environment conservation and massive economic improvements.

Reverse Logistics and Competitive Advantage

We looked at the use of reverse logistics to ensure that the company management of the flow of goods is cost effective. This will help the company increase the wealth in the banks. As a result, the company will hence acquire an advantage over the struggling competitors. This is as a result of the reason that companies that do not use reverse logistics may be undergoing loses which could be easily avoided through the use of effective reverse logistics. The competition within the market and for the limited number of consumers is one of the determinants of how an organization functions within the market environment. Therefore, the use of reverse logistics ensures that the company is able to defeat the other companies in the same market and dealing with the same commodities and services. This can be achieved since the sue o reverse logistics enables an organization to acquire professional workers who will be able to manage the flow of commodities from the consumers as the origin and the company reuses the products or even disposes of them properly. On the other hand, reverse logistics ensures that the company is able to maintain a good relationship with the workers and the stakeholders.

 One way that the stakeholders who include the customers are satisfied is through the application of reverse logistics to maintain a clean environment. If the company is able to maintain a clean environment where the consumers live, this will attract more consumers who will be willing to be associated with the organization (Aserkar, Kumthekar, and Aserkar, 2014: 228). This can only be effective if the company is able to apply the reverse logistics practices. This helps the organization to create a competitive advantage. This occurs since the consumers will have a good relationship with the company and do not refer to it as a polluter of the environment. The bottling companies which collect the used bottles for recycling have created confidence to the users of the products. Coca-Cola Company has created a competitive advantage through the application of reverse logistics. This company ensures that the used bottles are collected from the consumers and taken back to the company for reuse. This practice of reverse logistics helps this company in several ways (Lowe, 2017: 1).

 To start with, the company reduces the cost of production. This is achieved since the bottles will be sued more than once hence the money which could have been used for the manufacture of other bottling equipment can be used elsewhere. Two, the company helps the environment to remain clean. This is an attraction to the end users who prefer a company that is promoting a green environment. Additionally, the company maintenance of the environment through the collection and recycling of bottling material helps to ensure that the raw material is always available. Coca-Cola Company uses a lot of water to manufacture the products (Lowe, 2017: 1). It is believed that the water to product value of 3:1. Therefore, reverse logistics enable the company to reduce environmental degradation (Mohamed and Omwenga, 2015: 45).

Another company that can apply the reverse logistics to have a competitive advantage is a fast-food company. This company can ensure that the leftovers are always collected and disposed of properly. The company in this industry can ensure that the tins and cans used to pack the fast foods are collected to ensure that the environment is not degraded. This can be achieved through the use of dustbins. The application of reverse logistics will ensure that the company installs dustbins in areas where the customers are likely to move when they purchase fast foods. Example, if a fast-food hotel is located near a beach or a people’s park, the dustbins can be distributed across the part or the beach.

Therefore, the consumers will not dispose of the packaging materials anyhow. However, they will put the materials in the dustbins which are labeled or branded to indicate which hotel has installed which dustbins. The collection of the debris in these dustbins can be of use to the organization in order to have a competitive advantage. To start with, the organization can screen the materials and see the waste products which can use again in the organization for the work they had been used for previously. That will ensure that there are cost management and minimization of production cost. As a result, the company or organization can be able to defeat the competitors through the accumulated funds which could otherwise be used for the production of new packaging materials.

On the other hand, the company can benefit through collecting the debris from the dustbin and disposing them properly. In many countries, there are set bodies that regulate pollution from the organization. Therefore, the collection of used materials and ensuring that they do of pollute the environment can be of help to help the organization adhere to the law and regulations concerning the management and maintenance of the environment (Aserkar, Kumthekar, and Aserkar, 2014: 228). Additionally, the members of the public who are the consumers will develop a close relationship with the organization that is managing the properties well. This will ensure that the company has less need to conduct intensive and aggressive advertisements in order to retain the consumers. On the other hand, the company will have a ready market for their products hence creating an advantage over the competitors (Vural, 2015: 265).

Reverse Logistics Supply Chain Management
Reverse Logistics in Supply Chain Management

The reverse logistics also helps to maintain an agile supply chain (Elmas and Erdoğmuş, 2011: 161). This is a good way to ensure that the supply chain management id helping the organization benefit over the competitors. If the competitors are doing well in the market, an organization can be forced to either improve the services and good or exit the market. However, through the application of reverse logistics, the organization can improve its position in the market without being outplayed by the competitors. This can be achieved if the organization applies reverse logistics to acquire enough information concerning the issue of supply chain management. The return of goods initially provided or the market can be a source of useful information. The information helped the organization to understand which goods are doing well in the market. At the same time, the organization can use reverse logistics to acquire information about the commodities or services that are performing poorly in the markets (Elmas and Erdoğmuş, 2011: 164). This information is very necessary for the organization that is planning to win the competition battle among other potential competitors.

If the company realizes that certain products or service is not doing well in the market, they can either change the products and services or even abolish it can concentrate on the commodities that the company is doing extremely well. Unilever Company is one of the European based companies that was selling fast foods products. However, the application of reverse logistics helped the company identify the weakness in the market which led to massive losses due to dominance from fellow competitors such as McDonald’s. Therefore, the company stopped dealing with the consumable products and concentrated on the production and supply of dealing with product as us downy and baby products. This shows how a company can use reverse logistics to have a competitive advantage. The collection of the materials from the end users back to the company gives an overview of the market situation. The company can apply reverse logistics to ensure that the products which are not performing well in the market are removed from the manufactured commodities. This will help the company reduce the cost of operation as well as improve the performance in the market through concentrating on the good and services which are more likely to win the consumers in the limited market environment.

As a result, the company will have a competitive advantage since the cost of producing commodities that are bringing little or no returns will be eliminated. The specification is also a good way to ensure that the company’s dominance. Coca-Cola Company has dominated the beverages industry since the company has been concentrating on the sales of the soft drinks such as Coke Soda, Sprite, Fanta, among others (Coca-Cola, 2018: 1). The Coca-Cola Company had ventured into other practices such as selling fast foods and other branded commodities such as key holders, wallets, among others. Additionally, the company through the application of reverse logistics discovered that the used bottles for the coke brand are more compared to other products. Therefore, the concentration of the company developed along this line and most of the advertisements in the commercials have been focused on the major brands under this company.

However, if the company does not use reverse logistics, they cannot acquire enough information concerning the performance of the commodities in the market. This can make the organization to put more emphasis on the products that are not doing well in the market. However, acquiring enough information on the market will ensure that the company adopts supply chain management strategies that are helping to ensure that the competition is reduced and the organization has the ability to venture in the new markets through expanded revenue accumulation.

Reverse Logistics Common Practice

In order to make reverse supply management and logistics more efficient, a company has to have a deep understanding of areas of the business that is affected by recycling and returns. Measures and efforts should be employed to ensure that the component contributes to a positive stride (Govindan, and Popiuc, 2014: 3). To make the profit and ensure that the consumer attain maximum satisfaction, there are areas that the company needs to consider, and they include;

• Repairs and warranties which is a crucial area for the customer as there is need to inform them on the safety of the returned good. A company should have a number of ways to communicate with their customers such as creating a website or have a help desk as this will relieve their concern.

• Measurement of performance of goods particularly related to reverse supply chain e.g., checking on the sale of the returned goods, the percentage of returns, the growth or decline of returns year after another, the rate of asset utilization among others.

• Reason for return. The company must also find the reason for return. This will help to prevent processing of dishonest or stolen goods delivered. The company should therefore carry out analysis of the root-cause of good returned for processing. This is a key area in understanding business based on reverse logistic implication and coming up with strategies to close loop-holes for such good.

• Tractability is another key area that trace the flow of return to prevent mixing with items that are forward flowing.

• Company’s finance is another area and in order for the company to add value and profit, it should manage its finance issues to avoid causing bad relationship with customers, distributors as well as retailers. The companies should also check on taxes paid on return goods

• Optimization of logistics such as partnering with other parties that differ from them like in transporting goods makes increase logistic efficient on reverse-flow items. This makes it capable of improving its profit.

Deposition Strategies

Returned goods may be disposed of through various ways and the option or choice of deposing used should not only focus the profit but should consider other factors such as the satisfaction of the consumer and the image of the brand (Prahinski, and Kocabasoglu, 2006:6 These options include

• Remanufacturing or repair. Damaged goods or items that have not lost their identity are repaired and taken back to the market. However, there are factors that should be considered such as the cost the company uses to repair the item, the cost of transporting the repaired item as well as the market price of the refurbished commodity (Blackburn, et Al., 2004: 2). However, the company should identify remanufactured items from brand image to avoid posing risk. This is because consumers consider this item inferior. To avoid this, the company can give such item an image that appear more positive.

• Recycling. Recycling helps in recovering materials that are used to produce another new product. In this part the original identity of the item is lost. Factors such as the value to be reclaimed, the cost of transportation among others are considered. Recycling of some items e.g. electronic products brings out economic sense as such product minimizes the cost of mining and extracting metals.

• Discount sale. Companies may sometime sell returned goods on heavy discount. However care should be taken to avoid poisoning the customer perception on the brand image of the item and some may feel disappointed for paying less for same item.

• Energy regeneration. There are items that are not advisable to recycle such as food products. The company may use organic waste to generate renew energy through anaerobic digestion.

Screening of Retuned Goods

As mentioned above, one of the practices involved in the management of supply chain through the application of reverse logistics is the screening of goods. This practice ensures that the company has acquired enough information concerning the defective goods which are returned to the organization although they were previously in the markets. Screening of goods also enables the organization to improve on the goods before supplying them to the markets (Menachof, et Al., 2009: 148). A good example is a company that is dealing with selling o fast foods but the application of return logistics has enabled the collection of waste foods from the customers for proper management and disposal. These products can be screened so that the organization will understand the type of foods which are being disposed of frequently.

In a mixture of different foods which are packaged and supplied as a single commodity, the screening enables the organization to have a clear and vivid image of the market consumers and their preferences (Menachof, et Al., 2009: 146). Therefore, the company will take remedies and ensure that the supply of the commodities which are highly wasted is minimized (Billington, 1998: 24). On the other hand, the company can increase the supply of the materials which are highly consumed by the customers.

That is one of the strategies that reverse logistics can help an organization develop a competitive advantage. Understanding the customer’s needs is vital if the company is looking forward to maintaining their customers and at the same time attract more consumers. If a company does not understand what consumers need and preferences, the other companies that are dealing with the same consumer might take that advantage to provide precise services and commodities preferred by the consumers (Bowersox, 1999, 553). Many organizations have lost their market dominance after the consumers are not satisfied with the products being supplied.

Other companies have incurred losses for manufacturing surplus commodities and keeping them in the warehouse after the supply chain becomes extremely slow due to lack of ready markets (Al-Mashari, and Zairi, 2000: 31). The effects of such activities have been fatal for many companies which have dropped in the ranking or even lost the consumers’ trust altogether. Reverse logistics can, therefore, aids the company to provide the commodities that are best for the particular markets. The demand and supply which defines the nature of the supply chain in the organization can be affected by diverse situations.

The company can ensure that demand for the products is maximized through the application of reverse logistics and strengthening the noted weaknesses which influenced the return of goods previously supplied to the consumers in the markets. If the company is able to learn the market and treat the diverse situations appropriately, its competitive ability will be improved.

Conclusion

In conclusion, each and every company needs to maintain its customers and attract new customers. This is because the customers are the main source of profit in every company. A company creates a competitive advantage which helps it to outdo their competitors. While creating a competitive advantage the company must make sure that it is customers prefer their goods more than alternative goods.

Reverse logistics is one of the strategies used by most of the companies worldwide nowadays. This involves the companies are much involved in reuse and recycling of their used products. In the collection and recycling procedures, this reduces the production cost of most of the companies as fewer resources are needed to revalue products compared to production of new products. Reverse logistics have different practices which involve remanufacturing of products retuning of defective goods recycling and reuse of products.

References

Shad Dowlatshahi, (2000) Developing a Theory of Reverse Logistics. Interfaces 30(3):143-155.

Touboulic, A. and Walker, H., 2015. Theories in sustainable supply chain management: a structured literature review. International Journal of Physical Distribution & Logistics Management45(1/2), pp.16-42.

Vural C, 2015, Sustainable Demand Chain Management: An Alternative Perspective for Sustainability in the Supply Chain.

Liz Lowe, 2017, Sustainability and recycling: how the Coca-Cola system is fighting waste with sustainable packaging.

Coca-Cola Company, 2018, Sustainable Packaging.

Gabriela Cecilia Stănciulescu, 2011, Importance of Reverse Logistics for Retail Acts, The Bucharest Academy of Economic Studies Romani.

Güldem Elmas and Fevzi Erdoğmuş, 2011, The Importance of Reverse Logistics, International Journal of Business and Management Studies

Fleischmann, M., Bloemhof-Ruwaard, J. M., Beullens, P., & Dekker, R. (2004). Reverse logistics network design. In Reverse Logistics (pp. 65-94). Springer, Berlin, Heidelberg.

Govindan, K., & Popiuc, M. N. (2014). Reverse supply chain coordination by revenue sharing contract: A case for the personal computers industry. European Journal of Operational Research233(2), 3-5.

Blackburn, J. D., Guide Jr, V. D. R., Souza, G. C., & Van Wassenhove, L. N. (2004). Reverse supply chains for commercial returns. California management review46(2), 2.

Prahinski, C., & Kocabasoglu, C. (2006). Empirical research opportunities in reverse supply chains. Omega34(6), 5-7.

David A. Menachof, Brian J. Gibson, Joe B. Hanna, Anthony E. Whiteing, (2009) “An analysis of the value of supply chain management periodicals”, International Journal of Physical Distribution & Logistics Management, Vol. 39 Issue: 2, pp.145-165.

Dr. Rajiv Aserkar, Nihar Kumthekar and Shivani Aserkar, 2014, Investigating the Link between Supply Chain Performance and Brand Performance, International Journal of Humanities and Social Science.

Billington, C., Lee, H. L., & Tang, C. S. (1998). Successful strategies for product rollovers. Sloan Management Review, Sparing, 23-30.

Lee, H.L.(1996). Effective inventory and service management through product and process redesign. Operations Research 44 (1), 151-159.

Bowersox, D.J., Stank, T.P., Daugherty, P.J (1999). Lean launch: managing product introduction risk through response-based logistics. Journal of Product Innovation Management 16, 557-568.

Al-Mashari, M., Zairi, M. (2000). Supply chain re-engineering using enterprise resource planning (ERP) systems: an analysis of SAP R/3 implementation case. International Journal of Physical Distribution and Logistics Management 30 (3/4), 26-31.

Mohamed, K. S. & Omwenga, J. (2015). Supply chain risks mitigation strategies adopted by manufacturing firms in Kenya: A case of Coca Cola Company (K). International Academic Journal of Procurement and Supply Chain Management, 1 (4), 45-65

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Did you find any useful knowledge relating to reverse logistics within SCM in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Globalization and Outsourcing

Globalization and Outsourcing

Globalization is a phenomenon that has swept across most sectors of the globe leaving firms to adjust to the changes that are occurring. The rise of competition Is one example of an aspect that has emerged within the twenty-first century, especially due to a dissolution in trade barrier that marked numerous markets as impenetrable. With globalization escalating gradually, businesses have gained an exposure opportunity to learn more as well as share tips on better ways of approaching futuristic growth. The following report will expound on globalization as a phenomenon, as well as its associated impacts within the modern day era. 

From an entrepreneurship perspective, the duties and functions that defined the modern-day capitalist or businessperson, have significantly complicated with time. Ideally, the 21st century, unlike its predecessors, has been defined by a revolutionary economic, educational, political, and social landscapes, elements that have emerged as a result of globalization.

Interestingly, the emergence of the phenomenon has transformed the manner in which man does business, given that it has erased the limitations that were nurtured by geographical borders as well as trade barriers, an aspect that has resulted in man embracing new synergies that will offer him or her competitive advantage over other similar players in the same market niche. The following report will further expand on wise investment moves as well as tactics such as outsourcing and offshoring that managers can apply to realize a wider economy of scale as well as achieve a greater competitive advantage. By utilizing the Case study of Telstra Call center services Outsourcing and offshoring, this report will expound on the impact, opportunities, as well as challenges, Globalization, and its associated strategies, have imposed on business operations especially on the global scale.

The World as we know it is currently evolving at unprecedented levels, an aspect that is reconfiguring and transforming the manner in which business, as well as trade, is conducted. As a result of the rampant transformation, goods and services have become easily accessible for most people across diverse regions of the globe. In addition to this, the international business community has continuously expanded as a result of favorable influences that have been nurtured by the economic reconfiguration and transformation. But, what is all this economic reconfiguration and transformation? The 21st century, unlike its predecessors, has been defined by a revolutionary economic, educational, political, and social landscapes, elements that have emerged as a result of globalization. The emergence of globalization as a phenomenon has transformed the manner in which man does business, given that it has erased the limitations that were nurtured by geographical borders as well as trade barriers (Beck, U. 2018, P. 35).

From an entrepreneurship perspective, the duties and functions that defined the modern-day capitalist or businessperson, have significantly complicated with time. Why and How? With factors such as competition escalating as a result of the globalization aspect, most entrepreneurs have embarked on redefining the rules of trade and business engagement provoked by the need to craft and embrace new synergies that will offer them competitive advantage over other similar players in the same market niche (Hay, C. and Marsh, D. eds. 2016, p. 52). As a result of the shift in momentum, it is crucial to note that today’s economic environment has shifted its dependency from the public sector to the public sector, given that the later has emerged to be the global powerhouse, while the former segment has continuously shrunk in size, cumulatively losing its prior influence and relevance in the economy setting.

Globalization and Expansion

In spite of Globalization nurturing numerous advantages from an economic growth perspective, it is crucial to note that the phenomenon has also escalated the rate of competition present across all trade sectors. The given aspect has manifested as a result of numerous entities across diverse regions entering the market, with each unit producing a similar commodity, to an already existing product. The escalation of competition has provoked most organizations to invest heavily in expanding their operations onto a global scale, efforts that have emerged based on the need to grow and expand the market niche that each organization claims and controls (Beck, U. 2018, P. 27). As an approach, the expansion to international markets has provided firms with an opening to increase their returns, realize other potential economic opportunities, as well as improve their image perception and brand loyalty. Although there are also challenges associated with the entry into foreign markets, the manner in which a venture tackles the emerging challenges significantly determines its survival chance in the new territory.

Outsourcing and Offshoring

Outsourcing is a strategy that has been employed by numerous institutions, which have pursued the global expansion route, based on its cost-cutting approach. When entering new markets, firms have always been primarily challenged by their ability to adopt, embrace, and conform to new customs, cultures as well as language that define the new market (Solli-Sæther, H. and Gottschalk, P. 2015, p.90).

Outsourcing as a platform provides a solution to such challenges among others, by utilizing the local manpower within the new economic niche as the organization’s workforce. The following report will expound on globalization and its impact on today’s businesses as its foremost agenda. Furthermore, this paper elucidates on tactics that managers pursuing expansion into the international market should observe if they wish to remain ahead of the game. In the second segment, the publication will analyze outsourcing and offshoring, coupled with their contribution to globalization, based on an Australian firm Case study.

Globalization and Today’s International Managers

Globalization as a concept is not new as one may perceive it to be, given that the concept has existed for centuries, only evolving with time to its present state. By definition, Globalization is a term that refers to the gradual but global integration of the numerous states economies, through the production of goods and services, trade escalation, as well as investment flows (Hay, C. and Marsh, D. eds. 2016, p. 11). From a phenomenon perspective, globalization emerged as a result of the global outreach fever that swept most nations, transgressing through each of the states military economic, trade and geopolitical niches. The cumulative impact of the global outreach manifested in the erosion of national economic borders, an element that embraced the emergence and growth of integrated international economies.

From a profile perspective, globalization has been defined by; the emergence of global corporations, robust internalization of production related economic activities, growth in the level of specialization, and escalating disaggregation of production. How has this been possible? Globalization as a phenomenon has consistently relied on policy changes as well as technological growth as catalyst platforms (Teece, D. Peteraf, M. and Leih, S. 2016, p. 19).

From a policy perspective, the creation and amendment of numerous trade policies has resulted in the dissolution of trade tariffs and barriers, an element that has opened up and exposed the local markets to international products, while also local products from different nations have been able to trade on the global market platform (Beck, U. 2018, P. 42). Evidently, nations such as Australia, China, and Dubai, all of which opened up their markets to trade and embraced international brands, have gained immensely from Globalization, an aspect that is visible in each state’s current market situation. 

Technology as the second catalyst factor propelled the evolution of globalization to what it is today. How So? As a result of its rampant evolution, technology has been integrated into man’s life as a crucial platform in his civilization. The emergence of a technology-based lifestyle, shifted the manner in which consumers’ access, shop, and order for their products, as well as the strategy in which manufacturers, industrialists, and producers advertise, retail, and distribute their products (Hay, C. and Marsh, D. eds. 2016, p. 52). Given that the dependency on technology is still expected to escalate with time, the business world has realized of its importance in globalization and the influence it imposes in the productivity, of goods and services as well as the consumption of the products.

Impact of Globalization: A Business Perspective

Globalization as an economic exposure platform has brought along with numerous advantages as well as implications both from the producer as well as consumer’s perspectives. When focusing on the producer side, which primarily made up of entrepreneurial organizations within the private sector, it is crucial to note that globalization has exposed the sector to competition, fluctuation in prices, as well as the substandard quality of products (Kraidy, M. 2017, p. 31). The following segment will offer an in-depth view of Globalization from a business perspective.

It is crucial to note that from the consumer’s end, globalization has been perceived to bear numerous benefits over time. However, that may not be necessarily the case when the aspect is perceived from a business perspective. The increased exposure of markets has also escalated the vulnerability of ventures both in local and international economies to a myriad of unforeseen risks, aspects that will be expounded on below.

Globalization and Outsourcing Dissertation
Globalization and Outsourcing Dissertation

Intense Competition

Competition as the first impact of globalization emerges from the opening up of local markets as well as the integration of economies. It is crucial to note that exportation and importation, as well as outsourcing of product and services are crucial aspects of globalization. Unfortunately, the given elements have created an influx of substitute commodities to most products in diverse markets (Donati, P. 2017, p. 15). The cited aspect which has emerged as the entry of new players into the market culminated in the escalation of competition between existing firms and the new entrants. Cumulatively, although the approach has compelled previously existing firms to improve their quality of products and services, it is unfortunate to note that the cost of competition has been overwhelming for firms in markets that are defined by numerous players.

Price Fluctuations

Fluctuation of prices as the second impact of globalization is highly associated with competition and market saturation. It is crucial to note that although globalization opened up local and international markets, the platform also led to the saturation of various markets that were already defined by a presence of numerous existing local players. Most of the international entrants into local markets were able to supply the consumers with alternative or substitute commodities, to local options at a lower price and even a better quality (Teece, D. Peteraf, M. and Leih, S. 2016, p. 27). Case in point, China’s products are renowned for their cheap price, although inconsistent quality. The given aspect nurtures price fluctuation of commodities because local producers will always be compelled to adjust their prices in a bid to compete with foreign producers, and the cost of their commodities, an aspect that culminates in the unsteady prices of goods.

Substandard Quality of Goods

The quality of a product as well as the brand it has crafted for itself, are aspects that significantly shape customer loyalty and satisfaction. Globalization as a phenomenon has compelled most firms operating in the international platform to outsource their products to developing nations, in a bid to realize a wider competitive advantage, margin when compared to other firms operating in the same niche (Kraidy, M. 2017, p. 22).

The downside of outsourcing is that for most organizations, the ability to observe a given set of quality standards becomes impossible especially when the firm focuses on offering services, or manufactured goods. Cumulatively, although globalization is inevitable, its impacts can be positive as well as be overwhelming for organizations without adequate control structures. The following segment will expound on strategies that international managers can adopt in a bid to remain afloat if not advance in the face of stiff and harsh globalization-induced changes.

Today’s International Managers: Winning tips amidst fierce competition

Drawing from the above analysis of globalization, it is evident that the phenomenon has significantly reshaped the manner in which organizations functions, and conduct business, especially within the international market platform. In spite of the prevalent changes, there are several tactics that wise international managers can utilize to continuously attain growth in returns, and market share. In addition to this, the tactics will enable an organization to establish a reputable image that retains a wide base of loyal customers.

Globalization, Identifying and analyzing the existing and potential Competition

For an organization to stay ahead of its competitors within any market niche, the firm should be aware of the existing threats, an aspect that can only be realized by conducting a thorough competitor’s analysis. It is crucial to note that any industry with new players and startups joining every day is considered to aggressively active, and as such, any firm operating within such a niche should consistently update its analysis in a periodical manner (McLean, M. 2018, p. 35). When analyzing the potential threats, it is crucial to identify the primary and secondary competitors as well as the level of threat each player imposes on your particular firm. By doing so, a manager can analyze the strengths and weaknesses of potential and existing competitors, in addition to making strategic moves that will consistently position the organization ahead of the competition. 

Assessing and Understanding the Target Market

In any business competition, it is crucial to note that the clients or consumers always represent the judges, as their choice embodies their final opinion about their desired product. In any market niche, a wise international manager will always assess the audience, its expectation, and needs, as well as demands. It is crucial to note that consumer behaviors keep on changing depending on the influence of macro factors such as economic conditions (McLean, M. 2018, p. 54). In such an instance, an astute director establishes constant communication with the organization’s existing and prospective clients, as an approach to remain informed and update on consumer concern, predictions as well as desires. By doing so, a firm can adjust its product pricing, market strategies, product packaging, and promotional campaigns in a manner that will attract potential clients and retain the existing ones.

Outsourcing and Offshoring, Telstra Case study

Outsourcing, when defined, refers to the process whereby a firm subcontracts the organization’s tasks and mandates to various external organizations that have specialized in providing the desired service. In other cases, outsourcing also involves a practice whereby an organization acquires a smaller firm with adequate resources and employees to run its tasks. Cumulatively, outsourcing revolves around the breaking down of a given function, and it’s subsequent assigning to third parties (Oshri, I. Kotlarsky, J. and Willcocks, L. 2015, p. 15).

Offshoring, on the other hand, refers to the purposeful relocation of a specific or cumulative business procedure to another new location, such as a country. A good example of offshoring would be when an industrial firm physically relocates its manufacturing process to a new state. The main difference between offshoring and outsourcing is that the former focuses on establishing an operation in a new state as a result of repositioning, while the latter primarily refers to the subcontracting of a firms’ task or duty to a third party which in most cases is usually an external organization (Solli-Sæther, H. and Gottschalk, P. 2015, p.90).

 The fierce aspect of globalization has compelled firms’ overtime to search for innovative and alternative approaches to getting the work done efficiently. Outsourcing and Offshoring have emerged to be promising alternatives means of meeting the production needs of any company. By employing the two approaches, numerous international firms have been able to regulate and cut down operational costs, free up internal resources to support other crucial sectors, and streamline time-consuming functions (Oshri, I. Kotlarsky, J. and Willcocks, L. 2015, p. 48). 

Telstra Outsourcing

Telstra within Australia is presently recognized as the largest media and Telecommunications Company, offering services that include; operating telecommunication network, as well as a vast range of entertainment and communication product and services. As a firm, Telstra prides its purpose to be creating a brilliant and connected future for everyone, a vision it has managed to achieve over time through the expansion of its products and services towards the international telecommunications market.

Expanding into the international market is a move that Telstra implemented provoked by the need to grow the company’s portfolio onto the next level, in addition to embracing the global market platform (CX Central. 2018b, p1). In its expansion operations, the firm has gradually relied on outsourcing and offshoring as approaches to realize its economies of scale and competitive advantage over other players present in the telecommunications industry. One particular and crucial department that the firm has constantly outsourced and offshored to India, Manila, and Perth is its call center operations (CX Central. 2018, p1).

Essentially, under the firm’s international operations plan, Call centers are usually overwhelming departments that are defined by large volumes of low severity type of work. If the firm was to house most of call center operations within its main headquarters back in Australia, evidently quite extensive resources would be committed to the department, to the extent of overwhelming significance performance targets of the institution. Thus by outsourcing and offshoring call center services, the firm is primarily able to focus its resources on dealing with challenging and more severe issues affecting its product portfolio, brand depiction, and customer market base (CX Central. 2018, p1).

Challenges of Outsourcing and Offshoring

Two of the major challenges that Telstra has realized in its international expansion conquest, are cultural and language barriers. As a telecommunication firm, Telstra is constantly in touch with its customer base compelled by the need to introduce and sell new products, as well as offer supportive services (CX Central. 2018b, p1). Given that the firm opts to outsource and offshore its call center operations, most of its customer base across the western world have been complaining of an ineffective call center support base, as in most situations their needs and demands have often been unmet (CX Central. 2018b, p1).

One good example was a recent scenario, where an American customer received poor call center support services that were perceived to be abusive and culturally insensitive, especially after the firm had withdrawn its support for same-sex relationships (CX Central. 2018, p1). It is unfortunate to note that the given aspect resulted from a conflict in cultural and linguistic customs between the firm’s support staff and a worried client, an aspect that could have been deterred if the firm offered locally based call support from America or Australia.

Globalization, Outsourcing and Offshoring Opportunities

From an opportunity perspective, Telstra was able to run its call center support services at a lower cost especially given that the standard labor wage of employees in most of the countries that the firm outsourced its operations are way below what Telstra was offering its initial employees. Additionally, the firm, thanks to outsourcing and offshoring was able to free up more resources back at home and commit them to more severe and demanding issues associated with the firm’s growth and future projections.

In conclusion, it is evident that Globalization is a phenomenon that is here to stay. More so, firm’s that do not embrace this occurrence will gradually become outdated in our ever-changing and first paced world. As economies integrate, there is a crucial need for managers to begin “thinking out of their market niche, and across the globe.” Customer preferences change from time to time, and with that being a significant determining factor of choice, firms should consistently lay down moves that will secure more potential customers besides retaining the existing ones. Additionally, with competition emerging to be a significant defining factor of today’s markets, there is a pressing need for firms to adopt positive elements of outsourcing and offshoring, besides other competition analysis schemes, all in a bid to remain ahead of the curve that is a saturated market full of numerous existing and emerging start-up players. 

References

Beck, U., 2018. What is globalization?. John Wiley & Sons.

CX Central. 2018. Telstra call centre staff in Perth have language problems – CEO | CX Central.

CX Central. 2018b. Telstra’s offshore call centre has a cultural alignment shocker– CEO | CX Central.

Donati, P., 2017. Globalization of Markets, Distant Harms and the Need for a Relational Ethics. Rivista internazionale di scienze sociali, 1(1), pp.13-42.

McLean, M., 2018. Understanding your economy: Using analysis to guide local strategic planning. Routledge.

Oshri, I., Kotlarsky, J. and Willcocks, L.P., 2015. The Handbook of Global Outsourcing and Offshoring 3rd Edition. Springer.

Solli-Sæther, H. and Gottschalk, P., 2015. Stages-of-growth in outsourcing, offshoring and backsourcing: Back to the future? Journal of Computer Information Systems, 55(2), pp.88-94.

Teece, D., Peteraf, M. and Leih, S., 2016. Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), pp.13-35.

Kraidy, M., 2017. Hybridity, or the cultural logic of globalization. Temple University Press.

Hay, C. and Marsh, D. eds., 2016. Demystifying globalization. Springer.

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Management Practices Business Strategy

Management Practices and Business Strategy

Despite the fact that research findings are mixed, it is beyond a reasonable doubt that management practices are related to productivity, growth, decline, and failure in organizations. This report sets forth a multidisciplinary review and summary of evidence of such a relationship. The report presents a thorough and meticulous scrutiny of three peer-reviewed journal articles in terms of how management practices relate to growth, productivity, failure, and decline of companies. The articles include Bloom et al. (2012) study, Sadun et al. (2017) study and Teece (2007) study on management practices and explicating dynamic capabilities respectively. Taken as a whole the three research articles share similar sentiments. They both establish a solid positive relationship between management practices, growth, productivity, failure, and decline. Nonetheless, in extensive literature review, research findings seem equivocal.

Some researchers have established a positive relationship between management, growth, productivity, failure, and decline, some have found a negative correlation while others no correlation at all (Bender, Bloom, Card, Van Reenen & Wolter 2018). According to Bloom et al. (2019), it can be argued that the deficiency of a consensus might have been prompted by either issues related to the level of analysis or measurement. With this said, there is an urgent need for further research especially in terms of a multi-level approach to evaluate the impact that management practices have on productivity.

Management Practices, Productivity Growth, and Decline

There have been endless debates as to whether organizations are likely to succeed if they embrace good management practice. Scholars have been conducting studies for over a decade now to end these debates. The scholars have endeavored to reexamine the long-held assumptions to confirm whether they stand the test of time (Bloom et al. 2019). Since the time of Frederick Taylor’s work on principles of scientific management, organizations have traditionally followed a formalized set of best practices including three practices that are considered essential to good management such as targets, incentives, and monitoring. Most organizations around the world are poorly managed. The well-managed organizations establish achievable targets on productivity and growth as well as gauge the promotions and compensations they give on attaining the set targets (Bloom, Sadun & Van Reenen 2012). Unlike poor managed organizations, these companies continuously measure results.

Better management practices are strongly correlated with superior performance, increased return on capital, as well as increased productivity. It is clear that core management practices cannot be taken for granted. With this said, there are significant differences in terms of how organizations accomplish basic tasks such as grooming talent and setting targets. Those organizations with robust managerial processes perform significantly superior on metrics of high level like profitability, productivity, longevity, and growth (Ghoshal 2005). The differences in performance and quality of such processes persist with time signifying that core management practices cannot be replicated easily.

Operational excellence matter a lot but it should be viewed as a critical complement to strategy. In this regard, if an organization cannot put its operational fundamentals right then it does not matter how good the strategy is (Wong 2020). Again, if organizations maintain, for instance, sound management practices, these firms can leverage them to create dynamic capabilities like evidence-based decision making, data analytics, as well as cross-functional communication that is crucial to thrive in a volatile and uncertain industry. As much as it requires a sizable investment in processes as well as people throughout the bad and the good times, attaining managerial competence calls for ultimate effort and the investments bring along a key barrier to imitation (Yeow, Soh & Hansen 2018).

Productivity is a notable metric of economic progress and revolves around issues related to economic growth, incomes, as well as competitiveness. Productivity is molded by management practices, global market structures, competencies, and skills of people, as well as the adoption of new technologies (Yeow et al. 2018). A growing body of evidence posits that organizations that engage in target setting, performance-centered human resource management, as well as extensive use of data analysis are more productive and exhibit increased productivity growth levels as opposed to those with fewer formalized management practices.

This evidence has a particular focus for the manufacturing sector where most recent studies have been based; nonetheless, it is also becoming strong for the service sector as well (Bloom et al. 2019). Information on management has been lacking until recently. Small sample analyses and case studies can avail expedient anecdotes; however, they fail to generalize to the wider economy because of unrepresentative samples and a narrower focus.

In the contemporary turbulent competitive business landscape, organizational managers are striving to achieve competitive advantages to beat competition through the efficient as well as effective use of resources. Good management practices at all organizational levels has been proven and is increasingly being accepted as the sure way of improving productivity and growth (Bloom et al. 2012). With this said, improved levels of productivity allow organizations to fulfill all their obligations to suppliers, government, stakeholders, consumers, as well as employees while still staying competitive.

Research shows that organizations that apply the accepted management practices across the globe perform better that those that fail to do so. This assertion implies that the improved management practice is among the most effective approaches organizations can employ to outpace their rivals (Ghoshal 2005). Greater competition pushes for improved management practice, labor market flexibility, on the other hand, leads to better habits of people management and the well-managed organizations are those likely to have highly educated employees.

Dynamic Capabilities and Management Practices

Organizations that maintain sound management practices leverage them to create dynamic capabilities. Recent studies have put a particular focus on the significance of dynamic capabilities to organizational success and longevity (Teece, Peteraf & Leih 2016). With reference to organizational theory, the dynamic capabilities entail an organization’s ability to build, reconfigure, as well as integrate the external and internal competencies to address the fast-changing business environment (Fainshmidt, Wenger, Pezeshkan & Mallon 2019). The term dynamic capability was first coined by David Teece in the year 1997. Dynamic capabilities reconcile incongruous philosophies that an organization can be stable enough to deliver to its clients original and distinctive value while remaining adaptive enough to adjust when conditions suggest so.

According to Wong (2020), dynamic capabilities are tied to original management practices and business models making it hard to imitate them; they allow for extension, modification, as well as creation within a firm. The development of the iPod, for instance, is a good example of dynamic capabilities (Felin & Powell 2016). After realizing that the mp3 players were aesthetically unattractive and large, Apple grabbed the opportunity to design smaller and more appealing iPods. The company then switched its focus to consumer electronics as opposed to just sticking to computers.

The move has allowed Apple to dominate both the music and portable digital music player industries. This approach by Apple depicts the company as a creative and aesthetically focused firm. With this said, developing dynamic capabilities depend on three core organizational activities including sensing, seizing, and transforming (Sadun, Bloom & Van Reenen 2017). Sensing entails the evaluation of consumer needs as well as opportunities that are external to the firm; seizing which entails the reaction of a firm to the needs of the market to maximize the company value including securing access to resources as well as designing innovative business models.

Transforming, on the other hand, involves the renewing of organizational processes as well as maintaining the processes relevance to customers (Shao 2019). This calls for managers to continuously improve, iterate, as well as streamline processes.

The dynamic capability concept has been linked to a resource-based view of the organization as well as to the idea of ‘routines’ in the organizational evolutionary theories. The dynamic capabilities emphasize more on the concept of competitive survival to address the changing business conditions while the resource-based view stresses on sustainable competitive advantage (Felin & Powell 2016; Yeow et al. 2018). It is argued that dynamic capabilities serve as a bridge between evolutionary approaches to organization and economics-based strategy literature (Yeow et al. 2018). The dynamic capabilities theory entails the establishment of stratagems for managers of organizations to adapt to rapid intermittent change whereas sustaining the minimum capability levels to ensure competitive survival (Sadun et al. 2017).

Industries that rely on particular traditional manufacturing processes are not positioned to alter the process on short notice especially when tech arrives. However, when this transpires, organizational managers are required to adapt their routines to make the most out of their resources whereas concurrently planning for the future changes in processes as resources denigrate (Shao 2019). With this said, the type of change being emphasized by the theory of dynamic capabilities are the internal capabilities and not the external forces of business.

Although further research is required to measure dynamic capabilities as well as suitably apply the concept to practical management contexts, many scholars argue that the theory of dynamic capabilities is tautological and vague (Sadun et al. 2017; Teece et al. 2016). This assertion seems to hold true, as much as the theory is very helpful when it comes to addressing the rapid changing business conditions, it still fails to explain how to do so.

According to Teece et al. (2016), the theory’s capabilities are difficult to operationalize and identify as well and at other times, the very capabilities could prompt the core capabilities into turning the core rigidity (Felin & Powell 2016). In this regard, some studies have argued that it still hard to apply the theory in its present state without being in a position to develop, identify, as well as specify the capabilities. Nonetheless, recent studies have introduced a mechanism from the theory of dynamic capability for net enablement called the “Net-Enabled Business Innovation Cycle” to further an understanding as well as help predict how organizations transform the dynamic capabilities linked to net-enablement into consumer value using the theory (Shao 2019; Sadun et al. 2017).

The net-enabled organizations are able to constantly reconfigure their external as well as internal resources to apply digital networks in exploiting opportunities via routines, rules, analysis, and knowledge to create consumer value from the net-enablement capability (Sadun et al. 2017).

Businesses maintain portfolios of the hard to trade and idiosyncratic assets as well as competencies and competitive advantages can flow right from the sustenance of scarce but difficult to imitate resources such as expertise and novel ideas (Felin & Powell 2016; Teece 2007). Nonetheless, in the rapid changing business environment characterized by stiff competition, sustainable competitive advantages demand more than just the possession of hard to imitate assets; it demands the unique and hard to imitate dynamic capabilities (Teece 2007). Such dynamic capabilities can be leveraged to constantly help to extend, protect, create, as well as upgrade the unique organizational assets.

How the Findings Might Help Improve the Performance of the Firm

For the company that I operate in, the findings of this report are good news. These findings posit that the company has access to any performance improvements only by applying and implementing good management practices already used by other firms. Very few firms have management practices that are above average and the need to spread the word to thousands of underperforming organizations is urgent. A bigger part of the opportunity for improvement rests with local managers. To determine how far behind the company is, managers must rigorously assess their own management practices and contrast them with others. These managers can benchmark themselves by industry and country (Bender et al. 2018). Awareness is very low and should be the first initiative to be taken by the company managers.

After establishing where they need to improve, managers must start to embrace a slow but steady growth. Successful companies have reached greater heights by making good beginnings through the identification of processes that require immediate change and then afterwards developing the metrics to monitor advancement over long and short term. In this regard, goals must be visible to all employees and translated into group, individual, as well as company wide targets that are to be monitored meaningfully.

Of course, immediate results cannot be expected but by establishing powerful incentives, focused targets, as well as constantly monitoring performance could be effective in diving future greater shifts. Global organizational have be obliged to embrace a systematic management approach and only through maintaining robust as well as effective management practices have they managed to replicate similar performance standards across various cultures, markets, and regions (Ghoshal 2005). With this said, these organizations are realizing the benefits that come with good management practices including better capital returns, increased growth, as well as higher productivity. These benefits are readily accessible to other firms but very few have made efforts to obtain insights into the quality of their management practices. Nonetheless, those that do so enjoy the access to cost effective as well as sustainable competitive edge.

Management Practices Business Strategy
Management Practices Business Strategy

Lessons

The review of the three articles is fundamental to the credibility and rigor of research in social science. Obviously, the articles feature fundamental differences when it comes to format, length, and content but they both share similar sentiments. The articles are characterized by work built on management surveys across various companies. A critical lesson drawn from these studies is that it is a limitation to focus only on senior managers when providing feedback in research surveys because in sociological literature, there is varying opinions between senior managers and workers within the same company when it comes to evaluating management practice. With this said, workers might provide a valuable counterpart point of view to their managers’.

Another lesson drawn from review of articles is that unlike quantitative studies, qualitative research reports need a thick description of phenomena and context. This result from interpreting and describing observed behavior within a particular circumstance. Reports placed in this context must go beyond mere fact to present detail as well as webs of relationships that join dots to establish event sequence for the topic in question. Actions, meanings, feelings, as well as voices of persons are heard in thick description. Further, a thick description gives a balanced view of interpretation and analysis while showing that the research reflects thoroughness, appropriateness, and rigor. I have learned that this approaches supports transferability and trustworthiness of research to other contexts.

Further, another lesson drawn from the review of the articles is that it is paramount to establish a clear sense of urgency, small goals, and a clear research focus to be able to sort through immense data volumes as well as coalesce different data pieces towards building a remarkable interpretation of data with extrapolations on composite and dynamic literature. Additionally, tuning an empirical psychological science focus that is characterized by abstract reasoning and analysis helps to establish a contextual sensitivity that allows one to develop strong associations between the perspective of the author and the context in which research is founded.

Another lesson drawn from the review of articles is that to successfully scrutinize literature, a person must develop a well-structured workflow and a detailed oriented mindset to achieve a methodical review or else one might get overwhelmed and focus on mere data exploration. Further, a person needs to develop inspective reading and read ravenously to point out specifics as well as gaps in literature. However, for a successful review and summary of literature, a person needs to develop a data-driven mindset that will allow the individual to think outside the box to ensure his/her evaluation expertise serve the purpose.

References

Bender, S., Bloom, N., Card, D., Van Reenen, J., & Wolter, S. 2018. Management practices, workforce selection, and productivity. Journal of Labor Economics36(S1), S371-S409.

Bloom, N., Brynjolfsson, E., Foster, L., Jarmin, R., Patnaik, M., Saporta-Eksten, I., & Van Reenen, J. 2019. What drives differences in management practices? American Economic Review109(5), 1648-83.

Bloom, N., Sadun, R. & Van Reenen, J., 2012. Does management really work? Harvard business review, 90(11), pp.76-82.

Fainshmidt, S., Wenger, L., Pezeshkan, A., & Mallon, M. R. 2019. When do dynamic capabilities lead to competitive advantage? The importance of strategic fit. Journal of Management Studies56(4), 758-787.

Felin, T., & Powell, T. C. 2016. Designing organizations for dynamic capabilities. California Management Review58(4), 78-96.

Ghoshal, S. 2005. Bad management theories are destroying good management practices. Academy of Management learning & education4(1), 75-91.

Sadun, R., Bloom, N., & Van Reenen, J. 2017. Why do we undervalue competent management? Harvard Business Review95(5), 120-127.

Shao, H. X. 2019. Developing Organizational Dynamic Capabilities in Project-Based integrated Solution: A Study of Servitization in Chinese Water treatment Industry.

Teece, D., Peteraf, M., & Leih, S. 2016. Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review58(4), 13-35.

Teece, D.J., 2007. Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic management journal, 28(13), pp.1319-1350.

Wong, A. 2020. The Key to Keeping Up: Dynamic Capabilities. California Review Management.

Yeow, A., Soh, C., & Hansen, R. 2018. Aligning with new digital strategy: A dynamic capabilities approach. The Journal of Strategic Information Systems27(1), 43-58.

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Insider Trading University Essay

Insider Trading Ethical or Not?

Insider trading is malpractice that involves buying and selling stocks using information that is not available to the public. The practice gives some traders an unfair advantage over others, and it is a punishable crime. Insider trading is commonly found among the corporate officers or people who receive the non-public information. Traders are always tempted to carry out this malpractice to make more profits than others or avoid losses. This act is illegal, and the Securities and Exchange Commission usually investigates and prosecutes it. However, insider trading can be legal if the trading is done based on information that is available for public use. This papers aim is to discuss why insider trading is considered unethical and finding out if allowing insider trading would hinder the operation of the stock market in raising capital for new and existing companies.

Is Insider Trading Ethical?

Insider trading is unethical because it involves exploiting the knowledge that is only known to a few people. The insiders are usually given an unfair advantage that allows them to benefit from information of the stock market before the general public. These people get to exploit the opportunity before the rest making accumulative profits and avoid risks. Generally, insiders ought to maintain a fiduciary relationship with their companies and shareholders so when they try to benefit from the inside information puts their interest above the people they serve. The practice is unethical since the insiders are supposed to protect the interests of the entities they serve rather than using it to their advantage.

There are other times the people on the inside divulge the information to the people on the outside (Alldredge, 2015). The process involves a tipper and a whistle-blower, with the tipper being the person who divulges the information to the outsider and the tepee the receiver of the data. The whistle-blower then utilizes the information obtained to seek profits or avoid financial losses in the stock market. As much as the tippler may not benefit directly, it is still unethical since it makes some people gain unfair advantages over others.

In most cases, insiders are after personal gains at the expense of the investors and the company at large which is unethical. On moral grounds such as actions are unjust and are termed as a fraud. The investors feel unsafe and insecure to invest since they lose trust that they hold to the insiders.

Any interests in a stock market must look after the interests of all shareholders and not just favoring a few (Skaife, 2013). Generally, insider trading betrays investors’ trust; insiders act on data that is not available to shareholders for monetary gains, officers of a company are acting to satisfy their interests. The insider trading is an unethical practice and should be checked on and brought to a stop.

However, there some people who argue that insider trading is not a bad practice. Such people insinuate that insider trading allows for all the relevant data to be reflected in the shares’ price. The process makes the security it easy for investors to understand the costs before purchasing the shares (Alldredge, 2015).

In such situations, potential investors and current shareholders are able to make informed decisions on purchase and sale respectively.  Another argument is that barring the practice delays something that will eventually take place. Blocking investors from accessing the information on the price changes can subject them to buying or selling shares at losses which could have been avoided if the information had been available.

Insider Trading University Essay
Insider Trading University Essay

Insider trading hinders the operation of the stock market in raising capital for the new and existing forms. Instances when a few people benefit from the stock’s information, investors lose trust in the company hindering them from participating in the activities of the stock market. The process leaves the stock markets with nowhere to gets funds consequently affecting the market’s ability to carry out its operations. Without the services then it becomes difficult for the stock markets to finance new or existing companies (Skaife, 2013).

Additionally, when insiders reveal security’s information to some people before the sales take place, the stock markets become integrated affecting the stocks prices. The stock market fails to exploit the pricing advantage since buyers already know what to expect. The process may cause the market to suffer losses making it difficult for the market to raise cash for other firms. Generally, insider trading is allowed to continue, and it can lead to many investors being driven away and avoiding the practice.

Insider trading affects general business management and decision making. Managers may make wrong on a particular situation using the inside information which is not reliable all the time. On top of that, insider information influences investor decisions impacting the stock’s market price or valuation. For example, when the investors are aware that the price of shares is going to drop they sell their shares in advance to avoid losses consequently impacting a firm’s stock valuation.

Conclusively, insider practice is an unethical practice since it favors some people over others. The people on the side get to exploit nonpublic information for their benefits at the expense of the investors. The investors lose trust in the whole process of stock exchange and with time they get driven away. The method may leave the stock exchange market with funds that are needed to finance upcoming and existing companies. Insider trading is unfair and unethical since it involves lying to the investors and should be stopped to avoid negatively affecting the economy.

References

Alldredge, D. M., & Cicero, D. C. (2015). Attentive insider trading. Journal of Financial Economics, 115(1), 84-101.

Skaife, H. A., Veenman, D., & Wangerin, D. (2013). Internal control over financial reporting and managerial rent extraction: Evidence from the profitability of insider trading. Journal of Accounting and Economics, 55(1), 91-110.

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Coca-Cola Principles of Management

Coca-Cola is a multinational company which has been in the market for a long period of time. For it to survive, the company has adopted proper planning and strategies to its market and customer base. The main theme has been to make Coca-Cola products a refreshing beverage to all people. This theme has been maintained because the company has more than three thousand beverage products that market and customer. t are consumed by its portfolio. In order for this drink to be available to every part of the globe, Coca-Cola has so many companies that help in product distribution (Jones and Comfort, 2018). To have such a range of the beverage products selling well globally require proper strategic plans and marketing strategies. This is because the product has to penetrate through to customers of different cultures, tastes and preferences. Moreover, a strategy which works in one country might not work in another country. For instance, there have been campaign logos like a ‘delightful winter or summer drink’ which have been growing on the media. This advert logo was indicative that Coca-Cola products can be consumed at all times, all year round.

Coca-Cola Strategy, Vision and Mission

The second theme concerns the strategy, vision and mission of this company which are always progressive to make Coca-Cola beverages the first drink of choice by the customers on all occasions any time. The vision, mission and strategy for this company combined at the moment focused on vision 2020. While in 1989 F. David had developed nine components of the mission namely: technology, products, customers, philosophy, location, self-concepts, survival, public image concerns, and employees concerns. Currently, these components have changed and reduced to five, namely: people, portfolio, planet, profits and productivity. Out of these, the company has placed more emphasis on the component of people.

In this case Coca-Cola provides a good working environment through inspiration, and by supporting customers through supporting sustainable community projects. There are links between the former and the current these because some of them have been merged to reduce them from nine to five, while maintaining the final aim. At that time (1989), the mission and vision of the Coca-Cola Company was to sustain the business, improve the public image and meet the concerns of its employees. Once the component of people is properly handled, then customer and employee loyalty increases and hence more sales and profits. Coca-Cola engages in corporate social responsibility, then customer and employee loyalty increases and hence more sales and profits. 

A priority task to provide self-interest as well as care to the people and environment (Smarandescu and Shimp, 2015). Thus, the company has been producing disposable bottles annually. Based on the strategy of making positive contributions to all stakeholders, Coca-Cola USA has partnered with the government to encourage recycling of wastes materials.

Coca-Cola Management Dissertation
Coca-Cola Management Dissertation

Coca-Cola Mission Statement

The major role of the mission statement for a large organization like Coca-Cola is to make the customers, employees and other stakeholders aware about details of what the company is all about as well as the goals of the company (Gertner and Rifkin, 2018). The three mission statements of Coca-Cola are: to refresh the world, inspire moments and happiness, and to create value and make difference. By inspiring moments and happiness, Coca-Cola offers to its customers the beverages of high quality which refreshes their world and creates inspiration via the identity of their brand. The company creates value to stakeholders by participating in sustainability practices which benefits all stakeholders.

An example is the sponsoring of community based activities that have a common good. However, there some contradiction with regards to this mission due to increased solid waste, until the company gets to a point where they can reduce a large portion of the generated wastes. To refresh the world, Coca-Cola has engaged in innovative practices to produce so many beverage brands for its customers globally. From the perspective of Coca-Cola Company, the three points of mission statement have made the company the leading beverage company for so many years.

In the 1980s, most companies were aligned to continued improvement so that a business could survive for a number of years. However, Coca-Cola aligns to the portfolio aspect vaguely, although these companies have been in the process of increasing quality of the products for the consumers through continued improvement.

Reflection

I have come to clearly understand the significance of strategy and planning in a business organization. Without plans that are geared towards the customers, a business is bound to fail. This is because the interest of the customers is the most important.

Considering a company like Pepsi, their vision statement has lid more emphasis on financial performance. However, by concentration on meeting customer expectations and creating a loyal brand, sales and profits follows suit. However, this company also has statements similar to those of Coca-Cola such as corporate social responsibility and sustainability practices.

Coca-Cola has gone a step further to involve its staff in supporting various actions, more so the charity organizations, such as the Wings and Wishes. This is because, in some instances, poor or lack of philanthropic image can damage the long term plans of an organization. This is takes especially when the customers fail to appreciate the efforts of the corporate organizations.

There are a number of advantages and disadvantages associated with teamwork. For instance it increases productivity because a task is distributed based on the teams’ individual abilities. This division of tasks in teams also avoids task duplication and saves time (Costa et al., 2014). It also increases motivation where every team member feels as part of the team. However, teamwork could be associated with some disadvantages too. For example, there might be unnecessary wastage of time, especially when making decisions. This is because each team member has their own opinions and this might take a long time before the final decision is arrived at.

In assignment, since I was not in a group, I found challenges in completing the assignment. While it was easy for me to make decisions on the materials to use for the assignment, I took a long time to compile the important materials and come up with the final output. However, I have learned to make rational decisions and to utilize time properly especially when tasked with a complex issue to solve. Moreover, since I was not in a group I have learned innovative methods when handling complex and challenging tasks so as to come up with a fine output based on the requirements.

References

Jones, P. and Comfort, D., 2018. The Coca-Cola Brand and Sustainability. Indonesian Journal of Applied Business and Economic Research, 1(1).

Smarandescu, L. and Shimp, T.A., 2015. Drink coca-cola, eat popcorn, and choose powerade: testing the limits of subliminal persuasion. Marketing Letters, 26(4), pp.715-726.

Gertner, D. and Rifkin, L., 2018. Coca‐Cola and the Fight against the Global Obesity Epidemic. Thunderbird International Business Review, 60(2), pp.161-173.

Costa, P.L., Passos, A.M. and Bakker, A.B., 2014. Team work engagement: A model of emergence. Journal of Occupational and Organizational Psychology, 87(2), pp.414-436.

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