Tesla Strategic Management

Strategic management

It is true to consider strategic management as an evolutionary and a destination because it plays a significant role in ensuring that a corporation such as Tesla is successive in its endeavors. The success of the firm largely depends on the management that has the key role in making key decisions that will dictate the way forward by facilitating the achievement of organizational mission, goals, and objectives. By definition, strategic management covers all the company’s stakeholders interest by relying on the management to make decisions that safeguard each stakeholder’s interest by considering the available resources, how well they can be utilized and at the same time keep in mind both internal and external forces acting on the firm (Sekhar, 2009).

Among key roles that the management of a corporation is required to play is ensuring that the company chooses the best strategies that will give the company an advantage over its competitors to ensure that maximum profitability is achieved and maintained. Therefore, it is important for a company to be competent by ensuring that products offered are able to meet the customer’s expectations and also balance the needs of other stakeholder’s such as suppliers, the government and employees among others.

Examples of Strategic Management

Recently, there has been rising concern about climate change and the negative impact that the situation has on the environment with regard to environmental pollution which poses a threat to all existing life forms. Among the cause of environmental pollution include emission of greenhouse gases such as carbon dioxide as a result of human activities and depletion of natural resources such as oil. Consequently, Tesla Inc. being a strategic company, Elon Musk who is the company’s CEO has opted for the company to explore alternative renewable energy to ensure that sustainable development is achieved.

One of the ways that the company is practicing strategic management is through environmental preservation by manufacturing electric powered automobiles to get rid of carbon emissions in the atmosphere (Doeden, 2015). The company employs a supply chain management strategy whereby unlike most automobile manufacturers, the company owns that whole supply chain from the points of manufacture to distribution. It also facilitates a growth strategy whereby the corporation invests significantly on Research and Development so that it can be able to come up with new inventions such as the Model X and Model 3. Autonomous cars are among the latest inventions whereby vehicles will not only be able to drive themselves, but also will be powered by electricity instead of gasoline (Bilbeisi & Kesse, 2017).

Tesla Goals and Objectives

Among the companies goals are to have as many electric-powered cars as possible on the road after it launched the first semi-autonomous autopilot system back in 2016. Musk had the objective of having 500,000 cars on the road by this year depending on governments’ efforts to pass laws that will allow consumers to possess and drive the cars. This kind of technology is referred to as “level 4 autonomy.”

Another goal is to put in place the necessary charging infrastructure that will be able to supercharge the vehicles in 30 minutes or so. This will ensure that drivers will be able to add a range of 200 miles in their cars in half an hour. This makes the corporation the only manufacturer to offer drivers such a range in the shortest recharging time. In addition, the company has partnered with Panasonic to provide customers with lithium batteries (Bilbeisi & Kesse, 2017). This will not only ensure that the company cuts back on battery cost but also ensure that the same are available to customers at a reasonable price. To facilitate battery production, the company opened a Gigafactory in Nevada. The batteries are not meant for use by cars only but also supply alternative energy to residences and factories.

Corporate Governance

Traditional Roles of Board of Governors

The success of every business organization relies on the competency of the management which is why the Board of governors plays a significant role in corporations such as Tesla Inc. One of the roles is corporate governance. The board is responsible for overseeing the governance practices and structures to ensure that work ethics are adhered by seeing to it that corporate responsibility is followed to the latter. The board facilitates evaluation by conducting annual assessments which are meant to identify areas that need change or modification so that the firm can be able to improve its performance (Magliacani, 2014). Compliance is another issue of concern especially to companies that deal with emissions such as Tesla Inc. it is the duty of the board to ensure that the company complies with the relevant laws as stipulated in the constitution of the relevant government where the business is located.

Organizations are required to have a compliance and risk framework whose activities are monitored by the Risk and Ethics Officer and the Chief Compliance. These managers are required to report to the CEO and the Board of Governors to ensure that the company does not incur unnecessary costs such as lawsuits. Another role played by the board is strategic oversight. The company’s management is charged with the responsibility of the firm’s strategic planning to ensure that proper planning is facilitated.

As a result of strategic planning, the company is able to come up with strategies that improve performance by maximizing output thus making the organization effective, efficient and profitable. After the management has formulated and proposed new strategies, it is the duty of the board of governors to assess and evaluate the proposal and determine whether it is a viable option or not. Therefore, it is the responsibility of the board to oversee the company’s strategy and ensure that the most effective measures are undertaken in the firm’s activities (Ferlie & Ongaro, 2015).

Major Philanthropic Initiative/Program

Companies have a responsibility of ensuring that the practice corporate responsibility by giving back to society and also ensuring that they promote the growth of their employers apart from making a profit. In the case of Tesla Inc., the American company is involved in designing, manufacturing and selling electric power train parts and electric cars. The company was founded by Elon Musk, Ian Wright, Martin Eberhard, JB Straubel and Marc Tarpenning in 2003. The company realizes that environmental pollution is a major concern accompanied by negative impacts such as the depletion of natural resources.

In its initiative to safeguard mankind from the devastating effects of climate change, the company manufactures electric cars to eliminate the emission of greenhouse gases by automobiles (Doeden, 2015). By so doing, the company will reduce overreliance on oil to provide electricity and offer alternative renewable energy sources. According to Musk, the global population will be able to access electricity through harnessing wind and solar power which can be stored in batteries for later use.

Not only is the use of renewable energy conserve the environment, but it will also be accompanied by increasing the standards of living since people can access luxurious electric cars at affordable prices. The firm adopts a corporate social responsibility strategy that protects the interests of its various stakeholders through the design and nature of its products which are concerned with the ecological benefits of the aforementioned. The corporation has a lot of opportunities that will enable it to contribute to the global community. Its products for generating electricity and storing energy are all environmentally friendly and therefore makes it possible to achieve sustainability and environmental preservation (Blue, 2016). The organization’s management practices and products are designed to integrate corporate citizenship and also boost their brand and corporate image. Consequently, the company manages to balance both profitability and also consider the welfare of the society.

Porter’s Five Forces

Tesla Competitive Advantage and Core Competency

Tesla Inc. stands a good chance of maintaining the leading position in the electric car market segment given that it has a comprehensive leadership headed by competent managers led by the visionary CEO Elon Musk. As a result, the firm has a competitive advantage over its rivals some of which include the battery supply chain (Kauerhof, 2017). The factory in Nevada manufactures lithium batteries thanks to its collaboration with the electronics giant Panasonic. Tesla has included in its processes a supercharge network that will enable electric car owners to charge their automobiles incredibly fast. Unlike its rivals that have slow charging stations that are scattered, Tesla had approximately 3000 stations and intended to increase the number significantly.

Due to the numerous stations, the company has managed to build its customized supercharger network (Grant, 2016). In addition, the company has a software and electronics culture that ensures it keeps up with technological advancement which takes place on a daily basis. The company employs software that outperforms its competitors and ensures enhanced customer service and therefore customer experience. Among the software used by Tesla include Mobile App, Traction and Stability Control, Motor Control, Battery Voltage Management, and Core focus and Tesla DNA. Another boosting factor is that all these software are updated over the air.

Five Forces Including the Sixth Force

Like all other firms, Tesla is not immune to Porter’s five forces which means that its performance is affected by both internal and external factors. These forces can be categorized into two groups namely that which is beneficial (opportunities) and the other which might have negative implications (threats). The company is affected by the bargaining power of customers and through its cheaper electric cars compared to its rival companies, the firm stands a chance of commanding market presence. Furthermore, customers prefer energy efficiency since it saves their money and also there has been increasing awareness in the global arena on the negative impact of environmental pollution.

Although the company has rivals, the threat of new entrants is not a major concern since entering into the disruptive technology is an expensive venture and therefore most companies lack the required capital (Krippendorff, 2011). On the other hand, there are negative forces such as the bargaining power of suppliers. Most parts required by the company are manufactured by a few specific suppliers who are in a position to determine the prices according to what is in their best interest. Tesla faces competition from rival firms that manufacture cheaper combustion engines that are also efficient. Also, the companies can innovatively produce hybrids and low-end electric cars and parts.

Diesel engines are also a threat to the company since they are cheaper while some are capable of using hydrogen which is environmentally friendly. Another factor that threatens the existence of the firm is rivalry whereby the company competes with large firms that have already established good relations with suppliers. In addition, competitors also produce brands that are internationally recognized. According to Wheelen and Hunger, there exists a sixth Porter’s force which they call complementary and it involves other companies that compete with a firm by producing products that are complementary to the one being offered by the firm in question. Considering this aspect, it may not be always necessary for Tesla customers to recharge their vehicles only at the company’s outlet. They have the option of going to other recharging stations to charge their cars although they may not necessarily provide fast charge.

Blue Ocean Metaphor

To make the company relevant and successful at the same time, the company incorporates four elements in its strategy to increase its value innovation potential. These elements are illustrated in the figure below.

Tesla's Blue Ocean Strategy — Figure 1: Tesla’s Blue Ocean Strategy (Source: Frontier Strategy LLC)

Value Chain

Tesla’s Business Model

Tesla has used creativity and innovation to ensure that it provides consumers with an alternative renewable energy source thus making its business model different from other companies. To begin with, the company has a comprehensive supply chain management whereby it has reduced the number of middlemen by owning the whole chain from manufacturing to distribution. This supply chain has enabled Tesla to reduce the costs of doing business significantly.

A reduction in product costs and manufacturing costs has ensured that the company is able to achieve sustainability. In addition, the company has digitized its supply chain by using the latest software to ensure that its products are up to date (O’Marah, 2016). Tesla’s vehicles are a hybrid of both digital and mechanical technologies which enables the firm to ensure that it has products that offer customer satisfaction. To expand its supply chain and add value, Tesla has put in place supercharger stations in different parts of America and intends to put more in other countries once the relevant governments enforce regulations that will allow the use of electric cars and also have the necessary technology compatible with the automobiles’ (Adam, 2016).

Supercharger Stations Tesla — Figure 2: 613 Supercharger Stations that are equipped with 3,628 Superchargers (Source: Tesla)

Tesla Inc.’s supply chain ensures that the company maximizes its profitability through cost reduction and eventually keep minimal inventory. In its production process, the company has an order-production strategy that enables customers to wait for their car to be produced and therefore it is possible to customize the automobiles according to their preferences. Furthermore, order-production avoids storage of excess inventory and therefore risk associated with inventory can be mitigated. Considering the growth, inventory and supply chain management strategies, Tesla’s business model can be said to be unconventional.

Areas That Need Improvement and the Profit Margin/Goal

When Tesla was venturing into the electric cars market segment, the company had anticipated producing 55,000 units in 2015 but was faced by challenges especially since the company had projected that it would stock sales worth $500 million but this was not so and the management had to adjust the value to $640 million. The reason for the necessity of the change was a decrease in cash reserve accompanied by increased feasibility costs (Crawford, 2016). The company had also opted to invest in assembly robots to reduce the overall production cost and the robots incurred additional costs exceeding the anticipated value. As a result, the robots required reprogramming and therefore the company was forced to delay the anticipated time to complete installation and setting up the production plant (Young, 2015).

The increased usage of assembly robots leads to a reduction in the number of human workers required since the option is perceived to be more economical. Consequently, job opportunities become less which means that the company hires fewer people than it would if it relied more on human labor. Therefore, the company needs to find ways of ensuring that it provides more job opportunities for the sake of corporate responsibility. According to a report released by Tesla, the company recorded an increase in production of Model 3 with the number of units reaching 2,270 on a weekly basis. In the first quarter, the gross margin for the Auto GAAP went up by 80 bp and also the non-GAAP rose by 500 bp. At the end of the first quarter, the cash balance was $2.7 billion and the amount was expected to rise in the following third and fourth quarter. The company’s financial position is indicated in the figure below.

Tesla Consolidated Statements — Figure 3: Unaudited Condensed Consolidated Statements of Operations in thousands except per share data (Source: Tesla Inc., 2018)

Central Pillars Of Elon Musk’s Corporate Theory And Tesla’s Unique Assets And Activities

The key to the success of Tesla is the company’s CEO and co-founder Elon Musk. Elon is known to be a person who makes decisions based on values. Often than not he disagrees with others but always has reasonable explanations as to why he does not concur with the ideas he disputes. He is also known to be respectful as he allows others to be themselves and values everybody to the extent of interacting personally with all workers regardless of their status. He has also offered employment opportunities to people who do not have a college education by simply looking at the individual’s interest in engineering and considering whether that person has built anything in their life. He is humane as he deems others as human beings and does not elevate himself to levels that he is unreachable to his junior workers. Elon is of service to others and does not leave others to do everything for him. Instead, he is always active and works long hours to achieve organizational goals and visions.

Elon practices justice as he treats all his followers equally. From the sentiments of his workers, working around Elon is very hard as all of them are expected to work equally hard due to the high expectations that he has not only from himself but also his workers (Northouse, 2013). Elon practices honesty with his workers and is not afraid to speak out his mind regarding organizational matters. Musk’s honestyenables him to win the trust of his fellow investors and even governments as he is predictable and also reliable. He has been known to fund Tesla ‘through financial difficulty with his own money by investing approximately $100 when the company was manufacturing the electronic car (Jacoby, 2011). The company’s unique assets are its management and employees that apply creativity and innovation to design and manufacture remarkable products such as its Sedan, Model X, Model 3, software and its supercharge network among others.

Tesla General Strategy

Current Business and Corporate Strategies

After the release of the first quarter report, the management adjusted its goals and among the corporate strategies is to increase production. The company intends to do this by reducing bottlenecks experienced across lines and the plan is to shut down production for approximately 10 days. However, the company did not change its 25% gross margin target for model 3. Tesla intends to increase Model 3 production to 5,000 units weekly. The corporation plans to advance sustainable energy by increasing its energy storage products up to three times. It intends to achieve this by enhancing its solar power harnessing (Tesla, 2018).

Strengths and Weaknesses of Current Strategies

The major strength of the current corporate strategy is the increased production of Model 3 and one of the reasons is that the model is very energy efficient which means that customers will be exposed to a unique organizational experience. Also, the model will enable the achievement of sustainable development goals while at the same time remaining profitable. The major weakness of the strategy is that the decision is based on a crucial assumption. The performance of Model 3 is assumed which may be affected by external factors such as competing models from rival firms (Tesla, 2018).

Tesla – The Most Urgent Decision Required

Tesla Inc. registered a decline in its solar deployment in the previous quarters which means that the firm had not reached its profit maximization potential. Therefore, the most urgent decision that the company ought to make is maximum tapping of solar power. The main area of concern is the Buffalo Solar Roof facility. As a result, the company should come up with a manufacturing and design process that will increase the quality of electricity and also reduce the cost of manufacturing. Consequently, it will lead to improved customer experience.

References

Adam, M. (2016). Accelerating E-mobility in Germany: A Case for Regulation. Springer.

Bilbeisi, K. M., & Kesse, M. (2017). Tesla: A Successful Entrepreneurship Strategy. B> Quest.

Crawford, A. (2016). Tesla Lowers Production Forecast, Sells US$500m-plus in Stock.

Doeden, M. (2015). SpaceX and Tesla Motors engineer Elon Musk. Minneapolis: Lerner Publications.

Ferlie, E., & Ongaro, E. (2015). Strategic management in public services organizations: Concepts, schools and contemporary issues. Routledge.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Jacoby, O. (Producer & Director), (2011). Bloomberg Risk Takers: Elon Musk [Television Broadcast]. United States: Bloomberg Television.

Kauerhof, A. (2017). Strategies for Autonomous, Connected and Smart Mobility in the Automotive Industry. A Comparative Analysis of BMW Group and Tesla Motors Inc. GRIN Verlag.

Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Krippendorff, K. (2011). Outthink the Competition: How a New Generation of Strategists Sees Options Others Ignore. John Wiley & Sons.

Magliacani, M. (2014). Managing Cultural Heritage: Ecomuseums, Community Governance, Social Accountability. Springer.

Northouse, P.G. (2013). Leadership: Theory and Practice. Los Angeles: Sage Publications.

O’Marah, K. (2016). Tesla and the 21st Century Supply Chain.

Sekhar, G. S. (2009). Business policy and strategic management. IK International Pvt Ltd.

Tesla. (2018). Tesla First Quarter 2018 Update.

Young, A. (2015). Tesla Motors Inc. (TSLA) Says Robots Are Holding Up Its 2015 Sales Growth.

FDI Policy – Foreign Direct Investment

FDI Policy – Foreign Direct Investment in the Mining Industry

FDI policy in the mining industry – Foreign Direct Investment (FDI) in economic terms refers to the investment that an investor makes in a foreign country in which the investor has a significant control of the business or company invested in. It applies in many sectors of the economy, including the mining industry. Different governments have varied policies that seek to govern and regulate the application of foreign direct investment in their respective countries.

This exploration evaluates the situation of FDI in the mining industries in Nigeria and Argentina. In the analysis, the paper incorporates the Dickens’ framework to evaluate the impact that foreign direct investment has on the mining industry and determine whether the adopted FDI policies in the two countries, that is, Argentina and Nigeria serve in the best interest of the investors.

FDI policies in Mining

It is very important to consider a deeper understanding of the effects that mining activities will have in the country, both social, economic, political and environmental impacts before developing policy to regulate FDI in the mining sector. With the advent of globalization, each country tries as much as possible to engage in trade and allow trade in within their borders. This has led to global competition and the growth of Multinational Enterprises (MNE) and the Transnational Corporations (TNC).

Many countries, especially the mineral rich countries have business opportunities within their borders to exploit their resources, but do not have the financial muscle to invest in such explorations. Due to the need for exploitation of the business opportunities within the borders amid limited resources to exploit them, governments enact policies that either encourage or restrict foreign direct investment in their respective countries (Johnson 2005, p. 15).

One aspect of the FDI policies that is very critical is the aspect of quality. The term quality in this regard refers to the foreign direct investment’s ability to enhance the welfare of the host country’s citizens in terms of social, economic, political and environmental wellbeing. Based on this requirement, governments, therefore, have to assess the impact of allowing FDI in the mining industry to take place within their countries and to device mechanism of mitigating the possible negative impacts of FDI policy, for the benefit of the citizens’ welfare (Vazquez-Brust et al. 2013, p. 2).

The impact of mining activities and the subsequent social conflicts depend on an array of factors, including the type of mineral mined. Some minerals when mined leave more devastating effect on the environment than other minerals. Secondly, is the technology, the technology used will determine the extent of destruction the extraction of minerals will have to the environment.

Thirdly, the level of involvement by the MNCs in the mining activities will determine the impact it has on the economy. The fourth condition is the strategies of the mining companies; some companies involved in the mining business may want to optimize profit at the expense of the host country’s economic development. Finally, the culture of the host nation and its level of economic development among other conditions may also lead to conflict in the mining activities (Stiglitz 2007, p. 134).

In this respect, therefore, it is incumbent upon both the host nation and the international agencies to collectively evaluate these aspects of conflict and make decisions that are desirable and specific to every mineral extracted and the respective location of extraction. On the same breath, the researchers too have a responsibility to choose a theoretical framework, which encompasses all the conditions necessary for evaluation in order to address all research concerns (Gibson 2006, p. 19).

FDI policy in Argentina

Considering the FDI policies in Argentina, since the year 2001, Argentina has been encouraging huge foreign direct investment, especially in the mining industry. This policy followed the massive reforms that the country made in the mining code. Argentina is a developing economy having a substantial amount of mineral resources. At present, Argentina’s third most significant product for export is Gold. Gold has attracted many investors from outside the country to come and exploit the opportunity.

Nevertheless, since the government put these policies in place in 2001, with the government encouraging foreign direct investment, the mining reforms in Argentina have not fallen short of challenges. In many parts of the country, there has been an uprising resistance to the mining activities. Those who persistently resist FDI policy claim they are doing so based on the social and environmental factors. Today, about six provinces have succumbed to this public pressure to introduce legal bans on open-pit mining within their provincial zones. This public resistance has been growing and rapidly spreading manifesting lack of consensus between the government and the public on the mining policies (Auty 2001, p. 36).

This conflict between the Multinational enterprises and the public in Argentina is a clear manifestation of varied perception about the quality of FDI policy, especially in the mining sector. Whereas the companies consider boosting the local economy as an improvement of the welfare of the citizens, citizens, on the other hand, consider the effect mining activities have on their environment and the subsequent effects these negative externalities to the environment extend to affect the society.

Even though there is a need for the alignment of quality of FDI between the local community, the government and the respective MNEs, it is not easy to reach a common ground on the quality of FDI, which is a relative measure that depends on other aspects of the prevailing welfare standard. This is also because, the perceptions of welfare of the citizens vary from time to time and from individual to individual depending on their expectations, level of knowledge they possess and the overriding cultural values of the community (Ali 2003, p. 70).

One case in point that supports the gap in perception of citizens about the quality of FDI policy is the Esquel case. In this case, Meridian Gold, which is a Canadian multinational corporation, secured rights to mine a gold deposit in Esquel, a town in the province of Chubut at a cost of investment of over 200 million US dollars. The provincial government approved all the standards and environmental impact assessment reports for a potential mine. The provincial government gave the project a green light terming it as a high quality FDI, being environmentally friendly and useful economic development in the province.

Nevertheless, the community had a completely different perception. According to the community, the project was low quality FDI, dangerous to the environment, economically weak and if implemented would divide the society. The subsequent social unrest that followed compelled the provincial government to organize a referendum in 2002 in which, 80% of the citizens overwhelmingly voted against the mining activities. In the year 2003, as the social pressure continued to pile against mining activities, a judge ruled against any mining project in the province, forcing the Meridian Gold to drop the project (Mutti et al. 2012).

FDI policy in Nigeria

Similarly, the FDI policy in Nigeria as well has had a long journey. Before the year 1988, the Nigerian government was still skeptical about allowing FDI into Nigeria on grounds that it deemed FDI as a scheme for economic and political control. In 1972, the government outlined a regulatory policy on FDI by establishing the Nigeria Enterprise promotion Decree (NEPD). This declaration was meant to regulate rather than promote the foreign direct investment in Nigeria by limiting foreign equity participation in some sectors to a minimum of 60 percent. By the year 1977, the government again made a declaration further limiting the participation of foreign equity to 40 percent in Nigeria’s business.

These declarations implied that Nigeria had a restrictive FDI policy between 1972 and 1995. By the year 1988, the Nigerian government made some structural reforms that initiated the beginning of eliminating the restrictive policy on FDI. The government established the Industrial Development Coordination Committee to act as an agency responsible for the facilitation and the attraction of the flow of foreign investment (UNCTAD 2009, p. 89).

Subsequently, in the year 1995, the government repealed the restrictive NEPD and made a new one known as the Nigerian Investment Promotion Commission, with an aim to encourage foreign investors to come to Nigeria and set up businesses, which they could have 100 percent control. The only condition was to provide relevant documents and the NIPC would approve the application for a business permit within fourteen days. Other declarations followed thereafter promoting and encouraging FDI into Nigeria with some having free regulations on dividends accrued from foreign investment. In addition, the Nigerian government adopted an Export Processing Zone to enable interested investors establish businesses and industries within certain zones (Ayanwale 2007, p. 24).

The FDI friendly policies adopted by the government of Nigeria saw a steady rise in the foreign direct investment flow into Nigeria since 1995 in different sectors. There was also a rise in the foreign direct investment in the mining industry in Nigeria, which followed the putting up for sale of the Nigerian national petroleum corporation together with its branches. The civilian administration that began in 1999 also inspired the deregulation of the oil industry, subsequently opening up the mining sector for more FDI inflows (Albaladejo 2003, p. 43).

The Dickens’ Framework

Having looked at both the Nigerian and Argentina’s policies on FDI, it is evident that both countries have had their challenges in the implementation of these policies. Considering the Dickens’ framework, the manifestation of conflicting interests and perception between citizens and the Multinational in the execution of mining projects is a confirmation of a dynamic collaboration and conflict between TNCs and the government agencies. According to Dickens (2003, p. 275), in the foreign direct investments both the TNCs and the host government need each other.

However, they admit that the ultimate objectives of the host government and the MNEs significantly differ. For example, the aim of a host government is to ensure an increase in the gross domestic product (GDP), while the MNCs principal aim is to maximize profits and increase the value of shareholders in the investment. In his framework, Dickens admits that in the foreign direct investments, multinational enterprises can have both positive and negative impacts on the host country’s social, economic, political and environmental conditions.

They may exploit or expand national economies, distort or improve economic development, create employment opportunities or destroy jobs, introduce and spread new technology or prevent the wider use of new technology. The MNEs can also contribute to the destruction of the environment through pollution and destruction of the landscape through mining activities, or participate in the reconstruction and the creation of a sustainable environment through initiatives aimed at sustaining the environment (Dickens 2003, p. 277).

According to Dickens (2003, p. 278), there are six major areas in the host country’s business environment that MNEs may have an impact on, and these include the area of technology, employment and labor related issues, industrial structure, capital and finance, trade and linkages and the environment. In the area of environment, the impact could be increased soil, water and air pollution, effects on urban settlement, change the extent of natural resources use among other impacts. On the trade and linkages, the effects may include changes in the propensity to export and import resources and changes in the use of local suppliers.

On the employment and labor issues, the effects could include changes in the volume of employment, type of employment in terms of skills and gender, wages and recruitment levels, labor relations and affect the stability of the labor market. On capital and finance, the impact could include changes in the initial inflow of capital, changes in the capital raised locally, profits retained locally and transfer pricing among other impacts. In the industrial structure area, the impact could be effects on the industry concentration, changes in the competitiveness of the local companies and impact on the creation of new local companies. Finally, in the area of technology, the impact could affect the extent of technological transfer, determination of appropriate technology and may lead to additional cost on the host nation (Yakovleva 2005, p. 45).

Dickens’ framework also has a mechanism for assessing the extent of impact of MNEs activities in the host nation’s economy. In assessing the impact of MNEs, Dickens looks at the level of control that MNEs have on the host, the increase or decrease in the general welfare, the overall macroeconomic conditions, receptivity, cultural, social and political conditions, capital mobility technology and stage development, and the extent of natural resources availability among other factors (Gibson 2006, p. 18).

The framework as elucidated by Dickens is quite relevant to the two scenarios presented both in Argentina and in Nigeria regarding FDI policies. In Dickens’ assumptions are in three perspectives, first, he assumes that in FDI deals, the government always represents the community and mediates the relationships between the MNEs and the Citizens. However, in most developing economies, this might not be the case because the community always are directly involved in the affairs deemed to directly affect their livelihood and environment (Epstein 2008, p. 113).

Several environmental studies reveal that the conflict arising when FDI deals are negotiated is because of the adamant tendency by the state and the MNEs to ignore the role played by the communities in this process. This leads to a direct involvement between the government and the MNEs, which most of the time leads to environmental and social inequalities (Martinez 2002, p. 19). In order to eliminate any conflict arising from the community, it is imperative for all the stakeholders to engage collectively in the assessment of the quality of the FDI policy in terms of scientific, MNEs, Community and government assessment. Any gap that continues to exist between the projects’ evaluation will make conflict resolution among these parties very difficult.

The second assumption by Dickens is that the ultimate objective of the MNEs is to maximize their profit and increase the value of shareholders. This assumption overrules the fact that some firms may also aim at strategic and ethical undertakings to do more proactive activities with the aim of maximizing their profits, as well as reaping benefits to the community and the environment (Vazquez-Brust et al. 2013, p. 7).

To bridge the gap between the divergent interests of the parties involved in the FDI arrangements, the government together with other stakeholders can develop a code of ethics to govern the conduct and activities of the MNEs. Similarly, the MNEs have a good avenue of mitigating the ill perception of the community by participating in the corporate social responsibility practices to give confidence to the community that their interests are considered. Corporate social responsibility is a very significant tool that firm can use to develop the businesses in the host country. By taking part in solving the societal problems, firms will not only build the confidence of the local people, but also create a sustainable environment in which they guarantee and secure the future of their businesses (Elliot & Cummings 2006, p. 87).

The third assumption Dickens is making in his framework is the existence of two variables that depend on each other, that is, the truncation effects and the increase/decrease in welfare. Truncation effects refer to cultural, economic and institutional aspects of the FDI policies that negatively affect the host country. The international economic analysis indicates that it is possible to reconceptualize truncation effects as institutional effects of the foreign direct investment, which contain robust effects on the welfare of the host country. They should be considered as influencing the welfare too rather than being treated separately from factors that increase or decrease the welfare (Stieglitz 2007, p. 43).

According to Mold (2004), the truncation effects can have an impact on the host country in two forms, that is, governance and social cohesion. Wealth and income distribution is one area where MNEs have a potential to bring social cohesion because research indicates that there is a strong connection between MNEs activities and the increase in the inequalities. This understanding of the inequalities has informed the engagement between the governments of Argentina and Nigeria and the MNEs in the FDI projects, in order to boost economic development and reduce the adverse effects of social and economic inequalities in their countries.

This analysis reveals remarkable undertakings of both Argentina and Nigerian government in trying to facilitate foreign direct investment in their respective countries. The policies the two countries encourage FDI in their mining industries with a view of exploiting the opportunities available and bringing in capital to their economies to the benefit of their citizens. However, there is still need to involve the citizens in the decision-making process and in the evaluation of the quality of the FDI in order to reduce the conflict arising from the community. The FDI projects could be good for the economic growth and development and may be well intended for the public, but failure to involve them in the evaluation of such projects is a recipe for misconception of the projects leading to resistance (Ali 2003, p. 72).

The mining industry is a very delicate industry in that its activities directly affect the natural environment before such activities benefit the society. This calls for a delicate balance between approval of mining projects and the execution of the same considering the need for a sustainable environment that will accommodate the citizens and the business for posterity. The bottom line of every government as representative of its citizens is to protect their interest of its citizens, which is what the government of Argentina and Nigeria is doing in their FDI policies.

Conclusion

The global economy is becoming more competitive and every nation intends to have a competitive edge in the market. Emerging economies such as that of Argentina and Nigeria with the massive endowment of the natural resources, but no capital to invest in exploitation have a responsibility to create an enabling environment. The enabling environment includes developing policies that encourage foreign direct investment to bring in foreign capital and help exploit the natural resources for economic development.

Similarly, in order to have a successful FDI policy, all the stakeholders affected by such policies such as the community, the government and the MNEs need to engage collectively in trying to develop a common perception of the impact of any project before its implementation. By doing so, conflict of interest and varied perception on the quality of FDI will definitely be resolved. The MNEs too have a responsibility to embrace corporate social responsibility in order to protect the environment for a sustainable business.

References

Albaladejo M 2003, Industrial realities in Nigeria: from bad to worse. QEH Working Paper, Number 102, Queen Elizabeth House, London.

Ali, S.H 2003, Mining, the Environment and Indigenous Development Conflicts. The University of Arizona Press, United States

Ayanwale A.B 2007, FDI Policy and Economic Growth: Evidence from Nigeria. AERC.

Auty, R.M. (2001). Resource Abundance and Economic Development. Oxford University Press, Oxford.

Dicken, P 2003, Global Shift: reshaping the global economic map in the 21st century, 4th ed., Sage Publication, London.

Elliot, M., & Cummings, G 2006, Exploring the risks: attitudes to risk in the global mining sector. Ernst & Young.

Epstein, M.J & Buhovac, A 2008, Making Sustainability Work: Best Practices in Managing and Measuring Corporate Social, Environmental and Economic Impacts.

Gibson, R 2006, Sustainability assessment and conflict resolution: reaching agreement to precede with the Voisey’s Bay nickel mine. Journal of Cleaner Production , vol. 14, no.3-4, p. 334-348.

Johnson, A 2005, Host Country Effects of Foreign Direct Investment. The Case of Developing and Transition Economies. JIBS Dissertation series.

Mold, A 2004, “FDI Policy and Poverty Reduction: A critical reappraisal of the arguments,” Région et développement, vol. 20, p. 92-120.

Mutti D., Yakovleva N., Vazquez-Brust D., & Di Marco M.H 2012, “Corporate social responsibility in the mining industry: Perspectives from stakeholder groups in Argentina.” Resources Policy, vol. 37, no. 2, p. 212-222.

Stiglitz, J 2007, Making globalization Work, Sage, London

UNCTAD 2009, Investment policy review Nigeria. United Nations: New York and Geneva.

Vazquez-Brust D., Yakovleva, N., & Mutti D 2013, Mining FDI in Argentina: perceptions and challenges to sustainable development. University of Manchester, England.

Yakovleva, N 2005, Corporate Social Responsibility in the Mining Industries. Corporate Social Responsibility Series. Ashgate Publishing Limited . England.

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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.

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 Economics, 36(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 Review, 109(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 Studies, 56(4), 758-787.

Felin, T., & Powell, T. C. 2016. Designing organizations for dynamic capabilities. California Management Review, 58(4), 78-96.

Ghoshal, S. 2005. Bad management theories are destroying good management practices. Academy of Management learning & education, 4(1), 75-91.

Sadun, R., Bloom, N., & Van Reenen, J. 2017. Why do we undervalue competent management? Harvard Business Review, 95(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 Review, 58(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 Systems, 27(1), 43-58.

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Community Economic Development

Title: Community Economic Development. Effective public administration is key to promoting community economic development. Community economic development is term used to describe collective action by members of a particular community to generate common solutions to their economic problems. Such initiatives may involve both small and large groups (Green & Haines, 2012). Public administration on the other hand refers to civic leadership of community affairs that is held directly responsible for executive roles (Calabrò & Della Spina, 2014). Public administration aims at promoting respect and contributing to the enhancement of the worth, dignity, and potential of members of the public. Effective public administration enhances the success of community economic development initiatives.

The model of the community development process, also often referred to as the asset model of development provides mechanisms to manage community based and development infrastructure. It is mainly concerned with the management of human resources (Patterson, Silverman, Yin, & Wu, 2016). It provides processes and practices that are aimed at promoting the effective and efficient management of human capacity in public service (Loh & Norton, 2015). The model also champions the making of human resource management (HRM) decisions that are accurate, fair, transparent, and free from political influence (Green & Haines, 2012). There are six major components of the model of the community development process. These include strategic planning, organizational design and classification, competency profile development, resourcing, learning, development, and certification, and leadership development.

Strategic planning requires that the business needs of a community be identified first before any investments are made. The community economic development program that is developed should target these gaps and needs. Strategic planning requires that all decisions be made based on existing facts (Christens & Inzeo, 2015). As a community developer, one should engage members of the public to determine their needs and work with them to develop solutions that best satisfy these needs. For example, the needs of an urban community vary from those of a rural society. Subsequently, programs to be rolled out in the two areas should vary to some extent.

Organizational design and classification is the second component of the model. It requires that standardized services and products be developed with the aim of providing an integrated and consistent approach to staffing. Subsequently, well defined and or organized job positions and streams are developed (Green & Haines, 2012). In community development, organizational design and classification is important since it helps in the division of work. Different persons are given specific responsibilities (Majee, Goodman, Reed Adams, & Keller, 2017). For example, a engineer working in a community development project should have clearly defined responsibilities.

Competence profile development is the third component of the model. It champions the development of competency based products that help define and support job success. As such, public administration managers are in a position to use profiles for the purposes of staffing (Majee et al., 2017). At the same time, employees are in a position to identify that which is required of them for them to get promotions (Calabrò & Della Spina, 2014). A community developer should be involved in the designing of learning programs fill the skill and knowledge gaps of the human resources. These programs should target all fields.

The fourth component of the model is resourcing. It involves the launching of collective recruitment and staffing programs. This helps increase access to qualified human resources. At the same time, it ensures that vacant positions are filled in a quick, effective, and efficient manner (Green & Haines, 2012). The model enables community developers to understand the need to have fully staffed team at all times. For example, it would be not make sense to run a community development program whose agenda is housing without an architect, an engineer, and an accountant.

Learning, development, and certification is the fifth component of the model. It develops programs that are aimed at enhancing the skills and capabilities of human resources (Patterson et al., 2016). It ensures that employees have access to all the programs and tools they need to improve their competencies and skills (Christens & Inzeo, 2015). As such, they are in a position to advance in their careers. A community developer must understand that change is inevitable. As such, they must always seek to update the skills and knowledge of their teams.

The last component of the model is leadership development. It involves expanding the capacity of individuals to enable them perform leadership roles (Patterson et al., 2016). In community development, this is important since it provides persons with the right attitudes and abilities to influence others positively (Calabrò & Della Spina, 2014). A community developer must understand the need to create strong leadership. They must mentor leaders who are to guide the implementation and maintenance of community based project (Majee et al., 2017). This is important to ensure the sustainability of these community economic development programs.

Zoning and Community Economic Development

Zoning and comprehensive planning continue to be important tools for community development. Zoning is a development regulation tool. It involves the division of the existing land into zones. Each zone is dedicated to a specific purpose. In community development, zoning is key in ensuring that the goals of the comprehensive plan are implemented in an effective and efficient manner (Green & Haines, 2012). Public administrators must be keen to ensure that zoning guidelines are adhered to. Through zoning, developers can improve their communities by encouraging the use of the existing land resources in a sustainable manner (Loh & Norton, 2015). Zoning promotes sustainability of development programs since it allocates land resources for all the needs of a community. For example, zoning ensures that members of a community have adequate land for residential, farming, and economic purposes.

Comprehensive planning is the process through which the goals and aspirations of a community are determined. It results in the development of a comprehensive plan. In community development, a comprehensive plan dictates public policy and in matters land use, housing, recreation, public utilities, and transportation (Green & Haines, 2012). Comprehensive plans may cover either a small or large geographical area (Loh & Norton, 2015). As a developer, one can use comprehensive planning to improve their communities by assessing their needs and working with them to seek appropriate and sustainable solutions (Christens & Inzeo, 2015). A developer must be keen to involve all members of a community in the planning process. This ensures that their comprehensive plan created has the support of all members of the community. Subsequently, the implementation process tends to be easy.

References

Calabrò, F., & Della Spina, L. (2014). The cultural and environmental resources for sustainable development of rural areas in economically disadvantaged contexts-economic-appraisals issues of a model of management for the valorisation of public assets. Advanced Materials Research, 869(1), 43-48.

Christens, B. D., & Inzeo, P. T. (2015). Widening the view: situating collective impact among frameworks for community-led change. Community Development, 46(4), 420-435.

Green, G. P., & Haines, A. (2012). Asset building and community development (3rd edn.). Newbury, CA: Sage Publications.

Loh, C. G., & Norton, R. K. (2015). Planning consultants’ influence on local comprehensive plans. Journal of Planning Education and Research, 35(2), 199-208.

Majee, W., Goodman, L., Reed Adams, J., & Keller, K. (2017). The We-Lead Model for Bridging the Low-Income Community Leadership Skills-Practice Gap. Journal of Community Practice, 3(1), 1-12.

Patterson, K. L., Silverman, R. M., Yin, L., & Wu, L. (2016). Neighborhoods of Opportunity: Developing an Operational Definition for Planning and Policy Implementation. Journal of Public Management & Social Policy, 22(3), 143.

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Reliability and Validity Academic Research

Reliability and Validity

Inter-rater reliability

Reliability and Validity in Research – This is a statistical concept in the field of research whereby a particular phenomenon is being evaluated or rated by various raters. It is, therefore, the extent or degree to which there is an agreement in the rating scores amongst the multiple raters, which brings about homogeneity and unanimity amongst these raters. To measure inter-rater reliability, it entails taking the total number of ratings in a particular judgment conducted, as well as the counting the accumulative ratings are done in the rating exercise. The total number of agreements is then divided by the total number of ratings and converted into a percentage to give the inter-rater reliability. McHugh (2012) provides a good example of how inter-rater reliability is calculated by reviewing the various methods that have been stipulated by scholars previously.

Test-retest reliability

This is also another reliability aspect. Test-retest reliability is the extent or degree to which results obtained from a particular test (which is similar) and consistent over time. In test-retest reliability, a similar test is administered to the same people in two or more instances and then the results are evaluated. To measure the test-retest reliability, there are two primary formulas applied. The first formula, which is better applied in instances where two tests were conducted in the Pearson Correlation formula that tests how well two sets of data correlate.

The other method is intraclass correlation formula that is applicable where more than two tests were administered. These formulas help calculate the test-retest coefficients that range between 0 and 1. In his article on validity and reliability in social science research, Drost (2011) provides the various reliability and validity aspects and gives detailed examples of the test-retest reliability measurement.

Face validity

Face validity, which is also referred to as the logical validity, entails the extent or degree to which an evaluation or investigation intuitively seems to quantify or measure the variable or rather the theory that it is objectively meant to measure. This, therefore, means that face validity is when a specific evaluation or assessment tool does what it is meant to do to provide results. To measure face validity, one can engage in the assessment of the concepts or ideas to be measured against the theoretical and practical applications.

Predictive validity

This is the measure of how accurate or effective a given value from a research study is and can be used in the future or rather to predict future patterns in the field studied. In their research on the predictive validity of public examinations (Obioma & Salau, 2007) use the predictive validity aspect to predict how the performance of students in public examinations will affect their future academic performances in the university and college level.

Concurrent reliability and validity

This entails the degree to which current test results relate to results from a previous test. For instance, if in the measurement of an individual’s IQ test are taken at two varied intervals, concurrent validity is measured through comparing on how closely similar are these results from the two tests. A good example of research that has employed the use of concurrent validity is the research done by (Tamanini et al., 2004) on the Portuguese king’s health test performed on women after stress. The researchers indicate how this test is applied and measured by using it as their primary test in their research.

Addressing the issues of reliability and validity

On most qualitative researchers, the nature of the data is more important to the researcher than the other descriptive elements of the research. This, however, does not rule out the need for conciseness in the descriptive sections. Reliability in research entails the concerns the stability, consistency of the data as well as homogeneous repeatability of the results if several tests are done (LoBiondo-Wood & Haber 2014). On the other hand, validity entails the accuracy and integrity of the data or results collected from the various tests that a researcher performs. Various researchers address these issues of validity and reliability in different ways, based on the purpose and the kind of research they carry out.

The authors, Obioma & Salau, (2007), go down to research on the effects of public examinations on the future academic performance of students. The focus here, therefore, is more on the data validation to ensure that their conclusions, as well as the outcomes of the results, have the required accuracy and integrity to validate their arguments. The two authors and researchers have applied the aspects of predictive and concurrent validity in their research. In regards to the use of predictive validity, this is where their research question is based on.

Reliability and Validity Research — Reliability and Validity in Research

They have made sure that the data or the arguments that they bring forth as substantially valid and convincing to attain the objective of predicting the future academic performances of the children who undertake the public examinations that are governed by the various bodies in the country. They have however not applied any reliability aspects in their research. At least not anyone that can be easily identified.

In the book by Drost, he has touched on both aspects; validity and reliability. In this book, he has not presented it in a research form but rather brought it out to the readers in the form of a review of both aspects of research, but on the dimension of social sciences. For instance, she has covered the various instances of both validity and reliability, by providing real-life examples and the various methods that can be used to measure the respective instances of both aspects. She approaches the concepts of validity and reliability from a general perspective whereby she accounts for the reasons as to why researchers, especially in education and social sciences, should adopt a culture of ensuring validity and reliability in their results. He explains the various instances of reliability and provides formulas and tools that can be effectively applied to measure these instances. She also provides the various elements that can impact the level of validity and reliability of data or results in research.

In conclusion, the concepts of validity and reliability are important in research. The researcher from various fields should adopt a culture of achieving these concepts in the results they obtain during their research. As Drost argues it, strong support for the validity and the reliability of research not only makes the research highly validated or otherwise believed in but also limits the possible critiques that the research may face. It fills the gaps that may be identifiable in the research. A researcher should be able to understand the various instances of both reliability and validity as well as know when it is appropriate to apply what instance in the research.

References

McHugh, M. L. (2012). Interrater reliability: the kappa statistic. Biochemia Medica, 22(3), 276-282.

Drost, E. A. (2011). Validity and reliability of social science research. Education Research and perspectives, 38(1), 105.

Obioma, G., & Salau, M. (2007). The predictive validity of public examinations: A case study of Nigeria. Nigerian Educational Research & Development Council (NERDC) Abuja.

Tamanini, J. T., Dambros, M., D’ancona, C. A., Palma, P. C., Botega, N. J., Rios, L. A., & Netto Jr, N. R. (2004). Concurrent validity, internal consistency and responsiveness of the Portuguese version of the King’s Health Questionnaire (KHQ) in women after stress urinary incontinence surgery. International Braz j Urol, 30(6), 479-486.

LoBiondo-Wood, G., & Haber, J. (2014). Reliability and validity. G. LoBiondo-Wood & J. Haber. Nursing research. Methods and critical appraisal for evidence-based practice, 289-309.

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