Sunday, January 27, 2013

Life Sustaining Community Vision


By Lisa A M Bauman

First Impressions
I am a patriot. I am proud of America and proud of our abilities in business and industry. My impression has always been that America has succeeded primarily because of our hard-working, intelligent, competitive nature. When critics have argued that America has fattened itself on the plunders of war, I've felt that this was an over-exaggerated bias ideal meant to vilify America. Of course there are sensationalists out there, but the text in this class is not of that category. They support the fact that America did gain an advantage because competitors suffered from disrupted economies resulting from WWII while also giving credit to intelligent American ingenuity.

The History of American Ingenuity
America seems to have been fascinated with production from the beginning.  One observer in the 1900's noticed that although "the skill and knowledge of Europeans ... was equal and sometimes superior to that of Americans," Americans differed in that they would excel in making "a process for making a product" while the European counterpart would aim to design the original product (Locke and Spender 3). During WWII America invested in technologies by importing scientists from all over the globe to solve problems like the formation of the atomic bomb and operational use of radar information (Locke and Spender 10 and 11). This was done to meet the "demand for more effective weapons ... [and this] stimulated technology and invention (qtd. in Locke and Spender 51)." Here Operational Research (OR) was formed through statically and mathematically formed techniques drawn from military operations of strategic planning, logistics, and operational problems. In the late 1940's business schools were founded and OR was considered the 'best practice' of the time (Locke and Spender 11-14).

Managerilism Becomes Unsustainable
Although the scientific ingenuity of mechanistic managerilism was clearly admirable for the use of liner problems that the military faced in WWII, in the 70's people began to wonder if OR was as beneficial to business as once thought (Locke and Spender 28). Fritjof Capra, physicist and systems theorist, said that "as our new century unfolds one of our biggest challenges is to build and nurture sustainable communities in our cultural and physical environment that we can satisfy our needs ... without diminishing future generations." Capra believes, unlike managerilist notions, that business should be viewed as connected systems that mimic natures metabolizing networks. He makes a good point. Johnson explains that "the modern obsession" of basing decisions entirely from quantitative information, causes damage "to the underlying system of relationships that sustain any human organization (Kliner 2).” Organizational Research's application to social systems, especially business, is proving to be flawed.

The complaint is that because these scientifically based practices fail to understand that the purpose of a business is to "sustainably supply the economic needs" of society as a whole, they enrich "a small elite caste of investor-capitalists who use financial markets and business institutions to trade the future of humanity and non-human life for unlimited personal financial gain (Johnson)." Under these assumptions any measures to increase a firm's target market value will be acceptable. Firms will even stoop to layoffs, revisions of labor contracts that reduce wages, terminating employee pension contracts, and drawing cash from employee pension funds (Johnson). As Locke and Spender put it, OR systems legitimize "predatory instincts done in the name of good science (Locke and Spender 2)."

Real-Life Examples
This aversion to human sustaining systems and focus on quantifiable outcomes is something I can verify in my own life. I often feel affected by it at work and college. Our society satires the situation with highly popular zombie movies that compare the American worker to lifeless, life-eating creatures. We feel like our creativity is being wasted and our humanity is spent.

I remember a recent class assignment. I was part of a group composed of top business students. We had deadlines like all projects, but the goal of the class was to learn to solve problems in a group. Here I saw firsthand the lament of Professor Johnson when he said "Business schools mistakenly teach young MBAs to make decisions entirely from quantitative information, rather than from explicit, detailed knowledge of how a company conducts work (Kliner 2)." Even when paired with top students in a prestigious honors program, I suffered the effects of misdirected focus on the deadline, quantity, and production rather than benefiting from a process that sustained the long-term success of the group.

Our group agreed on how to collaborate and cooperate with ease; working hard to delegate tasks and come up with a schedule. Self-governing seemed to be working, but we were quickly derailed by one student who could not depart from his managerilist views. He was so focused on the deadline and determined to make a fail-proof cookie-cutter product that suited his quantitative standards that our team suffered. Creativity was stifled. Members threw their hands up and would not contribute, and relationships were broken. He sacrificed the whole team for his "A" grade on one assignment. Our team was never able to return to normal and consistently performed at the bottom of the class.

Let me give you another example. As a group in another class, I found myself part of a team that put focus on building strong relationships and solid communication habits. Although our meetings were more numerous and appeared to be more time-consuming, our quality of work was creative and at a very high level. Each assignment got easier to accomplish and students felt included, inspired, and successful. We set schedules with plenty of room for mistakes and even made time for two students who shared that certain days were necessary for family time. Our focus was on creating something accurate and beautiful while achieving the quantitative standards of the class. The difference between these experiences is that the focus in the second group began with the people, moved to the vision, and then considered the quantitative standard to achieve the goal. The project was approached as if an "A" grade goal was obvious. It became unnecessary to pressure each other about the grade, the deadline, to the amount of work required.

In conclusion, Confronting Managerialism and other texts shared in this class have helped expand my understanding of business. I realize that the criticisms of American industry and business are not meant to vilify, but to encourage life-sustaining habits that benefit society as a whole. By learning to think of business practices in a way that considers the environment and social impact within a network of interconnected relationships, we will be able to build sustainable communities. With this knowledge I will be able to become a better teammate and employee; learning to treat cohorts as members of a living system rather than easily removed parts of a machine.


Sources Cited
Capra, Fritjof, perf. Fritjof Capra, The Systems View of Life. 2007. Web. 27 Jan 2013. .
Johnson, Thomas H., and Anders Broms. Profit Beyond Measure: Extraordinary Results Through Attention to Work and People. The Free Press: 2000. Print.
Johnson, Thomas H. "When Accountants Come to Power."The NEP-HIS Blog. WordPress.com, 08 May 2012. Web. 27 Jan 2013. .
Kleiner, Art. "What Are the Measures That Matter?." Strategy Business: Culture and Change. 09 Jan 2002: Issue 26. Print.
Locke, Robert R., and J.C. Spender. Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out Of Balance. New York, NY: Zed Books, 2011. 1-192. Print.

** For MGMT410, US Management Since 1945, Winter Term, 2013

Netflix Profile and Market Strategy


Authors: Lisa Bauman, Nina Deal, Peter Ishak, Steven Johnson

Market Profile 
 Netflix, a company that specializes in DVD rentals and video streaming, has been in business since 1997. Being one of the first to enter the online video rental industry, Netflix dominates market share at 55 percent (Chang). Still, market share is declining from its peak market share of nearly 60%. The company made 3.54 billion in revenue in 2012 with a 32.92% three-year growth rate (Netflix Revenue).

Even though Netflix doesn’t have an official published mission statement, it does have vision. Co-founder and CEO Reed Hastings described the future of Netflix at the Dublin Founders conference in October, 2011. He said that Netflix aims to become the best global entertainment distribution service; licensing entertainment content around the world. Netflix desires to create markets that are accessible to film makers and expand services to a global audience (Netflix Movie Rentals Mission Statement).

BCG Matrix and Findings Summary
The Star, Cash Cow, Question Mark, and Dog
The BCG Matrix (Fig. 1) shows for distinctive sections: the star, the cash cow, the question mark, and the dog. On the left side we see the star and cash cow; products that bring the most profit to Neflix. Netflix's streaming service is clearly the cash cow. Available on devices such as internet connected TVs, Blu-ray disc players, game consoles, computers, smartphones, and tablets, Netflix's streaming service is accessible to 30 million members globally (Company Timeline).

Netflix's star, originally developed in 2000 and massively enhanced in 2009 by the Netflix prize-winning BellKor's Pragmatic Chaos team, is its recommendation system. This crowd-sourced program uses past viewing preferences to anticipate viewers' likes and dislikes. It will soon be integrated with Facebook sharing; allowing even more personalized and accurate suggestions for patrons (Company Timeline).

On the right side we see products that are less profitable, but may serve a purpose in the market: the question mark and the dog. Netflix's question mark is the development and licensing of exclusive streaming content. New deals with Time Warner and Disney makes popular television shows and films available to patrons (Pepitone). With the upcoming premier House of Cards, Netflix appears determined to grow from a content delivery company to a full-fledged content provider. Hastings characterized Netflix as "a leading global Internet TV network" and he expects to double to triple the audience of HBO (Roettgers).

Lastly, Blu-ray and DVD mailing services are Netflix's dog. In 2011 subscriptions were separated from streaming services and have since been experiencing a decline (Nakashima). Further diminishing the value of this service, Netflix competitor Redbox will be launching Redbox Instant that offers streaming service combined with DVD or Blu-ray rentals for a lower price (Will Redbox Instant Be a Netflix Killer?).

Plan of Resource Allocation
Streaming and new content are the main services customers desire. Physical DVD's and Blu-ray rentals are becoming outdated. Netflix's recommendation system adds value for both customers and content licensers. It provides a sustainable competitive advantage over competitors like Hulu and Crackle and an avenue for marketing (Kalogeropoulos). It delivers information to customers; making content accessible. Still, without streaming and fresh new programming, this program is extraneous. Netflix should allocate the majority of its resources to streaming and secondly to programming. Netflix should continue to invest in modernizing the recommendation system to change with the market so that it communicates and delivers content to members; especially as Redbox and other competitors are putting more pressure on Netflix to offer value to its customers.

Growth Strategy and One-Year Press Frequency Analysis
Netflix has been focusing bringing attention to all four areas of growth strategy, but the frequency analysis shows that Netflix's market strategy is strongly focused on product development (found in Appendix A and B). Netflix shared 29 press releases between 2012 and 2013 that related to its growth strategy. Four articles relate to market development and diversification, and seven articles relate to market penetration. But, thirteen articles relate to product development. Half of these articles showed a focus on offering new content or services to current patrons (Netflix: Media Center). The overall number of product development articles that were issued by Netflix in the last year supports the conclusion that Netflix is focused on offering new, exclusive programming to their target market of streaming subscribers.

The original shows and movies provided by the Time Warner and Disney partnerships and offered though newly developed streaming technology creates greater value for current customers, but Netflix has also began offering current services through new forms of media to diversify. Netflix has expanded to Europe and Latin America and reached out to the hearing impaired community to develop new markets. Meanwhile Netflix is attempting to deemphasize physical media and shift toward a media streaming. In conclusion, Netflix has a strong product development strategy but does not lose sight on other aspects of growth in the process.

Sources Cited
Chang, Veronica. "Netflix Could Sink $40 By 2014." Seeking Alpha: Read. Decide. Invest. Seeking Alpha, 24 May 2012. Web. 24 Jan 2013.

"Company Timeline." Netflix. Netflix. Web. 15 Jan 2013. .

Kalogeropoulos, Demitrios. "Facebook Are About to Get Tight." Daily Finance. AOL Money & Finance, 14 Jan 2013. Web. 15 Jan 2013. .

"Netflix Revenue." Macro Axis: Simple Personalized Investing. Macroaxis.Inc. Web. 26 Jan 2013.

Nakashima, Ryan. "Redbox Instant streaming plan takes on Netflix." CNN Today. CNN, 12 Dec 2012. Web. 15 Jan 2013. .

"Netflix: Media Center." Netflix. Netflix Inc. Web. 26 Jan 2013. .

"Netflix Movie Rentals Mission Statement - A Vision, A Promise and Nine Values." About.com: Retail Industry. About.com. Web. 24 Jan 2013. .

Pepitone, Julianne. "Netflix scores Cartoon Network, Adult Swim and more Time Warner content." CNNMoney: A Service of CNN Fortune, & Money. Cable News Network, 14 Jan 2013. Web. 15 Jan 2013. .

Roettgers, Janko. "Netflix aims for 90M U.S. subscribers." GIGAOM. GIGAOM, 14 Feb 2012. Web. 15 Jan 2013. .

Sandström, Per. "Netflix Mission Statement." Brand Research: Research into the market strategy and techniques used by successful and failing brands. WordPress.com, 04 Oct 2012. Web. 24 Jan 2013.

"Top Entertainment Web Sites, 2010." Market Share Reporter. Ed. Robert S. Lazich and Virgil L. Burton, III. 2012 Ed.

"Will Redbox Instant be a Netflix killer?" MSN Money. TheWeek.com, 13 Dec 2012. Web. 15 Jan 2013. http://money.msn.com/top-stocks/post.aspx?post=05e69905-37eb-4995-8cb8-9de649023c33. 

Appendix A

Frequency Analysis for Netflix 2012-2013
Products and Services
Markets
Current
New
Current
Market Penetration
Product Development
7
13
New
Market Development
Diversification
4
4 


Appendix B

Media Headline Examples
Market Penetration
1. Netflix "Just For Kids" Now Available on iPad
2. Instant Access to Large Variety of Streaming TV Shows and Movies Chosen Especially For Kids 12 and Under Now on iPad
3. Netflix Brings TV Shows and Movies to Windows Phone in Latin America, UK and Ireland
4. Windows Phone Users in Latin America, UK and Ireland Can Now Enjoy TV Shows and Movies on the Go With Netflix

Product Development
1. Turner Broadcasting and Warner Bros. Television Group Announce Multi-Year Agreement with Netflix
2. License Agreements Include Complete Previous Seasons From Cartoon Network, Warner Bros. Animation, Adult Swim and the TNT Drama Dallas from Warner Horizon Television
3. "Hemlock Grove" Eli Roth's Gothic Thriller Developed By Brian McGreevy & Lee Shipman Available Only On Netflix
4. All 13 Episodes of Original Series, Based on Brian McGreevy's Novel, Will Be Available Simultaneously in All Netflix Territories

Market Development
1. Netflix Launches in Sweden, Denmark, Norway and Finland
2. Continuing International Expansion, Leading Global Internet Movie and TV Subscription Service Arrives in Nordic Countries
3. UK And Ireland Embrace Netflix
4. Fastest Territories to Reach One Million Netflix Members

Diversification
1. Netflix "Open Connect" Delivery Network Gains Widespread Global Acceptance
2. Cablevision Most Recent Major Provider to Join Open Connect
3. New Super HD and 3D Video Formats Available on Open Connect
4. Netflix and the Walt Disney Studios Announce Multi-Year Premium Pay TV Window Agreement in the United States
5. Netflix Members to Enjoy Watching High Quality Films from Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature
6. Netflix and National Association of the Deaf (NAD) Reach Historic Agreement to Provide 100% Closed Captions in On-Demand Streaming Content Within Two Years


** For BA311, Marketing Management, Portland State University, Winter Term, 2013

Saturday, January 26, 2013

Differences in Japanese and American Schooling Styles


By Lisa Bauman

After WWII American and Japanese companies sought employees with different philosophies. Japanese companies desired employees educated in disciplines that could contribute to the ideal of a "web of connectedness" where each member contributed to the whole. Japanese lower level school systems emphasized on group process where disciplinary power and assessment was delegated to self-managed peer groups. Teachers' main duty was to establish order and direct students to learn to work as a group; pairing students with varied abilities to encourage higher achievers to help lower achievers. Basically, Japanese students can study at higher levels in college because business training occurred in lower-level education (Locke and Spender 43-44).

During this same time, American companies, who based their ideals in manageralism that separated power among mechanized systems, desired employees trained in the science of management. Unlike Japanese schools, the lower level American school system focused on disciplines of study rather than process. Individual efforts of the student were assessed apart from the group. Students competed against one another and teachers controlled the use of discipline rather than student peer groups. Once the student entered higher levels of schooling, he had to learn how to operate as a group in business rather than a study or discipline like his Japanese counterpart (Locke and Spender 44-45).

WORKS CITED
Locke, Robert R., and J.C. Spender. Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out Of Balance. New York, NY: Zed Books, 2011. 1-192. Print.

** For MGMT410, U.S. Management Since 1945, Portland State University, Winter Term, 2013

Descartes or Einstein?


By Lisa Bauman

In the 20th century economic and management thinking is mechanistic. This thinking assumed that the best way to understand the world is to break it down into parts and that business is best managed when units and people work independently from one another. Productivity increased when outside forces (the corporation) distributed power through a hierarchy of units (departments of a firm).

This mechanistic thought was derived from Descartes and Newton who viewed matter and "spirit" as independent. It assumed that parts of a system operate individually from other parts. Capra drew inspiration from Einstein's Theory of Relativity. He believed that all aspects of the universe are connected in a natural system - "integrated wholes whose properties cannot be reduced to those of small units (Locke and Spender 36)." This systemic or organic type of thought assumed that changes in one part of a system will impact other parts; working as a whole. Modern ideals sought to understand the world through interconnectedness of systems while older thinking understood the world by breaking it down into individual parts (Locke and Spender 33-37). 

WORKS CITED
Locke, Robert R., and J.C. Spender. Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out Of Balence. New York, NY: Zed Books, 2011. 1-192. Print.


** For MGMT410, U.S. Management Since 1945, Portland State University, Winter Term, 2013

Operational Research After WWII

By Lisa Bauman

In World War II tools were developed such as Operational Research (OR), Linear Programming (LP) and Queuing Theory (QT) to solve problems in military logistical operations. Publications and media sources promoted OR, LP, and QT to be the best practices in 50s and 60s. Because of their success in wartime and their popularity in the media, mathematical methods of managing gained a great following in education; especially business schools (Locke and Spender 6-15).

In 1968 the excitement began to wear down. Wartime success with OR was not experienced with the same success in business. Unlike the mechanistic conditions of wartime, the natural living system of a human organization was systemic. The most negative criticisms came from the people who knew the tools most intimately. Critics claimed that they lacked the ability of measurement for the “human value” and long term results. Wartime applications of OR were very successful in solving mechanistic, linear problems, but its long-term abilities for business and solving human problems showed to be less successful than predicted (Locke and Spender 24-33).


WORKS CITED
Locke, Robert R., and J.C. Spender. 
Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out Of Balence. New York, NY: Zed Books, 2011. 1-192. Print.


** For MGMT410, U.S. Management Since 1945, Portland State University, Winter Term, 2013

Thursday, January 24, 2013

Detoxify Your Company!

By Lisa Bauman

* A summary of article Danger Toxic Company by Alan M. Webber.

This article was made from an interview of Professor Jeffrey Pfeffer of Stanford Graduate School of Business. It explains the costly problems caused by employee turnover and why successful companies aim to keep employees happy. Pfeffer believes that there is a growing unwillingness to work for what he calls "toxic organizations" and  gives several ways that companies create an environment of toxicity: 

1.      Shortsightedness: To reduce costs, companies do not implement high-performance, high-involvement management practices; failing to understand that the skills, knowledge, commitment, and abilities of employees are a company's biggest asset. Smart employees will not put up with toxic environments for long and it is more expensive to hire new employees than to keep the current ones that have already been trained.
 
2.      Status Quo: Companies tend to continue in current behavior rather than make changes to fix problems that make employees unhappy. Values that are written down tend to be assumed as practiced even when evidence shows they are not.

3.      Discounting the Long-Term: When new hires are asked to sign an "at-will employment contract that gives the company the right to fire the person at any time and for any reason" it creates an attitude of anti-trust from day one. Stock options also encourage the mentality that an employee will strike-it-rich and leave  (Para 8 and 12).

4.      Dehumanizing Relationships: Companies see people as costs rather than assets. People are referred to as resources rather than friends or co-workers. They are merely a factor of production that must be calculated where human marginal revenue exceeds human marginal cost and business practices reflect this (Para 17). Eighteen hour flextime schedules create an atmosphere of toxicity by asking employees to work an unsustainable  pace. Employees face a moral dilemma where people must choose "Am I going to be a successful and effective ... employee, or am I going to know the names of my children (Para 13)?"
 
SOURCES:                                         
Webber, Alan M.. "Danger:Toxic Company." Fast Company. Fast Company, 31 Oct 1998. Web. 24 Jan 2013.

** For BA302, Organizational Behavior, Portland State University, Winter Term 2013

Wednesday, January 23, 2013

Goal Setting the SMART Way

By Lisa Bauman

QUESTION: If a manager tells you to "sell as much as you can," is this goal likely to be effective? Why or why not?

ANSWER
            Although setting a goal is very important, the quality of the goal can make a real difference in the outcome. "Sell as much as you can" is a poor quality goal because it fails to motivate, quantify, challenge, or give a clear schedule to when it should be completed. A better way of setting goals is to follow the SMART goal system where goals are Specific, Measurable, Aggressive (or difficult), Realistic, and Time-Bound. When an employee can measure specific, realistic goals within a period of time he can make a real plan-of-action and measure progress. It gives an end to reach that challenges and energizes the employee (Bauer and Erdogan, pages 128-131).

            Let's think about this particular goal. Selling "as much as you can" is not measurable. One employee may believe the manager expects her to sell at all costs - even unethically. Another may believe that "selling as much as you can" means that this goal is important, but only after the cleaning is done. It is not specific or measurable. It also fails to inspire because there is no challenge for difficulty. A car sales clerk that averages sales of 10 cars per week could be challenged to sell 15 cars this week. A reachable, time-bound goal like this gives something to work towards.

SOURCES:
Bauer, Talya, and Berrin Erdogan. Organizational Behavior Version 1.1. San Francisco, CA: Flat World Knowledge, Inc., 1-131. Print


** For BA302, Organizational Behavior, Portland State University, Winter Term 2013

Thursday, January 17, 2013

Financial Success or ... Social Loss?

QUESTION: Business media commonly attribute the unprecedented financial success of American business and growth of the American economy from 1945 to the late 1970s to the increasing number of CEOs trained in new scientific management methods at elite graduate business schools. Explain what the text says about this topic.

By Lisa A M Bauman

ANSWER: The financial success of the American economy from 1945 to the late 1970s can be attributed to many things including the plunder of war as noted by economist Werner Sombart who said that "'the growth of large-scale warfare' was the root cause of economic development, since the demand for more effective weapons ... stimulated technology and invention (qtd. in Locke and Spender, page 51)."  Additionally, after WWII, American competitors suffered from disrupted economies allowing America to advance undisturbed by competition.

Still, the science of management did play a big part in spurring America's financial boom. In Confronting Managerialism by Locke and Spender we learned that America's ingenuity in management had its effect on our financial success. Litterer wrote that although the skill and knowledge of Europeans sometimes surpassed Americans, the Americans possessed the ability to out-produce because they had a "difference in thinking of ... management ... how to obtain the advantage (qtd. in Locke and Spender, page 3)."

Although it is true that America has had great financial success, many argue that this success came at a loss. The measurement for success is skewed because the basis of success has been only weighed by financial gain. H. Thomas Johnson wrote in his blog post When Accountants Come to Power that the impact on large corporations since the late 1970s has moved our thinking from the goals of (1) providing gainful employment and (2) sustainably supplying economic needs to the selfish, soulless goal of maximizing a corporation's financial returns for the purpose of exclusively enriching its investor-owners (Para 1). In conclusion, America did benefit financially from the scientific management methods propagated by elite graduate business schools and the increasing number of CEOs, but the financial benefit could be arguably outweighed from the social loss it caused.

** For MGMT410, U.S. Management Since 1945, Portland State University, Winter Term, 2013