management quality

Greenwashing

Posted on by karla30121f14

Light_bulb_with_plant

The goal of every business is to maximize profits, but when a company does this by making false environmental claims to make their refrigerators appear more energy efficient it makes us take a step back to look at the real problem. LG electronics agreed to compensate thousands of consumers after two of their fridges were found to contain an illegal device that activates an energy saving mode when it detects room conditions similar to those in a test laboratory. This device has been banned in Australia since 2007.

 

Though this fridge claims to be more environmentally efficient, in reality it will end up raising your electricity bill $250 a year. This fridge isn’t only a danger to your wallet but to your food as well, because it can shut off when it is opened causing the food in your fridge to get spoiled. This fridge is a danger to your food, wallet and the environment. This isn’t the first time that LG has been caught making false claims about their products; the third time is the charm for this company.

 

Have companies learned nothing from incidents like the Toyota debacle. When accelerator problems were brought to attention Toyota denied that their cars were faulty. Why aren’t companies like Toyota and LG held more responsible for their actions? It is more common nowadays to see dishonesty than honesty in business, instead of allowing customers who bought these fridges to return them LG gave affected customers $331 to cover for the unexpected increase in their electricity bills. I can’t seem to wrap my head around this situation; the leaders of this company never apologized to their customers.  LG could’ve done more to win over their customers.

 

Being honest has put some companies on top; take for example Home Depot, after an article called “Is Home Depot Shafting Customers” published by MSN Money. CEO Frank Blake quickly responded not only by justifying their recent strategies but also with an apology “Sorry we let you down”. After this public apology Home Depot found themselves with a 22.9% increase in earnings. Much can be learned about these ethical companies; clearly we can see that consumers respond well to companies with trustworthy leaders.

 

Do CEO’s and executives of these companies not think that people are going to find out?

 

http://www.management-issues.com/opinion/5923/does-honesty-pay/

 

 

 

Reebok: Using CrossFit to Fire Up the Intensity

Posted on by spr1333cpassage

reebok

Many of us have heard of the fairly new workout brand CrossFit that has been sweeping the world for the past decade or so (2000). Some of you may even participate in the ultra intensified fitness regiments at your local CrossFit gym, or “boxes” as the growing cult has come to call them.  For those of you who are unfamiliar with CrossFit, it is an exercise program that advocates a mix of aerobic exercise, body weight exercise, gymnastics, and Olympic weight lifting that requires an individual to “to keep up the intensity, each and every time.” What does CrossFit have to do with total quality management within a corporate conglomerate you ask?

Well it just so happens that Adidas recently purchased Reebok back in 2006 and the company has been struggling mightily ever since the latter lost its decade long contract to outfit the National Football League last April to its biggest rival, Nike. This loss will reportedly cost Adidas an estimate of upwards to $250 million in lost revenue annually, a crushing blow to a company that was already being scrutinized for its purchasing of the floundering organization that had become Reebok. Reebok has also suffered heavy losses from lawsuits regarding their falsified health claims of their new “toning” shoes that deceived consumers. These allegations were brought forth by the Federal Trade Commission and required Reebok to pay nearly $25 million in total refunds. To top it all off, there has been turmoil within the infrastructure of the organization as an investigation has been prompted relating to alleged fraud by two former executives. However, there may be a silver lining yet for this once promising business transaction as Adidas hopes that sponsoring CrossFit using their newly affiliated business partner Reebok as its representative will not only reverse the current trend of posting a decline in sales the last three of five years, but also restore the brands image as a major powerhouse in the industry that is a force to be reckoned with.

adidas

Adidas continues to stand by there decision to purchase Reebok and hopes that their new two year deal with CrossFit will help them accomplish their goals that they set for themselves prior to their recent setbacks. In hopes of reaching the $3 billion objective for 2015, Adidas believes that their sponsorship of CrossFit will help speed up the process and provide them with some insurance they desperately need. The rapid growth of the CrossFit health craze is most certainly a positive sign for pulling Reebok out of the gutter as more than 3,000 gyms have popped up worldwide. The cult-like fitness routine seems it will continue to grow in popularity in the future as people gravitate towards the infectious atmosphere of the contagious motivation/energy and the promise of a complete workout in under 20 minutes. Will Adidas end up regretting their decision to purchase Reebok in the future? Or will the new addition of Reebok and the sponsorship of CrossFit pay off in the long run?

 

Source: http://www.businessweek.com/articles/2012-06-21/how-adidas-is-whipping-reebok-into-shape

 

Who said you can’t have it all?…. in the back seat of your car!

Posted on by spr1331acorvera

Mercedes Benz, also known as one of the long-held ranked luxury brands in the auto industry which lost its title of N0.1 in 2005, is focusing on its biggest market, China, to get their N0.1 spot back. The Chief Executive Officer Dieter Zetsche of Daimler realized there was a problem while leaning back in the rear seat of a prototype S-Class sedan in 2010. Zetsche realized that the seat did not incline far enough to fit the needs of the wealthy consumers accustomed to spacious airline seats. There is a reason behind him comparing the back seats to an airline seat, S-Class owners generally experience their car from the “second row”, which in China is very common where luxury cars are mostly driven by chauffeurs and not the actual owner. I believe this quality problem of the back seat could have been avoided if engineers were not focusing on the driver seat position so  much but in the overall car.

benz

The S-Class has been the leader, without a doubt, in luxury sedans since it was first introduced to the market in 1972. Because of heavy import levies, Mercedes is allowed to charge more than rivals for its cars in China, which can costs as much as $486,000.  This is a way Mercedes Benz can keep a good reputation when it comes to its image on their cars. The S-Class, as said by August Joas the head of the global automotive practice consultant in Munich, stands for luxury, prestige, comfort, and safety. All of these characteristics of the car can be easily measured by the quality ranked by previous owners. Mercedes Benz must maintain a good ranking on all of these aspects to continue holding the leading position of the luxury brand.

After thinking deeply about what China consumers will enjoy in the back seat of their S-Class Mercedes Benz, it was time to get to work.  Zetsche had his designers create a one of a kind back seat that reclines to a 43.5 degree angle which was available as an option on extended-wheelbase versions of the S-Class. Zersche thought about the comfort of sleep in the back seat, so they made the front passenger seat in a way where the seat slides forward to add legroom while the backrest recedes in a recess illuminated by ambient lighting for a more relaxing feel. In addition,  a calf support swivels forward and a heel rest pulls out of the front seat. And because a bed like back seat with relaxing features such as dimmed lighting wasn’t enough, they added a hot-stone massage function in the back part of the rear seat which can be used for long drives.  At this point it’s tough to even think about how safe this would be if the car was involved in an accident, but because everyone must follow  safety regulations, including ISO certifications, there was a special air bag to prevent passengers from sliding  under the seat belt during an accident presented in the image below.

comp_mercedes21__01__630x420 (1)

Well-heeled Chinese, who account for more that half of all S-Class sales worldwide, are critical to reviving the Mercedes brand. This will remain Mercedes biggest focus, targeting wealthy consumerss in China. Mercedes will continue offering additional services to impress more consumers along with building trusted relationships with current customers to remain brand loyal. They offer perks such as a 13 seat movie theater, located in Shanghai, along with a cigar room, and an in-house tea artist. Management has taken different routes to attract and keep their wealthy consumers, especially in China. The bottom line is that wealthy Chinese buyers will continue to account for more than half of all sales of Mercedes S-Class cars.  That being said, why not focus on making this group of consumers happy? After all, they are who are keeping the brand so exclusive and popular in China.

 

 

 References:

www.businessweek.com/articles/2013-05-16/mercedes-revamps-the-s-class-to-lure-chinas-wealthy-buyers

www.mbusa.com

 

 

 

Best Buy Questions Whether New Management Strategy Can Steer the Company Back on Track

Posted on by spr1322cleahy

best-buy

Best Buy has to rethink it’s management plan because it is losing business. From a sales perspective, it has not been doing as well as it once was, and in this economy, it is really taking a toll on the business. The number one reason for the drop in sales is due to inexperienced sales associates who can not adequately tend to customer’s questions and needs. One retailer analyst, Gary Balter, referred to the franchise as “that blue and gold store where the salesperson usually can’t help you.”  This does not send out a good message to consumers nor help to turn this around. So what is Best Buy going to change in it’s operation strategy? Clearly, what they are doing now is not working.

One possible solution is that the Vice President is trying to turn this around by starting to implement product knowledge education into the company. If the number one reason for lack of sales is the sales people, then that is where the VP should start. By training the employees properly and quizzing them on the products, they can be more helpful to the customers who are asking the questions. Giving incentives for reaching sales goals is another great way to boost sales and invigorate energy out on the sales floor. Scheduling the strongest employees on weekends, when Best Buy stores are at their busiest, is another smart approach that the company has begun to implement.

One problem that Best Buy faces is it’s online competition. Twenty percent of Best Buy’s business comes through online purchases, but it’s competitors have a one-up on them. Running online operations is costly, far higher than other websites because of the high labor costs and long-term leases that come along with the fourteen-hundred existing retail stores. Another issue that pops up with the retail locations is the fact that many of the people that walk in the door are “browsers,” not “buyers.” Many will seek out different products yet resort to purchasing online or not at all, causing some stores to go out of business. There has been no improvement with store closures yet, but with the new strategy implementation taking place, customer satisfaction has gone up a bit recently.

Amongst other problems, staff turnover is higher than ever, historically speaking. The average staff turnover to date is about sixty percent, increasing from thirty five percent in previous years.

It is always a sad thing to see American companies go out of business. Hopefully, the VP’s plan works because as we’ve learned, understanding the marketplace and customers needs, wants, and demands is a crucial element in the success of maintaining a business. Operating costs are a key factor to take into consideration as well. Do you think Best Buy has a chance?

References:

http://online.wsj.com/article/SB10001424127887324743704578444733449436900.html

http://www.google.com/search?hl=en&site=imghp&tbm=isch&source=hp&biw=1440&bih=686&q=best+buy&oq=best+buy&gs_l=img.3..0l10.822.2889.0.3173.8.7.0.1.1.0.148.471.6j1.7.0…0.0…1ac.1.14.img._SW2SohCc8k#imgrc=sCo_DVyj7x89mM%3A%3BJu5F4ITQI9zFAM%3Bhttp%253A%252F%252Fwww.savingadvice.com%252Fimages%252Fblog%252Fbest-buy.png%3Bhttp%253A%252F%252Fwww.savingadvice.com%252Farticles%252F2007%252F06%252F28%252F101581_12-tips-for-getting-the-best-price-at-best-buy.html%3B800%3B551

Higher Price Better Healthcare?

Posted on by spr1331acortez

Healthcare is one of the most talked about topics especially recently with Obama care being introduced. Most of us have yet to pay a medical bill but as we are closer to the real world we will be forced to start paying for it .If you were told that if you payed more for healthcare you would receive better quality what would you think? If you couldn’t afford it how would it make you feel to know that the wealthy would be more healthy than you? Most of us probably have never really thought about the link between cost and quality of healthcare.  Research was done on whether or not the link  existed.

healthcarePeter S. Hussey, PhD, from RAND Health, Arlington, Virginia, and colleagues conducted a systematic review of 61 studies and “found inconsistent evidence on both the direction and the magnitude of the association between health care costs and quality,” they write. “To our knowledge, there has been no previous systematic literature review of evidence on the cost–quality association in health care.” (McReady, 2012) The research  that was conducted included studies from bibliographies of selected papers, informal searches and consultations with experts. In order to assess the quality measures they used 5 categories such as structure, process, outcome, patient experience, and access. The measures of cost were put into 4 categories such as: accounting cost, charges expenditures, and a “care intensity index.

The results were that there was a link of higher cost and better quality of care. They did 61 studies and of them 21 said that their was a positive link between the two. Also, 18 of those studies showed a negative relationship and 22 showed no relationship at all. So we can assume that it is still somewhat unclear as to whether or not paying more money results in better healthcare. Still, more data is needed to come to this conclusion.

Some advice was given to physicians such as learning more about the cost and price of services that they provide.  The article also gives advice to “payers that they should reconsider the extent to which they shift financial risk onto provider organizations, and incentives for quality targets should be offered to promote processes of care that are well supported by evidence.” Lastly, the article states that everyone should participate in monitoring of care processes both  spending and clinical, as well as the patient experience and the outcomes that result for them.

Overall, this article was interesting because it allowed us to think of the results we are receiving from healthcare for how much we pay for it. I would be furious if the quality of healthcare was better if I payed more for it. Imagine all the families that can’t afford it, should we just leave them to receive less healthcare treatment? This would be horrible if it was a huge connection between the two.

http://www.medscape.com/viewarticle/776951

Can Self-Management Improve Quality?

Posted on by spr1332khendricks

As management students start to think about their career paths, especially for those graduating soon, one of the things on their minds is how they will differentiate themselves in the job market. Better yet, the opportunists’ who will be brave enough to tackle competitive markets, what kind of unfair advantages could these entrepreneurs come up with in their businesses? Well, one suggestion is how you actually structure the company through your business model and management style. This will determine how successful you will become in the long run, because the people you hire will indeed be the backbone of the company.

Morning Star’s founder, Chris Rufer has built a tomato processing empire that is like no other business model many have never heard of until now. He calls it a “bossless” model, which consists of no managers, no titles, so no one to report to, making everyone have mutual accountability of their work. They set their own goals and meet them, creating an extreme level of achievement.

When everyone having a high degree of accountability, the company strives; therefore you can focus in on the company’s core competency, in this case, the tomato process. In the video, Morning Star demonstrates their process from start to finish, and we can see the dedication from their employees; they take pride in their work every time. It shows how workers evaluate every single tomato for quality, before going on to the next process.  Innovation is also encouraged within the organization through everyone’s perspective of how to be more efficient in the process.

Consequently, when you have that amount of freedom in the workplace you can perfect a higher level of quality in your products and services, resulting in a greater profit margin or penetrating a larger market in the end. Why? There is no pressure of doing the job in just an autocratic way, unlike with the red bead Deming’s experiment; where there was no other approach  besides the way the boss wanted it to be done, which is impractical in today’s advanced technological age.

Rufer says that this model of doing business is “Quite good, high-performing people love it here, and they flourish,” and it is their competitive advantage in the market. So why don’t more companies follow this model? With traditional models becoming obsolete, our generation needs to figure out other ways to conduct business, in order to distinguish ourselves from the rest. This method of organizational structure is not fit for all businesses, but it is certainly a new and inventive system of increasing productivity, quality and overall well-being in the organization.

There is a saying that people don’t necessarily quit their jobs, but actually quit on their bosses. So, what if you worked at a company where there was no boss to quit on, do you think you would be happier? And therefore, be more productive, and result in products and services having better quality that could be beneficial to everyone?


http://www.inc.com/audacious-companies/leigh-buchanan/morning-star.html

http://morningstarco.com/index.cgi?Page=Self-Management

Video http://www.smithsonianmag.com/multimedia/videos/A-Tomato-Trail.html

 

 

 

 

Strategic Alliances Between Video Game Developers and Media Firms

Posted on by spr1332bhalan

Strategic Alliances between Video Game Developers and Media Firms

By: Brett Halan

So basically the situation at hand is that media companies like Disney are starting to develop their own video games rather than export the development. The skill to develop and program games was once extremely rare and difficult to learn. Today it is being taught by more and more universities, and the skill is more widespread. Companies like Disney and PIXAR have a strategic alliance to create games like Toy Story and many others. They still do have an alliance, but Disney is experimenting by creating their own methods to creating games. Other media companies are following their lead as well.

These companies originally make a film that is later turned into a video game. Toy Story is an example of this process. The problem is that as of lately the video games that are extracted from original movies are not successful whatsoever. Disney and the others had to ask themselves why?  They concluded that the quality of the games is terrible. The video game developing companies spend much of their effort working on original pieces of work like Halo or Call of Duty that attract the largest consumer base. They spend little time on these movies turned video games because they are historically weak sellers. The quote “quality is subjective, and perception is reality” pertains directly to this situation. The only real person who can claim that one game has more quality over the other are the end consumers. The media companies and the developing firms are essentially making the same mistake over and over again, and they need to accept change.

To fix the lack of quality going into the games there are a few alternatives. The most popular is that the media firms are buying smaller video game development companies. They are expanding in a way to give them a higher amount of control over the end product. As we saw in class during the ball passing game, when you have control over the process and design the end result is improved. Another alternative could include simply end making video games based off movies.     

Overall, the consumers of the big box office movies seem to really enjoy the movies, so why are the video games not popular? Media firms blame the video game developers for not putting maximum effort into the games. There are a few questions we should consider. The first is how do the media firms go forward with improving the transcendent definition of quality of these games? The second question is how are the video game developers going to stay in business with their strategically aligned partners?

Even though the information for this post is from 2008 the information is still relevant for today. I imagine we will see less and less video games based off of movies in the meantime. Further down the road I imagine some movies will have a more advanced feature where you can control the action similar to a video game. Today they have alternative endings to movies, but I think that is just the beginning of interaction with the audience.    

Sources from:

M. Marr and N Wingfield (2008). “Big Media companies want back in the game.” The Wall Street Journal, February 19, 2008.

C. Salter (2002). “Playing to Win.” Fast Company. December. Pg. 80.

C. Edward (2008). “Morphing Video Games into Movies.” BloombergBusinessWeek. March 19, 2008. http://www.businessweek.com/stories/2008-03-19/morphing-video-games-into-movies

 

Keeping up With Quality

Posted on by f1212mgarcia

As we discussed in our previous classes, we have discussed that an organization must always continually collect data in order to keep control of their processes. However, how exactly does an organization take control of a process that may need improvement or otherwise a routine check-up? Keeping up with a process that your organization has may be a daunting task due to the fact that the organization already has so many tasks and duties to keep up with. As the article explains, one must “look closely as to how you’re collecting data”. Machine, Part and Shift data are all very important aspects as far as collecting data goes but what exactly do these mean and how are they relevant to your organization?

Machine Data

  • As the article explains, there may be a machine that will be ultimately responsible for quality criteria. Being able to identify where exactly the data came from by identifying the machine is an excellent way of identifying quality errors and could help to finding the problem of quality criteria failures. Instead of giving the whole overall process such as “Line 1”, you can specifically assign the work line from “Line 1” to “Machine 1” and could help to easily identify where exactly a certain product may have come from or where the problem may have came from.

Part Data

  • Part data refers to the manner in which you may collect data. Most people may collect data in “parts” and therefore may not have the biggest organizational picture. As the article explains, one must go in to great detail and must expand their data collection when collecting their “samples” and “parts” of data to more closely represent the organization. A good source of collected data, can be better use for the organization and can help to provide a clearer picture.

Shift Data

  • A human component is always present as the article explains and a manager must be able to take account for the human aspect of any part of their aspect. One manner in which a manager can collect data is by looking at the different shifts and comparing to see how they are doing. Is the earlier shift producing more quality accepted products than the late night shift? If so, what can be done to fix it? etc. A good manager will always make sure to look at the organization at every part and not just as a whole

As we have explained in class, collecting data and being able to use data to better reflect and improve the organization can help to better overall total quality management. It may not be the employees or process that may need a check-up, but rather what is it that the manager can do to fix their process or better yet, what is it that they can do to improve it? How do you feel about having constant quality improvement even when the organization may not need it? Is it necessary to always “fix something that’s not broken”? How can one go in to more detail when collecting data?

http://www.qualitydigest.com/inside/quality-insider-article/comparing-quality-levels-between-machines-parts-or-shifts.html

What’s in your Coffee Cup this Morning?

Posted on by f1224ltaylor

Intelligentsia is a coffee and tea company that directly sources coffee from coffee bean farmers, such process can also be referred to as direct trade. Direct trade is completely different from what most companies do, which normally consists of buying coffee through brokers at the lowest market prices unaware of the coffee beans exact source. The direct trade label is also regarded as more effective than labels like fair trade, in which a 3rd party is involved to determine quality,  a process that has received a lot criticism. In an article about direct trade in the New York Times it was stated that, “Direct trade coffee companies…see ecologically sound agriculture and prices above even the Fair Trade premium both as sound business practices and as a route to better-tasting coffee.” On Intelligentsia’s website it explains their buying philosophy as believing in the quality of coffee and doing so by working closely with actual producers. Intelligentsia explains that in order to manage such exceptional quality they must follow the direct trade criteria. The direct trade criterion not only defines Intelligentsia’s quality but it also shows who is responsible for it, which demonstrates managing quality. The 6 points of criteria, as listed on their website, are as follows. 1. Coffee quality must be exceptional. 2. The grower must be committed to healthy environmental practices. 3. The verifiable price to the grower or the local coop not simply the exporter, must be at least 25% above Fair Trade price. 4. The grower must be committed to sustainable social practices. 5. All the trade participants must be open to transparent disclosure of financial deliveries back to the individual farmers. 6. Intelligentsia representatives must visit the farm or cooperative village at least once per harvest season, understanding that we will most often visit three times per year: pre-harvest to craft strategy, during harvest to monitor quality, and post-harvest to review and celebrate the successes. As we’ve learned in class it’s important to globalize companies for many reasons, a few include reducing costs and improving supply chain management which will naturally overlap with the critical decisions, like management quality and again supply chain management. Not all companies who globalize, manage the quality of their source and instead look for the cheapest prices, inter this can result in sourcing from places with unethical practices. In my personal opinion to reduce costs by sourcing from a source that under pays their employees or doesn’t ensure a safe a work environment, is not a justifiable or ethical trade-off. I believe examples of company’s operations like Intelligentsia can demonstrate ethical and responsible globalization, not only in quality but also within the supply chain. Of course the price of their coffee doesn’t come cheap, it is more of a luxury, but in perspective not more of a luxury than buying Starbucks daily.

 

 

Sources

http://www.nytimes.com/2007/09/12/dining/12coff.html?pagewanted=1&_r=0

http://www.intelligentsiacoffee.com/