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C

omparative

management
projects compilation

ii

ACKNOWLEDGEMENTS
First of all we would like to thank ALMIGHTY ALLAH the most
merciful and the beneficent that has showered us with his unlimited
blessings and gave us the strength, knowledge and wisdom throughout
our life and especially for this report.
We owe a great many thanks to a great many people who helped
and supported us during the compilation of this book.
We take immense pleasure in thanking our beloved Prof Manzoor
Iqbal Awan, Col (Retd) for selecting us and for believing in us to carry
out this compilation work of all the students assignments and
projects.
We wish to express our deep sense of gratitude to Prof Manzoor
Iqbal Awan, Col (Retd) for his guidance and useful suggestions, which
helped us in completing this book in time. He had been a source of
inspiration throughout the semester along will that has provided the
entire class with valuable assistance in the assignments and project
work.
Finally, yet importantly, we would like to express our heartfelt
thanks to our beloved parents for their blessings, our
friends/classmates for their help as they delivered their work on time
and for their wishes for the successful completion of this book.

iii

TEACHER`S NOTE

It is the endeavor of every business school of repute to provide environment


conducive for producing business executives with ability to think out of the box. Recognizing
that Bahria Universitys Management Sciences Department very much falls in that category,
and with a strong faith in the abilities and potential of our youth, I have been prodding my
students over the last couple of years to come up with relevant study/research papers, and
then compiling those as reference material for subsequent studies. That has been done in the
case of the students of Bachelors of Business Administration 7th Semester Section C during
the Spring 2011 semester too, and with very stimulating results. They were required to
complete three major assignments as part of Comparative Management program first the
allotted country study on individual basis, the second a multi-dimensional individual study of
comparative management practices of allotted large multinational corporations, and lastly the
study of business environment of select region as a group project. All of these required high
degree of understanding and application of the international management concepts covered in
the class as well as painstaking research work and creative thinking. Initial words of caution
about the required rigor were generally taken lightly, but the situation soon changed when
their usual online searches would not yield the data suited for cut and paste work.
Thereafter there was no dearth of the burning of midnight oil, leading to the production of
some thought provoking study papers. Not only these were rich in valuable data, the
attempted analytical work was generally of high standard. It would be a pity if such wealth of
knowledge is not made use of; thus this effort at compilation for suitable placement as
reference material.
Needless to say that these are the works of students in an area to which they have been
exposed for the first time. Hence there is bound to be room for improvement, and at places
substantial one. But what is of special significance is the originality of work, and that this
could serve as a humble beginning towards attaining greater creativity in the times to come,

iv

besides developing ability to handle independently and in teams such projects calling for
diligent research work.
It will be unfair if labor of Momal Zara and Hassan Hayat khan, nominated for this
compilation, is not recognized. They have done a wonderful job, and the final product itself
reflects this amply.
I wish all the contributing students success, with prayers that Allah Almighty may crown
their efforts at professional development, and bless them with success and happiness. Ameen.

Prof Manzoor Iqbal Awan, Col (R)


Faculty Member & Senior Consultant
* USQ (Australia), COMSATS & NUML
* Bahria, Air & Preston Universities
* University of Lahore
* Dual Matrix Inc. & MDi
Cell: +92 321 850 0732; Email: integrated.consult@yahoo.com
22nd May 2011

COMPILER`S NOTE
The compilation of comparative management class projects was indeed a tremendous
undertaking; a commitment of time and energy that always takes more of each than was
originally planned. Still there was rich learning in compiling the hard labor and much
dedicated projects of all students of BBA 7th -C. The compilation consists of three major
assignments as part of Comparative Management course first the allotted country study on
individual basis of some of the renowned successful business leaders, the second a multidimensional

individual

study

of

comparative management practices of


allotted large multinational corporations,
and

lastly

the

study

of

business

environment of select region as a group


project. We feel honored as Sir Manzoor
believed in us and gave us such big
responsibility. We have put in our level
best

efforts

and

creativity

for

this

compilation. The compilation quality and


consistency will reflect the verisimilitude of our hard work. The experience of this work was
great as it was an immense source of learning and improving our skill as well as knowledge.
It also gave the confidence for believing in ourselves and showing up best of our efforts.
However, it would have not been possible without the kind support and help of Sir Manzoor
throughout the semester. We would like to extend thanks sincere thanks to him. He has been
providing timely guidance and constant supervision.

Hassan Hayat Khan

Momal Zara

vi

TABLE OF CONTENTS
INTRODUCTION

SECTION A: STUDY OF SUCCESSFUL BUSSINESS LEADERS

ANDREW MORRISON

LAKSHMI MITTAL

11

MICHEAL BLOOMBERG

19

OPRAH GAIL WINFREY

26

ALVIN AILEY

35

FERNANDO HERNANDEZ

43

AMADEO PIETRO

49

KEITH RUPERT MURDOCH

56

MICHAEL DELL

67

DAVID SARNOFF

75

MARY KAY ASH

85

GLORIA STEINEM

96

LEO GOODWIN

105

HERB KELLEHER

113

JOYCE HALL

123

vii

PHINEAS TAYLOR BARNUM

132

WARREN EDWARD BUFFET

136

ANDREW CARNEGIE

142

STEPHEN MCCONNELL STEVE CASE

152

RUSSEL SIMONS

162

WARREN A. BECHTEL

173

PIERRE OMIDYAR

184

DAVE THOMAS

194

HOWARD SCHULTZ

204

CHARLES MICHAEL SCHWAB

208

RICHARD CHARLES NICHOLAS BRANSON

215

JEFFREY PRESTON BEZOS

222

HENRY ROSS PEROT

229

STEVEN PAUL JOBS

234

WILLIAM LEVITT

245

JOHN HAROLD JOHNSON

250

GORDON E. MOORE

255

DONALDALD AND DORIS FISHER

259

viii

WALTER ELIAS DISNEY

265

WILLIAM HENRY BILL GATES

271

FREDERICK WALLACE SMITH

280

DONALD JOHN TRUMP

290

SAM WALTON

296

SCOTT G.MC NEALY

305

SECTION B: STUDY OF INTERNATIONAL CORPORATIONSORASCOM TELECOM

317

ORASCOM TELECOM

318

NIKE

328

HONDA

338

TOYOTA

352

PEARSON PLC

357

MITSUBISHI GROUP

366

INTEL CORPORATION

379

DELL INC

389

HALLIBURTON

406

RANGE ROVER

419

MC-DONALDS

429

ix

GENERAL ELECTRIC

438

CLARKS

449

SCHLUMBERGER

459

BARCLAYS PLC

474

APPLE INC

483

HTC CORPORATION

493

NESTLE

508

PIZZA HUT

522

MOTOROLA INC

539

ADIDAS

558

GUCCI

575

WAL-MART

587

UNILEVER

596

IBM

613

MERCEDES BENZ

622

PEPSICO

633

CHEVRON

650

KFC

666

ABN AMRO

677

EBAY

685

WEATHERFORD

698

MICROSOFT

709

GLAXO SMITH KLINE

736

PROCTER AND GAMBLE

752

ABERCROMBIE & FITCH

765

DUNLOP TYRES

782

WALT DISNEY

794

SMITH & WESSON

806

CATERPILLAR

827

SECTION C: STUDY OF COUNTRIES ON REGIONAL BASIS

835

ANGLO CLUSTER

836

PAKISTAN-IRAN-TURKEY CLUSTER

846

LATIN AMERICA CLUSTER

883

GERMAN CLUSTER

904

ARAB CLUSTER

933

CHINA

960

xi

INTRODUCTION
COMPARATIVE MANAMGEMENT
Comparative management is the simultaneous study of management or business practices in
two or more different cultures, countries, companies or departments. Comparative
management analyzes the extent to which management principles are applicable from one
country to another. Although the concept of comparative management evolved in last sixties,
it continues to be the subject of considerable debate. This course is focused upon the study of
management in an international context. It examines and compares management practices of
different types from one cultural context to another, typically using different countries to
frame the cultural contexts. The study of comparative management requires a basic
understanding of organizational behavior in a highly competitive global marketplace. The
course considers management functions and manager skills including similarities and
differences between domestic and international management. In this course of comparative
management, class students were evaluated on following projects:

INDIVIDUAL PROJECTS (RESEARCH PAPERS & ORAL PRESENTATIONS)


A. Project 1 Individual:
This assignment was related to the study of successful corporate business leaders. Students
performed an analysis of in which they explored and analyzed the personal profile`s, early
life background`s, management styles of internationally successful leaders.
B. Project 2 - Individual:
The 2nd individual assignment was related to the management practices by renowned
international corporations. Students individually were allotted one international corporation
in which they had to do research on external and internal environments, SWOT analysis,
corporations background, and determine ways in which their strengths have exploited.
C. Project 3 - Individual cum Group:
This was the final project which involved the study of business environment of selected
countries by individual students, which were integrated on regional basis as group projects.
Students Worked as team of consultants, student groups presented their study report to a
1

board of directors engaged in the management of an enterprise having globa l presence. They
were to identify the right management style for success in the given country/group of
countries. To achieve this objective they were expected to present salient aspects of the
country/regional profile, business environment, entry barriers, most suited entry strategy, and
management appropriate management practices that may be used for running a successful
business.

SECTION A: STUDY OF SUCCESSFUL


BUSSINESS LEADERS

ANDREW MORRISON

NAME: ANDREW MORRISON


RESIDENCE: UNITED STATES OF AMERICA
ETHNICITY: AFRICAN-AMERICAN
CITIZENSHIP: AMERICA
OCCUPATION: PRESIDENT OF SMALL BUSINESS CAMP.
RELIGION: CHRISTIANITY
CHILDREN: A DAUGHTER

INTRODUCTION
The advent of technology and communication in the widespread competitive world of
business Small Business Success Survey highlights the struggles of small businesses
throughout the recession. Andrew Morrison is one of the successful business leaders and his
goal is to show how he built a Multi-million Dollar Business. He is a successful marketer, a
mentor, an entrepreneur and a motivational and inspiration leader. He with great devotion and
fervor serves his clients and his testimonials reveal that he had paved a way for many
potential customers who now run their own firms and business. Andrew Morrison is a
forward-thinker, gifted with knowledge that totally eliminates the box and promotes
success. Being an optimistic entrepreneur and belonging from a black minority he still had
strived for great success on both religious and ethnic background. Overcoming fear of public
speaking and writing was the pivotal point in his business career that he overcame to become
a success.
Andrew Morrison is the founder of Small Business Camp an entrepreneurial training and
marketing services firm. Andrew was born in Kingston, Jamaica and migrated to the United
States at the age of four. He grew up in the East Flatbush section of Brooklyn. After
graduation from Bronx High School of Science, Andrew studied Electrical Engineering at
Rensselaer Polytechnic Institute (RPI). His business and leadership skills were developed in
college.
When he became the president of African-American union during his studies, he was
responsible for 120 student clubs and managed a $5.4 million dollar budget. He also comes at
differe nt shows to discuss student leadership. Andrew is married and the proud parent of a
daughter. He also serves as an adjunct faculty member at New York University and the
Fashion Institute of Technology.

ABOUT ANDREW MORRISON


ACHIEVEMENTS AND ACCOMPLISHMENTS
In February of 2007, he trained 1,200 entrepreneurs in Nigeria, West Africa. The company
delivers an intensive 2-day program that allows the participants to walk-in with just an idea
and leave with a marketing plan, public relations strategy, money-making website, directmail campaign and 90 days of follow -up coaching.
5

His business and leadership skills were developed in college. In his junior year, he became
the first African-American to be elected the President of the Student Union. As the President,
he was responsible for 120 student clubs and managed a $5.4 million dollar budget. He also
comes at different television shows to discuss student leadership. He also serves as an adjunct
faculty member at New York University and the Fashion Institute of Technology.
Previously he built a multi-million dollar company by providing innovative direct marketing
services to Fortune 500 companies. He was featured in the Wall Street Journal, Entrepreneur
Magazine, The Network Journal and Crains Magazine 40 under 40 and Advertising Age. He
also appeared as a Young Millionaire on the Oprah Winfrey Show.
Andrew is the recipient of the prestigious Young Direct Marketer of the Year Award. He
recently completed a book entitled, 21 Questions That Can Build Your Business in 90
Days. Andrew is married and the proud parent of a daughter.
Andrew served as the Chairman of the Board for The Blue Nile Passage, Inc., a rite-ofpassage program for inner-city youth. He also sat on the Board of Trustees for the Rensselaer
Alumni Association, and was a member of the Presidential Search Committee for RPI.

MANAGEMENT STYLE AND ENTREPRENEURIAL SUCCESS


AS A MARKETING MANAG ER:
Andrew currently runs RFM Marketing, which develops interactive CD-ROMs, for magazine
publishers and retailers. Andrew is considered one of the leading experts in the field of
advertiser-supported database marketing programs. His first company, Nia Direct, reached $3
million dollars in sales by providing innovative direct marketing services for clients such as
P&G, AOL and Coca-Cola.
Most

recently,

Andrew

started

new

venture

called

Small

Business

Camp

(www.SmallBusinesCamp.com) to help small and minority business people take their


businesses to the next level. Small Business Camp - is an intensive hands-on weekend
seminar. On Friday, you can start with just an idea and by Sunday night, you will leave with a
moneymaking website, attention-generating direct mail campaign, and a public relations
strategy to help you gain local and national coverage. With Andrew's accom plishments he
certainly has the background to help you reach your goals with the insights shared at Small
Business Camp.
6

His business success has landed him as one of Entrepreneur magazine's youngest and
brightest Entrepreneurs and Crain's Magazine 40 Business leaders Under Age 40. He was
also awarded the Young Direct Marketer of the Year Award by the Direct Marketing
Association. Andrew has appeared on the Oprah Winfrey Show and CNBC. His company
was featured in Black Enterprise Magazine, The Wall Street Journal and Advertising Age . He
frequently gives lectures on direct marketing at New York University and industry seminars.

AS A MENTOR:
Andrew Morrison has developed a business over the internet for the help of minorities and
people who are passionate to venture into new businesses; Andrew Morrison helps people
transform their passions into a profitable business. He is wholehearted and fervent to inspire
and motivate people. His sincerest passion is to motivate, inspire, guide and connect men and
women to greatness, to their highest level of achievement. Write your own book product of
Andrew paints a picture that Andrew puts great deal of hope into people and he lets people to
find ways in maximizing their potential. Day by day he is reaching more people and helping
them to generate more money. His customers pride him, because he gave them tools that they
needed to be successful professionally.
Being a dazzling business strategist and a creative direct marketer, he is a successful mentor
and a coach as-well. His selfless, transparent approach to coaching and mentoring opened the
door to his personal and business contacts. One of the great successes revealed by his
customers and testimonials of customers on the web is that he gives simple idea such a
platform that becomes a profitable business. He continues to provide actionable steps anyone
can take to grow their business and by following his lead customers are able to significantly
increase the number of clients they have and amount of money their business makes. He is
also possesses very strong writing technical skills and confident public speaking skills.
Studying on Andrew Morrison reveals that he is a uniquely gifted business advisor,
consultant, brand manager, marketer and motivational speaker.

AS AN ENTREPRENEUR:
Andrew Morrison is a designation consultant for any new or existing small business owner.
He brings high energy and laser focused marketing recommendations to small businesses that
help them achieve their long term sales & profit objectives. He conduct`s different seminars
like Boost your sales in 90 days where Andrews insight gives people more bang to their
7

buck. His services are on the internet and he is recognized as one of the successful leaders on
internet too. Being a rare visionary breed he has created a lot of examples and helped people
to direct market their ideas and how to start a business with budget of $500. Andrew`s and his
customers success reveals that he let people follow and immediately execute the following
concepts as one of his client discloses:

Understanding biorhythm to resolve my challenge of procrastination.

Follow what other successful companies do to experience your own success.


You dont need to create a new wheel when there is one already well greased.

Identify the question you need to ask when you have that one opportunity to
talk to an industry expert.

He has 90 day marketing home study plan which is for somebody who has an idea for an
business and who is quite not sure from where to start. His marketing strategies are various
and they ways through which he helps people create their own business is enormous. He has
modes of teleconferencing, video conferencing, seminars, and his own publications have
paved a way for a lot people to build their own small business. In teleconferencing he gives
insight on different marketing tools such as developing the white pages and some strategies to
use when building a team and valuable tips on partnering with big corporations to solve a
clients needs, how to use the techniques of marketing to various multi-media outlets to
promote my businesses. Andrew steps into many people and his clients businesses sales,
promotion, advertising, marketing, public relations, networking, referral marketing, and
media relations with the goal of increasing their revenue. His insight and marketing knowhow is helps to create new innovative products to gather a new and a potential client base.

A MOTIVATIONAL AND INSPIRATIONAL LEADER:


Andrew Morrison is a powerful coach who knows how to get to the heart of matters. He
provokes thought and evokes the kind of change that propels businesses to new heights.
Keeping your mind going and knowing more about yourself is uncommon with some of the
mentors but Andrew coaches a wealth of information, inspiration, and simply fire`s to ignite
and push your clients to go beyond trying new ideas. His customers attest to the benefit of
Andrews coaching expertise when facing new challenges and adopting new behaviors. His
no nonsense communication style makes it easy to comprehend new concepts. He listens to
his clients and corrects when he sees them heading down the wrong path. Studies suggest that

most people give up on their New Years Resolutions within 30 days. You dont have to be
like most people. This year can still become your best year.
Here are a few quick tips from Andrew Morrison to keep you motivated all year-round:
1. be Gentle with Yourself.
2. Observe What Did NOT Work.
3. Implement a New Plan of Action.
4. Read a NEW Book.
5. Make Your Vision Plain.
6. Get Support.
7. Be Flexible.
In a interview to an journalist he was of the he explained his point of view that by focusing
on a small time frame, you actually begin to optimize your thinking and you optimize your
results. Furthermore it was disclosed that he believes in speed and he is a big believer in
being able to create something of value and to be able to show profit in less time. He really
wants to get his clients to understand that it is possible if they simply think its possible. He
further comments as your days are shorter; your wisdom begins to increase. If you have only
90 days to earn a profit, your brain begins to think more efficiently and more effectively. The
number of activities will always expand to the available time. If you be gin to compress time,
you begin to really morph it and direct it.
Once you are activated, once you wake up from your slumber, then you begin to act, move,
and do some really wonderful things. You already have the gifts, the skills, and the talents
inside of you and they simply need to be released. On one question that whether he is a coach
or not he commented that he is moving from being a motivational speaker to being an
activation speaker. People claim they need motivation, but they need activation.

CONCLUSION
Based on the research and the study it can be conclusively said that people like Andrew
Morrison not only have provided stage to productively assess their business strategies more
effectively, but he has also made it possible for clients to get the message of my business
more clearer which has set people moreover his clients on the paths for greater success. He is
9

doing business and seeks greater good of community by best appropriate and no-nonsense
communication. He has developed a website www.smallbusinesscamp.com through a
communication medium that is approachable and effective and this technological advanced
world also it is easily accessible to all those who are trying to start a business with a low
budget. His books, seminars of all kind, video training have helped a lot of people to develop
business. By doing a study on him I take a lot from him as an inspiration furthermore his
management style and entrepreneurial skills along with the support of his family let him
achieve his passions and interests which is also very interesting

REFERENCE`S
Book, 1 author
The Blueprint for Jump Starting Any Business Concept in 90 days, Andrew, Morrison, USA.
INTERVIEW
`Profile on Andrew Morrison, EINFONEWS, Written, Produced and directed by Kamau
Austin
INTERNET S OURCES
www.einfonews.com/profiles/andrewm.htm
http://harlemworldblog.wordpress.com/2010/01/26/andrew -morrisons-top -7-business-tips.
www.smallbusinescamp.com

10

LAKSHMI MITTAL

NAME: LAKSHMI MITTAL


BORN: 15 JUNE 1950 (AGE 60)
RESIDENCE:

LONDON, UNITED KINGDOM

ETHNICITY: INDIAN
CITIZENSHIP: INDIA
OCCUPATION: CHAIRMAN AND CEO OF ARCELOR MITTAL OWNER
OF KARRICK LIMITED
NET WORTH:

US$28.7 BILLION (2010)

RELIGION: HINDUISM
CHILDREN: TWO

11

INTRODUCTION
Lakshmi Mittal, The London-based, Rajasthan born steel baron is the Chairman and CEO of
Mittal Steel Company and the worlds 3rd richest man. He achieved this feat by creating
Arcelor Mittal; the biggest steel company in the world.

EARLY LIFE
Lakshmi Mittal was born in 1950 in a small town in India called Sadulpur of Rajasthan, in a
poor family. The extended family of 20 lived on bare concrete floors, slept on rope beds and
cooked on an open fire in the brickyard in a house built by his grandf ather. Lakshmi Mittal
belongs to Marwari Aggarwal caste and his grandfather worked for the Tarachand
Ghanshyam Das firm, one of the leading Marwari industrial firms of pre-independence of
India.
Being the eldest of five children, his parents decided to name him Lakshmi after the Hindu
goddess of wealth. At the age of six, his family moved to Calcutta, where his father gained
employment in a small British steel company. This gave the family the brevity to set up their
own business, but it turned out to be quite challenging and tough. His father worked night and
day to build their new business, Lakshmi Mittal, who happens to be a shy and introverted
teenager graduated from a Jesuit college, St Xavier's. Mittal surprised everyone, including his
parents by receiving excellent grades in accounting and mathematics. But instead of
becoming an employee accountant, Mittal joined the family's company "Ispat" and that
marked the turning point of his life.
The family later on moved to Kolkata where his father Mohan Mittal became a partner in a
steel company. Lakshmi Mittal graduated from St. Xaviers in Kolkata with a commerce
degree in 1969. He began his career working in the family's steelmaking business in India
and in 1976; Lakshmi Mittal founded Mittal Steel Company. He split from his father and two
younger brothers in 1994 and took the international arm, with interests in Indonesia and
Trinidad and Tobago, while the rest of the family kept the domestic Indian business.

EARLY CAREER & ESTABLISHMENT OF ARCELOR


Lakshmi was inspired 'by the massive rollers driven by rubber belts and pulleys that flattened
the red-hot steel into bars. Later on, Mittal went solo and founded the company, LNM Group

12

in 1976 at the age of 26 and has been responsible for the development of its businesses ever
since. He set up his first steel mill, in Indonesia, producing 26,000 tones and generating
annual profit of $1m.
Lakshmi Mittal soon realized that to become a major player in the steel market, his steel
would have to go global, just like car manufacturers, ship builders, iron and coal producers.
Determined to make his company a global player, he started acquiring companies in Canada
and Germany. Still not getting the big break he needs, he turned to Kazakhstan.
Back then, the former Soviet republic was in a financial mess and on the brink of bankruptcy.
Mittal acquired the country's Karmet Steel works in Temirtau for a knockdown price of
$400m. Kazakhstan happens to share a border with China, where demand for steel was about
to take off. That single acquisition turned out to be a very wise strategic investment as it
propelled Mittal into the big league of international steel makers. Lakshmi Mittal became a
global steel producer with operations in 14 countries.
Recognizing the need for a strong management team to execute his strategic expansion plans,
he brought in Indian managers, doubled production and began selling to booming markets in
the East. With luck, as well as timely judgment, he rescued Kazakhstan from financial ruin
and paved the way for further large scale acquisitions.
Lakshmi Mittal was also the visionary who saw that the fragmented international steel
industry, serving local markets, was crying out for consolidation. Many companies then were
owned by the governments and innovative developments were not forthcoming in the steel
industry. Though some companies had been privatized, the steel sector was still characterized
by acute over capacity, high indebtedness and steel prices that had hit rock bottom.
Lakshmi Mittal created Mitta l Steel in 2004 via a takeover of his private company, LNM
by his public one; Ispat. Mittal Steel became the largest steelmaker in the world, with
shipments of 42.1 million tons of steel and profits of over $22 billion in 2004.
In 2006, at the age of 58, Lakshmi Mittal took the world by storm by beating all European
establishments to acquire Arcelor Steel, a company created through a merger of firms from
Spain, France, Luxembourg and Belgium. Arcelor chairman, Guy Dolle, was forced to
swallow his words after controversially dismissing Mittal Steel as a company of Indians
paying with monkey money. After a long drawn battle, Arcelor's shareholders decided to sell

13

out despite opposition to the deal from politicians including former French President Jacques
Chirac.
The creation of Arcelor Mittal, the biggest steel company on earth and now worth over
100bn, couldn't have come at a better time. The new group, led by Lakshmi Mittal launched
into a worldwide commodities boom that has seen steel prices skyrocket fr om $240 a ton in
2002 to $1,000 today. Arcelor Mittal was the first to produce more than 100 million tons of
steel a year; that could double in a few years as Mittal Steel goes on another acquisition
spree, extending his empire to Africa, Australia and China.

PERSONAL LIFE
He is married to Usha Mittal, and both have a son and daughter, Aditya and Vanisha. His
wife runs the Indonesia business and his son Adtiya and daughter Vanisha are members of
the board of directors of Mittal steel.
He is the wealthiest person in Britain. His house in Kensington, bought in 2003 for $128
million is the most expensive house ever purchased. He also paid upwards of $55 million to
host his daughter's wedding celebration in Versailles in 2004.

PRESENT LIFE
Today, Arcelor Mittal employs 300,000 people in 60 countries, but accounts for only 10 per
cent of global output, so it could grow much bigger before attracting the attention of the antitrust authorities. Just as every successful entrepreneur is expected to face criticism, Lakshmi
Mittal has attracted criticism which he always welcomes and tries to find room for
improvement.
Lakshmi Mittal is proud to be Indian, but he considers himself a 'global citizen'. Despite his
immense wealth, his family's 44 per cent stake in Arcelor Mittal worth 24bn, he doesn't seek
the limelight.
Without showing signs of resting on his oars, Lakshmi Mittal is plotting his next move. He
wants to secure deposits of coking coal and iron ore, which have doubled in price in the past
four years and whic h are vital for the production of steel. He is in talks to acquire coal mines
in Australia and Russia, while expansion elsewhere means that Arcelor Mittal now meets 45
per cent of its iron ore requirements from its own supplies.

14

Lakshmi Mittal has also invested in shipping and rail to cut transport costs. The only part of
the supply chain that remains outside his control is oil and gas: an area, perhaps, that could
attract his attention before too long.
He is currently the Chairman of the Board, Chief Executive Officer, President, Managing
Director of Operations and Member of Group Management Board, Arcelor Mittal. He is
connected to 73 board members in 23 different organizations across 22 different industries

LEADERSHIP STYLE
A transactional leader:
Mittal is a transactional leader who guides and motivates his follower in the direction of
established goals by clar ifying role and task requirements.
The leader Mittal is

a great individual as besides business he has worked a lot for his people.

a corporate leader in business

started the trend of mergers around the world

a caring family man

a complete human being

QUALITIES AND DISTINCTIVENESS

Hardworking

Outstanding vision

Convincing

Motivating

Guiding

Zeal and fierceness

Capacity to lead

Bravery

Awards and Honors


Aside his achievements in business, Lakshmi Mittal was awarded Fortune magazines
European Businessman of the Year 2004 and also Steelmaker of the Year in 1996 by
15

New Steel, and the Willy Korf Steel Vision Award in 1998, for outstanding vision,
entrepreneurship, leadership and success in global steel development from American Metal
Market and PaineWebbers World Steel Dynamics.
In 2002, Lakshmi Mittal was involved in a political scandal with British Prime Minister Tony
Blair, when a donation he made to the Labour party led to Blair's intervention in a business
deal flavoring Mittal, it was announced later he donated 2 million to the Labour Party.
Lakshmi Mittal is an active philanthropist and a member of a few trusts. Mittal is a member
of the Foreign Investment Council in Kazakhstan, the International Investment Council in
South Africa, the World Economic Forums International Business Council and the
International Iron and Steel Institutes Executive Committee.
In March 2005, Forbes Magazine named him the 3rd richest man in the world and the richest
non-American, with an estimated wealth of US$25 billion. He has been on the Forbes list of
world's top 10 richest billionaires for more than five years running.
He is member of

The Foreign Investment Council in Kazakhstan

The International Investment Council in South Africa

The World Economic Forums International Business Council

The International Iron and Steel Executive Committee

Lakshmi Mittal is the Director of ICICI Bank Limited and is also on the advisory Board of
the Kellogg School of Management in the US.

CONCLUSION
Lakshmi Mittal is a person who is focused and determined. He has seen all the hardships if
life and yet he has be able to go through them successfully. He is a great corporate leader has
he had the abilities of motivating, guiding and convincing people easily by his skills due. He
provides his employees a healthy and safe environment. He as a person is a great human
being as he has worked a lot for his people as well as to his personal life. He has played a
major role in supporting the communities in which they operate. He has donated huge
amounts to community development projects for education.

16

The thing I liked about him was that he is successful in every field of life, whether it is
business, family or pleasure he maintained an immense balance. Interestingly he chose a
career towards which he was fascinated rather than in which he scored well. Due to his great
personal qualities he is so flourishing in his career which makes him a great leader. The best
thing I found about him was that he thinks out of box rather than following others and doing
the same thing again. He always looked for opportunities wherever they might appear.

Lesson Learned

Always think out of box

Help your own people and never lose your identity

Keep a balance with everything

Never give up easily

Choose the career according to your interest

Look for opportunities

Take criticism as positive thing

Take care of your employees

REFERENCES
Busine ss

exchange,

2011.

Bloomberg

Business

Week

[online]

Available

at:

http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId
=364042&ticker=MT:US [Accessed April 02, 2011 4:21 AM].
OPPAPERS,

2010.

OPPAPERS.COM

[Online]

Available

http://www.oppapers.com/subjects/lakshmi-mittal-leadership-skills-page1.html

at:

[Accessed

11/15/2010 08:06 PM].


Encyclopedia Britannica, 2011.

Encyclopedia Britannica eb.com [Online] Available at:

http://www.britannica.com/EBchecked/topic/1089324/Lakshmi-Mittal[Accessed April

02,

2011].
Investing value, 2008. Investing value business and finance portal [Online] Available at:
http://www.investingvalue.com/investment-leaders/lakshmi-mittal/index.htm

17

Woopidoo,

2005.

Biographies

of

business

leaders

[online]

Available

at:

[Online]

Available

at:

http://www.woopidoo.com/biography/lakshmi-mittal/index.htm
Slide

Share,

200.

Slide

share

present

yourself

http://www.slideshare.net/abhisheklbsim/laksmi- nivas-mittal-presentation

18

MICHEAL BLOOMBERG

NAME: MICHAEL RUBENS BLOOMBERG


BORN: FEBRUARY 14, 1942
BIRTH PLACE: BOSTON, MASSACHUSETTS
RESIDENCE: UPPER EAST SIDE, NEW YORK CITY
NATIONALITY: AMERICAN
RACE: WHITE
RELIGION: JUDAISM
OCCUPATION: 108TH NEW YORK MAYOR
NET WORTH: US$18 BILLION IN 2010
WEBSITE: OFFICIAL MAYORAL WEBSITE

19

EARLY LIFE
Michael Bloomberg was born in Boston on February 14, 1942 at St. Elizabeth's Hospital in
the Brighton neighborhood. His late father was William Henry Bloomberg who was a real
estate agent and his mother was Russian Jewish immigrant Charlotte Rubens Bloomberg. He
has a younger sister, Marjorie Tiven, who is the Commissioner of the New York City
Commission for the United Nations, Consular Corps and Protocol.
Initially his family lived in Allston and then moved to Atherton Road in Brookline,
Massachusetts. F inally they settled in Medford, Massachusetts. There he lived until after he
graduated from college. Bloomberg attended Johns Hopkins University, where he joined Phi
Kappa Psi, and graduated in 1964 with aBachelor of Science (B.S.) degree in electrical
engineering. Later he received his MBA degree from Harvard Business School.
Then in 1975 Bloomberg married Yorkshire-born Susan Brown and had two daughters,
Emma (b. ca. 1979) and Georgina (b. 1983). Though later on Bloomberg divorced Brown and
is currently romantically linked with former New York State Banking superintendent, D iana
Taylor.

INTIAL BUSINESS CAREER AND SUCCESS


After graduating from his University, Bloomberg went to work for the Salomon Brothers
which was a Wall Street investment bank. He started out as a clerk (1966) and advanced
through the ranks at and became a partner in 1972. By 1974 he was even the head of equities
trading and systems development and was supervising all of Salomon's stock trading, sales
and information systems. Unfortunately though, in 1981, after a merger, he was fired and was
given a $10-million severance package. Rather than retire, Bloomberg decided to start a new
business using the $10 million, and joining his experience with computers to his background
in the finance markets. He envisioned a computerized information system that would allow
Wall Street firms to tap into a real-time store of market data, financial calculations and
projections via a computer terminal on their desks. Therefore Innovative Market Systems was
born.
Though not many were interested his company caught the eye of Merrill Lynch in 1982. It
became the first customer of the company's Market Master Terminals and investing $30
million as it was sufficiently impressed with Bloomberg's creation. It insta lled 22 of his
20

machines which could perform complicated calculations on government bonds as well as


conventional pricing computations of Merrill Lynch's inventory
Although, by the mid-1980s at least 20 companies were offering almost the same screenbased news, market data, and research to Wall Street brokers and traders. Yet Bloomberg's
constantly evolving machine always stayed ahead as it not only provided bond and stock
prices and volume and other basic data, but it even combined sources that had previously
existed only in scattered paper versions or through various specialized electronic services.
Thus, by expanding, Bloomberg and his IMS partners set out to market their terminal to the
larger financial world. With industry leader Merrill Lynch already on board, IMS's new sales
force was soon leasing Bloombergs, at $1,000 a month to such eminent customers as the
Bank of England and the Vatican. Finally, in the spring of 1986 Bloomberg changed the
company's name from IMS to Bloomberg L.P.

BLOOMBERG L.P, THE COMPNAY ON THE RISE


Bloomberg LP started out as a financial data and communications company which leased
multifunction computer terminals to primarily financial and information industry customers
such as banks, securities brokerage firms, government agencies, and media organization.
Even though Bloomberg LP was installed in 1986 by 1987 it had already installed 5,000
terminals. He expanded his customer base from "buy side" firms such as pension funds,
central banks, mutual funds, insurers to the "sell side" of the financial industry such as
securities underwriters and trading firms.
Therefore, within a few years, ancillary products including Bloomberg Trade book (a trading
platform), the Bloomberg Messaging Service were also launched. Then in 1990 Blo omberg
newswire was instigated. Bloomberg News (originally known as Bloomberg Business News)
had over 145 bureaus around the world, producing more than 5,000 stories daily. B loomberg
News was one of the worlds largest and most trusted information sources. It includes
Bloomberg TV, the only worldwide 24-hour business and financial television network;
Bloomberg Radio; Bloomberg.com, and a number of print outlets including Business Week.
Its newswire operation provides content for 350 newspapers and magazines worldwide,
including The Economist, The New York Times and USA Today. Bloomberg L.P. also
maintains a large in-house staff of data collectors (Bloomberg Princeton, New Jersey), sales
people, and computer programmers and technical personnel.
21

Thus with a mission of clarity, transparency, empowerment and innovation, Bloomberg LP


was widely considered to be one of the worlds most ground-breaking companies especially
due to its belief in the importance of investing in and supporting its employees. Hence Forbes
magazine ranked Bloomberg L.P. 223rd in the 1996 Forbes 400.

BLOOMBERGS WAY OF MANAGING BUSINESS


MANAGEMENT OF EMPLOYEES
The incredible success of Bloomberg LP lies solely on Michael Bloombergs shoulders for
being one of the most creative media entrepreneurs of his time. He was a leader in the truest
sense of the word rather than a follower of the business norms. Performing what at other
companies would be separate jobs for each employee was typical for the members of
Bloomberg's operation. His compa ny was a serious, ambitious, blue-suited firm, highly
control-oriented, idiosyncratic in many ways but still very conventional in its top-down
management style and conservative strategies.
The culture Bloomberg built within his company was a mixture of openness and domination.
He was a Paternalistic leader who was essentially dictatorial yet took decisions that were in
the best interests of his employees as well as the business. Bloomberg L.P did not have a
well-defined management structure as none of his employees had a title, not even the bosses.
People were allowed to move around a lot from one job to another, from one branch to
another, learning different jobs while exchanging ideas. All his policies encouraged
cooperation and openness among his employees. Though, lines of responsibility were
maintained such as the reporters had editors and staff members had supervisors. Yet he
believed that allowing his employees to move around and interact with each other allowed
them to come up with great ideas and achieve greater goals.
On the other hand though, Bloomberg insisted on urgency, initiative, long hours, and
complete loyalty to the company. Take ownership of a project and do it now! was his
mantra. He would ask his employees to tank up on the caffeine and sugar need be to meet the
deadlines. This was one of the reasons Bloomberg provided all his employees free food on
site so to keep them from leaving the office for lunch. He continuously wanted them at their
desks, working. He freely admitted that he looked for workaholics who were young,

22

ambitious, urgent, caffeine -fueled hotshots, as they were the only types that would thrive in
the Bloomberg corporate culture.

MANAGEMENT OF CUSTOMERS
His strategy for dealing with his customers was basically centered on catering to his
customers every wish and whim. If his customers asked for sports scores Bloomberg gave
them sports scores or Horoscopes or weather reports. Customer satisfaction was his number
one priority. He never fell short to even provide to his international customers. He went as far
as to provide his Japanese customers information such as sumo wrestling results complete
with images of nearly naked behemoths. As a result his business grew to immense
proportions as word of his terminals spread.

CURRENT POSITION
On January 1st 2002, Michael Bloomberg assumed office as the mayor of New York. As
mayor of New York, Bloomberg declines to receive a city salary, accepting remuneration of
$1.00 annually for his services. Now, though Bloomberg does not run the day-to-day affairs
of Bloomberg LP, he still owns almost all the shares. Therefore he still gets to handpick the
firms managers, talk with them as much as he feels he needs to, and therefore imposes his
own will on the firm when he likes. New Yorks ineffectual Conflicts of Interest Board
limited but never fully defined the mayors role at the company he founded hence the board
allows him to maintain the type of involvement that he believes is consistent with his being
the majority shareholder.

LESSONS TO BE LEARNED
Bloomberg with his larger than life persona is truly a man to be followed considering his vast
amount of success in his every profession. There is no doubt that Bloomberg is a king in the
land of CEOs as he started out as a mere clerk and ended up as the owner of one the biggest
companies in the United States. Then as if his appetite for reaching the stars had not been
satisfied, he went into a completely different profession and became the mayor of New York.
His management style depicts a man of integrity who doesnt demand more than he can put in
himself which is a true indication of a leader. His stress on getting the job done without any
excuses is one of the major reasons why he and all his employees were always on the top of

23

his game. Not only that, he also paved the way like a true leader for his employees so there
was no way that his employees could never perform to the best of their abilities. If he
demanded absolute commitment on the job he also provided for such an environment in his
organization where people could commit to their work without feeling uncomfortable either
because of the people around them or the equipment in their use.
Furthermore, the incredible success of Bloomberg LP did not get to Mikes head; in fact it
allowed him to become one of the worlds leading philanthropists. In addition to Mikes
personal philanthropy, Bloomberg LP conducts its own extensive philanthropic program,
supporting education and literacy programs, health and medical research, and environmental,
arts and cultural programs around the world. Bloomberg LP is also a global leader in
sustainability, launching an aggressive program to reduce its carbon footprint by 50% by
2013 through energy efficiency, using more renewable resources and reducing waste.
The only point that puts one off was his extremely demanding nature. His absolute fixation
on getting the job done no matter what meant that even a good employee would have a
good chance of getting burned out by too much stress due to such skyrocketing expectations.
Yet, besides this one blip on his otherwise awe inspiring leadership capabilities, Michael
Bloomberg is no doubt a man that truly deserves recognition, as he reached the stars and
beyond. And then he made sure that the people around them reac hed the stars as well. As a
business student there is nothing more one would want them to follow in his footsteps.

CONCLUSION
Thus, Bloomberg LP is widely considered to be one of the worlds most pioneering
companies, from its bullpen style seating for all employees, to its belief in the importance of
investing in and supporting its employees, while up keeping a mission of clarity,
transparency, empowerment and innovation. Even today his namesake company remains a
leader in the market for business media. Its core product, the Bloomberg Professional, is a
service terminal that provides real-time financial news, market data, and analysis.
Headquartered in New York City, Bloomberg LP has more than 280,000 subscribers and
11,000 employees in over 135 offices around the world. Applying lessons from an early
career on Wall Street and from two decades building his eponymous financial-information
and Media Empire, the mayor is had made ample use of technology, marketing, data analysis,

24

and results-driven incentives to manage what is often seen as an unmanageable city of 8


million just like he did his company at one time. Lucky for him both are working like well
oiled machines.

REFRENCES
Business leader. (n.d). Retrieved March 11, from
http://www.mikebloomberg.com/index.cfm?objectid=87360FFB-C29C-7CA2F92DC3FBE4A49054
Bloomberg L.P. - Company profile, information, business description, history, background
information

on

Bloomberg

L.P.

(n.d).

Retrieved

March

11,

from

http://www.referenceforbusiness.com/history2/31/Bloomberg-L-P.html
Michael Bloomberg biography. (n. d). Retrieved March 12, from
http://www.investingvalue.com/investment-leaders/michael-bloomberg/index.htm
Michael Bloomberg. (n.d). Retrieved March 10, from
http://en.wikipedia.org/wiki/Bloomberg_L.P.
Michael Bloomberg biography. (n.d). Retrieved March 12, from
http://www.woopidoo.com/biography/michael-bloomberg/index.htm
Missing Mike, A media and data business is pining for its inspirational leader. (Sep 2004).
Retrieved March 10, from http://www.economist.com/node/3157650
Keiger, D. (n.d). What Makes Mike Bloomberg So Smart?. Retrieved March 11,
from http://www.jhu.edu/jhumag/1196web/bloombrg.html

25

OPRAH GAIL WINFREY

NAME: OPRAH GAIL WINFREY


BORN: NOVEMBER 29, 1954 IN KOSCIUSKO, MISSISSIPPI
OCCUPATION:
AMERICAN

TELEVISION

HOST,

ACTRESS,

PRODUCER,

AND

PHILANTHROPIST
OWNER

AND

THE

CHAIRMAN

OF

HARPO,

INC.;

HARPO

PRODUCTIONS; HARPO STUDIOS, INC.; HARPO FILMS, INC.; HARPO


PRINT, LLC; AND HARPO VIDEO,
NET WORTH: OVER $2.7 BILLION
CURRENT RESIDENCE: MONTECITO, CALIFORNIA.
CITIZENSHIP: AMERICAN

26

BACKGROUND
Oprah Gail Winfrey was born on November 29, 1954 in Kosciusko, Mississippi. After a
turbulent childhood with her single mother, Winfrey went to live with her father in Tennessee
at the age of 14. Winfreys father was a strict disciplinarian and he offered his daughter a
stable life rooted in religion, family, education, and hard work. The move to Tennessee
proved to be a turning point in the entrepreneurs life.
Winfrey attended Tennessee State University in Nashville majoring in speech and drama.
During her sophomore year, she landed a job at the CBS affiliate in Nashville becoming the
citys youngest television reporter as well as its first black female correspondent. Winfrey
quickly progressed to a position as co-anchor. Winfrey did not care for the news reporting
and would often deviate from journalistic standards when reporting disturbing stories by
showing too much emotion according to her producers.
Winfrey moved to Baltimore Maryland in 1976 to co-anchor the evening news. Two years
later the station executives decided to remove Winfrey from the newscast. Being under
contract, Winfrey was appointed the new co-anchor of the morning show People Are
Talking. After the first taping, Winfrey knew she had found the work she loved.
In 1984, Winfrey was hired to host A.M. Chicago which was faltering against the stronger
Donahue show. The station executives had expectations of just improving the shows numbers
with no expectations of beating Donahue. After the first month A.M. Chicago surpassed
Donahue to become the citys top rated talk program. Winfrey and her lawyer Jeffrey Jacobs
formed Harpo, Inc in 1986. Today, Winfrey is an owner and the Chairman of Harpo, Inc.;
Harpo Productions; Harpo Studios, Inc.; Harpo Films, Inc.; Harpo Print, LLC; and Harpo
Video, Inc., with a total net worth of over $1 billion. Jeff Jacobs, the president of Harpo, Inc.,
has a 10 percent of the ownership of that company with Winfrey still holding 90 percent. At
this time, Winfrey is not willing to go public with any of her ventures.

LEADERSHIP
A participative leader is one who shares decision making with group members. Most
organizations prefer this style of leadership since the leader does not always have all of the
answers. Oprah Winfrey utilizes a participative leadership style; Its all about attracting

27

good people. Ive always tried to surround myself not only with people who are smart but
with people who are smarter in ways I am not. (Koehn 2005). Consensus leaders encourage
group discussion about an issue and make a decision based on the consensus or general
opinion of the group. Winfrey encourages input from her colleagues and staff. Charisma is
the ability to lead or influence others based on personal charm, magnetism, inspiration, and
emotion. Winfrey is able to inspire her staff, colleagues and audience through her large scale
of humanitarian work. Oprahs Angel Networ k was created in 1997 to pool and donate
money to a wide range of charities. In its first seven years, the shows audience, along with
celebrities and corporate sponsors, contributed nearly $30 million. The donations were used
to fund Habitat for Humanity homes, college scholarships, womens shelters, youth centers,
and rural school construction. In 2000 the Use Your Life Award was established to
recognize the efforts of volunteers. In 2004 she contributed $50 million to The Oprah
Winfrey Foundation, an amount that placed her on The Chronicle of Philanthropys list of
Americas top donors for the year. In 2002, Nelson Mandela and officials from South
Africas Ministry of Education joined Winfrey as she broke ground on the future site of the
Oprah Winfrey L eadership Academy for Girls in South Africa.
Oprah Winfrey has the ability to inspire trust within her organization and among her
audience. Each November Winfrey airs a show titled My Favorite Things. During these
shows Winfrey presents a list of produc ts and services that she is fond of. The companies
whose products that appear on the show are prohibited from advertising the product with
reference to the show. Trust is cited as being the reason for avoiding any appearance of paid
endorsement. First and foremost she has credibility. Viewers know shes not recommending a
product on any quid pro quo. Its because she likes it. Her judgment, her advice they know
she cant be bought.
She inspires leadership within others. All of her humanitarian efforts enc ourage others to
achieve more in all aspects of their lives. Harpos official mission statement is to be a
catalyst for transformation in peoples lives, to help them see themselves more clearly and to
make the best choices they can by using stories, real peoples experiences, information and
ideas. Our intention is to create moments in which people can connect to the truest sense of
themselves and build from there.
Part of Winfreys success can be related to her communication style. It is Winfreys belief
that through the organizations expertise in communications, the organization can perform a
28

valuable service around the globe. Winfrey has become an expert in communicating to her
audience. The audience can relate to Winfrey and the shows topics. Winfrey can relate to the
shows topics equally as well as her audience members can. She struggled in life with abuse,
weight, race and a broken home just like so many others have. Winfrey is an entrepreneur
within the media industry. In addition to the Oprah Winfrey Show, she has been able to
purchase rights to films, produce another successful talk show, and start a magazine that is in
line with Harpos mission. Winfrey exudes a high level of enthusiasm as well as passion for
her business and the purpose of he r business.

MANAGEMENT STYLE
Throughout the years, Winfrey has inspired her employees and even rival talk show hosts
with her distinct approach. She is usually the first to show up to work and often last to leave.
By the 90s, Winfrey and Jacobs decided they needed more people to help run Harpo, Inc.,
and hired Tim Bennett to establish a clear business process and develop the organizational
charge. This choice was a defining moment in the development of Winfrey, and Harpo, Inc.
Oprah Winfrey has not always been a talk show icon. She has also starred in several
television shows and movies. One of the first films for Winfrey to be involved with was The
Color Purple a movie about a young, poor woman abused at an early age. Her portrayal won
her nominations for Academy and Golden Globe awards for her role of Sofia. Winfrey has
taken her celebrity status and used it as a platform to become a role model for women in
every walk of life. She often connects her talk show guests with assistance for those in crisis,
she rewards people who have shown unselfish behavior and she touches on issues that even
she has experienced. She speaks of her cocaine use in her 20s, and of her own abuse as a
child. She uses these opportunities to lead by example, to show that regardless of your
circumstance, perseverance and effort can overcome the obstacles often viewed as
insurmountable.
Two quotes attributed to Winfrey says My philosophy is that not only are you responsible
for your life, but doing the best at this moment puts you in the best place for the next
moment.. The second quote is Real integrity is doing the right thing, knowing that nobody's
going to know whether you did it or not. These quotes, taken separately, can have a wide
variety of interpretations on Winfreys management style. But looked at together, it shows

29

that she has built a strong foundation on being accountable for your actions, having a sense of
pride in your effort and doing the right thing, even if youre the only one to know you did it.

MOTIVATION
Winfreys company started with eight employees, and she learned early on she didnt know
anything about operations and didnt care for the business aspect of being Oprah. She hired
her then contract lawyer, Jeffrey Jacobs to be her Chief Operating Officer. Motivation is the
effort expended to accomplish results, from a force within the person. However, the leader
and/or manager is the one to ignite that force. Winfrey learned that the hard way in the
beginning. Winfrey will tell you that in her early years she ran her employees into the ground,
often expecting them to work sixteen to seventeen hour days. If they didnt have her stamina,
she said good-bye to them. She had a rude wakeup call however, when one of her employees
after a grueling 18-hour day pulled her car into the garage and fell asleep with it running.
Fortunately, she was ok, but it changed the way Winfrey treated her employees.
Since that time, Winfreys company has maintained a 10-15% turnover rate, while her top
executive team has an average tenure of eleven years. Currently her company employees over
220 people, with 68% of them being female. With the level of turnover at her company, you
can expect that she is meeting the needs of her employees, like recognition, and being valued
for their efforts. Winfrey leads by example and her employees understand her vision and
mission in life and make it theirs. Everything she does she has an intention about it, so must
her employees when they present ideas to her. What good will be done if we do this, is the
question she challenges them to ask themselves, whether youre the receptionist or part of the
team creating ideas for her shows. Winfreys employees report that Winfrey's enthusiasm is
rampant among the office and her charisma contagious. The employe es share her same
passion and they are an extremely committed team. People want to work for her. She pushes
them just enough to grow as individuals and professionals, and supports their many personal
commitments to charity and mission work as well.
The company isnt top down managed; she allows the individual departments to run
autonomously to meet their goals. She expects everyone to use his or her minds and hearts on
the job.
Interestingly, Winfrey requires employees to sign a confidentiality agreement, which
prohibits them from speaking publicly or privately about Winfrey while they are employed or
30

after they leave. This agreement also covers any photos in their possession as well. Upon
leaving the company, you must return any photos not given to you as a gift while employed,
should they show up somewhere, legal action would be taken. Obviously with the companys
low turnover most employees are comfortable with this and sign willingly, understanding the
importance of managing publicity to protect and retain image. After all, if Winfreys
reputation is tarnished, the company loses as well. Her employees are proud of her and take
her request for privacy very seriously; pride is often one of the psychological needs for
motivation. One former employee did challenge Winfrey on the agreement, stating it was a
violation of the First Amendment rights, and free speech. This was the same legal defensive
Winfrey used when taken to court by the Texas cattle ranchers. The cattle ranchers sued
Winfrey because the defamatory remarks she made about beef made on her show, which in
turn caused the beef industry to lose billions of dollars.
The former employee didnt win the fight, but was glad she tried. She said working for
Winfrey was tough, and could get very caddy at times, but there was no doubt Winfrey had
talent and integrity, but was much too controlling. In spite of that small bit of press, there is
nothing on the internet or in the bookstores as to what type of boss Winfrey really is. Based
on the tenure of her top executives and the low turnover rate one can only assume it must be a
great place to work. For their efforts, employees start their first year with six full weeks of
vacation time, and fully funded health insurance. At their office, which is an old ice hockey
rink, she provides an in house gym and spa for employees to use. Through the offering of
these benefits, plus a pleasant work environment, and a company culture that rewards
employees for being creative, and an opportunity to work as part of a team, Winfrey meets
the needs for employee motivation according the Maslows Need Hierarchy pyramid.
At the companies five-year anniversary she gave every employee a gift of $5,000.00 to
acknowledge his or her achievements within the company. Giving it as a gift meant they got
the extra bonus of not having to pay taxes on the money either. This is obvious financial
incentives for motivation, a common incentive used by managers.

COMMUNICATIONS
Though Winfrey communicates with the world through so many venues, the communication
style when it comes to business operations is kept secret. Employees are required to sign the
Harpo Employee Manual and are expected to abide by it. In this manual, it cle arly states that

31

during and after employment, the individual is obligated to keep anything dealing with
Harpo, Inc. confidential and may not disclose anything. This includes all business activities,
dealings or interests of the company.
Therefore one can only assume that her management style within her empire operates through
informal communication channels. Winfrey delegated certain individuals to leadership and
management roles throughout the different departments within the companies, based on their
expe rtise in a specialized area, or how trustworthy and close they were to her. The
communication blackout contract is also a way Winfrey can control negative organizational
politics in her business. Preventing employees from saying anything regarding the business
outside the office may also limit negative gossip and communication internally, in turn
preventing negative politics within the business. More time can be spent on operations and
job efficiency rather than handling the political games between workers. Oprah Winfrey is an
effective communicator. She understands her employees and her employees understand her
and the level of management. Another reason why she communicates so well is that she sees
people as she sees herself. Sometimes employees may be overloaded with information on the
job and she understands that. She has a way of positive motivation through communication.

TEAMWORK
Oprah Winfrey started Harpo, Inc. in 1986. In the beginning, Winfrey and her lawyer Jeffrey
Jacobs ran the business with minimal staff and little formal structure. At first Winfrey would
be one of the first to arrive each day. She personally reviewed the scripts, taped two shows,
talke d with the audience members, personally signed every key corporate check and edited
content for her publishing venture, O, The Oprah Magazine. She was fully engaged in
every aspect of the creative process. Gradually, however, it became clear that more people
were needed to run the growing organization. Winfrey built a team to run her company and
gave each division a great deal of autonomy. Winfred is providing the feeling of
empowerment which allows the team to have the four experiences of empowerment: potency,
meaningfulness, autonomy and impact. This all leads to a successful team experience. The
Company is not managed from the top down. Each department head has a considerable
amount of autonomy to execute it goals. And there is not a lot of micromanaging in these
areas. The fact that Winfrey chooses not to micromanage helps foster teamwork by giving the
team control over their work.

32

Winfrey built a team composed of members that shared her vision and was willing to support
her quest for excellence. By having her employees sign a confidentiality agreement, she is
providing the team with the common enemy to compete against. In this case the enemy is
those that would like to tarnish Winfreys reputation. Staff members in all departments
regularly logged long days, some days up to 17 hours. Winfrey knew the demanding schedule
and constant deadlines strained some staff members. Winfrey commented I have great
stamina, and I wear other people into the ground. The members of the team who succeeded
at Harpo, Inc. became a part of a group deeply prized by Winfrey. Winfrey was quoted in a
TV Guide article, I could weep when I think about my team. Its all about attracting good
people. Ive always tried to surround myself not only with people who are smart but with
people who are smarter in ways that I am not. I have the best team ever. They get me. I feel
Ive created my own extended family here at work, with people that understand the code. We
have a code of excellence that has been the standard bearer for us, and everybody gets it.
And, if you dont get it you dont last very long.
Winfrey by demanding performance helps to sustain her team. The teams reward is the
continued success of Harpo, Inc. By surrounding herself with the best and brightest, Winfrey
is providing an opportunity for success of the team and her company as the quality of team
members directly relates to the success of the group.

CONCLUSION
Starting from the ground floor of the television industry, Winfrey has made all the right
moves in becoming one of the largest and most successful entrepreneurs in the
communications industry. Her highly loyal and motivated staff has risen to the challenges
provided by their leader and continues to strive to be industrys best. Winfreys future is still
in question as to whether she will continue her successful The Oprah Winfrey Show or if
she will take Harpo, Inc. in yet another successful direction in the communications industry.
As a CEO, Winfrey will continue to be a shining example in an industry that has proven to be
tough on CEOs with more business experience.
She really sets an example for the women around the world through her unparallel
entrepreneurial skills. According to Forbes, she is considered to be the most influential and
powerful women in the world. Her tremendous work towards the betterment of the poor

33

around the world makes us wonder that a person could do so much through philanthropist
efforts and bring a considerable change in the lives of the needy.
Oprah Winfrey utilizes a participative leadership style, and believes that there should be
cooperative environment in every or ganizations and the spread of power should be fair. Her
philosophy to be responsible to your actions and the repercussions of those actions to the
general society has greatly influenced the leaders of today to have their corporate strategies
linked with the general good of the society.

REFERENCES
DuBrin, A. J., 2006, Essentials of Management, Seventh Edition, Thompson South-Western,
Mason, OH.
Koehn, N. & Helms, E., 2005, Oprah Winfrey, Harvard Business School, Harvard Business
School Publishing, Boston, MA.
Sellers, P., 2002, The Business of Being Oprah, Fortune Magazine, New York, NY.
http://highered.mcgraw-hill.com/sites/dl/free/0072873744/120285/his73744_ch01pms.pdf
retrieved on May 22, 2006.
http://www.achievement.org retrieved on May 18, 2006.
http://www.foxchicago.com/-ezpost/data/36602.shtml retrieved on May 16, 2006.
http://www.gale.com/free_resources/bhm/bio/winfrey_o.htm retrieved on May 16, 2006.
http://www.mutualofamerica.com/articles/Fortune/2002_04_08/Oprah retrieved on May 14,
2006.
http://www2.oprah.com/presents/2003/christmaskindness/leadership/pres_2003_ck_leadershi
p.jhtml retrieved on May 17, 2006.

34

ALVIN AILEY

NAME: ALVIN AILEY


BORN: JANUARY 5, 193 1
DIED: DECEMBER 1, 1989
RESIDENCE: ROGERS, TEXAS
ETHNICITY: BLACK
CITIZENSHIP: UNITED STATES OF AMERICAN
OCCUPATION: DANCER
NET WORTH: $14 BILLION (SEPT 2010)
EDUCATION: ATTENDED THE UNIVERSITY OF CALIFORNIA, LOS
ANGELES, AND SAN FRANCISCO STATE COLLEGE

35

BIOGRAPHY:
Alvin Ailey Jr. was born to Alvin and Lula Elizabeth Ailey on Janua ry 5, 1931, in Rogers,
Texas. He was an only child, and his father, a laborer, left the family when Alvin Jr. was less
than one year old. At the age of six, Alvin Jr. moved with his mother to Navasota, Texas. As
he recalled in an interview in the New York Daily News Magazine, "There was the white
school up on the hill, and the black Baptist church, and the segregated [only members of one
race allowed] theaters and neighborhoods. Like most of my generation, I grew up feeling like
an outsider, like someone who didn't matter.
In 1942 Ailey and his mother moved to Los Angeles, California, where his mother found
work in an aircraft factory. Ailey became interested in athletics and joined his high school
gymnastics team and played football. An admirer of dancers Gene Kelly (19121996) and
Fred Astaire (18991987), he also took tap dancing lessons at a neighbor's home. His interest
in dance grew when a friend took him to visit the modern dance school run by Lester Horton,
whose dance company (a group of dancers who perform together) was the first in America to
admit members of all races. Unsure of what opportunities would be available for him as a
dancer, however, Ailey left Horton's school after one month. After graduating from high
school in 1948, Ailey considered becoming a teacher. He entered the University of California
in Los Angeles to study languages. When Horton offered him a scholarship in 1949 Ailey
returned to the dance school. He left again after one year, however, this time to attend San
Francisco State College.

EARLY LIFE
For a time Ailey danced in a nightclub in San Francisco, California, then he returned to the
Horton school to finish his training. When Horton took the company east for a performance
in New York City in 1953, Ailey was with him. When Horton died suddenly, the young Ailey
took charge as the company's artistic director. Following Horton's style, Ailey choreographed
two pieces that were presented at the Jacob's Pillow Dance Festival in Becket, Massachusetts.
After the works received poor reviews from the festival manager, the troupe broke up.
Despite the setback, Ailey's career stayed on track. A Broadway producer invited him to
dance in House of Flowers, a musical based on Truman Capote's (19241984) book. Ailey
continued taking dance classes while performing in the show. He also studied ballet and

36

acting. From the mid-1950s through the early 1960s Ailey appeared in many musical
productions on and off Broadway, among them: The Carefree Tree; Sing, Man, Sing;
Jamaica; and Call Me By My Rightful Name. He also played a major part in the play Tiger,
Tiger, Burning Bright.
In 1958 Ailey and another dancer with an interest in choreographing recruited dancers to
perform several concerts at the 92nd Street Young Men's and Young Women's Hebrew
Association in New York City, a place where modern dances and the works of new
choreographers were seen. Ailey's first major piece, Blues Suite, was inspired by blues music.
The performance drew praise. Ailey then scheduled a second concert to present his own
wor ks, and then a third, which featured his most famous piece, Revelations. Accompanied by
the elegant jazz music of Duke Ellington (18991974), Revelations pulled the audience into
African American religious life.
Alvin Ailey Dance Foundation, Inc. is the umbrella organization for the Alvin Ailey
American Dance Theater, one of the best-known modern dance companies in the United
States. Founded by African-American dancer and choreographer Alvin Ailey in 1958, the
company was one of the few showcases for black dancers anywhere in the United States.
Headquartered in New York, the Alvin Ailey company began touring internationally in 1962.
The group has found a devoted following worldwide with its innovative dances, which often
explore African-American culture in ways never previously seen. The Alvin Ailey American
Dance Theater tours extensively abroad and in the United States. In addition, its junior
company, known as Ailey II, tours and performs widely. The Ailey School teaches dance to
thousands of students from the age of three through adults. The school's curriculum is based
on the dance techniques of Lester Horton and Martha Graham, and includes ballet, West
African dance, and other dance techniques. The Alvin Ailey Dance Foundation also runs
extensive arts in education program, bringing dance to schools through performances,
workshops, and artist-in-residence programs. The foundation runs Ailey Camps as well,
which teach dance and other skills to underserved children. The foundation is currently
building a new home in New York City, which will be the largest facility devoted exclusively
to dance in the United States.

37

GROWTH IN THE 1970S


Alvin Ailey American Dance Theater toured abroad so much in the 1960s that it was better
known in Europe than in its own country. In 1968 the group began an extended U.S. tour.
Ailey continued to produce works that reflected African-American U.S. culture, at a time of
great racial strife. His company featured mainly African-American dancers, though he used
white and Asian da ncers as well. The group's shows brought rave reviews, and the company
got support from grants from the National Endowment for the Arts and from the Rockefeller
Foundation. The company completed another domestic tour in 1970, and Ailey collaborated
with ja zz great Duke Ellington on a ballet for American Ballet Theater. Despite the group's
growing fame and the influx of grant money, the company was still barely solvent. At the
close of the 1970 season Ailey announced that financial problems would force him to disband
the dance company. The company recently had moved to new quarters in the Brooklyn
Academy of Music, which proved unsatisfactory, and a promised State Departmentsponsored tour of the Soviet Union had been canceled. But the group had many supporters,
and ultimately it moved back to Manhattan and the Soviet tour was reinstated. The company
embarked on another long tour of the United States the next year. The year 1971 also saw the
premiere of another Ailey classic, "Cry," which featured the extraordinary six-foot tall dancer
Judith Jamison. In new quarters at the American Dance Center on East 59th Street, the
company worked relatively comfortably for the next nine years. Ailey established a popular
school, and added two student companies. The company reigned over modern dance in the
United States in the 1970s, and was lauded on its international tours. By 1978, when the
company celebrated its 20th anniversary, the company included 29 dancers, more than twice
its original number, and enrollment at the Ailey school was almost 5,000 students. The
company's budget had grown to about $3 million annually, and Ailey himself was making a
substantial income from choreography commissions and royalties, television appearances,
and his salary for directing the company.

UPS AND DOWNS IN THE 1980S


Alvin Ailey American Dance Theater gave a command performance for President Jimmy
Carter at the White House in 1979, and then flew to Morocco for a New Year's performance
at the behest of that country's king. Nevertheless, the company was still running a deficit, and
when its headquarters building was demolished, it could not afford to build a studio and

38

school to its specifications. Instead it moved into three floors of a midtown building owned
by one of its board members. Ailey's health was beginning to fail, and the 1980s were a
slower decade for the group than the 1960s and 1970s had been. Ailey was arrested in 1980
for creating a disturbance, apparently while having a mental breakdown. He was released
without charge, only to set off a similar incident a few months later. Ailey was apparently
increasingly frustrated that his company still had to scrounge for funds and it seemed that he
was treated better in Europe than in New York.
Ailey was beset by both mental and physical problems from 1980 on. He was under treatment
for manic depression, and he was in pain from arthritis. He continued to choreograph in the
1980s, producing another of his best-loved works in 1984, "For Bird--With Love." Ailey and
his company were feted and honored repeatedly in the 1980s, and toured both abroad and
domestically. Ailey was made Distinguished Professor of choreography at City University of
New York in 1985. In 1986 Philip Morris Companies awarded Ailey's troupe a $300,000
grant, to cover two years of touring. In 1987, Ailey was diagnosed with AIDS. Although he
continued to travel and undertake new projects, by that time he was clearly very ill. In 1988,
the Ailey company's lease expired on the midtown building it had rented, and yet again the
group had to scramble to find a suitable space. Ailey died on December 1, 1989.

FINDING STABILITY IN THE 1990S


Leadership of the company fell to Judith Jamison, the dancer who had made her mark with
Ailey's signature piece, "Cry." She had left the company in 1980 to pursue her own
choreography, but she returned after Ailey's death. She became the company's artistic
director, dedicated to keeping the vision of Ailey alive. Alvin Ailey American Dance Theater
had always made a point of performing work of other choreographers, and during the 1980s,
it put on far more non-Ailey works than Ailey originals. So it was not necessarily the loss of
its chief choreographer that hurt the company most. But despite the Alvin Ailey group's long
prominence, the company was still not on a sound financial footing. The company had
amassed a deficit of roughly $1 million during the 1980s, and in the early 1990s, government
funding for dance began to dry up. The company could not continue without some
restructuring and a plan for future fundraising. Jamison brought in a new director of
development and recruited new trustees --generally, corporate CEOs--who could contribute
$10,000 and take a seat on the foundation's board of directors. In 1993 the company received
a grant from the Lila Wallace-Reader's Digest Fund as part of its Art Stabilization Initiative.
39

The grant gave money to the group not for performing or touring but to let it pay off debts.
The grant allowed the company to build capital reserves so that its finances would no longer
be so unstable.
By the mid-1990s, the company was in much better shape. It had paid off its debts, increased
its revenue from performances, and found other ways to bring in cash. By 1996, the group
brought in $3 million through fundraising, about twice the figure from 1992. The Ailey
company also got corporations to underwrite some of its domestic shows, while Philip Morris
continued to give money for domestic and international touring. The group also increased its
marketing efforts, finding new ways to spread the Ailey name, particularly through outreach
programs in schools. The company began unusual co-marketing agreements in 1998, trading
its name to corporations for major donations. For example Jaguar became the "official car of
Alvin Ailey" (Ailey had long dreamed of owning a Jaguar), and a chain of sports medicine
clinics used the Ailey name in its advertising, while giving free physical therapy to Ailey
dancers. These various stratagems paid off. By 1998, the company had an operating budget of
$12 million, and it managed a $1 million surplus. Jamison said in an interview with Black
Enterprise (December 1991) that for years she had "listened as Alvin struggled with
prospective donors on one telephone line and bill collectors on the other." She was
determined to ask for and get appropriate funding for her group to avoid that embarrassing
struggle, and she was extremely successful.
In the late 1990s, Jamison began to plan for something the company had never been able to
afford--a home of its own. Its rented space on West 61st Street was filled to overflowing, and
the company had had to move suddenly before when leases expired. So Jamison began
working on funding to build a school, studio, and performance space. In 2001 plans were
cemented to build a new dance center on 55th Street and Ninth Avenue in Manhattan. New
York Mayor Rudolph Giuliani approved a $7.5 million matching grant from the city to the
company, surprising many with his generosity. The Dance Foundation began raising funds
needed to complete the building, expected to open in 2004

LEGACY OF LEADERSHIP:
When choreographer Alvin Ailey died, the dance world wondered what would happen to the
Alvin Ailey American Dance Theater. But with Ailey protge Judith Jamison at the helm,

40

the rejuvenated company is continuing and even expanding Ailey's rich legacy of ethnicaccented modern dance.
It's stimulating to continue Alvin's legacy, which is multicultural and in so many ways
stimulates the community," says Jamison, 46, the former Ailey company premiere dancer and
artistic associate. "The legacy reflects the lives of African-Americans and is a microcosm of
the way the world should work."
Ailey's legacy is evident in the company repertoire -a fine balance between traditional works
and new dances that expand old boundaries. The 1990-91 lineup features five premieres,
including Jamison's own Forgotten Time, Pearl Primus' Impinyuza and an exciting piece by
young Kris World of Milwaukee, Read Matthew 11:28. The company is also reviving Ailey's
Hidden Rit es and will continue to perform its signature works-Ailey's Revelations and Blues
Suite and standards such as Talley Beatty's Come and Get the Beauty of It Hot.
This season's choreography is just one example of Jamison's impact. She is also expanding
the company's residency program and outreach so more young people in different cities can
be exposed to Ailey's genius. But the dancer-choreographer, who dissolved her own 12member Jamison Project to take over the Ailey company, says audiences should not expect
drastic changes.

TWO ASPECTS AILEYS LIFE


Two of the most interesting aspects of Ailey's life are his cultural achievements viewed in the
context of racism and national oppression, and his own thoughts on racism and national
oppression; and what has been described as his mental breakdown, also deeply intertwined
with the realities of being a Black man in a racist society.
So we review Ailey's life here not as a model of oppressed national revolutionary cultural
work, but as an example of how prominent Bla cks cannot ignore national oppression. The
contradiction between imperialism and the oppressed nations is the principal contradiction in
the world today, so understanding the Black nation's subordinate position in this contradiction
is necessary for dealing with it correctly. In a remembrance of Ailey, the journalist who
helped him write his autobiography said "he was aware that this world, while accepting him,
believes that European music and dance are vastly superior to all other music and dance."(1)
In a way, Ailey's greatest strength and contribution was that as much as he fought to be

41

accepted by the Euro-chauvinists of the art world, he fought to be accepted as a Black artist
doing Black culture.
As someone who did cultural work with no explicit political affiliation, Ailey is not someone
with whom MIM has a lot in common. But while Ailey himself probably would not have had
a lot to say to MIM, his work has a lot to say about cultural efforts and leadership in the
Black nation. In Revelations, Ailey talks about what it meant to grow up and develop a public
career as a Black man in America. He does a better job of explaining his politics and their
role in his work.

AWARDS
Dance Magazine Award, 1975; Spingarn Medal, National Association for the Advancement
of Colored People (NAACP), 1979; Capezio Award, 1979; Kennedy Center Honors prize,
1988; honorary degrees in fine arts from several institutions, including Princeton University,
Bard College, Adelphi University, and Cedar Crest College.

CONCLUSION:
Aim high and devote yourself on what you are doing and let nobody interfere in your job.
If you can dream it, you can do it.

REFERENCES
http://www.mimdown.org/mt/mt13ailey.html
http://www.answers.com/topic/alvin-ailey
http://en.wikipedia.org/wiki/Alvin_Ailey

42

FERNANDO HERNANDEZ

NAME: FERNANDO HERNANDEZ


BORN: 21, MAY, 1964 (AGE 47)
RESIDENCE: NEW JERSEY, AMERICA.
RELIGION: JEWISH
ETHNICITY: WHITE
CITIZENSHIP: UNITED STATES OF AMERICAN
NET WORTH: $16TH BILLION (OCT, 2010)
OCCUPATION: MICROSOFT CORP. AND AT&T
CHILDERN: TWO

43

BACKGROUND
As, Fernando Hernandez grew up in Cuban-America and his family background is related to
factory workers. Hernandez is a graduate of St. Peter's College in New Jersey, where he
majored in accounting. He also studied at the Pennsylvania -based Wharton School of
Business, and is pursuing a graduate degree in information sciences at Stevens Institute of
Technology. Then got an opportunity to take executive training at Wharton school of
Business, where he got great professional work experience. As, he has professionally learned
different language and much influencing speaker on multicultural issues. Hernandez, who is
fluent in Spanish and English, is co-authoring a book on multicultural marketing in America.
He was recognized recently by the American Marketing Association for his work in
promoting awareness of multicultural diversity and its impact in the workplace.

EARLY CAREER STARTUP


After starting his career as a commercial Real Estate Broker in New York, Fernando joined
AT&Ts International Sales Group in 1990.Fernando serves as Supplier Diversity Director
for Microsoft Corporation. In this position, Fernando supports executive business leaders at
Microsoft to achieve their supplier diversity goals and objectives. As, he was responsibility
for Microsofts supplier diversity outreach efforts, and serves as the leader of the
Corporations national team of supplier diversity advocates.
Fernando served as of Multicultural & Diversity Strategy for Washington Mutual Bank where
he lead, developed, and implemented comprehensive multicultural market strategic plans
inclusive of all aspects of Washington Mutuals mission, business goals, and representative
diverse segments. Fernando drove the strategies, tactics, and investments in the multicultural
markets.
He established and communicated the strategic importance of the multicultural markets to
improve shareholder performance. He was responsible for translating and transforming the
multicultural markets strategic objectives into profitable initiatives.
Fernando served as Executive Director of Supplier Diversity with AT&T. He focused on
providing strategic direction to AT&Ts Supplier Management & Business Unit clients in
development and implementation of policies, strategies, and programs related to the

44

enterprise-wide MWSDVBE (Minority, Women, Service Disabled Veterans, Business


Enterprise) Business Development Program.
In that regard, he served on various boards, including National Minority Supplier Diversity
Council, Womens Business Enterprise National Council, Business Consortium Fund, United
States Hispanic Chamber of Commerce Procurement Council, United States Pan Asian
American Chamber of Commerce, Billion Dollar Round Table, Telecommunications Industry
Group, and Board of Public Utilities Supplier Diversity Development Council.

PROFESSIONAL EXPERIENCE
After starting his career as a commercial Real Estate Broker in New York, Fernando joined
AT&Ts International Sales Group in 1990. He directed the development of Multicultural
Marketing programs for both AT&Ts Business and Consumer Markets Divisions. A pioneer
in the field of multicultural business to business and consumer marketing.
Fernando launched AT&Ts first Hispanic, African American, and Asian business marketing
programs in 1991. He and his team developed and implemented strategies to reach the
growing numbe r of U.S. multicultural business owners. Fernandos experience includes
leading AT&Ts National Multicultural Marketing and Marketing Communications
Directorates, and managing four national advertising agencies with programs in seven
languages.
Fernandos experience includes leading AT&Ts National Multicultural Marketing and
Marketing Communications Directorates, and managing four national advertising agencies
with programs in seven languages.

ACHIEVEMENTS
Fernando served as SVP of Multicultural & Diversity Strategy for Washington Mutual Bank
where he lead, developed, and implemented comprehensive multicultural market strategic
plans inclusive of all aspects of Washington Mutuals mission, business goals, and
representative diverse segments. Fernando drove the strategies, tactics, and investments in the
multicultural markets.
Fernando has taken every opportunity to leverage bicultural abilities throughout his
professional career, using his numerous skills and multicultural sensitivity. This has served

45

him well in successful launches of marketing programs, but has also made it possible for him
to sell the original business case and concept for multicultural marketing to forward thinking
senior management.
He holds a degree in Accounting from Saint Peters College and his Masters in Information
Systems from Stevens Institute of Technology. He has also studied at the Wharton School of
Business and has been recognized by the American Marketing Association for his leadership
in sponsoring multicultural marketing conferences at the United Nations.
As, Supplier diversity director for Microsoft Corporation. He started a Microsoft Vendor
Program (MSVP) ,.which related to preferred vendor program to make easy for Microsoft
employees to work globally with a prequalified, select group of vendors.
The objective of (MPVP) program to make working with Microsoft beneficial to all. The
program is currently available in Belgium, Canada, China, Denmark, France, Germany, Hong
Kong, Ireland, Italy, MDCC, the Netherlands, Norway, Spain, Sweden, Switzerland, Taiwan,
the United Kingdom, and the United States.
The goal of MSVP is simply enable new efficiencies for both Microsoft and vendors,
bringing new value to the relationship that we are building together.

PROGRAM HIGHLIGHTS
A primary purpose of MSVP is to define the way vendors do business with Microsoft,
including requirements and expectations, to create a clear, straight path to success. The
following are some key elements of MSVP:

MSVP includes vendors of all kinds of goods and services.

The program includes only vendors who are the best in providing their category.

MSVP vendors are divided into two distinct levels premier vendor and preferred
vendor to provide a hierarchy of benefits and visibility to MSVP vendors.

MSVP is committed to diversity, including exceeding government-mandated


goals and requiring MSVP vendors to share in this goal.

46

MSVP PROGRAMS ACHIEVEMENTS


Vendor Awards
Microsoft annually recognizes vendors that consistently provide an outstanding level of
service and quality through the MSVP Excellence Awards Program.
The award categories are:

Vendor of the Year

Value Excellence

Quality Excellence

Service Excellence

Diversity Excellence

Technology Excellence

Environmental Excellence

All nominations are submitted by the Category Manager (CM) and Vendor Account Manager
(VAM) by using an official entry form. Vendors cannot nominate themselves. An award
selection committee then determines the winners, which are announced and awarded at the
MSVP Annual Vendor Summit each year.

ANALYSIS OF DATA
As, his contribution as a Executive Director of Supplier Diversity with AT&T, he develop a
Business Development Program and implementation of policies, strategies, and programs
related to the enterprise-wide MWSDVBE (Minority, Women, Service Disabled Veterans,
Business Enterprise).
He directed AT&Ts International Alliance Channel programs responsible for business
development in Canada, Mexico, and Latin America.
Fernandos experience includes leading AT&Ts National Multicultural Marketing and
Marketing Communications Directorates, and managing four national advertising agencies
with programs in seven languages

47

CONCLUSION
Fernando serve as Multicultural & Diversity Director, first focuses on interaction and
communication between different cultures. Interactions of cultures provide opportunities for
the cultural differences to communicate and interact to create multiculturalism.
The second focus on diversity and cultural uniqueness. Cultural isolation can protect the
uniqueness of the local culture of a nation or area and also contribute to global cultural
diversity.
As, He works in different field of organizational culture, he promotes minority right
,influencing role of woman in professional field, vendor program to make easy for Microsoft
employees to work globally with a prequalified, select group of vendors. He serves as the
leader of the Corporations national team of supplier diversity advocates.

REFERENCES
http://www.csrwire.com/press_releases/26872-Fernando-Hernandez-Named-AT-T-Supplier Diversity-Group-Procurement-Director
http://www.einfonews.com/profiles/hernandez.htm
http://www.highbeam.com/doc/1G1-113053347.html
http://www.spoke.com/info/p7KryAu/FernandoHernandez
http://www.microsoft.com/about/companyinformation/procurement/diversity/en/us/wsmith.as
px

48

AMADEO PIETRO

BORN: 6-MAY-1870
RESIDENCE: SAN FRANCISCO, CALIFORNIA
ETHNICITY: WHITE AMERICAN
CITIZENSHIP: SAN JOSE, CALIFORNIA
OCCUPATION: BUSINESS
NET WORTH: $500,000
RELIGION: ROMAN CATHOLIC
CHILDREN: 1DAUGHTER AND 1 SON

49

EARLY EDUCATION AND PARENTHOOD


Amadeo Pietro (Peter) Giannini was born on a small farm in San Jose, California in 1870, the
son of Italian immigrants. He attended Heald College, in San Francisco, California. He was
only seven years old when he saw his father killed in a fight with another man over a dollar.
His mother remarried, and his new stepfather was in the produce business. A. P. quit school
at the age of 14 to help his stepfather, and soon impressed the stepfather so much that he was
made a partner in the business. His first occupation was as a commission merchant and
produce dealer for farms in the Santa Clara Valley. In that position he found established
banks unwilling to take on his or the farmers business.
A. P. built his reputation and the produce business by being fair and honest in dealing with
people. He did so well that he was able to retire at age 31, by selling his half of the business
to his employees. His retirement didnt last long though, because he was asked by a group of
San Francisco businessmen to serve on the board of a small Savings and Loan that catered to
the Italian-American community.

BEGINNING OF CAREER AS BANKER


A. P. was the first to challenge the unwritten rule that banks should only lend money to
people who dont nee d it.
In those days, banks only leant money to large businesses and other assorted rich folks.
Because of his humble beginnings, A. P. could relate to the immigrant poor and their needs.
He trusted hard-working poor people and wanted to extend credit to them through liberal loan
policies, "To give the little guy a bank that will do business with him."
A. P. couldnt convince the other members of the board to give his ideas a try, so he decided
to start his own bank. He lined up some investors and started the Bank of Italy in a converted
saloon. He even kept one of the bartenders on as an assistant teller.

HIS PIONEER ACTS


He was the first to offer home mortgages, auto loans and installment credit, and marketed
those services to people who had no experience with credit. He built his business by reaching
out to the immigrant poor, even going door-to-door to explain his services to folks who didnt
know anything at all about banks.

50

Giannini always worked harder and longer than any of his competitors. Once, when he was
riding his horse out of town to visit a farmer in order to close a deal, he saw a competitor
behind him who he knew was on his way to the same farmers house. Giannini took a
shortcut by racing ahead, dismounting his horse, swimming across a small pond, and running
all the rest of the way to the farmers house in order to get his contract signed before the other
man arrived.
Many of his customers were traveling over long distances to do business with him, so in 1909
he decided to open a branch of his bank in San Jose to make it easier for them. He then began
to buy other banks and open new ones in many other California cities, and a few other major
US cities.
Giannini and his bank helped nurture the motion picture and wine industries in California. He
loaned Walt Disney the funds to produce Snow White, the first full-length, animated motion
picture to be made in the U.S. In the depths of the Great Depression, he bought the bonds that
financed the construction of the Golden Gate Bridge. During World War II, he bankrolled
industrialist Henry Kaiser and his enterprises which supported the war effort. After the War,
he visited Italy and arranged for loans to help rebuild the war-torn Fiat factories. Giannini
also gave capital to William Hewlett and David Packard to help form HP or Hewlett-Packard.
At this time, HP made oscilloscopes.

GROWTH DURING DISASTERS


A.P.'s imaginative behavior during the great San Francisco earthquake and fire of 1906
furthered his reputation and that of his bank. Although the quake occurred at 5 a.m., the Bank
of Italy opened its doors at 9 o'clock and conducted business as usual. Giannini closed the
bank at noon, however, fearing the worst as the fires spawned by the ruptured gas lines
spread closer to the financial district. Sec uring horses and wagons from Scatena & Co.,
Giannini loaded the bank's cash and gold onto a wagon, hid them beneath a crate of oranges,
and transported them to his home outside the city. There he hid the bank's assets in the ash
trap of the living room fireplace.
A.P. saw in the city's destruction not only a chance to service his customers but another
opportunity for the Bank of Italy. Nine days after the quake a newspaper advertisement
announced the temporary location of the bank's operations. The city's larger banks were
unable to respond as quickly. Giannini's foresight in removing his bank's cash together with
51

his personal knowledge of his customers' accounts (he needed no records) allowed him to
resume operations quickly. Deposits exceeded withdrawals in less than six weeks after the
earthquake.
Giannini demonstrated similar ingenuity and foresight when in mid-1907 he picked up
rumblings about future financial uncertainty despite the nation's prosperous economy. He
began a campaign to increase the bank's gold reserves, build up deposits, and reduce
outstanding loans after personal review. Thus, when the financial panic struck the Bank of
Italy was able to meet it head on. Its stock of gold piled high in the teller's cage inspired
confidence, and the bank did not have to invoke rules limiting withdrawals or requiring
advance notice as other, larger institutions did. Once again the bank had weathered a major
crisis due to the foresight of A. P. Giannini.

SUCCESS STARTED
In 1928, he purchased Bank of America, an old and much respected institution in New York
City, and consolidated all of his banks under that name. He continued to open branches all
over the United States, making Bank of America the first nationwide bank and by 1945, Bank
of America was the largest bank in the United States.
Giannini was a liberal in a very conservative business, but he wasnt just being a nice guy.
All of his innovations like loans to ordinary people and installment payments, were sound
business decisions that revolutionized the banking business and generated substantial profits
for his shareholders. He also helped large and small businesses that were down on their luck
or out of favor. His financial backing of the California wine and movie industries was
instrumental in their growth.
He was very generous with his employees, and instituted profit -sharing and stock ownership
plans. He understood that sharing profits with his employees would guarantee their loyalty
and his success.

NEVER FELT RETIRED!!!


The man, who tried to retire at 31, was still at the helm when he died in 1949, at the age of
79. His estate was valued at a rather modest $500,000, because although he could have
amassed a huge fortune in his lifetime, he was never interested in accumulating wealth and
often didnt take a salary. A. P. often said, "I don't want to be rich. No man owns a fortune; it

52

owns him. He used most of the money he did make to start foundations that funded
scholarships, and supported medical and agricultural research.
A. P. once said, "It's no us e to decide what's going to happen unless you have the courage of
your convictions. Many a brilliant idea has been lost because the man who dreamed it lacked
the spunk or the spine to put it across. It doesn't matter if you don't always hit the exact bullseye; the other rings in the targets score points, too.

BIG BANKER
In 1928, Giannini put his banks into a giant holding company he called Transamerica
Corporation, reflecting his new ambition. In 1930, he formed the Bank of America, which
would eventually become the largest in the United States. As a measure of its success, it
withstood the Great Depression, funding large industrial and agricultural interests as well as
California's burgeoning movie industry and even the Golden Gate Bridge. When Giannini
died on June 3, 1949, at age 79, hundreds of ordinary people showed up for his funeral.

THE BANK OF AMERICA


Giannini's efforts were not without opposition and hostility. In 1919, for instance, California's
superintendent of banks raised objections to A.P.'s opening of additional branches. He
relented only after Giannini was able to convince him of the reasonableness of his motives
and the falsity of the "whispering campaign" which had raised the doubts. The last great
challenge to A. P. Giannini's banking empire came in 1948 when the Federal Reserve began
an investigation into charges that his holding company had violated the anti-monopoly
provisions of the Clayton Anti-Trust Act. A.P. died on June 3, 1949, however, before the
board returned its findings and ordered that his corporate structure be dismantled. Later the
U.S. Court of Appeals set aside the order, declaring that the Federal Reserve had failed to
prove its charges of monopolistic practices.
A. P. Giannini's contributions were as a businessman and as an Italian-American. As a banker
he established and refined branch-banking, and his bank became a model for the nation and
the world. He stressed services for the "little fellow." Through his introduction of such
practices as the repayable monthly home loan he brought home ownership within the reach of
the multitudes. His concern for those previously ignored also included giving them
representation in the management of his banks.

53

Giannini's success allowed him to assist fellow Italian-Americans in several ways. In addition
to providing financial services, he is credited with having helped save alien Italians from the
loss of their property and civil rights in California at the outbreak of World War II.

PERSONAL COMMENTS
He lived his life with honesty and integrity which even led him to gain his step father trust
and he worked with him.
When he joined bank at that time he observed that banks were only lending money to large
businesses and poor are left out. He thought of poor immigrants and their needs trusted them
for their hard work, he extended credit through liberal loan policies. Other members of board
refused his idea and he took pioneer step to start his own bank in order to cater poor people
for their hard work which was being neglected in past.
Basically his nature was very compassionate about poor people and especially immigrant
poor. He even went door to door to find out needy people. As a student business studies right
now, I believe that I should adapt such style of being passionate about my profession and as
professional serving and catering poor and needy people.
His business was his passion and he was always a threat for his competitors.
His life tells that he was a man of real principals and he always lived for people with
sincerity. His mana gement style shows that he loved his work and employees. He was use to
share his profits with his employees.
He transferred his leadership skills to his people and family. After his death his son and
daughter took over his positions.
Upon Giannini's death in 1949, his on Mario Giannini, who had been afflicted with polio in
his youth, took over leadership of the bank; and, Giannini's daughter, Claire Giannini
Hoffman (19051997), took her father's seat on the Bank's Board of Directors, where she
remained until the 1980s. Giannini is buried at Holy Cross Cemetery, in Colma, CA.

LEGACY
The large plaza of the Bank of America Building, at California Street and Kearny, in
downtown San Francisco, is named for Giannini. A.P. Giannini Middle School, which
opened in the Sunset District of San Francisco, in 1954, is named after him, also.[5] Other

54

places and groups named after Giannini include the Giannini Foundation of Agricultural
economics and the building that houses the Department of Agricultural and Resource
Economics, at the University of California, Berkeley.
The U.S. Postal Service honored Giannini's contributions to American banking by issuing a
21 postage stamp bearing his portrait, in 1973. A ceremony to mark the occasion was held
near his former home, in San Mateo.
TIME magazine named A.P. Giannini one of the "builders and titans" of the 20th century. He
was the only banker named to the Time 100, a list of the most important people of that
century, as assembled by the magazine.
Walter Huston's bank president in Frank Capra's 1932 film, American Madness, was based
largely on A.P. Giannini.[citation needed]
American Banker magazine recognized him as one of the five most influential bankers of the
20th Century.[citation needed]
In 2004, the Italian government honored Giannini with an exhibition and ceremony in its
Parliament, to mark the centennial of his founding of the Bank of Italy. The exhibition was
the result of the collaboration of the Ministry of Finance, the Smithsonian Institution, Italian
Professor Guido Crapanzano and Peter F. De Nicola, an American collector of "Giannini"
memorabilia.[citation needed]
In 2010, Giannini was inducted into the California Museum Hall of Fame.

REFERENCING
http://www.nndb.com/people/380/000094098/
http://www.pbs.org/wgbh/theymadeamerica/whomade/giannini_hi.html
http://en.wikipedia.org/wiki/Amadeo_Giannini

55

KEITH RUPERT MURDOCH

BORN: 11 MARCH 1931 (AGE 80)


OCCUPATION: CHAIRMAN AND CEO OF NEWS CORPORATION
NET WORTH:

US$6.2 BILLION (2010)

RELIGION: CHRISTIAN
AWARDS: COMPANION OF THE ORDER OF AUSTRALIA (1984)

56

PROFILE
Starting out as a newspaper publisher in his native Australia, Rupert Murdoch became a
powerful media entrepreneur (someone who begins a business venture) with many
publications in England and the United States. His style of journalism brought criticism from
serious readers but served the entertainment needs of a wide audience.

EARLY LIFE
Born March 11, 1931, in Melbourne, Australia, Keith Rupert Murdoch was the second son of
a distinguished journalist. He and his two sisters and a brother were raised on a farm. His
mother surrounded her children with classics in literature as well as music, with their living
room hosting a grand piano. Rupert learned to ride horses at the age of five. His childhood
has been described as ideal. His father, Sir Keith Murdoch, was a celebrated World War I
(191418) reporter, who later became chief executive of the leading Melbourne Herald
newspaper group.
After studying at Oxford University in England, Murdoch entered journalism as a reporter for
the Birmingham Gazette and served an apprenticeship at the London Daily Express, where he
learned the secrets of building circulation (average number of copies of a publication sold
over a given time period). Returning to Australia to begin his publishing career, Murdoch
revived the Adelaide News that he had inherited after his father's death in 1952.

PUBLISHING WORLD
In the process of expanding his $1.4 billion-a-year News Corporation Limited, Murdoch
often heard from critics who disliked his entertaining style of journalism. He applied a
recognizable formula to most of his papers. His trademark operations included rigid cost
controls, circulation gimmicks (tricks to gain sales), flashy headlines, and a steady emphasis
on sex, crime, and scandal stories. Murdoc h's brand of publishing was scorned as rude and
irresponsible by his fellow publishers.
In early 1969 Murdoch became a London publisher when he gained control of the Sunday
paper News of the World, the largest English-language circulation paper in the world. Later
in 1969 he bought a worn-down liberal paper, the Sun, which he transformed into an eyecatching tabloid featuring daily displays of a topless girl on page three. The Sun became the

57

most profitable paper in his empire. In 1981 Murdoch bought the failing but prestigious
London T imes.
Murdoch expanded into the American market in 1973 when he acquired the San Antonio
Express and News. In early 1974 he started the weekly tabloid the National Star (later
renamed Star) to compete with the popular Enquirer. It adopted a format based on celebrity
gossip, health tips, and self -help advice that boosted its circulation to almost four million.
In his quest for a big-city audience, Murdoch surprised the publishing world in 1976 when he
bought the New York Post, a highly regarded liberal (open-minded) paper. By changing its
image he nearly doubled the circulation. Murdoch's newspaper style, though, did not fare as
well in the United States as in Britain. The New York Post was a steady financial drain
despite its increased circulation. Murdoch's formula did not attract advertisers. His American
papers did not show a profit until 1983.
Murdoch was seen as an effective popular journalist who gave his readers what they wanted.
Ignoring his critics, he regarded most papers as too snobbish in their approach and too boring
in appearance. He preferred a bright and entertaining product that would attract the largest
body of readers.

BRANCHING OUT
In 1983 Murdoch purchased a controlling interest (a majority of the company's stock that
allowed him to make decisions for the company) in Satellite Television, a London company.
His plan for beaming programs from satellites directly to homes equipped with small
receivers did not progress, and his attempt to gain control of Warner Communications and its
large film library did not succeed. In 1985, however, he did purchase the film company
Twentieth Century Fox. A year later he bought six (Metromedia) television stations and
sought to create a fourth major network called Fox Television. The United States does not
permit foreign nationals to own broadcast stations. In order to maintain his control of Fox
Television, Murdoch became a citizen of the United States in 1985. In 1987 he bought the
U.S. publishing house Harper and Row.
Other than publishing, Murdoch's business interests include two television stations in
Australia, half ownership in the country's largest private airlines, book publishing, records,
ranching, gas and oil exploration, and a share in the British wire service Reuters News
Corporation Limited, which earned almost $70 million in 1983.
58

INSPIRATION
Rupert Murdoch was influenced by his parents, the Presbyterian Church, the Geelong
Grammar School and the Flemington Race Course. Rupert Murdoch is a person with a love
for business, in particular of the newspaper business, a passion he inherited from his father,
Sir Keith Murdoch. His fathers family were enthusiastic members of the Free Church of
Scotland. Rupert Murdochs mother gave him his love of risk-taking and a fiery
determination. The Flemington Race Course was the first place where he started to gamble.
He contains within his character both an extraordinary gambling instinct and a certain dour
Puritanism, as William Shawcross (1992) describes him. (cited in Crainer 2002 p.4)

POLITCIAL ACTIVITIES
Australia
Murdoch's disconcerting experience with Thomas Playford in South Australia and his early
political activities in Australia set the pattern he would repeat around the world.
Murdoch found a political ally in John McEwen, leader of the Australian Country Party (now
known as the National Party of Australia), who was governing in coalition with the larger
Menzies-Holt Liberal Party. From the very first issue of The Australian Murdoch began
taking McEwen's side in every issue that divided the long-serving coalition partners. (The
Australian, 15 July 1964, first edition, front page: "Strain in Cabinet, Liberal-CP row flares.")
It was an issue that threatened to split the coalition government and open the way for the
stronger Australian Labor Party to dominate Australian politics. It was the beginning of a
long campaign that served McEwen well.
After McEwen and Menzies retired, Murdoch transferred his support to the newly elected
Leader of the Australian Labor Party, Gough Whitlam, who was elected in 1972 on a social
platform that included universal free health care, free education for all Australians to tertiary
level, recognition of the People's Republic of China, and public ownership of Australia's oil,
gas and mineral resources.
Rupert Murdoch's flirtation with Whitlam turned out to be brief. He had already started his
short-lived National Star newspaper in America, and was seeking to strengthen his political
contacts there.

59

Acquiring American Citizenship


In 1985 Murdoch became a United States citizen to satisfy legislation that only United States
citizens could own American television stations. This also resulted in Murdoch losing his
Australian citizenship.
Asked about the Australian federal election, 2007 at News Corporation's annual general
meeting in New York on 19 October 2007, its chairman Rupert Murdoch said, "I am not
commenting on anything to do with Australian politics. I'm sorry. I always get into trouble
when I do that." Pressed as to whether he believed Prime Minister John Howard should be reelected, he said: "I have nothing further to say. I'm sorry. Read our editorials in the papers.
It'll be the journalists who decide that the editors."

United States
McKnight (2010) identifies four characteristics of his media operations: free market
ideology; unified positions on matters of public policy; global editorial meetings; and
opposition to a perceived liberal bias in other public media.
On 8 May 2006, the Financial Times reported that Murdoch would be hosting a fund-raiser
for Senator Hillary Clinton's (D-New York) Senate re-election campaign.
In a 2008 interview with Walt Mossberg, Murdoch was asked whether he had "anything to do
with the New York Post's endorsement of Barack Obama in the democratic primaries."
Without hesitating, Murdoch replied, "Yeah. He is a rock star. It's fantastic. I love what he is
saying about education. I don't think he will win Florida... but he will win in Ohio and the
election. I am anxious to meet him. I want to see if he will walk the walk."
In 2010 News Corporation gave $1M to the Republican Governors Association and $1M to
the U.S. Chamber of Commerce, which was largely working to elect Republicans that year.
This drew condemnations from Democrats and non-partisan watchdog groups, who claimed
that it represented a conflict of interest for the owner of a major publishing empire to
contribute directly to political campaigns in this way. A spokesman for the Wall Street
Journal would not comment.
Murdoch also served on the board of directors of the libertarian Cato Institute.

60

United Kingdom
In Britain, Murdoch in the 1980s formed a close alliance with Margaret Thatcher, and The
Sun credited itself with helping John Major to win an unexpected election victory in the 1992
general election. However, in the general elections of 1997, 2001 and 2005, Murdoch's
papers were either neutral or supported Labour under Tony Blair. This has led some critics to
argue that Murdoch simply supports the incumbent parties (or those who seem most likely to
win an upcoming election) in the hope of influencing government decisions that may affect
his businesses. The Labour Party under Blair had moved from the Left to a more cent ral
position on many economic issues prior to 1997. Murdoch identifies himself as a libertarian.
In a speech delivered in New York, Rupert Murdoch said that the UK Prime Minister Tony
Blair described the BBC coverage of the Hurricane Katrina disaster as being full of hatred of
America.
In 1998, Rupert Murdoch failed in his attempt to buy the football powerhouse Manchester
United F.C. with an offer of 625 million. It was the largest amount anyone had yet offered
for a sports club. It was blocked by the United Kingdom's Competition Commission, which
stated that the acquisition would have "hurt competition in the broadcast industry and the
quality of British football".
On 28 June 2006 the BBC reported that Murdoch and News Corporation were flirting with
the idea of backing Conservative leader David Cameron at the next General Election.
However, in a later interview in July 2006, when he was asked what he thought of the
Conservative leader, Murdoch replied "Not much". In a 2009 blog, it was suggested that in
the aftermath of the News of the World phone hacking affair, Murdoch and News
Corporation might have decided to back Cameron, although there had already been a
converging of interests between the two men over muting of the UK's communications
regulator Ofcom.
In 2006, the UK's Independent newspaper reported that Murdoch would offer Tony Blair a
senior role in his global media company News Corp. when the UK prime minister stood
down from office.
He is also accused by former Solidarity MSP Tommy Sheridan of having a personal vendetta
against him and of conspiring with MI5 to produce a video of him confessing to having
affairs allegations over which Sheridan had previously sued News International and won.
61

On being arrested for perjury following the case, Sheridan claimed that the charges were
"orchestrated and influenced by the powerful reach of the Murdoch empire".

PRIVATE MEETINGS WITH POLITICIANS


Murdoch has a history of hosting private meetings with influential politicians. Both parties
describe such meetings as politically insignificant; social events, informal dinners or friendly
drinks. It has however been argued that such meetings are significant because of Murdoch's
exceptional influence as an international media magnate , as well as his consistent interest in
and involvement with political issues.

David Cameron
In August 2008 British Conservative leader and future Prime Minister David Cameron
accepted free flights to hold private talks and attend private parties with Murdoch on his
yacht, the Rosehearty. Cameron has declared in the Commons register of interests he
accepted a private plane provided by Murdoch's son-in-law, public relations guru Matthew
Freud; Cameron has not revealed his talks with Mr Murdoch. The gift of travel in Freud's
Gulfstream IV private jet was valued at around 30,000. Other guests attending the "social
events" included the then EU trade commissioner Lord Mandelson, the Russian oligarch Oleg
Deripaska and co-chairman of NBC Universal Ben Silverman. The Conservatives have not
disclosed what was discussed.

Kevin Rudd
On 21 April 2007, future Australian prime minister Kevin Rudd dined with Rupert Murdoch
in New York, following a one -hour private meeting at Murdoch's News Corporation
Building.
News Limited's resources involvement and coverage, in Australia, on the 2009 OzCar affair
controversy caused antagonism by Rudd. Rudd responded to a press conference question
from The Australian journalist Matthew Franklin, questioning "what sort of journa listic
checks were put in place" for publishing a story claiming he was corrupt without "having
cited any original document in terms of this email." Although such newspapers Daily
Telegraph, the Courier-Mail and the Adelaide Advertiser are owned by News Limited, it has
been viewedthat Murdoch's personal involvement is unlikely and "the anti-Rudd push, if it is
coordinated at all, is almost certainly locally driven."
62

Murdoch once said that Rudd is "...oversensitive and too sensitive for his own good..."
regarding Rudd's response to criticism made of him by News Corporation's Australian
newspapers. Murdoch also described Rudd as "...more ambitious to lead the world than to
lead Australia..." and criticised Rudd's expansionary fiscal policies as unnecessary: "We were
not about to collapse...I thought we were trying to copy the rest of the world a little
unnecessarily."

Stephen Harper
Canadian Conservative Prime Minister Stephen Harper had lunch with Murdoch and Fox
News president Roger Ailes in March 2009, but the New York City meeting was not public
knowledge until the summer of 2010 when a Canadian Press reporter learned of it from
filings with the U.S. Justice Department. News of the meeting sparked speculation of a
politically motivated drive to bring "Fox News North" to Canada.

Barack Obama
In October 2008 Murdoch biographer Michael Wolff wrote a Vanity Fair story recounting a
meeting between Barack Obama, Murdoch, and Ailes at the Waldorf-Astoria Hotel in New
York early that summer. Obama had initially resisted Murdoch's proposals for a meeting,
despite senior News Corp. executives having recruited the Kennedys to act as go-betweens.
According to Wolff, at the meeting Obama complained of Fox News's portrayal of him "as
suspicious, foreign, fearsome just short of a terrorist", while Ailes said it might not have
been this way if Obama had "more willingly come on the air instead of so often giving Fox
the back of his hand." A "tentative truce" was nonetheless agreed upon. Wolff also noted that
Murdoch has met every US President since, and including, Harry Truman.

MANAGEMENT AND LEADERSHIP STYLE


So what is it that makes him such a successful businessman? What is his management style
and what are his leadership characteristics? Study attempts to analyse Rupert Murdochs
management style and leadership characteristics. Rupert Murdoch moves with the times, he is
always thinking of the future, never of the past. His philosophy is to think of tomorrow today,
otherwise he would not make it in the business world (Crainer 2002 p.101). He is constantly
updating and developing his network of contacts. The cornerstone of good career
management is networking, which is a daily commitment. Rupert Murdoch is well known for
63

his style in using people to build his empire. However, he does not pay much attention to
people, and those who are not doing their job do not belong there and simply have to go. His
managers have to be prepared to receive a call in the middle of the night and inform him
about their particular company. On the other hand Murdoch recruits strong people; mirrors of
his own image. Kelvin MacKenzie and Andrew Neil are perfect examples of how some of his
most successful executives have turned out to be larger than life personalities.

CRITICISM
Along the way, he drew criticism that his stewardship lowered standards, with quality
journalism replaced by vulgarity. The Sun - which was a loss-maker when he snapped it up in
1969, a year after beating Robert Maxwell to buying the News Of The World - was a case in
point.
The introduction of Page Three "stunnas", tabloid gossip and sensation-seeking stories soon
made it the UK's most widely-read daily paper - and gained Mr Murdoch the nickname of the
Dirty Digger. But even in the early days, Mr Murdoch denied he was peddling sleaze, telling
one interviewer: "I'm rather sick of snobs who tell us they're bad papers, snobs who only read
papers that no-one else wants."
The Times and Sunday Times also soon joined his growing News International stable.
Throughout the 1970s, his influence stretched across the Atlantic, with the purchase of the
New York Post and New York magazine.
Catalyst for change'
But his aggressive management style drew widespread criticism. In an effort to cut costs at
his UK operations, he quit Fleet Street for good. The move to Wapping in London's East End
signaled a bitter, year-long battle with staff, which culminated in the de -recognition of the
print unions and the loss of 5,000 jobs.
"I'm a catalyst for change. You can't be an outsider and be successful over 30 years without
leaving a certain amount of scar tissue around the place," he once famously said.
Meanwhile, Mr Murdoch was also turning his attentions to the world of broadcasting. In
1985, in order to comply with US laws on foreign ownership of TV stations, he moved to
New York and became an American citizen.

64

FAILURES AND LAWSUITS


In the early 1990s, faced with debts of around $8bn, the group was stretched thin financially
and nearly crashed. As a result, Murdoch was forced to sell many of his US magazine
interests to service its loans yet by the late 1990s, he had bounced back.
The subject of Murdoch's alleged anti-competitive business practices surfaced in September
2005. Australian media proprietor Kerry Stokes, owner of the Seven Network, instituted legal
action against News Corporation and the PBL organisation, headed by Kerry Packer. The suit
stemmed from the 2002 collapse of Stokes' planned cable television channel C7 Sport, which
would have been a direct competitor to the other major Australian cable provider, Foxtel, in
which News and PBL have major stakes.
Seve n complained that News Corporation had abused its market power which derived from
its half-ownership of the National Rugby League, half-ownership of C7's direct competitor,
Fox Sports, and 25 per cent ownership of the Foxtel pay TV service. Seven wanted Justice
Ronald Sackville to order News and Publishing and Broadcasting Ltd to divest their
combined 50% stake in Foxtel or to sell their wholly owned Fox Sports. They argued that this
would be justified because of the way in which Foxtel gave preferential treatment to Fox
Sports and declined to take any rival sports channel provider on "reasonable commercial
terms".
In evidence given to the court on 26 September 2005, Stokes alleged that PBL
executive James Packer came to his home in December 2000 and warned him that PBL and
News Limited were "getting together" to prevent the AFL rights being granted to C7.
However, Justice Sackville dismissed Seven's case on all grounds, saying that there was
"more than a hint of hypocrisy" in many of Seven's claims. Recently, Murdoch has bought
out the Turkish TV channel, TGRT, which had been previously confiscated by the Turkish
Board of Banking Regulations, TMSF. Newspapers report that Murdoch has bought TGRT in
a partnership with the Turkish recording mogul Ahmet Ertegn.
Murdoch has recently won a media dispute with Italian Prime Minister Silvio Berlusconi. A
judge ruled the Italian Prime Minister's media arm Mediaset had prevented News Corp.'s
Italian unit, Sky Italia, from buying advertisements on its television networks.

65

CONCLUSION
The effect that Rupert Murdoch has had on the media and entertainment industry is massive.
Along the way he created an empire that has gone from strength to strength, securing
positions in every important media and country. Murdoch continues to push his News
Corporation company forward and is leading the way into the lucrative Chinese market that
has up until now been out of reach for Western media companies. With his great success and
power he has also created a lot of critics, but Murdoch continues to brush them all aside and
is happily living his life with his young w ife and is continuing to grow his global media
empire.

REFERENCES
Chenoweth, Neil (2001). Rupert Murdoch, the untold story of the world's greatest media
wizard. New York: Random House.
McKnight, David. "Rupert Murdoch's News Corporation: A Media Institution with A
Mission," H istorical Journal of Film, Radio and Television, Sept 2010, Vol. 30 Issue 3, pp
303-316
Arsenault, A & Castells, M. (2008) Rupert Murdoch and the Global Business of Media
Politics. International Sociology. 23(4)
http://www.askmen.com/celebs/men/business_politics/27_rupert_murdoch.html
http://www.techdirt.com/articles/20101219/22155912331/look-rupert-murdochs-historyinternet-failures.shtml
http://www.foxchicago.com/-ezpost/data/36602.shtml retrieved on May 16, 2006.
http://www.theatlantic.com/technology/archive/2010/12/a-look-at-rupert-murdochs-pastinternet-failures/68351/
http://news.bbc.co.uk/2/hi/business/6925738.stm
http://www.grin.com/e-book/41757/keith-rupert-murdoch

66

MICHAEL DELL

NAME: MICHAEL DELL


BORN: 23 FEBRARY 1965 (AGE 46)
RESIDENCE: TEXAS, AMERICA
RELIGION: JEWISH
ETHNICITY: WHITE
CITIZENSHIP: UNITED STATES OF AMERICAN
OCCUPATION: CEO & FOUNDER OF DELL COMPUTERS
NET WORTH: $14 TH BILLION (SEPT 2010)
CHILDERN: FOUR

67

EARLY L IFE AND EDUATION


Michael dell is the son of Orthodontist , Dell was born in to an upper-class Jewish family and
attended Herod Elementary School in Houston, Texas. Dell had his first encounter with a
computer at the age of 15 when he broke down a brand new Apple II computer and rebuilt it,
just to see if he could be succeed in it or not. Michael Dell borrowed thousand U.S Dollar to
start his own business of computer accessories. The idea that set the young entrepreneur apart
from others was to sell directly to the customers. PC limited named business was start-up but
later on it was Dell Inc. The company became successful enough that with the help of an
additional loan from his grandparents, Dell dropped out of college at the age of 19 to run PC's
Limited which later became Dell Computer Corporation then ultimately Dell Inc.

CAREER
Michael was dropped out of college at the age of nineteen to run Dell Computer Inc. DELL
is an American multinational information technology corporation based in Round Rock,
Texas, and United States that develops, sells and supports computers and related products and
services. As the name of its founder is Michael Dell, the company is one of the largest
technological corporations in the world. According to the Security and Exchange
Commission Dell had 46,000 employees in USA and 96,000 people worldwide. "Dell
Computer Corporation" became "Dell Inc." as they moved into other areas of business. Dell
Inc. has an expanding product range that includes home entertainment systems and personal
devices. Michael Dell was married to Susan in 1994. Michael Dell uses some of his great
wealth for philanthropic activities and had started the "Michael and Susan Dell Foundation"
with his wife Susan. The organization is to improving the lives of children in the United
States of America and internationally. A letter from Michael Dell and S usan tells that the role
of the foundation is to focus on quality education and good health which is the first priority
for children. The Dell family lives in one of the largest houses in Austin, Texas and has been
reported to be the 15th largest house in the world Dell stepped down from his role as CEO at
Dell Inc.

HONORS

In May 2002, the University of Limerick which is situated in Ireland conferred Michael
Dell with an honorary doctorate degree in Economic Science.
68

March 27, 2007. The CEO Gary Shapiro and President of CEA, honored Michael Dell
that "Michael is an industry pioneer who continuously fights for innovation, and we are
honored to recognize him as a true Digital Patriot for his commitment to technology

No.1 PC provider in the U.S. and No.2 wor ldwide

National Technology Medal of Honor

ACHIEVEMENTS
Michael Dell is the founder CEO and chairman of Dell Inc. The worlds second-biggest
personal computer maker. He is worth 15.8 billion according to Forbes list of The Worlds
Billionaires in 2007. In 1992, he became the youngest CEO ever earning a ranking on the
Fortune 500. Michael Dell is the author of Direct From Dell Strategies That Revolutionized
an Industry the strategies he has refined that apply to all businesses. He is a member of the
board of directors of the US Chamber of Commerce. Dell also serves on the nominating
committee for the National Technology Medal of Honor and is a member of The Business
Council. There are some of the things which make Michael Dell a good leader. They are as
followed,

He knew his goal clearly and he focused on it . When he was a freshman in college,
Michael Dell declared that he wanted to beat IBM. In the following years, he started his own
business and achieved his goal unceasingly, no matter what diff iculties he faced with. Today,
Dell company revenues are about $ 7.8 billion a year. He has passed IBM in annual sales, and
is closing in on industry leader Compaq.

He has strong sense of innovation. As a successful entrepreneur, he is fond of doing


something new and takes a risk and works hard to make them work. He also cherishes
difference and thinks difference can breed innovation. He hired a diverse work force in his
teams with different angles on problems.
He dares to change his position and do something new. When he saw opportunity ahead that
selling custom made PCs and components was very profitable, he made a decision to drop out
of university and started his own business. Dells sense of innovation makes him hold lots of
number 1 record in computer industry.

69

MSD CAPITAL
In 1998 Michael Dell founded MSD Capital LP , A private investment firm to invest in
various small companies on Dell's behalf. According to reports, the firm tends to invest in
"late stage" investments rather than early in a company' s startup. The money management
firm that oversees Michael Dells fortune raised almost $780 million March 8, 2011 for a
hedge fund that will invest in energy companies, according to a regulatory filing.

LEADERSHIP EXPERIENCES
Michael Dell assembles computers and sells them direct to customers, creating a business that
generates nearly $14 billion in revenues a year and employs 96,000 people all over the world.
Thanks to this original direct marketing approach and to Michael Dell who owns the
industry's first service and support programs, Dell Computer became recognized as the top
vendor of PC. Another of Dell's worldwide innovations is his leadership on the Web. Dell is
recognized as the largest online commercial seller of computer systems with an average of
over $30 million per day in online sales.
Michael gets high ranking for inspiring millions of entrepreneurs to proceed with their dream.
Tom Peters says that perfect entrepreneurs such as Michael Dell "have the ability to
appreciate people who are inde pendently minded. These companies are places where strong
minded people with contrarian points of view do well." To keep his managers on the lookout,
Michael Dell, for instance has split the company into smaller and smaller pieces that can act
pioneering and entrepreneurial. Michael dell narrows the focus of each executive so that he or
she can go to a much deeper level with the innovation.
his leadership structure has experienced a fundamental change. In the furious market
competition, Dell realized that he didnt have all the right skills to build his company into a
multi-product, multi-geography powerhouse. And he couldnt manage alone, he should bring
in the talent he needed. So, Dell made a decision that he will share his power with his long
time partne r Kevin Rollins. He developed a new leadership model one company, two CEO's.
Without doubt CEO model may bring about a lot of risks. One risk of shared leadership is
that conflicting signals are transmitted down through the ranks. If it wasnt handled well it
would bring about negative effects to the company. Fortunately, they have done well.
Although they have lots of differences, such as they have 12 year age difference, Dell
dropped out of college to pursue his business, Rollins earned an MBA from Brig ham Young,
70

Dell is optimistic, Rollins is a lit bit pessimistic, and so on they see the future the same way
they have a very healthy Yin and Yang. They set a model for other leaders how to share
leadership. CEO of EMC has said that the connection between Dell and Rollins is so
seamless he needs to communicate with only one of them to get information to both.

MANAGEMENT STYLES
I think his leadership style belongs to transformational leadership. Because he has a strong
desire to break up laws and to change situation completely and he also has ability to create
something new and benefit others.
Leadership is about coping with changes. More change always demands more leadership the
computer industry field is a world with more and more competitive. If the leaders couldnt
cope with complexity and change very well, they would go bankruptcy. Fortunately, through
his transformational leadership, the company can keep up with the changes of the market, and
make more and more progress.
He started with nothing but built a empire and created a fantastic wealth for millions of
people he took hold of any commercial opportunities ahead and led his team to create a lot of
pioneering activities in the computer industry field he created a low cost mail order model to
sell computers and helped more and more people realize the power of computing and the
internet he has a good self conscious of his disadvantages and he knows what he doesnt
know, So he can break his role of leadership and create one company, two CEO leade rship
he has a strong moral responsibility for business and family and keeps a good balance
between life and work. He created a new image of young entrepreneur.
Michael Dell used some of these management styles which are as followed;

CONSTANT ANALYSIS
As all successful businessmen and leaders are constantly looking to improve their business
Michael Dell also use to do constant analysis to its maximum advantage of his company. Dell
was increasing efficiencies systematically and Michael Dell was not wasting time in his
favorite activities.

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SPOTTING OPPURTUNITIES
Dell says that, we need to spot the opportunity for improvement and not only spot them but to
make leverage that opportunity.

Know your business and innovate - IT strategy


Dell manages the entire IT department to develop an innovative mindset. Dell helps the IT
business by understanding each department and then helping that department through
innovative use of technology.

LESSONS LEARNT
As a successful leader, he must have clear goal and powerful vision for the future. He must
use his entrepreneur personality to motivate, communicate, excite and influence his followers
and transform his personal goal and vision into all followers practice. As a successful leader,
he must have strong sense of innovation. He should do his best to develop a environment of
innovation.
He should respect difference and encourage his followers to have different idea and different
solution, he should have ability to cope with change and find out opportunity from it, he
should have courage to take risk of doing something new and strong desire to change the
current situation and to be pioneer in their own field.
As a successful leader, he must have strong self consciousness. He must know what he
doesnt know and face up his disadvantages. He should learn from mistakes and borrow
others talent he needed.
As a successful leader he must have high moral responsibility either for business or for
private life. He should distribute his energy and time wisely into three interdependent and
interconnected spheres: work sphere, family sphere and self sphere. He should keep good
balance among them and gain strength from three spheres.

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CONCLUSION
Michael Dell is the founder and CEO of Dell computer corporation that is the worlds largest
direct computer company. He is also the youngest person ever to head a Fortune 500 firm
And he is the longest-serving CEO in the computer industry.
Michael Dell is clearly a genius in the computer world and business field. At age 13 he got a
knack for taking apart the motherboard of his Apple II computer, when he was a senior in
high school, he began to show his talent in business. He sold so many newspapers
subscriptions that he was able to pay cash when he bought a BMW, In 1983 at 18 as a
freshman at the University of Texas, Austin. The day his former classmates were graduating,
his sales had already hit $ 70 million a year At 33, the visionary CEO of Dell Computer is at
the pinnacle of the entire PC industry. Today, he runs the second largest (after the HP
Compaq merger) and still fastest growing PC maker in the world with a market capitalization
of well over $ 100 billion.
For Michael Dell, inventing the Next Big Thing is not the goal. His mission is to build the
Current Big Thing better than anyone else. He doesn't plan on becoming IBM or HP. Rather,
he wants to focus on his strength as a super-efficient manufacturer and distributor. That's why
Dell continues to increase the efficiency of its operations. Michael Dell is the biggest and
greatest entrepreneur of the centuries.

REFERENCES
BUSSINESS MASTERS HOME.
http://www.woopidoo.com/biography/michael-dell/index.htm
GOOD2WORK.
http://www.good2work.com/article/1099
WIKIPEDIA.
http://en.wikipedia.org/wiki/Michael_Dell
BOOKSREGS.
http://www.bookrags.com/wiki/Michael_Dell
ENGAGED IT FOR THE CIO.
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http://mubbisherahmed.wordpress.com/2010/04/04/michael-dells-ceo-dellstyle -and-cios/

74

management-

DAVID SARNOFF

NAME: DAVID SARNOFF


BORN: FEBRUARY 27,
DIED: DECEMBER 12, 1 971 (AGED 80)
NATIONALITY: AMERICAN
KNOWN FOR: LONGTIME EXECUTIVE OF RCA, FOUNDER OF NBC
RELIGION: JUDAISM
SPOUSE: LIZETTE HERMANT
CHILDREN: ROBERT W., EDWARD, AND THOMAS W.

75

ABOUT:
David Sarnoff was an American businessman and pioneer of American commercial radio and
television. He founded the National Broadcasting Company (NBC) and throughout most of
his career he led the Radio Corporation of America (RCA) in various capacities from shortly
after its founding in 1919 until his retirement in 1970.
He ruled over an ever-growing telecommunications and consumer electronics empire that
included both RCA and NBC, and became one of the largest companies in the world. Named
a Reserve Brigadier General of the Signal Corps in 1945, Sarnoff thereafter was widely
known as "The General."
Sarnoff is credited with Sarnoff's law, which states that the value of a broadcast network is
proportional to the number of viewers.
David Sarnoff was born in Uzlyany, a small Jewish village, and emigrated to the United
States and raised funds to bring the family. Sarnoff spent much of his early childhood in a
cheder studying and memorizing the Torah. He immigrated with his mother and three
brothers and one sister to New York City in 1900, where he helped support his family by
selling newspapers before and after his classes at the Educational Alliance. In 1906 his father
became incapacitated by tuberculosis, and at age 15 Sarnoff went to work to support the
family.[2] He had planned to pursue a full-time career in the newspaper business, but a chance
encounter led to a position as an office boy at the Commercial Cable Company. When his
superior refused him unpaid leave for Rosh Hashanah, he joined the Marconi Wireless
Telegraph Company of America on September 30, 1906, and started a career of over sixty
years in electronic communications.
Over the next thirteen years Sarnoff rose from office boy to commercial manager of the
company, learning about the technology and the business of electronic communications on
the job and in libraries. He also served at Marconi stations on ships and posts on Siasconset,
Nantucket and the New York Wanamaker Department Store. In 1911 he installed and
operated the wireless equipment on a ship hunting seals off Newfoundland and Labrador , and
used the technology to relay the first remote medical diagnosis from the ship's doctor to a
radio operator at Belle Isle with an infected tooth. The following year, he led two other
operators at the Wanamaker station in an effort to confirm the fate of the Titanic.[3] Learning

76

early the value of self-promotion and publicity, Sarnoff falsely advanced himself both as the
sole hero who stayed by his telegraph key for three days to receive information on the
Titanic's survivors and as the prescient prophet of broadcasting who predicted the medium's
rise in 1916. [2]
Regarding the Titanic story, some modern media historians question whether Sarnoff was at
the telegraph key at all. As the profile done for the Museum of Broadcast Communications
correctly points out,[2] by the time of the Titanic in 1912, Sarnoff was in management, and no
longer a telegrapher; plus, the event occurred on a Sunday, when the store would have been
closed. [4] Regarding the "radio music box" prediction, the memo he allegedly wrote making
that claim has never been found, but Louise Benjamin, the author of the 1993 article which
expressed skepticism about it has since back-tracked somewhat. She and the curator of
Sarnoff's papers found a previously mis -filed 1916 memo that did mention Sarnoff and a
"radio music box scheme" (the word "scheme" in 1916 usually meant a plan); Benjamin
wrote a follow-up article about Sarnoff and the radio music box in 2002. (See Louise
Benjamin articles in References, below)
Over the next two years Sarnoff earned promotions to chief inspector and contracts manager
for a company whose revenues swelled after Congress passed legislation mandating
continuous staffing of commercial shipboard radio stations. That same year Marconi won a
patent suit that gave it the coastal stations of the United Wireless Telegraph Company.
Sarnoff also demonstrated the first use of radio on a railroad line, the Lackawanna Railroad
Company's link between Binghamton, New York, and Scranton, Pennsylvania ; and permitted
and observed Edwin Armstrong's demonstration of his regenerative receiver at the Marconi
station at Belmar, New Jersey. Sarnoff used H. J. Round's hydrogen arc transmitter to
demonstrate the broadcast of music from the New York Wanamaker station.
This demonstration and the AT&T demonstrations in 1915 of long-distance wireless
telephony inspired the first of many memos to his superiors on applications of current and
future radio technologies. Sometime late in 1915 or in 1916 he proposed to the company's
president, Edward J. Nally , that the company develop a "Radio Music Box" for the "amateur"
market of radio enthusiasts. Nally deferred on the proposal because of the expanded volume
of business during World War I. Throughout the war years, Sarnoff remained Marconi's
Commercial Manager, including oversight of the company's factory in Roselle Park, New
Jersey.
77

RADIO CORPORATION OF AMERICA (RCA)


Unlike many who were involved with early radio communications, viewing radio as point-topoint, Sarnoff saw the potential of radio as point -to-mass. One person (the broadcaster) could
speak to many (the listeners).
When Owen D. Young of the General Electric Company arranged the purchase of American
Marconi and turned it into the Radio Corporation of America, a radio patent monopoly,
Sarnoff realized his dream and revived his proposal in a lengthy memo on the company's
business and prospects. His superiors again ignored him but he contributed to the rising
postwar radio boom by helping arrange for the broadcast of a heavyweight boxing match
between Jack Dempsey and Georges Carpentier in July 1921. Up to 300,000 people heard the
fight, and demand for home radio equipment bloomed that winter. [5] By the spring of 1922
Sarnoff's prediction of popular demand for broadcasting had come true, and over the next
eighteen months, he gained in stature and influence.
In 1926, RCA purchased its first radio station (WEAF, New York) and launched the National
Broadcasting Company (NBC), the first radio network in America. Four years later, Sarnoff
had become president of RCA and NBC had split into two networks, the Red and the Blue.
The Blue Network later became ABC Radio. [3] Sarnoff would be later described by others as
the founder of both RCA and NBC, but he was neither. These misconceptions were
perpetuated because Sarnoff's later accomplishments were so plentiful that any myth was
believable. [2]
Sarnoff was instrumental in building and established the AM broadcasting radio business
which became the preeminent public radio standard for the majority of the 20th century. This
was until FM broadcasting radio re-emerged in the 1960s (following FM's initial appearance
and disappearance during the 1930s and 1940s - see Yankee Network for more details on
early FM broadcasting and a tragic legacy to the Sarnoff story).

RADIO-KEITH-ORPHEUM (RKO)
Sarnoff negotiated successful contracts to form Radio-Keith-Orpheum (RKO), a film
production and distribution company. Essential elements in that new company were RCA and
the former Keith-Albee-Orpheum (KAO) theater chains.

78

EARLY HISTORY OF TELEVISION


When Sarnoff was put in charge of radio broadcasting at RCA, he soon recognized the
potential for television, i.e., the combination of motion pictures with electronic transmission.
Schemes for television had long been proposed (well before World War I) but with no
practical outcome. David Sarnoff was determined to lead his company in pioneering the
medium and met with Westinghouse engineer Vladimir Zworykin in 1928. At the time
Zworykin was developing an all-electronic television system at Westinghouse, with little
management support. Zworykin pitched the concept to David Sarnoff, claiming a viable
television system could be realized in two years with a mere $100,000 investment. Sarnoff
opted to fund Zworkyin's research, most likely well-aware that Zworykin, in his enthusiasm,
had underestimated the scope of his television effort by orders of magnitude in cost and
several years in duration. Seven years later, in late 1935, Zworykin's photograph appeared on
the cover of the trade journal Electronics, holding an early RCA photomultiplier prototype.
The photomultiplier, subject of intensive research at RCA and in Leningrad, Russia, would
become an essential component within sensitive television cameras. RCA, soon thereafter,
demonstrated a working iconoscope camera tube and kinescope receiver display tube (an
early cathode ray tube), the two key components of all-electronic television, to the press on
April 24, 1936.
The final cost of the enterprise was closer to $50 million. On the road to success they also
encountered a battle with the young inventor Philo T. Farnsworth, who had been granted
patents in 1930 for his solution to broadcasting moving pictures. Eventually Sarnoff was
ordered to pay him $1,000,000 in royalties.
In 1929, Sarnoff engineered the purchase of the V ictor Talking Machine Company, the
nation's largest manufacturer of records and phonographs , merging radio-phonograph
production at Victor's large manufacturing facility in Camden, New Jersey.
Sarnoff became president of RCA on January 3, 1930, succeeding General James Harbord.
On May 30 the company was involved in an antitrust case concerning the original radio
patent pool. Sarnoff's tenacity and intelligence were able to negotiate an outcome where RCA
was no longer partly owned by Westinghouse and General Electric , giving him final say in
the company's affairs.

79

Initially, the Great Depression caused RCA to cut costs, but Zworykin's project was
protected. After nine years of Zworykin's hard work, Sarnoff's determination, and legal
battles with Farnsworth (in which Farnsworth was proved in the right), they had a
commercial system ready to launch. Finally, in 1939 Television in America was born under
the name of the National Broadcast Corporation. The first television show aired at the New
York World's Fair and was introduced by Sarnoff himself.
The standard approve d by the National Television System Committee (the NTSC) in 1941
differed from RCA's standard, but RCA quickly became the market leader of manufactured
sets and NBC became the first Television network in the United States.
Meanwhile, a system developed by EMI based on Russian research and Zworykin's work was
adopted in Britain and the BBC had a regular television service from 1936 onwards.
However, World War II put a halt to a dynamic growth of the early television development
stages.

WORLD WAR II
At the onset of World War II, Sarnoff served on Eisenhower's communications staff,
arranging expanded radio circuits for NBC to transmit news from the invasion of France in
June 1944. In France, Sarnoff arranged for the restoration of the Radio France station in Paris
that the Germans destroyed and oversaw the construction of a radio transmitter powerful
enough to reach all of the allied forces in Europe, called Radio Free Europe. Thanks to his
communications skills and support he received the Brigadier General's star in December
1945, and thereafter was known as "General Sarnoff." The star, which he proudly and
frequently wore, was buried with him.
Sarnoff's anticipated that post-war America would need an international radio voice
explaining its policies and positions. In 1943, he tried to influence Secretary of State Cordell
Hull to include radio broadcasting in post-war planning. In 1947, he lobbied Secretary of
State George Marshall to expand the roles of Radio Free Europe and Voice of America. His
concerns and proposed solutions were eventually seen as prescient.

POST-WAR EXPANSION
After the war, monochrome television production began in earnest. Color television was the
next major development and NBC once again won the battle. CBS also had their electro-

80

mechanical color television system approved by the FCC on October 10, 1950, however
Sarnoff filed an unsuccessful suit in the United States district court to suspend that ruling.
Subsequently he made an appeal to the Supreme Court which eventually upheld the FCC
decision. Sarnoff's tenacity and determination to win the "Color War" pushed his engineers to
perfect an all-electronic color television system that used a signal that could be received on
existing monochrome sets that finally won the day. CBS was now unable to take advantage of
the color market, due to lack of manufacturing capability and sets that were triple the cost of
monochrome sets. A few days after CBS had its color premiere on June 14, 1951, RCA
demonstrated a fully functional all-electronic color television system and became the leading
manufacturer of color Television sets in the United States.
Color television production was suspended in October 1951 for the duration of the Korean
War. As more people bought monochrome sets, it was increasingly unlikely that CBS could
achieve any success with its incompatible system. The NTSC was reformed and
recommended a system virtually identical to RCA's in August 1952. On December 17, 1953
the FCC approved RCA's system as the new standard.

LATER YEARS
In 1955, General Sarnoff received The Hundred Year Association of New York's Gold Medal
Award "in recognition of outstanding contributions to the City of New York."
In 1959 Sarnoff was a member of the Rockefeller Brothers Fund panel to report on U.S.
foreign policy. As a member of that panel and in a subsequent essay published in Life as part
of its "The National Purpose" series, he was critical of the tentative stand being taken by the
United States in fighting the political and psychological warfare being waged by Soviet-led
international Communism against the West. He strongly advocated an aggressive, multifaceted fight in the ideological and political realms with a determination to decisively win the
Cold War.[8]
Although a cousin's sympathetic biography earned Sarnoff's approval, there is not yet an
objective, scholarly biographyone which documents its sources and draws on multiple
archives.

81

Sarnoff retired in 1970, at the age of 79, and died the following year, aged 80. He is interred
in a mausoleum featuring a stained-glass vacuum tube in Kensico Cemetery in Valhalla, New
York.

CONCLUSION:
Rather than fearing the disruption caused by new technology, David Sarnoff embraced it,
building a broadcast empire first in radio and then in TV. So was David Sarnoff an
entrepreneur or a cunning corporate warrior? In some respects, the broadcasting pioneer was
a little of both.
Born in a small village in Belarus , Sarnoff came to America as a young boy and began selling
newspapers to support his family. He was soon running a whole newsstand, and then he
began working in the telegraph business. As a young man, he famously claimed that he was a
hero telegraph operator who kept in touch with operators aboard the Titanic on the night that
the ship sank. It was a bold PR claim and one that was thoroughly debunked but only years
after Sarnoff had moved onto bigger and better thin gs.
From the telegraph business, Sarnoff eventually made the leap into radio and then into TV.
His great gift as a businessperson was the ability to see a new technology coming long before
it arrived, and to take steps to make sure he was ready to profit from it. He was also adept at
figuring out ways to combine content and distribution under one roof. He was a tough (some
would say ruthless) competitor, a shrewd (again, some would say ruthless) operator in the
legal world of intellectual property, an aggressive lobbyist for his industry, and a creative
dealmaker when it came to mergers and acquisitions. He also pushed forward new
technologies that delighted his networks' audiences. Among other advances, he saw very
early the appetite Americans had for sports broadcasts. He oversaw the development of the
morning and late night formats (Today and the Tonight Show) that are still with us. And he
was one of the earliest advocates of broadcasting in color.
But if launching a company is the litmus test used to define entrepreneurship, then Sarnoff
falls short of the mark. He rose through the ranks of American Marconi, General Electric , and
other companies, placing himself near decision makers so that he was able to grab a
leadership position at a start-up radio network when that business model first took off. When
TV was developed in 1926, he pulled the same trick. As his official biography with the

82

Museum of Broadcast Communications notes: While later described by others as the


founder of both the Radio Corporation of American (RCA) and the National Broadcasting
Company (NBC), Sarnoff was neither. These misconceptions were perpetuated because
Sarnoff's later accomplishments were so plentiful that any myth was believable.
Sarnoff is further derided by those who believe that he tried to steal the technology behind the
television from Philo T. Farnsworth, a genius from the West who fought to hold onto his
patents even as Sarnoffs NBC popularized television. (The case against Sarnoff was made in
a 2002 book by the journalist Evan I Schwartz called The Last Lone Inventor: A Tale of
Genius, Deceit, and the Birth of Television.)
Still, if Sarnoff was not always the first person to have an idea, he was relentless when it
came to turning that idea into a business. And he was equally relentless when it came to
expanding that organization ever outward. He demonstrated the ability for popularizing
innovation for profit throughout his career.
In 1966, no less an authority on the industry than William S. Paley Sarnoffs archrival and
occasional partner in crime described Sarnoff as broadcastings most imaginative prophet.
If we rate imagination more highly than inventiveness on the list of entrepreneurs' most
important characteristics, than Sarnoff may yet stake his claim to being one of the greatest
entrepreneurs of the 20th Century.

REFERENCES
Museum of Broadcast Communications web site
Radio Hall of Fame web site
Radio Legends Revealed #1
The American Experience television series. (1997)
"Big Dream, Small Screen,"
RKO Radio Pictures, Inc.
New York Times..
http://www.nytimes.com
Nelson, Valerie J. (2008-02-26).

83

"Richard

Baer,

79;

wrote

for

many

popular

sitcoms".

Los

Angeles

Times.

http://www.latimes.com/news/printedition/california/la-me-baer26feb26,1,1331705.story..
"Writer

Richard

Baer

dies

at

79".

Variety

Magazine.

http://www.variety.com/article/VR1117981450.html?categoryid=25&cs=1&query=Richard+
Baer+.
National Association of Broadcasters.
http://www.nab.org/AM/Template.cfm?Section=Awards7&CONTENTID=11047&TEMPLA
TE=/CM/ContentDisplay.cfm.

84

MARY KAY ASH

NAME: MARY KAY ASH


BORN: MAY 12, 1918
DIED: NOVEMBER 22, 2001(AGED 83)
RESIDENCE: PRESTON HOLLOW, DALLAS
CITIZENSHIP: AMERICAN
OCCUPATION: FOUNDER OF MARY KAY
CHILDREN: RICHARD ROGER, MARILYN ROGER & BEN ROGER

85

EARLY LIFE:
Mary Kay Ash (May 12, 1918 November 22, 2001) was an American businesswoman and
founder of Mary Kay Cosmetics, Inc.
She was born in Hot Wells, Harris County, Texas. She was of daughter of Edward Alexander
and Lula Vember Hastings Wagner. She attended Reagan High School in Houston,
graduating in 1934.
Ash attended the University of Houston until 1943 when she married, but despite having
three children, the marriage did not last, and after her divorce Ash went to work for Stanley
Home Products, a direct sales firm out of Houston. In 1963, Ash left Stanley. Frustrated when
passed over for a promotion in favor of a man that she had trained, Ash retired in 1963 and
intended to write a book to assist women in business. The book turned into a business plan
for her ideal company, and in September 1963, Mary Kay Ash and her second husband began
Mary Kay Cosmetics with a $5,000 investment. Before the company could open its original
storefront operation in Dallas, her second husband died, and her son, Richard Rogers, took
his place. The store opened in 1963, but grew rapidly, particularly after Ash was interviewed
for CBS's60 Minutes in 1979. The pink Cadillac awarded to top sales people were the most
visible sign of the company's success.

MARY KAY LEADERSHIP:


When Mary Kay Ash started the Dallas-based company in 1963, she had a mission: to enrich
women's lives. And it's still the company's motto. Once you understand that, it's not a surprise
to read the ways she set out to complete her purpose. Her nine keys to corporate success are
the main focus of the book, and, despite going against common business practice, none of
them are bizarre. For example, Mary Kay believed in a different way to tackle the problem of
worker motivation. While most companies may offer money incentives to do this, Mary Kay
believed in recognizing the worker's effort and achievement in a public way. That's where the
Cadillacs come into play. It's not the value of the car that's appealing; it's that they are a
conspicuous way to reward accomplishment. Underwood claims that the pink Cadillac
"represents a victory of will over doubt" and is a way for peers to see the results of hard
work. For many saleswomen in the company, the pink caddy is also a tangible triumph over
adversity and discouragement.

86

Another way the company tries to foster an enriching and productive working environment is
through its adherence to a value system. Underwood firmly believes that one large reason
companies deteriorate over time is that their leaders "fail to remember what got them to the
top in the first place." Mind you, he isn't saying that an organization needs to be steeped in
traditions, but rather it should be committed to the practices that made it successful. That's
where Mary Kay Inc. is strong. It still cultivates the same caring and stimulating atmosphere
it did in the l960s. Before Mary Kay died, a Corporate Heritage Department was created in
2000 to ensure that the history and principles of the company wouldn't be forgotten. They
also continue with a care list, just as Mary Kay herself once did. Each week, executive
members personally contact employees during times of personal crisis to offer comfort and
encouragement.
Admittedly, Mary Kay's rags-to-riches story may seem hokey, especially in the wake of
corporate scandals, layoffs, and dwindling pay checks. Underwood paints a flowery portrait
of the company and its employees with barely a mention of the dark periods. But Underwood
rightly points that no single key is the fix to management woes. What makes Mary Kay Inc.
successful is that it's able to incorporate its practices into a unique business culture. That
culture, in turn, creates and keeps talented and motivated employees who are eager to
produce.
You can do it!
These words embody the very spirit of Mary Kay Ash and the Company she created. Its the
spirit she learned as a child growing up in Hot Wells, Texas. When facing new and daunting
tasks, her mother encouraged her with, You can do it, Mary Kay. You can do it. Mary Kay
Ash did more than embrace this empowering spirit she passed it on through a remarkable
company that would inspire millions in generations to come.
That company story didnt begin until Mary Kay Ash faced a situation all too familiar to
women. After 25 years in the direct selling business, Mary Kay Ash resigned her position as a
national training director when yet another man she had trained was promoted above her at
twice her salary. Her response was visionary. At first, she started writing a book that would
help women gain the opportunities she had been denied. But soon she realized she was
creating a plan that would do much more than give advice. It formed the foundation for a new
opportunity where women could develop their talents and achieve unlimited success.

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I envisioned a company in which any woman could become just as successful as she wanted
to be. The doors would be wide open to opportunity for women who were willing to pay the
price and had the courage to dream.
So in 1963, with her past experience, her plan and $5,000 in savings, Mary Kay Ash enlisted
the help of her 20-year-old son, Richard, and created Beauty by Mary Kay. It was a first
company dedicated to making life more beautiful for women. It was founded not on the
competitive rule but on the Golden Rule on praising people to success and on the principle of
placing faith first, family second and career third. It was a company, as Mary Kay Ash often
said, with heart. The success of Mary Kay Inc. is much, much deeper than just dollars and
cents and buildings and assets. The real success of our Company is measured to me in the
lives that have been touched and given hope. Her vision, her courage and her unwavering
spirit continue to bring women the opportunity to achieve their potential and bring their
dreams to life. With more than 1.8 million Independent Beauty Consultants throughout the
world, Mary Kay carries on the legacy of Mary Kay Ash inspiring, enriching and
empowering women to do great things.

HER ACHIEVEMENTS:
Dynamic speaker, inspiring motivator, visionary entrepreneur these qualities helped make
Mary Kay Ash a powerful leader in business and in her community. Throughout her life, she
was recognized for her achievements with these awards and honors.

2007

Mary Kay on the Biography Channel produced by A&E Television Networks

2004

One of the 25 Most Influential Business Leaders of the Last 25 Years by PBS and the

Wharton School of Business

2003

Greatest Female Entrepreneur in American History by Baylor University

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2002

Dallas Business Hall of Fame Laureate in recognition of her lifetime achievements as

well as demonstrating inspiring business and community leadership, industry vision and
service as a business and civic role model in the community

National Conference on Medical Care and Domestic Violence Community Service

Award, now known as the Mary Kay Ash Award

2001

Women's Advocacy Award, Legal Services of North Texas Inc.

What's Next? Women Redefining Their Dreams in the Prime of Life, by Rena

Pederson, book feature

Texas Monthly article, "Where Are They Now?"

The Very Best Opportunity for Women, by Angela L. Moore and Lisa Stringfellow,

book feature

Feminine Fortunes: Women of the Next Millennium magazine feature, honoring the

achievements of professional women

2000

Lifetime Television Network as the most influential woman in business during the

20th century

Mary Kay Ash Charitable Foundation mission expanded to include programs devoted

to the prevention of violence against women

One of 39 American women featured in the Unforgettable Women section of The

Women's Museum: An Institute for the Future

One of the "Champions of Commerce" in August issue of Dallas Woman

100 Christian Women Who Changed the 20th Century, by Helen Kooiman Hosier

Cover story for The Godly Business Woman, July/August issue

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1999

Women of the Century award from Women's Chamber of Commerce of Texas,

honoring the state's 100 most influential women of this century

"Salesman of the Century" Texas Monthly magazine's December issue featuring

Texans who shaped the state over the past century

One of 20, and the only woman business leader, profiled in Forbes Greatest Business

Stories of All Time

1998

One of six personalities who shaped the industry in the past 100 years in a special

collector's edition of Women's Wear Daily

1996

Mary Kay Ash Charitable Foundation to fund innovative research studies for cancers

affecting women and provide financial support for nonprofit cancer organizations for
education and assistance

One of the Legends of Texas through the Legends of Texas Bridge project,

Georgetown, Texas

National Business Hall of Fame by Fortune magazine and Junior Achievement

One of 20 entrepreneurs profiled in Forbes Greatest Business Stories of All Time

1995

Third book, You Can Have It All, achieved best-seller status during first week of sales

National Association of Women Business Owners 1995 Pathfinder Award

1994

Honorable Mention Award for Awarenes s and Achievement from the Board of

Sponsors of National Breast Cancer Awareness Month

1993

Mary Kay Museum dedication, a 3,000-square -foot tribute to 30 years of direct selling

success
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Mary Kay Ash/St. Paul Medical Center Mobile Cancer Screening Unit, Dallas

dedication

First female recipient of the Kupfer Distinguished Executive Award, Texas A&M

University

Dallas Mother of the Year, Dallas Can! Academy

Outstanding Texas Citizen, Texas Exchange Clubs

1992

Living Legend Award, Direct Selling Education Foundation

1991

Outstanding Woman of the Year, Les Femmes du Monde

1990

Outstanding Business Leader Award, Northwood Institute

National Family Business Award, Baylor University

Women of Achievement Award, General Federation of Women's Clubs

Business Leader of the '90s Award, Association of Women Business Owners

Individual Komen Award for Philanthropy, Komen Foundation for the Advancement
of Breast Cancer Research

1989

Sovereign Fund Award by Founder and President Kurt W. Simon to one


outsta nding citizen who has rendered great service to the cause of individual
freedom in America"

First Annual National Sales Hall of Fame Award, Sales and Marketing Executives
of Greater New York

Circle of Honor Award, Direct Selling Education Foundation

Honorary chairperson yearlong Texas Breast Screening Project

"Great American Entrepreneur" series at the Smithsonian Institute

1988

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1987

Christian Excellence Award in Business, International Association of Women in


Leadership

Churchwoman of the Year Award, Religious Heritage of America

1986Woman of the Year, Crystal Cathedral Christian Executive Women

Distinguished Woman Award, Northwood Institute

One of the women entrepreneurs featured in the National Federation of


Independent Businesses Report and honored by President Reagan

Texas Business Hall of Fame Award

Texas Women's Hall of Fame Award

Outstanding Women in Business in Dallas Award, The Dallas Chamber of

1985

Commerce

Number eight in "The Savvy 60" list of top U.S. businesses run by women

America's 25 Most Influential Women in 1985, The World Almanac and Book of
Facts

1984

Women's Award of Achievement, Women's City Club of Cleveland, Ohio

Mary Kay on People Management published by Warner Books; featured on The


New York Times best-seller list for 11 weeks

1983

Entrepreneur of the Year Award, Edwin L. Cox School of Business, Southern


Methodist University, Dallas, Texas

One of the "100 Most Important Women in America" by Ladies' Home Journal

Outstanding Corporate Sales Executive, The Gallaghar Report

Distinguished Business Leadership Award, University of Texas at Arlington

1982

College of Business Administration and Advisory Council


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Golden Achievement Award from Incentive Manufacturers Representatives


Association

1981

Business Award for Excellence in Community Service, Dallas Historical Society

Free Enterprise Award, San Fernando Valley Business and Professional


Association and the Free Enterprise Award Committee

Mary Kay by Mary Kay, published by Harper and Row

Saturday Evening Post cover photo and feature story

Golden Plate Award, American Academy of Achievement

60 Minutes profile

Horatio Alger Distinguished American Citizen Award, Horatio Alger Association

Cosmetic Career Woman of the Year Award, Cosmetics Career Women, Inc.

Dale Carnegie Leadership Award for "assisting the Mary Kay independent sales

1980

1979

1978

1977

force in programs of self-development leading to improved performance and


personal growth

1976

Hall of Fame Award, Direct Selling Association

HER LEGACY OF LEADERSHIP:


Dynamic speaker, inspiring motivator, visionary entrepreneur these qualities helped make
Mary Kay Ash a powerful leader in business and in her community. Throughout her life, she
was recognized for her achievements with awards and honors. Here are a few.

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Mary Kay on the Bio graphy Channel produced by A&E Television Networks,

2007

Named one of the 25 Most Influential Business Leaders of the Last 25 Years
by PBS and the Wharton School of Business in 2004

Greatest Female Entrepreneur in American History by Baylor University,


2003

Dallas Business Hall of Fame Laureate in recognition of her lifetime achievements as


well as demonstrating inspiring business and community leadership, industry vision
and service as a business and civic role model in the community, 2002

National Conference on Medical Care and Domestic Violence Community Service


Award, now known as the Mary Kay Ash Award, 2002

Legal Services of North Texas "Equal Justice" Award for her work to positively
impact women's lives, 2001

"Most Outstanding Woman in Business in the 20th Century" by Lifetime Television,


1999

"Texas Woman of the Century" by the Texas Women's Chamber of Commerce, 1999

"Business Leader of the '90s" Award by the Association of Women Business Owners,
1990

One of "America's 25 Most Influential Women," The World Almanac and Book of
Facts, 1985

Horatio Alger "Distinguished American Citizen" Award, 1978

Guest appearances on national television shows, including: 60 Minutes; Good


Morning, America; 700 Club; The Hour of Power; The Oprah Winfrey Show; Late
Night With David Letterman; Phil Donahue; and Today

CONCLUSION:
All of us are born for a reason, but all of us don't discover why. Success in life has nothing
to do with what you gain in life or accomplish for yourself. It's what you do for others.
(Danny Thomas)

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You can do it was a tag line for Mary Kay Ash and she did it very well by her unique
approach towards her employees. Her unique way of motivation made her employees to
realize that she cared for them and this increased the output of the company.
Caring for your employees is the key to success and use unique ways like Ash. Recognize the
worker's effort and achievement in a way that they feel it comfortable. It will enhance their
loyalty.

REFRENCES:
http://www.dsef.org/press/pdfs/Mary_KayCosmeticsInc_Corp_PlanningInAnEraofUncertaint
y.pdf
http://www.financial- inspiration.com/Mary-Kay-Ash-biography.html
http://en.wikipedia.org/wiki/Mary_Kay_Ash
http://www.novelguide.com/a/discover/bls_01/bls_01_00020.html

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GLORIA STEINEM

BORN: MARCH 25, 1934 (AGE 76)


RESIDENCE: TOLEDO, OHIO USA
ETHNICITY:

WHITE AMERICAN

OCCUPATION: WRITE/ JOURNALIST


POLITICAL MOVEMENT: FEMINISM

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EARLY LIFE
Steinem was born in Toledo, Ohio. Her mother, Ruth (ne Nuneviller), was a Presbyterian of
Scottish and German descent, and her father, Leo Steinem, was the son of Jewish immigrants
from Germany and Poland. The Steinem lived and traveled about in the trailer from which
Leo carried out his trade as a traveling antiques dealer.
When Steinem was only a few years old, her mother Ruth, then aged 34, had a "nervous
breakdown" that left her an invalid, trapped in delusional fantasies that occasionally turned
violent. She changed "from an energetic, fun-loving, book-loving" woman into "someone
who was afraid to be alone, who could not hang on to reality long enough to hold a job, and
who could rarely concentrate enough to read a book." Ruth spent long periods in and out of
sanatoriums for the mentally disabled. Steinem was only ten years old when her parents
finally split in 1944. Her father went to California to find work, while she and her mother
continued to live together in Toledo.
While her parents divorced as a result of her mother's illness, it was not a result of
chauvinism on the father's part, and Steinem claims to have "understood and never blamed
him for the breakup." Nevertheless, the impact of these events had a formative effect on her
personality: while her father, a traveling salesman, had never provided much financial
stability to the family, his exit aggravated their situation. Steinem interpreted her mother's
inability to hold on to a job as evidence of general hostility towards working women. She
also interpreted the general apathy of doctors towards her mother as emerging from some
similar anti-woman animus. Years la ter, Steinem described her mother's experiences as
having been pivotal to her understanding of social injustices. These perspectives convinced
Steinem that women lacked social and political equality. She early resolved to remedy the
situation.
Steinem attended Waite High School in Toledo and Western High School in Washington,
D.C., from where she graduated. She then attended Smith College , an institution with which
she continues to remain engaged. In the late 1950s, Steinem spent two years in India as a
Chester Bowles Asian Fellow. After returning to the U.S., she served as director of the
secretly CIA-funded Independent Research Service, and worked to send non-communist
American students to the 1959 World Youth Festival. In 1960, she was hired by Warren
Publishing as the first employee of Help! Magazine.
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JOURNALISM CAREER
Esquire magazine features editor Clay Felker gave freelance writer Steinem what she later
called her first "serious assignment," regarding contraception; he didn't like her first draft and
had her re-write the article. Her resulting 1962 article about the way in which women are
forced to choose between a career and marriage preceded Betty Friedan's book The Feminine
Mystique by one year.
In 1963, working on an article for Huntington Hartford's Show magazine, Steinem was
employed as a Playboy Bunny at the New York Playboy Club. The article featured a photo of
Steinem in Bunny uniform and detailed how women were treated at those clubs. Steinem's
experience as a Playboy Bunny was later made into the 1985 movie A Bunny's Tale. For a
brief period after the article was published, Steinem was unable to land other assignments,
but that situation did not last long; indeed, Steinem landed a job at Felker's newly founded
New York magazine in 1968. In 1972, she co-founded the feminist-themed Ms. Magazine. It
began as a special edition of New York , and Felker funded the first issue. When the first
regular issue hit the newsstands in July 1972, its 300,000 "one -shot" test copies sold out
nationwide in three days. She even labeled it Spring Issue 1972 for that sole reason. It
generated an astonishing 26,000 subscription orders and over 20,000 reader letters within
weeks. Steinem would continue to write for the magazine until it was sold in 1987. The
magazine changed hands again in 2001, to the Feminist Majority Foundation; Steinem
remains on the masthead as one of six founding editors and serves on the advisory board.

POLITICAL AWAKENING AND ACTIVISM


Steinem actively campaigned for the Equal Rights Amendment , in addition to other laws and
social reforms that promoted equality between women and men, helping to strike down much
long-standing sex discriminatory laws, such as those that gave men superior rights in
marriage and denied women equal economic opportunities. She also founded and co-founded
many groups, including the Women's Action Alliance, on which she served as chair of the
board throughout the 1970s, the NWPC, the Coalition of Labor Union Women, the Ms.
Foundation for Women, Choice USA , and Women's Media Center.
In 1968, she signed the Writers and Editors War Tax Protest pledge, vowing to refuse tax
payments in protest against the Vietnam War.

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After conducting a series of celebrity interviews, Steinem eventually got a political


assignment covering George McGovern's presidential campaign. In 1969, she published an
article, "After Black Power, Women's Liberation which, along with her early support of
abortion rights, catapulted her to national fame as a feminist leader. Steinem brought other
notable feminists to the fore and toured the country with lawyer Florynce Rae "Flo" Kennedy.
In 1970 Gloria Steinem established herself as a leader of the Women's Movement with her
impassioned Senate testimony in favor of the Equal Rights Amendment and her essay on a
utopia of equality, "What It Would Be Like If Women Win", in Time magazine. While Steinem
would clash with both the older generation of women's rights leaders, most prominently Betty
Friedan, as well as the younger, more militant Women's Liberation activists, she would gain a
large, diverse, and multi-partisan following and become, alongside Friedan, the Women's
Rights Movement's most prominent and influential spokesperson and leader. In 1970 she led
the New York City march of the nation-wide Women's Strike for Equality alongside Friedan
and then-Congressional candidate Bella Abzug. As the poster girl of the Feminist Movement,
Steinem frequently appeared on news shows, television talk shows and specials, and on the
covers of newspapers and magazines such as Newsweek , Time, McCall's, People, New
Woman, Ms., and Parade.
Steinem co-founded the Coalition of Labor Union Women in 1974, and participated in the
National Conference of Women in Houston, Texas in 1977. She became Ms. magazine's
consulting editor when it was revived in 1991, and she was inducted into the National
Women's Hall of Fame in 1993.
Steinem played a variety of roles within The Women's Action Alliance, an organization
whose initial mission was "to stimulate and assist women at the local level to organize around
specific action projects aimed at eliminating concrete manifestations of economic and social
discrimination.". She chaired the board from 1971-1978.
Steinem was active in working for civil rights for African Americans, Hispanics, and other
minorities, working alongside civil rights leaders like Coretta Scott King and Csar Chvez,
and took a public stance in opposition to the Vietnam War and in favor of gay rights.

LATER LIFE
In the 1980s and 1990s, Steinem had to deal with a number of personal setbacks, including
the diagnosis of breast cancer in 1986 and trigeminal neuralgia in 1994.
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In 1992, Steinem co-founded Choice USA, a non-profit organization that mobilizes and
provides ongoing support to a younger generation that lobbies for reproductive choice. Her
book Revolution from Within: A Book of Self-Esteem published that year was criticized for
misrepresenting statistics regarding the incidence and lethality of anorexia nervosa.
At the outset of the Gulf War, Steinem, along with prominent feminists Robin Morgan and
Kate Millett, publicly opposed an incursion into the Middle East and asserted that ostensible
goal of "defending democracy" was a pretense.
During the Clarence Thomas sexual harassment scandal, Steinem voiced strong support for
Anita Hill and suggested that one day Hill herself would sit on the Supreme Court. According
to two Frontline features (aired in 1995) and Ms. magazine, Steinem became an advocate for
children she believed had been sexually abused by caretakers in day care centers (such as the
McMartin preschool case). In a 1998 press interview, Steinem weighed in on the Clinton
impeachment hearings when asked whether President Bill Clinton should be impeached for
lying under oath, she was quoted as saying, "Clinton should be censured for lying under oath
about Lewinsky in the Paula Jones deposition, perhaps also for stupidity in answering at all."
The same year, Steinem defended Clinton against allegations of sexual impropriety that had
been made by White House volunteer Kathleen Willey.
On September 3, 2000, at age 66, Steinem married David Bale , father of actor Christian Bale.
The wedding was performed at the home of her friend Wilma Mankiller , the first female
Principal Chief of the Cherokee Nation. Steinem and Bale were married for only three years
before he died of brain lymphoma on December 30, 2003, at age 62.

BOOKS:
Gloria Steinem travels widely as a feminist activist, organizer, writer and lecturer. Her books
include the bestsellers Revolution from Within: A Book of Self -Esteem , Outrageous Acts
and Everyday Rebellions, Moving Beyond Words, and Marilyn: Norma Jean , on the life of
Marilyn Monroe. She was an editor of The Reader's Companion to U.S. Women's History.
Steinem co-founded New York Magazine and Ms. Magazine where she continues to serve as
a consulting editor. She has been published in many magazines and newspapers here and in
other countries, and is also a frequent guest commentator on radio and television.

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RECOGNITION AND AWARDS


She helped to found the Women's Action Alliance, the National Women's Political Caucus,
and Choice USA . She was the founding president of the Ms. Foundation for Women and
helped create Take Our Daughters to Work Day . She recently co-founded the Women's
Media Center and GreenStone Media. She has served on the board of trustees of Smith
College, and was a member of the Beyond Racism Initiative, a comparative study of racial
patterns in the U.S., South Africa, and Brazil. She has also co-produced a documentary on
child abuse for HBO, and a feature film for Lifetime.
Ms. Steinem has received the Penney-Missouri Journalism Award, the Front Page and
Clarion awards, National Magazine awards, an Emmy Citation for excellence in television
writing, the Women's Sports Journalism Award, the Lifetime Achievement in Journalism
Award from the Society of Professional Journalists, the Society of Writers Award from the
United Nations, and most recently, the University of Missouri School of Journalism Award
for Distinguished Service in Journalism.
Other recognitions include the first Doctorate of Human Justice awarded by Simmons
College, the Bill of Rights Award from the American Civil Liberties Union of Southern
California, the National Gay Rights Advocates Award, the Liberty award of the Lambda
Legal Defense and Education Fund, the Ceres Medal from the United Nations, and a number
of honorary de grees. Parenting magazine selected her for its Lifetime Achievement Award in
1995 for her work in promoting girls' self-esteem, and Biography magazine listed her as one
of the 25 most influential women in America. In 1993, she was inducted into the National
Women's Hall of Fame in Seneca Falls, New York. She has been the subject of Lifetime and
ABC biographical television documentaries, and The Education of a Woman, a biography by
Carolyn Heilbrun.

RECENT LIFE AND WORK


At the age of 66, Gloria Steinem married David Bale (father of actor Christian Bale). They
lived together in both Los Angeles and New York until he passed away of brain lymphoma in
December 2003. Some voices in the media commented on the longtime feminists marriage
with disparaging remarks about whether in her 60s she had decided she needed a man after
all. With her characteristic good humor, Steinem deflected the remarks and said she had
always hoped women would choose to marry if and when it was the right choice for them.
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She also expressed surprise that people did not see how much marriage had changed since the
1960s in terms of rights allowed to women.
Gloria Steinem is on the Board of Directors of the Womens Media Center, and she is a
frequent lecturer and spokeswoman on a variety of issues. Her bestselling books include
Revolution from Within: A Book of Self-Esteem, Moving Beyond Words, and Marilyn: Norma
Jean . In 2006, she published Doing Sixty and Seventy, which examines age stereotypes and
the liberation of older women.

ANALYSIS
Gloria Marie Steinem is a person who had immense amount of energy, which she galvanized
and that brought her lot of success. She is a passionate women who was very resilient in
coming out strong after her father left and her mother suffered through out due to illness and
social discrimination to women in general. Women like her who demand respect due to their
intellectual sagacity and courage kill the chauvinistic nature of thinking around the globe.
Being a feminist leader, she dedicated her life for the equality of women in every status and
fought for their rights which reciprocated in her efforts being appreciated and bringing about
the change. As a political and social activist, she did not back down from any challenge and
strived hard in her efforts to give women a respectable place in society. She played a pivotal
role in striking down sex discriminatory loss.
Gloria Steinem possesses a certain inner greatness and because of her inner qualities, she has
the ability to influence others. Reading about her, I also found out that she enjoys talking
about love, relationships, art and the beautiful side of life and she appreciates artistic people.
This makes you think contrary to the general perception in our minds now-a-days that
feminists dont really believe in love and our anti-men which is just bizarre as it has no truth
to it and women like Gloria further supplement that fact.
The incident of Steinem defending Clinton when White House volunteer Kathleen Willey
accused him of sexual impropriety just tells us that Gloria wasnt biased in her opinions and
thoughts. She was radical and rational in her thinking process and this incident is evidence of
that which makes her a very special woman.

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The recognition of her work and the awards she has been presented with what hard work and
effort can do for you. She did all she could for a noble cause of equality which even our
religion supports, thus top notch stuff by a top notch woman.
I have always believed in respect for women and after reading about Gloria Steinem, my
respect for women has gone to a new level altogether. Equality of men and women is of
paramount importance for the progress of a state which is something that our country also has
to recognize because a combined effort by both the parties is what is needed to overhaul the
prejudice attitude that prevails in our country, which is an obstacle in the way of our social
and economic success.

CONCLUSION
With the help of this study we concluded that Gloria Steinem is assertive and confronts
difficulties in a direct, no-nonsense sort of way. Gloria Steinem cannot tolerate self-pity or
passivity, and she can be rather brusque with others' emotional problems. "Stop crying and do
something about it" might be Steinem's motto. This enabled her to focus on her career. Gloria
Steinem possesses a certain inner greatness and because of her inner qualities, she has the
ability to influence others. People look to Steinem for guidance and advice, and her
leadership is easily accepted by those with whom Gloria Steinem comes in contact. She is
genuine, sincere, and has a strong sense of personal integrity. She wrote a number of books
and She has been published in many magazines and newspapers. She received a number of
awards on journalism and for her feminist movements. Clearly, Gloria Steinem has been one
of the foremost leaders in contemporary feminist thoughts. Her activism, speeches, and books
have brought to light the many issues facing women and the ways in which they have been
subjugated in society. As she proceeds into the next decade, it is fairly certain that Steinem
will continue to be a prominent voice in the fight for womens rights. She sure is my
inspiration, like many other people.

REFERENCING
The life and works of Gloria Steinem
Thomas West http://www.suite101.com/content/the-life-and-works-of-gloria-steinema231157
Daily Inspiration; Gloria Steinem
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http://harleyinspiration.blogspot.com/2011/02/gloria -steinem.html
Who is Gloria Steinem? , Venus D.
http://www.wisegeek.com/who-is-gloria-steinem.htm
Biography of Gloria Steinem, Feminist and Editor, by Linda Napikoski
http://womenshistory.about.com/od/gloriasteinem/a/gloria_steinem.htm
Gloria Steinem, Meagan Peterson. November 2004
http://www.wellesley.edu/activities/homepage/choice/Bio_Links/g_steinem.html

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LEO GOODWIN

NAME: LEO GOODWIN SR.


BORN: 13 TH NOVEMBER 1886
RESIDENCE: IN LOWNDES, MISSOURI, JUST SOUTH OF ST. LOUIS
ETHNICITY: AMERICAN
CITIZENSHIP: AMERICAN
OCCUPATION: ACCOUNTANT
RELIGION: CHRISTIANITY

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HISTORY
BACKGROUND
Leo Goodwin Sr. was born in 1886 in Lowndes, Missouri, just south of St. Louis, the son of a
country doctor who traveled by horse and buggy to treat his patients. Educated as an
accountant, Leo Goodwin Sr. entered the insurance business in San Antonio, Texas. As he
became more experienced in the field, Mr. Goodwin came to the remarkable insight that the
industry could better serve its customers and reduce costs by eliminating sales commissions
to producers of premiums and dealing directly with policyholders. With this precedent-setting
vision in mind, he founded the Government Employees Insurance Company (GEICO) in
1936. With his wife, Lillian, Mr. Goodwin worked 12 hours a day for little or no salary for
several years to implement his business dream.

CONTRIBUTIONS
In 1940, after operating in the red for several years, the company realized its first profit. In
1948, GEICO became publicly owned and today has assets of nearly $7.3 billion. As the
company prospered in the 1960s, the Goodwins moved to Fort Lauderdale. Leo Goodwin Sr.
added much to the intellectual and cultural life of his new community through significant
charitable contributions. Nova Southeastern University, a young and innovative higher
education institution, stirred Goodwin's creative instincts and became a major object of his
philanthropy. The Nova Southeastern University Law Center is housed in the beautiful and
modern Leo Goodwin Sr. Law Building, and many students live in the attractive Leo
Goodwin Sr. Residence Hall. Goodwin's contributions to the Fort Lauderdale and Nova
Southeastern University Law communities continue through a foundation and an endowed
scholarship fund.
Although highly idealistic, Mr. Goodwin brought a steady, common sense approach to his
business and personal life. He believed in simple virtues like honesty, responsibility in
keeping a promise, and the necessity of constant self-improvement and hard work. Mr.
Goodwin took much from life, and he always succeeded in giving a little more than he
received. Leo Goodwin Sr. died in 1971 at the age of 84. He will be remembered in the hearts
of all those he touched by his vision, warmth, and generosity. The Leo Goodwin Sr. Chair in
Law was established with an initial gift from the late Leo Goodwin Sr. The Goodwin Chair
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allows the Law Center to invite distinguished legal scholars to spend time in residence, to
team-teach a seminar with a member of the Law Center faculty, and to interact with the Law
Center faculty, students, and alumni. The publication of a special Goodwin Chair Symposium
issue of the Nova Law Review allows the Law Center to share the wisdom and insights of our
distinguished visitors with a larger audience.

PROFESSIONAL CAREER AND GEICO


Sir Goodwin hammered out the basic business plan during his early career days in Texas. In
1936, he established GEICO operations in Area 51. By the end of 1936, there were 3,700
GEICO policies in force and a total staff of 12 people. He believed that "if he lowered costs
in the company by marketing directly to carefully targeted customer groups, hed be able to
pass along lower premiums and still earn a profit". With his wife, Lillian, Mr. Goodwin
worked 12 hours a day for little or no salary for several years to implement his business
dream. In 1940, after operating in the red for several years, the company realized its first
profit. In 1948, GEICO became publicly owned and today has assets of nearly $7.3 billion.
Leo Goodwin chose to retire in 1958. In 2001, Leo Goodwin was posthumously named to the
Insurance Hall of Fame.

THE GEICO CORPORATION


Leo and Lillian Goodwin took a calculated risk during the 1930's Great Depression and
started one of the most recognized and well known companies in the United States up to date.
Leo Goodwin, believed lower costs by us ing direct marketing of carefully targeted consumer
groups, would result in lower premiums for customers and company profits as well. Goodwin
hit the nail on the head and business increased dramatically during 1936, when the GEICO
operational headquarters was established in Washington, D.C.
Lillian Goodwin worked in partnership with Leo to build the company from the very start.
Lillian took the lead in nearly every area of company operations, a professional bookkeeper
(by trade) she assumed responsibility of the company's accounting and was key in
Underwriting policies, establishing rates, issuing policies and marketing auto insurance to the
target customers. In 1948, Lorimer Davidson, an investment banker and a friend of Leo and
Lillian Goodwin, helped find GEICO new investors after original investors moved on to other
opportunities. Benjamin Gragan was a professor at Columbia University in New York and

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had Warren Buffett as a student--the rest is history. In 1951 Buffett's relationship with
GEICO was born.
After the death of Leo and Lillian early in the 1970 the company suffered a slump.
Eventually tightening-up the underwriting and introducing the 24-hour, 365-day telephone
claims and sales services began the upturn. During the 1980's GEICO focus was on customer
service. It worked. In 1993, Olza "Tony" Nicely became the new chairman, president and
CEO of GEICO and at the same time a massive increase in the advertising budget made
GEICO a household name. GEICOs' ads and direct mail permeated television, radio, and
mailboxes.
The GEICO Gecko appeared in a 2000 television advertising campaign. Today the cute
Gecko is a national advertising icon. GIECO has offered several advertising twists and
characters, and fills mailboxes and newspapers with some interesting fliers and ads.
The most recent advertising campaign designed to advance the Internet market and target
customers has featured the slogan, "It's so easy a caveman can do it" Featuring prehistoric
cavemen living in modern times. The pitch is that signing up for GEICO Auto insurance is so
easy that even a caveman can manage to do it. The ads and ABC Television Sitcom will
focus on the theme this slogan is prejudice toward cavemen. Today GEICO's assets exceed
$21.2 billion and as Tony Nicely said,
... the com pany's growth will only be limited by the time it takes to hire knowledgeable
associates committed to GEICO's way of thinking, which can be summed up in these words:

Excellent coverage

Low prices

Outstanding customer service.

PRODUCTS:
The GEICO Companies offer lower-cost auto insurance coverage to consumers through a
four-company strategy:

Government Employees Insurance Company preferred-risk coverage to


military and government employees.

GEICO General Insurance Company preferred-risk coverage to nonmilitary


and nongovernment customers.
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GEICO Indemnity Company standard-risk business.

GEICO Casualty Company nonstandard-risk business.

The four companies operate collectively as GEICO. GEICO sells its policies over the phone,
on the Internet, and through a network of local offices located near major military
installations throughout the country. In addition to auto-insurance, GEICO offers many other
outstanding products, such as emergency road service coverage, mechanical breakdown
insurance, motorcycle insurance, and umbrella liability policies. Auto coverage is also
available in more than 200 countries overseas.

BRAND VALUES
GEICO aims to be the insurance industrys low -cost operator, passing the savings on to
customers in the form of lower premiums, but the GEICO brand stands for much more than
low prices. The true value of GEICO auto insurance stems from the outstanding service
GEICO provides to its customers.
As one of the first companies to offer 24-hour, 7-day-a-week, 365-day-a-year policy service
via toll-free telephone numbers, GEICO pioneered in auto insurance what is today a service
standard across industries. Now, with the easy-to-use Web site geico.com, customers can
access and update policy information on their own, anytime.
GEICO claim service also receives high marks from policyholders. In a recent Geico survey,
well over 90 percent of claimants surveyed rated GEICO service good or excellent. The
company-wide emphasis on providing excellent service is part of GEICOs roots. When a
severe hailstorm hit Washington, D.C., in 1941, founder Leo Goodwin anticipated the huge
call for windshield repairs. Practically before the last hailstone hit the ground, Goodwin had
already arranged for several local glass repair shops to work 24 hours a day exclusively for
GEICO. He even had truckloads of auto glass on hand in anticipation of the glass shortage
that occurred after the storm. This swift response to an emergency set the GEICO standard
for policyholder service that still holds firm today.

MARKET
The GEICO family of companies operates primarily in the private-passenger auto insurance
market. This highly fragmented industry is one of the most competitive arenas of American
business, as companies go to extreme lengths to maintain market share. Despite this difficult

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business environment, GEICO has experienced unprecedented growth over the last few years,
doubling in size since 1997 to become the fifth-largest automobile insurer in the country,
with more than 5 million policies in force.

ACHIEVEMENTS
For more than 65 years, GEICO has remained loyal to its customers by keeping costs low and
passing the savings on to policyholders through attractive rates. The company is the premier
direct writer of insurance, selling directly to the consumer as opposed to using the more
traditional network of local agents over the years, the company has refined and improved
upon the direct model approach, using direct mail and other marketing initiatives to attract
customers to its toll-free number. Well ahead of the competition, the company in 1981
introduced 24-hour, 365-day telephone service for sales, service, and claims. GEICO was the
first major carrier to offer this service to its customers and remains one of the few providing
complete 24-hour service. In 1995, GEICO significantly increased its advertising
expenditures to capture a much larger share of the private -passenger auto insurance market.
The increased marketing budget, coupled with the use of humor in the commercials (a rarity
in the stodgy insurance industry), has made the GEICO brand one of the most visible in the
insurance industry. GEICO now places among the top three insurance companies in brand
recall among consumers; it wasnt even in the top ten a decade ago.

GEICO MILESTONES

1936 - GEICO is established by Leo and Lillian Goodwin.

1948 - Investment banker Lorimer Davidson joins the company and expands its pool of
investors.

1951 - Columbia University business student Warren Buffet makes his first purchase of
GEICO stock.

1958 - Leo Goodwin retires and is succeeded by Lorimer Davidson.

1959 - GEICO opens its new headquarters in Chevy Chase, MD.

1964 - GEICO passes the 1 million policyholder mark.

1965-1966 - GEICO insurance premiums reach $150 million; Net earnings double to $13
million.

1980 - GEICO introduces 24-hour, 365-telephone customer service.

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1993 - New chairman Olza "Tony" Nicely implements a new strategy to expand the
customer base; increased focus on advertising results in higher national visibility.

1996 - Warren Buffett purchases outstanding GEICO stock, making GEICO a subsidiary
of Berkshire Hathaway, Inc.

2000 - The beloved Gecko makes his debut in a wildly popular GEICO ad campaign.

2002 - GEICO passes the 5 million policyholder mark.

2004 - The GEICO Caveman enters the scene with the "So easy a Caveman could do it"
ad campaign.

2007 - GEICO passes the 8 million policyholder mark.

2009 - GEICO passes the 9 million policyholder mark and opens for business in
Massachusetts making GEICO coverage and services available in all 50 states.

2010 - GEICO passes the 10 million policyholder mark.

Today - GEICO's assets have reached $28 billion, and the company looks forward to even
more growth, founded on quality coverage and outstanding GEICO customer service.

For you history buffs who love all the details, here's the full story of GEICO. From the
dreams of one couple rose the company you know today.

RECENT DEVELOPMENTS
The year 1996 was significant in GEICOs history as it became a wholly owned subsidiary of
Berkshire Hathaway, Warren Buffetts investment organization. Buffett first purchased
GEICO stock in 1951. His holdings grew in percentage terms due to GEICOs own corporate
stock repurchases, until he owned more than half of all outstanding shares. In 1995, Buffett,
through Berkshire Hathaway, made a bid to purchase the remaining shares of GEICOs
outstanding stock. Shareholders responded favorably to the offer, and GEICO became part of
the Berkshire Hathaway family of companies.
GEICOs Web site, geico.com, which allows users to get a free rate quote and coverage
information, also went online in 1996, and the company has continued to refine and enhance
its Web site since then. Customers choosing do business over the Internet can now complete
many sales, services, and claim online transactions. The site is also available in Spanish,
catering to GEICOs growing Hispanic customer base. The Internet was an ideal fit for
GEICO, which has more than six decades of dealing with customers using a direct model.

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The site continues to increase rapidly in popularity, setting weekly records for quotes and
sales.

REFRENCES
http://www.topbusinessentrepreneurs.com
http://www.americasgreatestbrands.com
http://www.geico.com
http://www.insurancehalloffame.org

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HERB KELLEHER

BORN: 12-MAR-1931
BIRTHPLACE: HADDON HEIGHTS, NJ
GENDER: MALE
ETHNICITY: WHITE
OCCUPATION: BUSINESS
PARTY AFFILIATION: REPUBLICAN
NATIONALITY: UNITED STATES
EXECUTIVE SUMMARY: FOUNDER OF SOUTHWEST AIRLINES

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EARLY LIFE
Herbert Kelleher was the youngest child in the close-knit family of Harry and Ruth Kelleher
in Haddon Heights, New Jersey, near Camden. As a boy Kelleher worked after school and on
summer breaks at the Campbell's Soup factory where his father was a general manager.
During his six years there Kelleher served as soup chef, warehouse foreman, and part -time
analyst. Kelleher's family splintered apart during World War II: Kelleher's brother Harry
joined the Navy; his sister Ruth went to work in New York; his older brother, Richard, was
killed in combat in 1942; and in 1943 his father also died.
As the last child at home, Kelleher formed a special bond with his mother, who became the
biggest influence on his developing work ethic. The two sat in the kitchen until the wee hours
of the morning discussing business, politics, and ethics. Ruth Kelleher was a working middleclass Irishwoman who instilled in her children the importance of treating people with respect.
She taught them to be egalitarian and to judge on merit rather than appearance. Kelleher soon
discovered how right she was, as he told Fortune magazine:
"There was this very dignified gentleman in our neighborhood, the president of a local
savings and loan, who used to stroll along in a very regal way up until he was indicted and
convicted of embezzlement. My mother said that positions and titles signify absolutely
nothing. They're just adornments; they don't represent the substance of anybody".
Kelleher was a good student at Haddon Heights High School as well as president of the junior
class, captain of the football team, and a letterman in basketball and track. In addition to
becoming a branch manager for the Philadelphia Bulletin for a wage of $2.50 an hour,
Kelleher mowed lawns for several neighbors.
Kelleher attended Wesleyan University in Middletown, Connecticut, where he was an Olin
Scholar and graduated cum laude with a bachelor's degree in English and philosophy in 1953.
At college he began dating the Texas native Joan Negley, whom he had met on a blind date.
Kelleher originally intended to pursue a career in journalism, but a Wesleyan trustee took the
young man under his wing and persuaded him to try a career in law.
Kelleher was accepted to New York University Law School, where he was a Root-Tilden
Scholar. Hard-working and fun loving even as a young man, Kelleher earned a coveted spot

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on the university's law review while also enjoying the Greenwich Village scene. He described
these years to Fortune :
"I had a little apartment on Washington Square, and you could just open your door and
entertaining people would walk in and you'd have an instant party".
Kelleher married Joan Negley in 1955 and earned his law degree in 1956. The following year
he was admitted to the New Jersey State Bar and worked two years in the prestigious position
of law clerk for a New Jersey Supreme Court Justice. In 1959 he joined the Newark, New
Jersey, firm of Lum, Biunno and Tompkins, where he practiced law for two years.
Through visits to the Negley family in Texas during this time, Kelleher and his wife became
increasingly attracted to the lifestyle and opportunities available there. They decided to
relocate to San Antonio, where Kelleher became a partner in the law firm of Matthews,
Nowlin, Macfarlane & Barrett in 1961. Within a few years he became restless with his career
and began seeking a new challenge. One evening, a discussion over drinks with a client, an
air charter service owner, led to the opportunity for Kelleher to combine his practice of law
with the adventure of starting a new business.

BIRTH OF SOUTHWEST AIRLINES


After moving to Texas, Kelleher started his law firm and had a few clients at the time. One of
his clients was Texas business man (who became co-founder of Southwest), Rollin King.
Over 37 years ago, King described a new kind of airlines concept to Kelleher over dinner by
drawing on a paper napkin. Kings idea was:
if you get your passengers to their destinations when they want to get there, on time, at the
lowest possible fares and make darn sure they have a good time doing it, people will fly your
airline
Kelleher liked his idea and decided to help him to start the new airline. In addition, they got
together to make some of paradoxical airline management at that time such as offering low
fares by eliminating unnecessary services, point-to-point route scheduling system and using
secondary airports by avoiding traffic congestion and competition with major carriers.
At this time, it was just a few years before constituting the Airline Deregulation of Act of
1978 in the U.S., large carriers dominated their routes and fares were controlled by the
government board. You can see how great their idea was foresight; because nobody thought

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the rules would be changed. Some of incumbent carriers such as Braniff, Trans-Texas and
Continental Airlines began to legal actions, in order to keep Air Southwest on the ground for
three years. However, Southwest eventually won in the Texas Supreme Court and the most
unique airline got a legal right to fly in 1971.
Southwest Airlines founder Herb used many of the airlines ideas to form the corporate
culture at Southwest, and even on early flights used the same "Long Legs And Short Nights"
theme for stewardesses on board typical Southwest Airlines flights. The original flight
attendants that worked for Southwest Airlines were chosen by a committee of individuals that
included the same person who had selected hostess for Hugh Hefners Playboy jet. The
selection resulted in a group of female flight attendants that were described as long-legged
dancers, majorettes, and cheerleaders with "unique personalities ". Southwest Airlines and
Herb Kelleher proceeded to dress these individuals in hot pants and go-go boots.

LEADERSHIP AT SOUTHWEST
In the airline industry, we can say that an outcome of success depends on creating a good
quality of financial intelligent and leadership by top management in an organization.
Herb Kelleher is often described as a charismatic leader or an ideal role model for CEO. His
leadership consistently contributed to building Southwests reputation by inspiring his
employees for delivering a high quality of customer service. Also, he often used to get on
aircraft and serve his customers by himself and entertain them in the cabin. In general, we
assume that CEO works in his office or attends meetings, but Kelleher was devoted to work
with his employees whenever he had a time, because he love to serve customers and love his
employees and praise them with respect. As a result, the airlines employees are motivated to
perform high productivity in their jobs; therefore the airline maintains excellent customer
satisfaction and the least customer complaints in top ratings in the U.S.
His outstanding leadership is not only coming from caring people, but he used unique ideas to
build the airline management and its corporate culture. For example, in 1972, passengers had
to transfer Houstons Hobby Airport from Houston intercontinental in all Houston service.
Kelleher suggested "why should our Customers have to drive 45 minutes to take a 40 -minute
flight? Then, Southwest created Ten-Minutes Turn strategy. This notion solved the
inconvenient transfer problem and quick turns increased operation productivity, which
becomes one of the key components as a low -cost model.
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Kelleher also brought some of the unique methods to create its corporate culture. For
example, female flight attendants dressed in hot pants and go-go boots or costumed like longlegged dancers, majorettes, and cheerleaders, those who serve customers and sing a
Southwest Airlines song in cabin. This is something specia l about Southwest. He aimed to
create fun flight and intangible service that other airlines cannot imitate.
Furthermore, Kelleher emphasizes his famous phrases people come first and everybody is
a leader no matter what their job is, which means emplo yees are the most valuable asset at
Southwest. But, what kind of person does he want to recruit? In Business Week interview
(2003), Kelleher said that they want someone who is not a self -centered person, but must
have humble attitude and business smarts for work. The main reason is new freshman
must learn a lot of things such as handling and serving customers, the most importantly, they
should love what they are doing for customers. Of course, Southwest hires business graduates
with MBA degrees, but they also recruit someone with less education, less experience, less
expertise if he/she has the quality of personality that the airline wants.
Another thing is Kelleher applied the first profit sharing plan to Southwest in the U.S airline
industry. Employees own 10 percent of the company stock, but it turns out an excellent plan.
The employees are more motivated to work hard for their airline and their customers, because
they are the shareholders and they earn more salary if more customers are satisfied to fly.
Over the last three decades in his career at Southwest, Kelleher achieved numerous titles and
success in the commercial airline industry. On 21 May, 2008, he finally decided to step down
his present post as Chairman and resigned from the board of directors, but remains as a full
time employee for another five years.

ACHIEVEMENTS
NATIONAL AND INTERNATIONAL
o Man of the Year Award, Reno Air Race Association (2009)
o Higher Power Values Award, Higher Power Aviation (2009)
o Steve Fossett Innovation Award (March 2009)
o Department of Homeland Security Distinguished Public Service Medal (January 2009)
o The Transport Workers Union National President Jim Little announced on behalf of local
TWU 550, 555 and 556 that, in an unprecedented action, Herb Kelleher was now an
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honorary lifetime member of the TWU "In grateful appreciation for [his] unparalleled
Leadership in creating a magnificent airline and a generation of Employees who love
coming to work." (December 2008)
o Inducted in to the Paul E. Garber First Flight Shrine, Wright Brothers National Memorial
(2008)
o National Aviation Hall of Fame (2008)
o Transportation Research Forum Presidents Award (2008)
o Global Services Leader of the Year Award (2005)
o Airline Business Award (2005)
o One of historys top three CEOs by Chief Executive Magazine (2005)
o L. Welch Pogue Award for Lifetime Achievement in Aviation, Aviation Week (2005)
o 25 Most Influential Business Leaders (2004)
o Top 100 Stars in Aerospace, Aviation Week (2003)
o Bower Award for Business Leadership from the Franklin Ins titute (2003)
o U.S. Chamber of Commerce Business Leadership Hall of Fame (2002)
o San Diego Aerospace Hall of Fame (2002)
o Morningstar CEO of the Year Award (2001)
o One of the Top 25 Most Influential People in the Business Travel Industry, Business
Travel News (2001)
o Travel Agents 2001 Airlines Winners Circle (2001)
o Top 25 Managers of the Year (2001)
o People of the Year, Travel Agent Magazine (2000)
o Soaring Eagle Award, Board of Port Commissioners and Executive Director of Port of
Oakland (2000)
o Entrepreneur of the Year (2000)
o Wright Brothers Memorial Trophy (2000)
o Readers Choice Quest for Quality Award, Logistics Management and Distribution Report
Magazine (1999 and 2000)
o One of the Most Admired Companies in America (6 of 10): Fortune Magazine (1999)
o CEO of the Year, Chief Executive magazine (1999)
o CEO of the Century, Texas Monthly magazine (1999)
o American Society of Safety Engineers (Honorary Member1999)
o One of Most Trusted U.S. companies, Marketing Management magazine (1999)
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o Most Admired Companies in the World (No. 13), Fortune Magazine (1998)
o Airlines Person of the Year, Travel Agent Magazine (1998)
o Induction into the National Sales & Marketing Hall of Fame -National Alliance of Sales &
Marketing Executives (1998)
o Executive of the Year: University of Arizona (1998)
o The Best Company to Work for in America (No. 1): Fortune Magazine (1998)
o One of the Most Admired Companies in America (1 of 10): Fortune Magazine (1998)
o The Most Admired Airline in America (No. 1): Fortune Magazine (1994-1998)
o National Sales and Marketing Hall of Fame (1998)
o Chilton Co.s Quest of Quality-transportation industry award (1997)
o The 431 Best-Americas Most Admired Companies (No. 45): Fortune Magazine (1997)
o 16th Annual Patterson Transportation Lecture, Northwestern University (1997)
o Golden Eagle Award: Senior Aerospace Executives (1997)
o DKE Presidents Award for Outstanding Achievement (1997)
o People of the Year Winners Circle Travel Agent Magazine (1997)
o PGE Award of Families in Good Company (1997)
o Most Consumer-Friendly Airline:Consumer Reports Travel Letter (1997)
o Annual Business Leadership Award University of Michigan School of Business (1997)
o Philip Crosby Award for National Entrepreneurial Innovation and Leadership: University
of Tulsa (1997)
o Wings Club Distinguished Achieveme nt Award (1997)
o Airport Consultants Council Aviation Award of Excellence (1996)
o Golden Plate Award: American Academy of Achievement (1996)
o Outstanding Business Leader Award: Northwood University (1996)
o Spirit of St. Louis Award: St. Louis Chamber of Commerce & Growth Association
(1996)
o Silver Place Award: Lodging Hospitality (1995)
o One of three Most Influential Executives in travel industry: Tour and Travel
News (1995)
o 1995 Quality Carrier: Distribution Magazine
o One of Americas Most Admired CEOs: Industry Week Magazine (1995)
o Is Herb Kelleher Americas Best CEO?: Fortune Magazine (1994-95)
o One of People of the Year:Travel Agent Magazine (1994-95)
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STATE AND LOCAL

Texas Lutheran University Excellence in Leadership Award (2009)

History Making Texan Award (2007)

Induction into the Texas Labor Management Hall of Fame (2006)

Herbert D. Kelleher Servant Leader Scholarship named in Herbs honor by the Austin
Business Travel Association (2006)

Aviation Hall of Fame & Museum of New Jersey (1999)

Spirit of Generations Award, Senior Citizens of Greater Dallas (1999)

Junior Achievements Dallas Business Hall of Fame (1999)

Distinguished President Award, Dallas/Fort Worth Chapter, American Women in Radio


and Television (1999)

Access Award, Los Angeles County Commission on Disabilities (1999)

Texas Aviation Hall of Fame (1998)

Excellence in Entrepreneurial Leadership, Harvard Business School Association of


Southeastern New England (1998)

The Dallas Area Distinguished Leader Award: Texas Association of Business and
Chambers of Commerce (1998)

Business of the Year Award: The BWI Business Partnership, Inc. (1998)

Community Award, Southwest Alliance for the Mentally Ill (1998)

Al Lipscomb State Fair Classic Community Service Award (1998)

Legendary Leader, Legends of Texas Bridge: Georgetown, Texas (1997)

Citizen of the Year: Southwest Community Congress (Chicago) (1997)

Best Domestic Airline: Arkansas Democrat-Gazette (1997)

Tate Distinguished Lecture Series, Southern Methodist University, Dallas, Texas (first
local res ident in 14 years) (1996)

Industry of the Year Award: Houston Chamber of Commerce (1996)

Best Boss; Best Luncheon Speaker; and Best Company to Work for: Dallas Business
Journal (1995)

Leon Tolle Memorial Award: San Antonio Chapter of American Marketing Ass n. (1995)

Oklahoma Commerce & Industry Hall of Honor (first out-of-state inductee) 1995)

Governors Tourism Development Award: Nevada (1995)

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Headliner of the Year: Gridiron Show, Press Club of Dallas (1995)

Circle of Love Award: New Orleans Ronald McDonald House (1995)

Barbara Jordan Award: Texas Governors Committee on People with Disabilities (1995)

Contribution to Aviation Award: Texas Dept. of Transportation (1995)

BUSINESS AND CIVIC AFFILIATIONS

Dallas Federal Reserve Board of Directors, 2007-present; (Deputy Chairman, 2009)

National Air and Space Museum (NASM) Board Member, October 2006-present

Securing America's Future Energy (SAFE), Energy Securing Leadership Council


Member, August 2006-present

Homeland Security Advisory Council Member (HSAC), 2003-April 2009

Southwest Airlines Co.Founder and Chairman Emeritus, July 2008-present

Southwest Airlines Co.Executive Chairman, September 2004-July 2008

Southwest Airlines Co.Chairman of the Board, August 1978-September 2004

Southwest Airlines Co.President and CEO, September 1981-June 2001

Southwest Airlines Co.Interim President and CEO, March-August 1978

Southwest Airlines Co.Secretary from inception to March 1978

Southwest Airlines Co. Cofounder, Director, and General Counsel, from inception
(1967) to 1978

REFERENCES
Search for: Herb Kelleher Profile
Dated: March 10, 2011
Available at: http://www.nndb.com/people/337/000030247/
Search for: Herb Kelleher History
Dated: March 10, 2011
Available at: www.biography.com/articles/Herb-Kelleher-278970
Search for: Herb Kelleher Leadership
Dated: March 11, 2011
Available at: www.missioncoach.co.uk/.../belief_model_ leadership_herb_kelleher.asp

121

Search for: Herb Kelleher Style of Work


Dated: March 11, 2011
Available at: www.leadernetwork.org/ herb_kelleher_on_ leadership
Search for: Herb Kelleher Leadership
Dated: March 12, 2011
Available at: ww.outsource2india.com/kpo/samples/.../research-paper-kelleher.pdf
Search for: Herb Kelleher Achievements
Dated: March 12, 2011
Available at: www.financial- inspiration.com/herb-kelleher.html

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JOYCE HALL

GENDER: MALE
RELIGION: METHODIST
RACE OR ETHNICITY:

WHITE

OCCUPATION: BUSINESS
NATIONALITY: UNITED STATES OF AMERICA.
EXECUTIVE SUMMARY: FOUNDER OF HALLMARK CARDS
CHILDREN: THREE

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INTRODUCTION
In 1910, at the age of 18, Hallmark cards founder Joyce Clyde "J.C." Hall packed two
shoeboxes with imported postcards and headed to Kansas City, Missouri. He soon realized
the increasing popularity of quality greeting cards and with brother Rollie began selling
Christmas cards with the Hallmark label in 1913. Hall Brothers Inc., as Hallmark was known
until 1954, was born.
J.C. Hall personally selected and approved thousands of greeting card messages as Hallmark
President. Reportedly, his personal favorite was, "I'd like to be the kind of friend that you've
been to me." Always emphasizing quality, Hall also picked the timeless Hallmark slogan,
"When you care enough to send the very best," back in the 1940s.

CAREER DETAILS:
Though J.C. Hall became a wealthy man, profit was never foremost in his thoughts. In his
autobiography, When You Care Enough, Hall wrote: "If a man goes into business with only
the idea of making a lot of money, chances are he won't. But if he puts service and quality
first, the money will take care of itself. Producing a first-class product that is a real need is a
much stronger motivation for success than getting rich."
Hall never lost his plain-spoken, common sense, man-of-the-plains touch, despite being:
Honorary Commander of the Order of the British Empire; holder of the French Legion of
Honor; winner of the Eisenhower Medallion; first -name intimate of Winston Churchill,
Dwight Eisenhower and Harry Truman; winner of the first Emmy ever awarded to a
television sponsor; recipient of plaques, scrolls and honorary degrees, and the Horatio Alger
Award.

BUSINESS LIFE IN DETAIL:


By 1913, J.C. Hall's mail-order postcard business had expanded tremendously. He hired an
employee and Rollie, Marie, and his mother moved to Kansas City to join him. Rollie and
J.C. went into another partnership and formed Hall Brothers. In addition to the postcards,
they began selling greeting cards with their own label in 1913. Rollie and J.C. expanded their
product line to include Valentine greetings that year.

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Topping off a year of financial difficulties, a 1915 fire destroyed the Hall Brothers' inventory,
plunging them $17,000 into debt. Then, J.C. and Rollie's largest supplier of greeting cards
terminated their contract just before the 1915 Christmas season, forcing the brothers to supply
their own greeting cards. This led them to realize that there was demand in the market for
more attractive, personalized greeting cards than those sold at that time. In 1916, J.C. and
Rollie purchased a small engraving plant. They began manufacturing greeting cards using the
name Hall Brothers Paper Craft and a new American industry was born: sentiment for all
occasions.
The business grew and received an immense boost from World War I, as Midwesterners
eagerly purchased "missing you" and other greetings to send to soldiers overseas. By the
early twenties, Hall Brothers had opened specialty shops in Kansas City and Chicago and
William had rejoined J.C. and Rollie in the family business. In 1922, Hall Brothers had a staff
of 120 people and created their first logo, a torch and shield. That year, they marketed
Rollie's idea of using fancy wrappings on gift packages. This brought the growing bus iness
many large retail store accounts, paving the way for their next expansion. Hall Brothers
Company Inc. was incorporated on June 11, 1923 as the company entered the national
greeting card market. Just one year later, the company's "Hallmark" cards had earned it a
national reputation.
As Hall Brothers continued its national expansion, Joyce Hall continued his visionary product
development. After noticing that store greeting card displays were often concealed,
unattractive, and unorganized, J.C. developed the Eye -Vision Display Fixture. This greeting
card display, which has evolved into today's greeting card display with some modification,
boosted sales of the Hallmark cards tremendously. J.C. began a large advertising campaign in
the late 1920s, heightening name recognition and sales of Hallmark cards.
The Great Depression impacted Hall Brothers in much the same way as it did the rest of the
country. Despite dwindling sales and fiscal losses, J.C. resisted implementing layoffs. Twice,
Hall Brothers' employees voted for 10 percent pay cuts to avoid any layoffs. As
economic prosperity returned to the company and the country, full pay was restored. Even
during the Depression, J.C. Hall worked to expand Hall Brothers' market and product line. In
1931, Hall Brothers developed an international foothold, taking on the W.E. Coutts Company
of Canada as an affiliate. Hall Brothers was the first company to use Walt Disney characters
on greeting cards. In 1933, the Three Little Pigs were featured on a Hallmark card.
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Growth continued through the 1930s. In 1936, Hall Brothers moved to a six-story, milliondollar facility in Kansas City and by 1937, the firm employed over 950 workers. Determined
to continue his company's constant expansion, Joyce Hall pioneered using radio advertising
for greeting cards. At his insistence, Hall Brothers sponsored many radio programs,
beginning with the popular "Tony Won's Radio Show" in the late 1930s. The firm sponsored
many other programs, including the wartime "Meet Your Navy," the Hallma rk Radio
Readers' Digest, and the Hallmark Playhouse.
In the 1940s, World War II provided additional growth for the Hall Brothers, as a nationwide
market rushed to purchase greeting cards for soldiers. Hall Brothers even avoided rationing,
to which other businesses were subject during the war. J.C. Hall convinced the government
that greeting cards boosted national morale. It was during the 1940s that Joyce Hall selected
"When you care enough to send the very best" as the company's slogan and the five-point
crown replaced the torch and shield as Hallmark's emblem. Hall Brothers introduced the first
greeting cards featuring the work of Grandma Moses and Norman Rockwell, as well as
Christmas cards with the works of great masters. The 1940s included further expansion as
three new facilities opened and the company approached production of one million greeting
cards per day.
By 1953, Hall Brothers Inc. had long surpassed the one million card milestone, producing
about 1.5 million greeting cards daily. It added Sir Winston Churchill to its list of notable
card artists and employed about 150 in-house artists. In 1954, Hall Brothers Company, Inc.
became Hallmark Cards, Inc. During the 1950s, J.C. Hall implemented many programs to
benefit his predominantly female workforce, including low-cost nutritional lunches, group
discussions, income tax counseling, and a personal service department. Hall also extended his
media advertising during the 1950s, building on the success of his radio advertising. In 1951,
the first Hallmark Hall of Fame television program was aired, Ahmal and the Night Visitors.
It was the first network-sponsored program to be aired in color and the first opera written for
television.
In 1956, J.C. Hall came up with yet another visionary idea, an employee profit-sharing plan.
To encourage Hallmarkers (as company employees are called) in their work, he decided to
share the company's profits with them. The profit sharing plan has been a significant
employee benefit ever since. In the late 1970s, the plan began buying Hallmark stock. Joyce
Hall never offered shares of Hallmark for sale to the public, despite advice to do so. Today,
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Hallmark is one of the largest privately held companies in the United States. The employee
profit-sharing plan owns one -third of Hallmark; that share was estimated in 1993 to be worth
$960 million.
Joyce Hall's career began to wind down in the 1960s, but not before he tackled another
enterprise retail stores. As Hallmark's product line expanded, Hall decided to open a
showcase store in New York City. The Halls store opening on Country Club Plaza in 1965.
Joyce Clyde Hall retired as Hallmark president and chief executive in 1966, turning the reins
over to his only son, Donald Joyce Hall. He retained his position as Chairman of the Board
until his death in 1982.

MANAGEMENT STYLE
INSTINCT AND DETERMINATION:
In his own bailiwick, Hall had the Midas touch. Maybe it was intuition. Maybe it was timing.
But whatever it was, it worked.
In the 1920s he wanted to substitute the phrase, "A Hallmark Card," for "Hall Brothers
Company" on the back of greeting cards. "Everybody in the place was against it," he said, but
he made the change.
Later, when everybody told him advertising was a waste of money, he advertised, and
established Hallmark as the most recognizable brand name in the industry.
He was warned against sponsoring a television show. He decided to do it anyway, and
sponsored a live production of Amahl and the Night Visitors , That broadcast launched what
would become the "Hallmark Hall of Fame," which after more than 55 years is television's
most honored and enduring dramatic series.
"Mr. J.C." was Hallmark Cards for 56 years. "Good taste is good business" was his creed.
Until 1966, when he stepped aside as chief executive officer in favor of his son, Donald J.
Hall, no Hallmark greeting card reached the marketplace without his "O.K.J.C." imprimatur.

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HELL-BENT ON QUALITY:
Hall never totally retired. Not one to drop out of sight, he continued as chairman of the board
and kept a close watch on quality. "I'm hell-bent on quality," he used to say. Whether buying
or selling, Hall appreciated and demanded value.
In semi-retirement, he spent a part of each summer in Malibu, Calif. But the rest of the year
he put in a day's work just as he had done almost every day of his life since he began selling
perfume door-to-door at age 9.

DEMANDED EXCELLENCE:
Joyce C. Hall demanded excellence of him and others, and he got it. Yet he appraise d himself
as a man who had achieved success primarily because he had worked harder than others. "I
figured I wasn't as smart as some of the other fellows, so I had to work twice as hard," he
said.

SOCIAL AND ECONOMIC IMPACT:


During the Great Depression, Joyce Hall worked hard to develop a plan that would save the
jobs of his employees. He also worked to help the nation return to prosperity. The 1930 Joyce
Hall Prosperity Plan was embraced and promoted by Rotary Clubs throughout the country.
Some newspapers credited Hall and his plan with aiding the country's eventual economic
recovery. The plan encouraged suppliers and customers to buy materials in advance,
providing working capital for companies. According to Hall, his plan allowed people to keep
working and earning wages and to keep the spending cycle going.
J.C. Hall used his greeting cards and his successful business to further the fine arts. The
Hallmark Gallery Artists Christmas cards featured works by great masters, such as
Michaelangelo, da Vinci, and Rembrandt. Hall hoped these cards would bring the art of these
celebrated painters to people who would not ordinarily see them. In 1949, Hall created the
International Hallmark Art Awards, providing funds to artists worldwide and acquiring works
for the Hallmark Fine Arts Collection. J.C. Hall also maintained 38 scholarships for students
at the Kansas City Art Institute.
In 1956, President Dwight David Eisenhower invited Hall and other prominent American
businessmen to the White House for an important discussion. The meeting concerned
establishing an organization to promote world peace. The resulting organization was called
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People -to-People. It was an effort involving American citizens dedicated to implementing


mutual understanding, respect, and friendship in the pursuit of peace. J.C. Hall served on the
group's board of directors and was chairman of People-to-People's executive committee.
Joyce Hall was honored with many citations and awards during his life. In 1961, he was the
first sponsor to receive an Emmy from the National Academy of Television Arts and
Sciences. Queen Elizabeth II named him Honorary Commander of the Order of the British
Empire that same year. The Kansas City Chamber of Commerce named him 1961's "Mr.
Kansas City." He served on the Boards of Directors of the Eisenhower Foundation and
People -to-People. In 1971, he was awarded the Eisenhower medal for international
understanding. He was granted a citation from the Midwest Research Institute and the
Distinguished Service Award from the Unive rsity of Kansas. The National Association of
Greeting Card Publishers recognized his immense contributions to the industry in 1974. He
was elected to Fortune's Hall of Fame for Business Leadership in 1977. J.C. Hall held
honorary degrees from Kansas State University, the University of Missouri, the University of
Nebraska and William Jewel College.

CHRONOLOGY: J. C. HALL:
1891: Born.
1905: Invested in Norfolk Postcard Company.
1910: Moved to Kansas City, Missouri to find bigger postcard market.
1913: Distributed greeting cards with the Hall Bros. Logo.
1930: Developed Joyce Hall Prosperity Plan during the Great Depression.
1931: Expanded business to international markets.
1954: Hall Bros. became Hallmark.
1965: Opened Halls, Hallmark's first showcase store in New York City.
1966: Retired and stepped down as Hallmark President and Chief Executive Officer.
1982: Died.
In retirement, Hall stayed active. His prize project was the Crown Center Redevelopment
Corporation, a $400-million city-within-a-city development in Kansas City. J.C. Hall hoped
the project would add economic and cultural energy to the downtown area. It was yet another
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successful enterprise for J.C. Hall and the ground was broken on the project in 1968. The
office complex opened in 1971 and the retail shops opened in 1973. On a more tragic note,
the Crown Center Redevelopment Corporation owns the Kansas City Hyatt Regency
Hotel, the site of one of the worst American construction failures. Two suspended walkways
in the hotel fell in July 1981, killing 114 and injuring nearly 200 others.
At the time of Joyce Clyde Hall's death in October, 1982, Hallmark was the country's leading
greeting card producer, manufacturing over 8 million greeting cards per day and amassing
sales of over $750 million a year. Hallmark also owned Ambassador Greetings, the country's
number three greeting card company. Hallmark's 20,000 card shops sold those cards, plus
other Hallmark wares: gift-wrap, stuffed animals, birthday candles, many collectibles, and
other products. By 1993, Hallmark employed a creative staff of over 700 employees, a staff
that generates over 24,000 new cards per year. Hallmark has maintained its industry-leading
position wit h estimated sales of $2.9 billion in 1992.

CONCLUSION:
Joyce C. Hall always put quality first, whether it came to products, customers, or employees.
Because of this, Hall, a high school dropout, was able to build a multibillion-dollar greeting
card empire that diversified into a wide variety of products and services, including residential
and commercial property, art supplies, gift wrap and accessories, and television
programming. In less than one hundred years, Hallmark went from a tiny postcard shop in
Kansas City, Missouri, to the world's largest manufacturer and distributor of greeting cards,
with thousands of retail outlets around the globe and annual sales of $4 billion.
"If a man goes into business with only the idea of making a lot of money, chances are he
won't. But if he puts service and quality first, the money will take care of itself. Producing a
first-class product that is a real need is a much stronger motivation for success than getting
rich."

REFERENCING:
Book:
Hall, Joyce C. When You Care Enough. Kansas City, MO: Hallmark Cards, 1993.
Encyclopedia and Dictionaries:

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Entrepreneur magazine encyclopedia of entrepreneurs By Anthony Hallett, Diane Hallett

Dictionary of Missouri biography


Bibliography:
Searching for literature on Joyce C Hall
Available at:
Corporate.hallmark.com
Accessed on: [March 12, 2011]

www.novelguide.com
Accessed on: [March 12, 2011]

www.entrepreneur.com
Accessed on: [March 12, 2011]

131

PHINEAS TAYLOR BARNUM

NAME: PHINEAS TAYLOR BARNUM.


BORN: JULY 5, 1810 B ETHEL, CONNECTICUT
DIED: APRIL 7, 1891
POLITICAL AFFIALIATION: DEMOCRATIC
PARTY: REPUBLICAN
OCCUPATION: FOUNDER OF BARNUM& BAILEY CIRCUS
RELIGION: UNIVERSALISTIC

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INTRODUCTION:
This is a success story of P. T. Barnum which will analyze in detail the business strategies in
different professions to lead at peak. His management style in every business to gather
people and earn his name. He started the grand traveling museum business which was a
circus business and he innovate this business and its now common in all over the world. This
study also show that what efforts have made by P. T. Barnum throughout his life to teach
people about different arts including acting, standup, music, autobiography and different
ways of amusement. This study also shows that what lesson we can learn from the business
life of P. T. Barnum and it also include the short conclusion that what we get from his life.

BUSINESS LIFE
His business life is full of many professions which are discussed as follow:

Early Life & Career:


In his teen age, he started as a store keeper and he learned haggling to make sale. He was
involved with the first lottery mania in the United States. At the age of 19 he was running a
general store, a book auctioning trade and state wide lottery network. He also started a
weekly paper in 1829, The Herald of Freedom, in Danbury, Connecticut. In 1834 his lotteries
were banned in Connecticut and he sold his store and moved to New York City. In 1835 he
began as a showman there because emerging new ideas, strategic position and life style of
New York City.

Business Strategies:
After spending difficult three years he purchased Scudders American museum in 1841. He
applied his business strategies on his museum. Barnum changed the name Barnums
American Museum and he renovated the building. He created the attention of people by
adding light house lamp. He placed the flag along the roofs edge to attract in day time. He
placed different paintings in windows of first floor. He added series of live acts including
albinos, giants, fat boys, jugglers, magician and famous battles were added to the exhibition.
In 1842, he introduced mermaid in his business named, Feejee to use as adver tisement for
museum. Then he introduced the character General Tomb Thumb who was 4 year and the
boy was taught to intimate different people like Hercules to Napoleon. As a showman he
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toured Europe especially in England. He and Tomb Thumb acted in front of Queen Victoria
and pleased them. He also visited Czar of Russia and acquired dozens of attraction. After
returning to New York he bought other museums. By the end of 1846, Barnums museum
was drawing 400,000 visitors a year.
In 1850, he engaged Jenny Lind Swedish nightingale to sing in America at $1000 a night
for 150 nights. The tour began with a concert at Castle Garden on September 11, 1850 and
was a major success. It four time increased his investment. After using Lind tours profits, he
changed the concept of theater and made it middle class entertainment. He built the citys
largest and modern theater named Modern Lecture Room. He followed with historical
dramas, melodramas and watered down the Shakespeare plays. To promote family
entertainment he organized flower shows, beauty contests, dog shows and baby shows. In
1853, he started pictorial weekly newspaper Illustrated News. In 1868 he retired from
museum business.
Barnum did not enter the circus business until he was 61. In 1871 he established "P. T.
Barnum's Grand Traveling Museum, Menagerie, Caravan & Hippodrome", a traveling circus,
menagerie and museum of "freaks", which by 1872 was billing itself as "The Greatest Show
on Earth. Despite more fires, train disasters, and other setbacks, Barnum plowed ahead,
aided by circus professionals who ran the daily operations. He and Bailey split up again in
1885, but came back together in 1888 with the "Barnum & Bailey Greatest Show on Earth",
later Barnum & Bailey Circus", which toured the world.
Barnum wrote several books for self promotions. It included Life of P. T. Barnum (1854),
The Humbugs of the World (1865), Struggles and Triumphs (1869), and The Art of MoneyGetting (1880). (Wikipedia)
Barnum served two terms in the Connecticut legislature in 1865 as a Republican for Fairfield.
With the ratification of the Thirteenth Amendment to the United States Constitution over
slavery and African-American suffrage, Barnum spoke before the legislature and said, "A
human soul is not to be trifled with. It may inhabit the body of a Chinaman, a Turk, an Arab
or a Hottentots - it is still an immortal spirit!(Wikipedia) As mayor of Bridgeport,
Connecticut he worked to improve the water supply, bring gas lighting to streets, and to
enforce liquor and prostitution laws. Barnum was instrumental in starting Bridgeport
Hospital, founded in 1878, and was its first president.

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Barnum focused on your work what were you doing. This study showed the quotation of
Barnum from his book, The Art of Money-Getting. He said that When a mans undivided
attention is centered on one object, he said, his mind will constantly be suggesting
improvements of value, which would escape him if his brain were occupied by a dozen
different subjects at once. (Peter Kass)

CONCLUSION:
We should learn lesson from his life. First lesson is that promotion is your companys best
punch. He just get promoted and become a best showman ever. He used to say that give
people more than their moneys worth. It was for this reason that people stayed loyal to him,
keeping his business afloat when others were sinking around him. He also gives this lesson
that invests your best capital in your customers. Barnum was a master promoter, but he knew
there was no advertising as valuable as word of mouth recommendations.

REFRENCES:
Benton, Joel. The Life of Phineas T. Barnum
Peter Krass. The Book of Business Wisdom: Classic Writings by the Legends of Commerce
and Industry
http://en.wikipedia.org/wiki/P ._T._Barnum
http://www.evancarmichael.com/Famous -Entrepreneurs/1024/summary.php

135

WARREN EDWARD BUFFET

NAME: WARREN EDWARD BUFFET


BORN: AUGUST 30, 193 0
ETHNICITY: WHITE
CITIZENSHIP: AMERICAN
OCCUPATION: CHAIRMAN& CEO OF BER KSHIRE HATHAWAY,
INVESTOR
NET WORTH: US$50 BILLION (2011)
RELIGION: AGNOSTIC
CHILDREN: THREE

136

EARLY LIFE & CAREER:


At only six years old, Buffett purchased 6-packs of Coca Cola from his grandfather's grocery
store for twenty five cents and resold each of the bottles for a nickel, pocketing a five cent
profit. While other children his age were playing hopscotch and jacks, Warren was making
money. Five years later, Buffett took his step into the world of high finance. At eleven years
old, he purchased three shares of Cities Service at $38 per share for both himself and his
older sister, Doris. Shortly after buying the stock, it fell to just over $27 per share. A
frightened but resilient Warren held his shares until they rebounded to $40. He promptly sold
them - a mistake he would soon come to regret. Cities Service shot up to $200. The
experience taught him one of the basic lessons of investing patience is a virtue.
After doing his graduation in 1948 he returned home and took a job at his father's brokerage
house. During these initial years, Warren's investments were predominately limited to a
Texaco station and real-state , but neither were successful. It was also during this time he
began teaching night classes at the University of Omaha (something that wouldn't have been
possible several months before. In an effort to conquer his intense fear of public speaking,
Warren took a course by Dale Carnegie). Thankfully, things changed. Ben Graham called one
day, inviting the young stockbroker to come to work for him. Warren was finally given the
opportunity he had long awaited.
Warren Buffett Goes to Work for Ben Graham, Buffett spent his days analyzing S&P reports,
searching for investment opportunities. It was during this time that the difference between the
Graham and Buffett philosophies began to emerge. Warren became interested in how a
company worked - what made it superior to competitors. Whereas Ben looked at income
statement and balance sheet. Between 1950 and 1956, Warren built his personal capital up to
$140,000 from a mere $9,800. With this war chest, he set his sights back on Omaha and
began planning his next move.
On May 1, 1956, Warren Buffett rounded up seven limited partners which included his Sister
Doris and Aunt Alice, raising $105,000 in the process. He put in $100 himself, officially
creating the Buffett Associates, Ltd. Before the end of the year, he was managing around
$300,000 in capital. Over the course of the next fiv e years, the Buffett partnerships racked up
an impressive 251.0% profit, while Dow up was up only 74.3%. By 1962, the partnership had
capital in excess of $7.2 million Warren was entitled to 1/4 of the profits above 4%). He also
137

had more than 90 limited partners across the United States. In one decisive move, he melded
the partnerships into a single entity called "Buffett Partnerships Ltd.", upped the minimum
investment to $100,000, and opened an office in Kiewit Plaza on Farnam street.
Ten years after its founding, the Buffett Partnership assets were up more than 1,156%
compared to the Dow's 122.9%.Acting as lord over assets that had ballooned to $44 million
dollars. The next year, Warren went much further than closing the fund to new accounts; he
liquidated the partnership. In May 1969, he informed his partners that he was "unable to find
any bargains in the current market". Buffett spent the remainder of the year liquidating the
portfolio, with the exception of two companies - Berkshire and Diversified Retailing. The
shares of Berkshire were distributed among the partners with a letter from Warren informing
them that he would, in some capacity, be involved in the business, but was under no
obligation to them in the future. Warren was clear in his intention to hold onto his own stake
in the company (he owned 29% of the Berkshire Hathaway stock) but his intentions weren't
revealed.

WARREN BUFFETT GAINS CONTROL OF BERKSHIRE HATHAWAY


Buffett's role at Berkshire Hathaway had actually been somewhat defined years earlier. On
May 10, 1965, after accumulating 49% of the common stock, Warren named himself
Director. Terrible management had run the company nearly into the ground, and he was
certain with a bit of tweaking, it could be run better. Immediately Mr. Buffett made Ken
Chace President of the company, giving him complete autonomy over the organization.
Two years later, in 1967 Warren offered to buy the whole company on the spot, a move that
cost him $8.6 million dollars. That same year, Berkshire paid out a dividend of 10 cents on its
outstanding stock.
In 1970, Buffett named himself Chairman of the Board of Berkshire Hathaway, That same
year, the Chairman's capital allocation began to display his prudence; textile profits were a
pitiful $45,000, while insurance and banking each brought in $2.1 and $2.6 million dollars.
The paltry cash brought in from the struggling looms in New Bedford, Massachusetts had
provided the stream of capital necessary to start building Berkshire. A year or so later,
Warren Buffett was offered the chance to buy a company by the name of See's Candy. The
businessman decided Berkshire would be willing to purchase the company for $25 million in

138

cash. See's owners were holding out for $30 million, but soon conceded. It was the biggest
investment Berkshire or Buffett had ever made.
Following several investments and an SEC investigation (after causing a merger to fail,
Warren and Munger offered to buy the stock of Wasco, the target company, at the inflated
price simply because they thought it was "the right thing to do". Not surprisingly, the
government didn't believe them), Buffett began to see Berkshire's net worth climb. From
1965 to 1975, the book value of company rose from $20 per share to around $95.

WARREN BUFFETT WANTS TWO NICKELS TO RUB TOGETHER


By the late '70s, the his reputation had grown to the point that the rumor Warren Buffett was
buying a stock was enough to shoot its price up 10%. Berkshire Hathaway's stock was trading
at more than $290 a share, and Buffett's personal wealth was almost $140 million. The irony
was that Warren never sold a single share of his company, meaning his entire available cash
was the $50,000 salary he received. During this time, he made a comment to a broker,
"Everything I got is tied up in Berkshire. I'd like a few nickels outside."

WARREN BUFFETT BUYS NEBRASKA FURNITURE MART, SCOTT FETZER AND AN


AIRPLANE FOR BERKSHIRE HATHAWAY
In 1983, Warren Buffett walked into Nebraska Furniture Mart, the multi-million dollar
furniture retailer built from scratch by Rose Blumpkin. Speaking to Mrs. B, as local residents
called her, Buffett asked if she would be interested in selling the store to Berkshire
Hathaway. Blumpkin's answer was a simple "yes", to which she responded she would part for
"$60 million".
Scott & Fetzer was another great addition to the Berkshire family. The company itself had
been the target of a hostile takeover when an LPO was launched by Ralph Schey, the
Chairman. The year was 1984 and Ivan Boesky soon launched a counter offer for $60 a share
(the original tender offer stood at $50 a share - $5 above market value). The maker of Kirby
vacuum cleaners and World Book encyclopedia, S&F was panicking. Buffett, who had
owned a quarter of a million shares, dropped a message to the company asking them to call if
they were interested in a merger. The phone rang almost immediately. Berkshire offered $60
per share in cold, hard, cash. When the deal was wrapped up less than a week later, Berkshire
Hathaway had a new $315 million dollar cash-generating powerhouse to add to its collection.

139

In 1986, Buffett bought a used Falcon aircraft for $850,000. As he had become increasingly
recognizable, it was no longer comfortable for him to fly commercially. The idea of the
luxury was hard for him to adjust to, but he loved the jet immensely. The passion for jets
eventually, in part, led him to purchase Executive Jet in the 90's.

WARREN BUFFET AT THE TURN OF THE MILLENNIUM


During the remainder of the 1990's, the stock catapulted as high as $80,000 per share. Even
with this astronomical feat, as the dot-com frenzy began to take hold, Warren Buffett was
accused of "losing his touch". In 1999, when Berkshire reported a net increase of 0.5% per
share, several newspapers ran stories about the demise of the Oracle. Confident that the
technology bubble would burst, Warren Buffett continued to do what he did best: allocate
capital into great businesses that were selling below intrinsic value. His efforts did not go
unrewarded. When the markets finally did come to their senses, Warren Buffett was once
again a star. Berkshire's stock recovered to its previous levels after falling to around $45,000
per share, and the man from Omaha was once again seen as an investment icon.

MANAGEMENT STYLE
Buffett's hands-off approach has held strong appeal and created room for his managers to
perform as owners and ultimate decision makers of their businesses. This acquisition strategy
enabled Buffett to buy companies at fair prices because the sellers wanted room to operate
independently after selling. Besides his skills in managing Berkshire's cash flow, Buffett is
skilled in managing the company's balance sheet. Since taking over Berkshire Hathaway,
Buffett has weighed every decision against its impact on the balance sheet.
Many people misunderstand the willingness by Warren Buffett to take risks. He's more than
willing to, it's just that he knows how to take the right type of risk; not risk just for the thrill
of partaking in risk. Reinsurance is one example. He's willing to reinsure anything if the
customer is willing to pay the type of premium required to manage the risk. The one risk he
refuses to take, is partaking in something that could permanently destroy a company. That's
part of his risk-management strategy.
One of the great challenges in business management is to guide the company through growth
and innovative process while maintaining that which is generating the major revenue for
today. Maintaining that healthy tension is one of the secrets to Warren Buffett's success.
140

CONCLUSION:
In short it could be summed up that Warren Edward Buffet chairman and CEO of Berkshire
Hathaway, Investor is a person who started earning and investing from a minimum amount
and reach till the top of success. His life and the strategy he followed is an excellent example
for new investors. He led a successful life and always took healthy risks. Apart from all that
his luck and fortune was also favorable for him that he reached till the top of success and
became the wealthiest person of world in 2008.

WHAT LESSON WE GET?


After going through biography of Warren Edward Buffet we get to know that Hard work is a
key to success and by being patient and by taking healthy risks in life any new investor can
also climb the ladder of success like Buffet. His life and his strategy to deal and to do
business is a great example for upcoming investors. Being a management sciences student I
have learned that Buffett's hands -off approach has held strong appeal and created room for
his managers to perform as owners and ultimate decision ma kers of their businesses. Thats
how subordinates feel free to give their opinion and suggestion and that creates a healthy
working environment.

REFERENCES:
http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrenbio.htm (accessed 11 march
2011).
http://www.warrenbuffett.com/warren-buffett-management-style.html (accessed 11 march
2011)
http://en.wikipedia.org/wiki/Warren_Buffett

141

ANDREW CARNEGIE

NAME: ANDREW CARNEGIE


BORN: NOVEMBER 25, 1835
DIED: AUGUST 11, 1919(1919-08-11) (AGED 83)
NATIONALITY: SCOTTIS H
INVENTION: AMERICAN STEEL INDUSTRY
OCCUPATION:

FIRST

PRACTICAL, ENTREPRENEUR,

MAGNATE AND PHILANTHROPIST STEEL TYCOON


NET WORTH: $298.3 BILLION
SPOUSE: LOUISE WHITFIELD
CHILDREN: MARGARET CARNEGIE MILLER

142

BUSINESS

BACKGROUND
The Scottish-born American industrialist and philanthropist Andrew Carnegie was the leader
of the American steel industry from 1873 to 1901. He donated large sums of his fortune to
educational, cultural, and scientific institutions
Andrew Carnegie, the son of a handloom weaver , was born in Dunfermline, Scotland, on
25th November, 1835. Though his formal education ended after elementary school, the
family's respect for books and learning ensured that Carnegie's education would continue
throughout his life.
The family had a long radical tradition and his father, William Carnegie, was an active
Chartist. His maternal grandfather, Thomas Morrison, had worked with William Cobbett
during his campaign for social reform. The invention of weaving machines replaced the work
Carnegie's father did, and eventually the family was forced into poverty. In 1848 the family
left Scotland and settled in Allegheny City, Pennsylvania. Andrew's mother went to work to
support the family, opening a small grocery shop and mending shoes
Carnegie's father found a job in a cotton factory, but he soon quit to return to his home
handloom, making linens and trying to sell them door to door. Carnegie also worked in the
cotton factory, but after his father died in 1855, his strong desire to help take care of the
family pushed him to educate himself. He became an avid reader, a theatergoer, and a lover
of music.

HISTORY
"I began to learn what poverty meant,"
"It was burnt into my heart then that my father had to beg for work. And then and there came
the resolve that I would cure that when I got to be a man."
Andrew Carnegie
An ambition for riches would mark Carnegie's path in life. However, a belief in political
egalitarianism was another ambition he inherited from his family. Andrew's father , his
grandfather Tom Morrison and his Uncle Tom Jr. were all Scottish radicals who fought to do
away with inherited privilege and to bring about the rights of common workers.

143

William Carnegie's handloom business dwindled in the wake of industrialization, and in 1848
the family immigrated to the United States, settling in Allegheny, Pennsylvania. There, at the
age of 13, Andrew began his career as a bobbin boy in a cotton factory. A voracious reader,
he took advantage of the generosity of an Allegheny citizen who opened his library to local
working boys. Books provided most of his education as he moved from being a Western
Union messenger boy to telegraph operator and then to a series of positions leading to the
superintendent of the Western Division of the Pennsylvania Railroad.

THE YOUNG ENTREPRENEUR


While still employed by the Railroad, Carnegie invested in a new company to manufacture
railway sleeping cars. From there, he expanded his business ventures to encompass the
building of bridges, locomotives and rails. In 1865, he organized the first of his many
companies, the Keystone Bridge Company, and in 1873, the first of his steel works.

IN PARTNERSHIP WITH HIS WORKERS


Carnegie's companies were founded not as stock corporations but as partnerships, in line with
his philosophy that it shall be the rule for the workman to be Partner with Capital, the man
of affairs giving his business experience, the working man in the mill his mechanical skill, to
the company, both owners of the shares and so far equally interested in the success of their
joint efforts. As associates, Carnegie attracted young men with exceptional talent for
organization management. His steel company prospered, and when Carnegie sold the
company to J.P. Morgan in 1901, the Carnegie Company was valued at more than $400
million.

A PHILANTHROPIST
Andrew Carnegie's philanthropic career began around 1870. He is best known for his gifts of
free public library buildings. His first such gift was to his native Dunfermline in 1881, and it
was followed by similar gifts to 2,509 communities in the English-speaking world.

THE RICH AS 'TRUSTEES'


In 1889, he wrote The Gospel of Wealth in which he boldly articulated his view that the
rich are merely trustees of their wealth and are under a moral obligation to distribute it in
ways that promote the welfare and happiness of the common man. Carnegie was a prolific

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writer, but the quotation for which he is most famous comes from The Gospel of Wealth:
The man who dies thus rich dies disgraced.
When Carnegie retired from business in 1901, he set about in earnest to distribute his fortune.
In addition to libraries, he provided hundreds of church organs to local communities.
Carnegie's wealth helped to establish numerous colleges, schools, nonprofit organizations and
associations both in his adopted country, as well as in Scotland and throughout the globe. By
the time of his death in 1919, Andrew Carnegie had given away about $350 million, but the
legacy of his generosity continues to unfold in the work of the trusts and institutions that he
endowed.

STRENGTHS OF ANDREW CARNEGIE


He surrounded himself with the best
Carnegie had a knack for attracting and retaining the most talented and competent people.
Many historians believe Carnegie was a management gurubut many of the management
innovations he is famous for were thought of by his lieutenants.

He was rabid about costs


He instituted revolutionary accounting methods that detailed the cost of every itemeven
small nails. He accounted for every single expense and then found ways to reduce them. One
exasperated partner said, Carnegie never wanted to know about profits. He always wanted to
know the costs! This cost cutting practice ga ve him immense power to set prices and gain
new market share. He knew that if he took care of the costs the profits would take care of
themselves.

He was willing to sacrifice short term profit for long term gain
He constantly reinvested: in new machinery, the latest technology, in improved practices, and
etc. In fact, sometimes he would find it exceedingly difficult to convince his partners to
fore go the short term gain. They wanted their money now, he wanted more money later.

He saw the end first


Carnegie started out with this end in mind: be the best steel company in the world. All
resources, capital, labor, intellect, time, and etc were geared toward that goal (and the smaller
goals leading up to it). Vision is a necessity for business leaders. In other words, a fool brags
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about not having goals!! Carnegie saw greater and therefore pushed his company to greater
heights.

AWARDS AND HONOURS


Andrew Carnegie had a lot of institutions, awards, streets named after him:

Carnegie, Oklahoma and Carnegie, Pennsylvania were named after him.

The Carnegie Medal for Best Childrens Literature was named after him.

Carnegie Hall in New York was named after him.

Besides that, he had received many other awards and honors, having a lot more other things
named after him. He has also founded several social organizations. The Andrew Carnegie
Medal of Philanthropy was inaugurated on December 10, 2001, by more than 20 of the
institutions Mr. Carnegie establishe d all over the world during his lifetime. This award,
created at the centennial observance of Andrew Carnegie's official career as a philanthropist,
is given every two years to one or more individuals who, like Andrew Carnegie, have
dedicated their private wealth to public good
The Andrew Carnegie Medal for Excellence in Children's Video, supported by the Carnegie
Corporation of New York, was awarded for the first time in 1991 to honor outstanding video
productions for children released during the previous year. The Anderson Public Library
Board of Trustees Vice President, Tammy Ihnat, presented the Andrew Carnegie Award to
Fred and Alice Milley, during the April 28th meeting.
The Andrew Carnegie Award is presented to an individual or group, who, in the spirit of
Andrew Carnegie, has given of themselves and made an outstanding contribution to the
improvement of public library services in our community.

UNITED STATES STEEL CORPORATION


Andrew Carnegie was the most successful businessmen and most recognized philanthropists
in history. His entrepreneurial ventures in America's steel industry earned him millions and
he, in turn, made great contributions to social causes such as public libraries, education and
international peace.
"Andrew Carnegie was the pioneering tycoon of the Age of Steel". His steel empire produced
the raw materials that built the physical infrastructure of the United States. He was a catalyst

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in America's participation in the Industrial Revolution, as he produced the steel to make


machinery and transportation possible throughout the nation.
He started the Carnegie Steel Company, which later merged with Steel Company to become
U.S. Steel. Andrew Carnegie was the father of modern steel and was one of Americas richest
men. With the money made from his business, he started his philanthropic work, starting
many foundations and organization for the cause of world peace and education.
When founded in 1901, United States Steel Corporation was the largest business enterprise
ever launched, with an authorized capitalization of $1.4 billion. Throughout the years,
U. S. Steel responded to changing economic conditions and new market opportunities
through diversification and periodic restructuring. Today, over a century after its founding, U.
S. Steel remains the largest integrated steel producer headquartered in the United States.
U. S. Steel had its origins in the dealings of some of America's most legendary businessmen,
including Andrew Carnegie, J.P. Morgan, and Charles Schwab. However, its principal
architect was Elbert H. Gary, who also became U. S. Steel's first chairman. At the turn of the
century, a group headed by Gary and Morgan bought Carnegie's steel company and combined
it with their holdings in the Federal Steel Company. These two companies became the
nucleus of U. S. Steel, which also included American Steel & Wire Co., National Tube
Company, American Tin Plate Co., American Steel Hoop Co. and American Sheet Steel Co.
In its first full year of operation, U. S. Steel made 67 percent of all the steel produced in the
United States.
U.S. Steel has multiple domestic and international facilities. Every day, U. S. Steel
employees around the world dedicate themselves to putting their five core values into action.
Safety is first its companys top priority. The other core values are diversity and inclusion;
environmental stewardship; focus on cost, quality and customer; and results and
accountability.
U. S. Steels operations are efficient and high tech, and customer focus is intense. They have
been making steel for more than 100 years, always with an eye to serving their customers
needs in the most cost-effective ways possible.
Companies that want to be competitive in an increasingly global marketplace must have a
global outlook and presence. U. S. Steel continually looks for opportunities to strengthen
their existing presence in the global arena and strives to meet and set world-class standards in
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everything they do. At U. S. Steel, creating value for the stakeholders is a priority. To ensure
the long-term success, their aim to build value for their customers, employees, shareholders,
creditors, and the communities in which they operate using the same responsible approach
that has positioned them as a leader in the industry.

MANAGEMENT STYLES
One of the captains of industry of 19th century America, Andrew Carnegie helped build the
formidable American steel industry, a process that turned a poor young man into one of the
richest entrepreneurs of his age.
Carnegie believed that achievement of financial success could be reduced to a simple
formula, which could be duplicated by the average person. The most striking quality of
Andrew Carnegie was their simplicity, the ease of words and thoughts, rather than their
condescension. In fact, he gets things done using the shortest number of words. .He has the
ability to see beyond the problem. He was the source of courage for his fellows.
Andrew Carnegie proved to everyone the value of continual hard work in his life. His hard
work caused him to be noticed by his superiors, who gave him promotions even at his young
age.
He establishes a strategic business development and support group. One person or several
who are motivated to brainstorm and research without pressure and support each other.
Teamwork, management, leadership and productivity is all born and developed here with this
group and must succeed here first or will set a bad or defective model for the business. Cut
the need for multiple layers of management. (Upper management works from home when
possible. Cut need for vast corporate admin/operating offices, support the local economy with
quality local outsourcing and sub-contracting). Quality takes care of itself. Consumer choice
takes care of the business.
He was the self-employed. He took take initiative and acts as he was playing a critical role in
the organization and energizes their people, demonstrate entrepreneurial creativity, search
continuously for new opportunities and pursue them, take risk, venture into new areas and
provide strategic direction and inspiration to their people. He also took responsibility for the
failures of their team, learn from these failures and use them as a step to ultimate success and
strategic achie vement.

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The company has a wide range of goals it wants to attain as a whole, such as creating brand
loyalty and expanding to a global level. The top executives are in charge of determining these
goals and explaining them to the rest of the company. In order for the goals to be received
well by the employees, executives must be confident that the goals can be achieve while
simultaneously making them challenging. Each division will have separate specialized goals
on how to increase their market share and improve their product or service in the process. As
you move down the supply chain the goals become more specific and short term. This system
of organization keeps the company on track to achieve the top level goals set by executives.
Managers can use many different strategies to maintain a vigorous organizational structure.
In my opinion transformational leadership is better than others because it allows groups of
people to work together for one common goal. By working together a group can come
together to achieve great things and improve their overall efficiency. In transactional
leadership individuals are rewarded for their personal performance so it can lead to greed and
a lack of teamwork.

ANALYSIS ON HIS BUSINESS TECHNIQUES


The experiences Carnegie had growing up had a large impact on his ideals regarding politics
and the effect they have on society and economics. Carnegie believed that political inequality
is what caused Scotlands social and economic woes which caused the conditions that
forced his family to leave Scotland. He basically believed that had Scotland had a better
political system there would not have been the disastrous social consequences of the
changing economy. As a result of his beliefs, he supported the American political system
fiercely. He believed that the United States success justified his wealth and the ways he
acquired it.
The management strategies Carnegie used are another example of a skill he had mastered.
Carnegie focused a great amount on cutting costs and making sure that no money was being
wasted. They tried to reduce labor costs by holding down wages and substituting machines.
Carnegie insisted on seeing the cost sheets each week. He focused only on the costs and not
the profits because he felt that once costs are cut profits will take care of themselves. Each
week he analyzed those wanting explanations for everything. Carnegie was able to manage
very effectively through this system.

He was able to compare the performance of the

different employees by seeing who was saving the most money. Through this, he was able to
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make intelligent decisions about promotions and firings even though he had no shadow of
claim to rank as inventor, chemist, investigator, or mechanic.
He used management techniques based on cutting cost and being able to bring in profit as a
result. Carnegie was able to take the knowledge he ga ined from the railroad industry and
apply it to the iron industry. He did this through such methods as increasing the amount of
the specific product being made in a specific amount of time and through the method of cost
accounting. Carnegies story is a true example of what one thinks of when they hear the
phrase the American Dream. His story is one of going from rags -to-riches and in the end
giving away his fortune to help others achieve that same dream.

LESSON TO BE LEARNED
Offer incentives to employees that will make them loyal but will not make you bankrupt. A
worker who is loyal to his boss will in turn lead to a boss who is loyal to his worker, possibly
for years to come. Reward the hardest workers with the best yearend bonuses and hopefully it
will motivate the others. Always balance positive with negative when doing employee
evaluations. Give the employees encouragement when encouragement is due and show them
your lighter side on occasion. Employees morale can go a long way to business success we
can learn how to achieve your goals, attract new customers, and how interact with other
businesses.

CONCLUSION
Andrew Carnegie was one of the richest men in the world. But he was more famous for his
philanthropist activities. Andrew Carnegie had a humble beginning. His rags to riches story
fuels passion and admiration from people all over the world. Andrew Carnegie's
philanthropic endeavors are extensive in their value. "There is no doubt that Carnegie was a
hard businessman"his success is testament to this"but the acquisition of wealth was not due
to personal greed" He strongly believed that the wealthy had a moral obligation to serve as
stewards to society. He believed that everyone was entitled to a proper education. For this
reason, Carnegie was involved with the founding of many schools and universities. Another
way he contributed to public education was through his interest in free public libraries. His
love of reading stemmed from a positive childhood experience of reading from the personal
collection of a merchant in his town. He is responsible for the establishment of approximately
2,500 libraries worldwide. He was naturally enthusiastic. He has the power of positive
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thinking to work overtime. In Order to pursuit his goals, he was willing to work hard and if
necessary, face danger. He was serious, responsible, industrious and hardworking. He is a
factual or first practical entrepreneur and a Paradigm to not only business executives, but also
for

us,

students

around

the

world.

No man will make a great leader who wants to do it all himself, or to get all the credit for
doing it

REFERENCES
http://www.infoplease.com/ipa/A0771862.html
http://www.notablebiographies.com/Ca-Ch/Carnegie-Andrew.html
http://www.spartacus.schoolnet.co.uk/USAcarnegie.htm
http://www.carnegiemedals.org/
http://www.ala.org/ala/mgrps/divs/alsc/awardsgrants/bookmedia/carnegiemedal/carnegieabou
t/index.cfm
http://www.leadership-w ith-you.com/andrew -carnegie -leadership.html
http://www.ussteel.com/corp/company/profile/history.asp

151

STEPHEN MCCONNELL STEVE


CASE

NAME: STEPHENMCCONNELL STEVE CASE


BORN: AUGUST 21, 195 8 (AGE 52)
HONOLULU, HAWAII, UNITED STATES
RESIDENCE: MCLEAN VIRGINIA
ETHNICITY: WHITE
CITIZENSHIP: UNITED STATES
OCCUPATION:

FORMER CHAIRMAN CEO OF

CHAIRMAN CEO OF REVOLUTION LLC.


NET WORTH: $1.3 BILLION (2010)

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AMERICA

ONLINE,

INTRODUCTION:
Stephen McConnell "Steve" Case (born August 21, 1958) is an American businessman best
known as the co-founder and former chief executive officer and chairman of America Online
(AOL). He reached his highest profile when he played an instrumental role in AOL's merger
with Time Warner in 2000.

HISTORY AND BACKGROUND:


Steve case is Inspiring, challenging, and incredibly thought-provoking. Steve Case has the
most innovative mind in youth ministry. He combines youth ministry savvy, boundarybending creativity, spiritual impact, and humor. He is unique in the world of youth ministry.
He speaks to kids with an understanding and love for who they really are. He is able to do
that through his writing, too. He is a terrific storyteller. He is the funniest theologians. He
has authored multiple books that effectively mix practical theology with worshipful
experiences. His workshops are equally as engaging. He is the most amazing speaker.
He is one of the worlds most famous entrepreneurs and successful business man. He cares
about his people and his customers. He is always looking for new ways to do more for
people.
There are no road signs to help navigate. And, in fact, no one has yet determined which side
of the road we're supposed to be on."
Steve Case
Born in 1958 in Honolulu, Hawaii. Case began his entrepreneurial career at age six, when he
and his older brother set up a juice stand, selling lime juice for 2 a cup. Not long after, the
brothers established Case Enterprises, which sold seed sand greeting cards through the mail
and with door-to-door sales. Case attended Williams College, where he showed an avid
interest in music: He wrote rock reviews for small local papers in order to get free concert
tickets and albums and sang with two new -wave rock groups.
Case put his entrepreneurial instincts on hold after graduating with a B.A. in political science
in 1980. Steve Case was the driving force behind America Online and a leading business
pioneer of the Internet boom of the 1990s. Case worked briefly for both Proctor & Gamble
and PepsiCo before joining the computer game company Control Video in 1983. Case

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became the company's director of marketing and helped push it into the new world of online
gaming and, eventually, online communities. The company morphed into America Online in
1991 and Case succeeded.

PERSONAL LIFE:
Steve Case might be the closest thing imaginable to a family-oriented, self-made middle-class
billionaire. Like "ordinary" Middle-Class Millionaires, Case sees vacations as opportunities
for his family to spend time together. Yet with all his considerable resources, he seldom had
satisfactory experiences when vacationing with his wife and their five children. They owned
three rarely used vacation homes around the country, which Case says left him feeling guilty
when the family would vacation someone else for the sake of variety. On those occasions,
accommodating the large family presented other problems. They'd either get adjacent hotel
suites with inconvenient connecting doors or rent a vacation home sight unseen. They once
rented a house in Hawaii with seven bedrooms, only to find three of the bedrooms were
accessed by a flight of stairs outside the building. Rather than risk navigating the outdoor
steps at night, some children wound up sleeping on couches in the living room.
We all share the goal of protecting children. Congress passed this law without understanding
the many technological tools available and under development that empower parents, rather
than the government, to determine what their children receive on the Internet. (Steve Case)

AMERICA ONLINE (AOL) - INTERNET SERVICE PROVIDER:


This is a company that started 20 years ago when one man thought it would be a good idea to
make the power of the Internet available to the average consumer. In the years since, America
Online has grown to a company of 20,000 people serving a community of nearly 29 million
members worldwide. AOL is headquartered at 770 Broadway in New York. Founded in 1983
as Control Video Corporation, it has franchised its services to companies in several nations
around the world or set up international versions of its services.AOL is best known for its
online software suite, also called AOL, that allowed customers to access the world's largest
"walled garden" online community and eventually reach out to the Internet as a whole. At its
prime, AOL's membership was over 30 million members worldwide, most of whom accessed
the AOL service through the AOL software suite.

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In 1989, Apple and Q-Link ended their deal together and Q-Link became America Online
(AOL).In 1991, Kimsey left the CEO seat and went to sit at their board of chairmen. Steve
Case became the CEO. Also that year; AOL had its first public offering. During the early
1990s, Prodigy and CompuServe held the top places as Internet service providers, and Case
wanted to win that place. He lowered the price to below their competitors and sent out
thousands of free trail diskettes for new members. When 1993 was almost over, they had
more than 600,000 members and users of their service. With the success that AOL had in
1993, Microsoft co-founders both tried to buy AOL-which they failed to, do, with Case
blocking them from doing so. This lead Microsoft to creating Microsoft Network (MSN).In
1994, AOL started buying up companies that would help them and their subscribers. Prior to
that, they were considered a closed network, meaning that their users only had access to what
they offered them. By starting to buy up and connecting with other networks, they were able
to offer more to the subscribers. This helped AOL to grow quickly.
By late summer 1996, they reached six million subscribers and that fall they started offering
flat-rate monthly service fee of $19.95. They also hired MTVs creator Bob Pittman, to help
improve their brand and customer service. He later on became the president and chief
operating officer, while Case gave up the title; he was still in those positions.
When 1997 came around, they gained 3 more million subscribers and CompuServe gained
2.6 million, though they maintained some of their independence. AOLs stock rose in 1998
and 1999 over 600% and they bought Netscape Communication Corp. for $4.2 billion in
stock. Their web portal and browser were included in the buy up. Sun Microsystems also was
a third party during the acquisit ion
In January of 2000, AOL announced that they wanted to buy up Time Warner Inc. After the
merge, AOL lost its huge market and faced troubles with more companies competing with
them and offering either a free or low-cost service. In 2006 AOL started to of fer many of its
services outside of their internet service, making it a latecomer to that market.
Since the many changes within AOL, we have watched them grow and fall like most
companies. They were one of the first providers to offer internet service. AOL will always
play a key role in the history in the internet and the future of the internet. Though most of the
stuff they once offered for a fee, that they now offer for free, they still does offer internet
provider service.

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STRENGTHS:
One of the main competitive strengths that the company possesses is its affordable tuition,
which is one of the lowest in the industry. The reason why it can charge less than its peers is
because of its exclusive online education model and lowest student acquisition costs. The
companys business has a flexible cost basis and is scalable.

BENEFITS:

Streaming news and streaming sports, updated every hour (this service is available
through CNN.com for non-aol users for a monthly fee, but AOL customers get this free).
They offer local news, local sports, local weather, etc. All this can be displayed instantly
when you sign on.

You can play almost any card game against other opponents online. There are also many
other games available, this is really great if you are a card player or online game player.

The best email service out there. Virus's can never be activated directly through email the
way they can with other services, which is another big plus. Their spam filter is also the
best I have found yet.

Free virus protection for anyone using AOL Broadband.

You can run AOL Broadband on top of any other internet service. They call it the BYOA
plan (bring your own access). No matter what broadband internet service you use, you
can run AOL right over the top of it just as if you were dialing in, but of course you will
have the high speed instead!

Through innovation and creativity, AOL raised the bar and set the standard for what they
believe high quality content is on the Internet.

AOL content sites and products allow more than 250 million visitors around the world to
access the best collection of journalists, artists and musicians on the web.

COMPANYS STRATEGY:
America online is first consumer online service to introduce windows version. AOL is a
global advertising-supported Web company, with display advertising network in the U.S., a
substantial worldwide audience, and a suite of popular Web brands and products.

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The companys strategy focuses on increasing the scale and sophistication of its advertising
platform and growing the size and engagement of its global online audience through leading
products and programming.
AOL is committed to conducting its business in ways that minimize its impact on the
environment through a variety of initiatives. AOL leverages the power of the Internet to
improve and unify communities, and benefit those in need.

COMPANYS MISSION:
Mission of AOL is to inform, entertain and connect the world.

INFORM
From hyper-local community news to accurate reporting by Pulitzer Prize -winning writers,
AOL gives the latest and most credible information-both globally and locally.

ENTERTAIN
the extensive network of content sites cover a broad spectrum of topics and are brought to life
by first-class writers, musicians, actors and editorial talent. No matter what people interested
in, there is bound to be something that will both surprise and delight the people.

CONNECT
As a global company; one of the focuses of AOL is to connect people with information and
people across the world. With best-in-class products, like AIM, AOL Life stream and AOL
Mail, communicating and connecting with the friends and family has never been easier.
Likewise, local platforms such as Patch allow customers to connect with their community in
unprecedented ways.
AOL has a strong strategy, a clear mission and a firm commitment to delivering value. The
diverse backgrounds, experiences, perspectives and thought processes make AOL unique.
The AOL Accessibility Policy expresses the company's commitment to develop products and
services that are accessible to all users, including those with disabilities.
The policy is founded on three fundamental principles:

Awareness

Responsibility

Collaboration

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About 250 million people around the world rely on AOL. They are global leaders in sourcing,
creating, producing and delivering high-quality, trusted, original content to their consumers.

MANAGEMENT STYLES:
Organizational culture is basically a system of shared beliefs that members of the
organization have. This determines how members in an organization act when confronted
with decision-making responsibilities. In every organization, you will notice that there are
systems or patterns of values that are constantly evolving. These shared values will also
affect how the employees will deal with issues and concerns inside and outside the
organization.
AOL believes that their employees and culture are their true advantage. They embrace AOL's
cultural diversity so much that they instituted the Cultural Ambassador Program in order to
shape and maintain their cultural values throughout our global offices. As part of their hiring
process, each candidate will meet with one of the ambassadors to learn about AOL's values
and how they fit in to the AOL culture. The AOL ambassador will guide the potential hire
through a Cultural Assessment used to determine if the candidate's values are aligned with
those of AOL.
They invested in creating a positive and passionate culture at AOL. At AOL they care about
the people that work with and try to foster an environment in which we help each other, they
act with integrity, they support each other and they have fun while doing it. Employing
talented people with a passion for what they do is not just a talking point but a way of life.
Steve played an integral role in building the worlds largest Internet company and helped
transform how people communicate, learn, and conduct business.
By creating an environment in which the employees feel healthy and supported, AOL can
achieve business and personal success. They support and invest in their employees. AOL
encourages employees to have a desire and curiosity to learn. They support a dynamic
learning culture where employees can learn all day, everyday via formal and informal
learning opportunities. A comprehensive Career Management site is available to help
employees explore and define their current and future career goals, align resources to meet
development needs and put plans into action.

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The ability to tie individual goals to the company's strategy is critical to their success. AOL
employees create performance goals, establish development plans and track progress
throughout the year with Success Factors, the performance management tool. Creating and
achieving great performance goals is just one part of being a truly great performer. AOL
offers a series of leadership development programs designed to help transition through each
career stage beginning with core management programs and progressing from there to more
in-depth leadership training like leading leaders.
Case was willing to do anything that kept customers coming and revenues flowing. Instead of
focusing on the competition, Case gave priority to the customer's needs and desires.
According to Case,
"The center of gravity has to be the consumer, what consumers want and how they want it.
Case, who was a shy guy from his childhood, was more comfortable working on his
computer than interacting with people. Commenting on this, Kimsey said,
"Case is much more at home behind a keyboard than a podium."
But Case admired forceful and charismatic CEOs who became a source of inspiration for
employees. He is a transformational leader, meaning he is passionate and enthusiastic about
what he does. He creates visions and injects energy and motivation into his team.
Case's entrepreneurial spirit continues with his new venture Revolution, launched in April
2005. Its mission
"is to partner with entrepreneurs in building businesses that give people more choice, control
and convenience in important areas of their life,"
Case's personal style probably had a lot to do with his ultimate success in taking AOL to the
top of the Internet service provider heap. Case had been described as an unassuming and
down-to-earth leader who was not boisterous in his managerial style. He understood clearly
the need for good PR and the power of the inside strategy of talking one-on-one with people
to get what he wanted. For example, he continually met with politicians of all persuasions in
Washington, D.C., as he tried to iron out concerns about the Internet, including the
availability of pornography. At the same time, he won concessions that virtually eliminated
AOL's liability for crimes committed by users of its network and derailed ant pornography
pressure. He also helped defeat privacy legislation that would have limited online companies'
ability to gather marketing information about the Internet habits of teenagers.
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AOL became successful because of Case's diligence and vision, values that he ingrained in
AOL's corporate culture. For Case, there was no alternative to the Internet and AOL's future
domination of it. His stubbornness about building the company was apparent, said analysts,
when Case and AOL could have sold out for millions of dollars early on but rejected the deal.
They also noted that Case was relentless in reengineering his company around a marketing
sensibility that he knew well.
Case had a healthy ego; and it never stopped him from hiring people who were more
flamboyant and creative. He did not take a threatening approach to management and worked
well with the technological talent he needed to make AOL grow.
In review, there is a lot to be learned from the management and leadership of AOL. Steve
Case has created a unique management formula that has contributed to the long term success
of the company. Although there is a clear distinction between management and leadership,
the company has been able to incorporate a combine of each in many aspects of the business.
The transformational leadership has proved to be a valuable tool for executives, managers,
and workers alike. Employees within the company have a willingness to work together to
expand and improve the company in order to reach their own personal success in life.

CONCLUSION
Few people can match the impact on business and culture than that of Steve Case. A lifelong
entrepreneur and innovator, Steve created Revolution to create far-reaching change, further
empower consumers, and build enduring business success. As co-founder of AOL, Steve led
the charge to make the Internet an essential part of everyday life. I am extremely impresses
by his passion about life and source of revenue every minute to its fullest. Steve Case was
able to attract and retain a conglomerate of truly talented andin the entrepreneurial sense
effective team of executives. Steve case is a very encouraging person. He has set challenging
goals and achieved every one of them. He is a right entrepreneur and a role model to not only
business executives, but also for us, students around the world.

REFERENCES:
http://www.infoplease.com/biography/var/stevecase.html#ixzz1GU7EK7h3
http://www.askmen.com/celebs/men/business_politics/49_steve_case.html
http://www.biography.com/articles/Steve-Case-40879
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http://aol.bfxmedia.com/
http://www.webhostingreport.com/learn/aol.html
http://www.crunchbase.com/company/aol
http://corp.aol.com/about-aol
http://www.referenceforbusiness.com/biography/A-E/Case-Steve-1958.html

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RUSSEL SIMONS

BORN: OCTOBER 4, 195 7 (AGE 53)


RESIDENCE: NEW JERSEY
ETHNICITY: AFRICAN AMERICAN
CITIZENSHIP: QUEENS, NEW YORK, UNITED STATES
OCCUPATION: MEDIA AND FASHION MOGUL
NET WORTH:

$341 MILLION (2007)

RELIGION:HINDU/BUDDHIST
CHILDREN:

2 DAUGHTERS

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INTRODUCTION
There's nothing like a good example to motivate and inspire one. Having know-how of
business is an essence of conducting it competently, but it takes time and requires money as
well. Therefore, the best option is to learn from the experiences of booming business men.
This study is conducted in order to get insight and to learn from the success story of Russel
Simons. The young entrepreneurs and new business starters can discover about all the hurdles
which he /she could face while starting up a business.

BACKGROUND
Simmons had a rather inauspicious start, like many earlier captains of industry. Born in
1957, Simmons and his elder brother, Daniel, and baby brother, Joseph, grew up middle class
in Queens, N.Y. Their father was a teacher and their mother was a recreation director. When
their middle class neighborhood began to experience the effects of the burgeoning street drug
trade, young Russell flirted with a career in that illegal, not to mention deadly, industry. In
fact, he admits that he sold fake coke on the streets before his run-in with the new sounds of
hip hop sent him careening in another direction that of club and concert promoter.
Spectacular successes followed. In short order, Simmons famously co-founded Def Jam
Recordings with Rick Rubin from their dorm room while students at City College of New
York in the mid-1980s. He systematically sold his pieces of Def Jam for hundreds of
millions of dollars, selling his final st ake in 1999. But his entrepreneurial empire had been
fast evolving in other, non-music directions since 1990, when he founded Rush
Communications, which served as a holding company for various ventures rooted in hip -hop
culture. Rush Communications has encompassed Phat Fashions, including the trendsetting
Phat Farm clothing for men and boys, Baby Phat for women, and Run Athletics; the
Simmons Lathan Media Group; the HBO's "The Def Comedy Jam" and "Russell Simmons
Presents Def Poetry"; the Tony Award winnin g stage production "Russell Simmons Def
Poetry Jam on Broadway," and in the financial services industry, UniRush and its RushCard
and Baby Phat RushCard debit cards.

INVOLVEMENT OF FAMILY:
One of the remarkable things about Simmons' business empire is the involvement of family
in his pursuits, from the very beginning with Run DMC, a trio of Joseph, friend Darryl
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McDaniel and the late Jay "Jam Master Jay" Mizell, as one of Def Jam's founding acts.
Today Run is an ordained minister and is co-owner and an executive with Run Athletics,
while Danny works with both of his brothers in the Rush Philanthropic Arts Foundation,
established in 1995.
In March 2006, Simmons and wife Kimora Lee separated. However, they remain business
associates, as she is the creative force behind Baby Phat, a Phat Farm offspring, as well as
parents to their two daughters, Aoki and Ming Lee, who are models for Baby Phat Kids'
Collection.
In 2005, MTV debuted "Run's House," a now popular reality TV series based on the
interactions between Joseph "Run" Simmons' blended clan of his kids from a previous
marriage and current marriage to Justine Simmons, all co-existing in his Saddle River, N.J.,
home. The show provided a platform for the family to extend its entrepreneurial pursuits,
with Run's daughters Vanessa and Angela establishing a wildly successful line of sneakers
for women that they named Pastry Footwear. Angela also founded a magazine, and Justine
has introduced her Brown Sugar jewelry line. Run's son Joseph "JoJo" Simmons, Jr., is
taking a stab at the music side of the family dynasty by trying to establish a career as a hiphop performer.

BUSINESS:
DEFF JAM:
Early on his brother, Reverend Run of Run DMC, proved he had the sound, and Simmons
clearly had the savvy to take hip hop to the next level. He started throwing block parties and
promoting rappers like pioneer Kurtis Blow , proving to record labels that hip hop was not a
fad. It was a cultural revolution. In 1984, he and Rick Rubin started Def Jam Records. The
label launched hip hop legends like LL Cool J, The Beastie Boys, Jay-Z and Run-D.M.C. and
the Beastie Boys.
Rush Communications Inc. which included a management company, a Clothing company
called Phat Farm, a movie production house, television shows such as Def Comedy Jam, a
magazine and an advertising agency. His movie production house has produced such films as
Krush Groove and The Nutty Professor.

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His nephew, Jamal "Redrum" Simmons and his group Flatlinerz released the highly
controversial album U.S.A. in 1994 on Def Jam but was dropped from the label soon after.
Rick Rubin sold his share of the record company for $100 million to Universal Music
Group in 1996. Simmons didn't stop there. He launched Rush Communications, which
spawned clothing lines like Phat Farm, an extremely successful TV and movie production
company and that's just the tip of the iceberg. His empire is worth hundreds of millions of
dollars; Def Jam became just one piece in Simmons' corporation

PHAT FARM:
Pat farm is a national fashion line created by the vision of Russell Simmons, the founder of
the modern day hip-hop movement, Phat Farm, a division of Phat Fashions, is symbol of
men's contemporary American culture, mixing the urban aesthetics of the streets and the
preppy culture of the Ivy League.
Since its inception in 1992, Phat Fashions began from a small New York City showroom and
is now a multi-million dollar business. Phat Fashions' success is a result of the brand's
commitment to quality, innovation in design and support of the retail trade through strategic
marketing and advertising. For the consumer, Phat Fashions delivers a universal message that
breaks stereotypes and ethnic boundaries, settin g the new standard in sportswear and
establishes the company as the complete American lifestyle brand. 2008 is the sneaker
company Run Athletics , which was started in January - June 2008, a company that produces
both the Legacy and Russell Simmons clothing line brand shoes.

BOOKS:
Simmons takes his mentoring role seriously. In 2007, he wrote his first self -help book, a goget-'em career primer called "Do You." Now, he issues his follow -up, "Super Ric h," a slim,
succinct and sagacious volume about the true meaning of wealth (spoiler alert: It isnt about
the money).
While Americans easily welcome advice from wealthy men, could anything be more
obnoxious than a rich guy telling the aspiring masses, as Simmons does, that "there's no
difference between being broke and being a millionaire"? But Simmons knows this and
spends the first passages of "Super Rich" front-loading his explanation: There's nothing
shameful in enjoying the worldly fruits of your labor, he argues. But it's the labor, and not its
fruits, that bring happiness. The title doesn't mean what you think.
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"I define super rich as the state of needing nothing," Simmons said. "We naturally wake up in
the morning and decide on what we're going to give as opposed to what we're going to get.

CHARITY WORK, EVENTS AND CAUSES:


Russel Simons is not just a selfish, materialistic business man, he is also a Philanthropist.
Simmons participated in a number of causes and he love to do charity as well. In the
aftermath of Hurricane Katrina, Simmons joined 22 other top executives in the apparel and
home fashions industry to form (Fashion Delivers Charitable Foundation, Inc.) to unify the
apparel and home fa shions industry to donate new product to help needy individuals and
families who fell victim to one of the USA's worst natural disaster. In supporting the new
charity, Phat Farm underwrote a t-shirt design contest with 100% of the proceeds going to
Fashion Delivers.
I want to contribute more to earth than I take away from it, Simmons says. Simmons
supported a PETA protest against the treatment of chickens at KFC.
He is Co-Chairman of the Hip -Hop Summit Action Network. Russell co-founded the
Rush Philanthropic Arts Foundation with his brothers, Danny, and Joseph Simmons.
Russell donated his time to support The Doe Fund, and led a Transcendental Meditation
workshop for participants of their Ready, Willing & Able program in August, 2009. Simmons
called The Doe Fund, probably the most successful program in the nation to help
homeless men re-enter society. Simmons is often described as the man who made black
urban culture a part of the mainstream, but Newsweeks Johnnie L. Roberts noted that "in the
view of many, he is now emerging as potentially the most credible and effective leader of the
post-civil rights generation."

PASSING THE TORCH


With his own family getting more and more ingrained in the business empire, Simmons said
he sees a day when the younger generation of Simmons is founding their own ventures. He
has two daughters and he hopes and wishes that one day they will run his business empire
and he has high hopes from them.
"They'd better be!" Simmons said. "Diggy and Russy better run something. What? Mingy
and Aoki are going to run the Aoki Lee Foundation and they're going to be like a big
foundation that has an endowment and they're going to give, one of them, and the other one's
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going to run a business. That's what I think. I really do have faith that they're going to be
still doing it, of course.

ANALYSIS: WAYS TO SUCCESS ADOPTED BY RUSSEL SIMONS:


He started as a druggy on the streets of New York (Crack dealer) and ended up as billionaire
and one of the most creative, successful and well-respected entrepreneurs of the 20th century.
His hard work, dedication and persistence helped him to be a world class businessman.
Russell Simmons has learned what it takes to reach your goals and objectives. Some
principles are discussed as follows:

DETERMINATION
You have to stick with what you start, says Simmons. Dont let other people dissuade you
because you dont have instant success.
It is the quality of being resolute to do or achieve something; or the firmness of purpose.
Simmons knew what it was to face obstacles and criticism along his way to success, but he
didnt let that stand in his way. He devoted himself wholeheartedly to achieving his goals and
remained confident in his abilities to do so.

FOCUS.
Everybody has a great idea, but very few are successful without true focus.
Focus is basically having a maximum clarity or distinctness of ones goal. Russel Simmons
never strayed from his goal of promoting hip -hop music and culture to his core audience
African Americans. He wanted to present the truth about what was going on in the streets and
wasnt going to gloss over anything for anyone. Eventually, hip-hops appeal spread to a
wider, primarily white audience, but Simmons stayed true to his roots, focusing on his niche
market and keeping his message constant. Thats the most basic thing,

DUTY
I try to make my life about service, and hope that one day we can all see a little better,
says Simmons. Recognizing that his success came from the very struggles that his audience
was facing on the tough streets, Simmons dedicated himself to giving back to those
communities. He founded numerous projects to encourage education and political awareness
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and involved himself in other social causes such as animal cruelty and HIV awareness. I'm
not a politician. I only want to help relieve the suffering in communities, and I want to help
people see their community in each other.

CREATIVITY
Simmons recognized that in order to succeed he had to do something different and creative.
Crediting his yoga and his keen street sense with giving him the confidence to pursue new
avenues of opportunity, Simmons found success where others werent looking for it, which
also helps and inspires him while designing clothes for his label Phat Farm. From marketing
rap music with Adidas shoes to voting with LL Cool J, Simmons achieved success by doing
things differently and thinking along lines nobody had thought alone.

TEAMWORK:
A lot of people like to think that an individual makes or breaks his or her own success, but
thats not really the case, says Simmons. Often your success is determined by the people
you surround yourself with. Simmons created a hard-working and efficient workforce by
creating an open environment and encouraging the entrepreneurial spirit at all levels of his
companies. Simmons staff wanted him to succeed because he wanted them to succeed. He
has encourage the culture which promotes and appreciates the inputs of the workers and
which aided him to have dedicated workers, who has this sense of liking and ownership of
the organization and this type of practice enabled them to work both effectively and
efficiently.

FOCUS ON EDUCATION:
Russel Simmons is obstinate and adamant that education is the key to success; though he
started his business in college and didn't go on to earn his degree. There are plenty of success
stories where entrepreneurs carved out rewarding niches. But launching and maintaining a
successful venture is a tougher row to hoe without higher education, Simmons said, so he
mostly surrounds himself with people who first proved themselves by accomplishing an
academic degree because running a booming business requires one to get educated.

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"All the young people I work with came out of school," Simmons said. "I don't really end up
with people that didn't come out of school. If you're not educated, you're really not useful.
You can maybe become an artist, but you can't be a businessperson. It's very difficult."
Having an education doesn't negate your individual value. In fact, done right, education can
heighten one's individualism and earns one respect as well, Simmons suggested. "College
studentsthe most important thing about young people is that they are fewer followers and
they ask more questions than the adults," Simmons said. "So they're more connected. They
have a greater opportunity. It's much easier for them to say, Wait a minute. I don't want to go
along with that.' They always see the contradic tion. They see the adult say one thing and do
another. It's up to them to try to make a path."
"You can always find individuals in college. You can't find them at the workplace all the
time. But in college you find a lot of independent thinkers and those people are the ones who
not only change the world, but they build their own businesses, they start their own way to
contribute to the world in a way that sometimes is really good for them, and they receive
what they give."

FOR THE ENTREPRENEURIAL COLLEGIAN


Even if one perhaps desires to go into business for himself, the value of an education cannot
be overrated, Simmons says. "I think everybody that's an entrepreneur is enhanced when they
have an education," he said. In "Do You" Simmons warns about becoming too docile upon
receiving a formal education at the collegiate level.
"The caution about education I didn't mean that you shouldn't go to school," Simmons said.
"I meant that you shouldn't be trained; you shouldn't be put in line. You need to be able to be
a cultural hero. In other words, you think inside box which is inside the heart. The world
would say it's outside the box, which is where the whole world exists. The little bit of stuff
that's being told to you every day is a small part of the entire picture. If you live in that little
bit of stuff, you'll be stuck out of the big picture. Don't be controlled."
If you want to establish and build a business for the long haul, here's a big tip: know your
market and your customer, Simmons said. Really, know them and don't limit yourself with
marginal thinking, he suggested. For instance, your customer may not be limited to one
demographic category, such as a specific race. This means he believes in the diversification
of business, which is a safer way to handle it.
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"It depends on your business, but you have to remember that 80 percent of the world is not
black,"
He said.
"If you're working on something that's kind of for black people, you have to then look and see
the other 80 percent you're usually not marketing to might need it even more."
So one should not limit himself and keep on gaining knowledge to widen his horizon which
would help him to run a business smoothly.

PASSION:
As someone beautifully said:When work, commitment, and pleasure all become one and you reach that deep well where
passion lives, nothing is impossible
That passion helped him become one of the wealthiest men in America and allowed him to
shape the face of music, fashion, business and philanthropy. He loved his work, and thats
why he is so successful in his field because he is doing something which he adores.
"I was very lucky that I found a passion,"

WORDS OF WISDOM BY RUSSELL SIMONS:


We learn a lot from the sayings and quotations of successful business leaders because their
words do matter, as they talk with the experience knowledge and talent. Some of the precious
words of wisdom by Russell Simons are stated below:

I want to fight poverty and ignorance and give opportunity to those people who
are locked out.
If you learn late, you pass it on to people so they can learn early. It`s a step
process.
Piling up zeros in your bank account, or cars in your driveway, won't in and of
itself make you successful. Rather, true success is based on a constant flow of
giving and receiving. In fact, if you look up affluence in the dictionary, you'll
see its root is a Latin phrase meaning "to flow with abundance". So in order to
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be truly affluent, you must always get what you have received flow back into the
world.
Message learned
The message which we learn from the precious and valuable sayings of Russell Simmons is
that when we achieve the paramount success and fulfill our aspirations we have to transfer
our knowledge to others and its our duty to help others with our experiences so that they
would learn from our mistakes and go through the obstacles. The ultimate definition of
success is when a person constantly gives and receives, its a two way process. Its our duty
to give back to the world as well rather than being selfish and heartless.

CONCLUSION:
Shakespeare beautifully articulated about leadership by saying "Some men are born great,
some achieve greatness, and some have greatness thrust upon them". Russel Simons is the
one who achieved greatness with his constant devotion and commitment to his work. Nobody
expected success from Russell Simmons; nobody expected anything from Russell Simmons.
Having been written off by society as a drug dealer, Simmons dedicated his life to proving
that he could be more. He focused on his passion for hip-hop, identified a void in the music
industry at the time, and set out to fill that void. Since that time, his keen sense of business
and promotion has turned the Simmons name into a marketable brand in and of itself. With a
personal net worth of approximately $500 million, Simmons is now approaching the age
when many choose to retire. But, he shows little interest in slowing down. He still goes to
work daily and asks himself, What else?His dedication, commitment and passion aided him
to reach the heights of his business and enabled him to be one of the most influential
businessmen of United States of America, its tough to belief that this same guy was a drug
dealer once, thats the beauty of his life story. Today, he's devoting a lot of his time to giving
back through various charities and educational programs. Simmons also wants to teach the
rest of us the principles that have made him so successful.

REFFERENCES:
Black Collegein http://www.black-collegian.com/issues/2ndsem08/business_mind.htm

171

William Jean A. 03 March 2010 , Inside The Business Mind Of Russell Simmons: Creating a
Business

Legacy

ttp://findarticles.com/p/articles/mi_qa3628/is_200802/ai_n25501588/pg

4/?tag=content;col
Wikipedia http://en.wikipedia.org/wiki/Phat_Farm
ROD Kurtz, Russell Simmons, Rush Communications
Hip-Hopping to the top: Simmons Rise to Success http://www.evancarmichael.com/FamousEntrepreneurs/544/HipHopping-to-the-Top-Simmons-Rise-to-Success.html
Look to The Stars, The world of celebrity giving
http://www.looktothestars.org/celebrity/728-russell-simmons
Alexis Wiley. Wednesday, 16 Feb 2011, Russell Simmons on His Secret to Success
http://www.myfoxdetroit.com/dpp/entertainment/celebrity_news/russell-simmons-on-hissecret-to-success -20110216-wpms
Hurt III, Harry (April 22, 2007), The New York Times,
"The Russell Simmons Guide to Success Through Spirituality
Simmons, Russell (February 24, 2010). "Why I Meditate". HuffingtonPost.com.

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WARREN A. BECHTEL

NAME: WARREN A. BECHTEL


BORN: 12-SEP -1872
BIRTHPLACE: FREEPORT,IL
DIED: 28-AUG-1933
GENDER: MALE
RELIGION: METHODIST
RACE: WHITE
OCCUPATION: BUSINESS, ENGINEER
NATIONALITY: UNITED STATES

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EARLY LIFE TILL HIS SUCCESS


Warren A. Bechtel was born on a stock farm in Freeport, Illinois, September 12, 1872, and is
a son of the late John M. and Elizabeth (Bentz) Bechtel, both of whom were natives of the
state of Ohio. John M. Bechtel was a farmer and cattleman in Illinois until 1884, when he
removed with his family to Kansas, in which state Warren A. Bechtel graduated from high
school. The latter then went to work on the farm and afterward engaged in the cattle business
for a short period. He played trombone in a band as a young man, unable to make a living as
a musician. Subsequently he made his way to the Indian Territory, he worked with a mule to
grade railroad track bed, and subsequently he was able to find work on other railroad
projects, eventually becoming a foreman and then a contractor. In 1898 he opened his own
engineering office, specializing in railroad and irrigation work, and in 1925, with his brother
and three sons, he incorporated his office as W. A. Bechtel & Company.
His early work included the Northwestern Pacific Railroad and the Caribou Water Tunnel in
the Sierra Nevada. The company's first federal contract for highway construction was signed
in 1919, and by the mid -1920s Bechtel & Company was the largest construction firm west of
the Mississippi River. When the federal government announced its intention to construct
Hoover Dam -- then the largest civil engineering project in American history -- six
engineering firms formed a consortium called Six Companies, Inc. Bechtel's company was
the consortium's largest shareholder and he was named president, but he did not live to see
the dam's completion.

DEATH
In 1933 he accepted an invitation to consult w ith Russian engineers and tour the
Magnitogorsk and Dnieperstroy Dams in the Soviet Union. Instructed to come alone, he left
his wife at a hotel in Vienna and flew to Moscow, checked in to the National Hotel, and there
he died of an overdose of insulin on 28 August 1933. After a brief power struggle his
son, Stephen D. Bechtel, became president of the firm, which remains the largest engineering
company in the world.

FAMILY INVOLVEMENT
W. A. Bechtel Co. was a family business from the beginning. W. A. was determined to build
a company that would allow him to pass along to his children not just financial security and
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physical assets, but a sense of responsibility and obligation to company employees and
associates, and to the enterprise. He took immense pleasure in the increased interest and
involvement of Bechtel family members. His younger brother, Art, was a mainstay on
numerous railroad jobs; Warren Jr., Steve, and Ken all shared their fathers enthusiasm for
building.
There was never really any question about what the Bechtel boys would do when they grew
up. Dusty equipment yards filled with massive trucks and steam shovels served as their
childhood playgrounds. By the time they were in their late teens, the sons were well
positioned to carry the business into the next generation. Each of them enrolled at the
University of California at Berkeley and did well academically. But all left before graduation
because their father needed them. Their country needed them, too. Warren Jr. and Steve
shipped out to France in 1917 to serve in the U.S. Army, Warren Jr. with the 18th Engineers,
Steve with the 20th Engineers.
When the boys came home in 1918, W. A. was counting on the rapidly expanding influence
of a second generation of Bechtels to ensure continuity of family control. He would not be
disappointed. Warren Jr., Steve, and Ken spent their time overseeing Bechtel projects and
subcontracting small jobs on their own.
In 1923, young Warren took a subcontract with Utah Construction to extend his fathers
earlier Natron work for Southern Pacific. When the horse teams bogged down in the deep
Oregon mud that winter, Warren remembered the new 60-horsepower track laying tractors he
had seen on large commercial farms. These machines could get traction on soft ground where
horses and mules were helpless. Warren bought some of these tractors, hitched trailers behind
them, and moved the heavy equipment and materials. It was perhaps a first in the
construction industry and would become standard practice with contractors throughout the
world.
Around this time, in 1923, Steve took a job as project chief constructing Southern Pacifics
main line extension into Phoenix. He had married Laura Adeline Peart earlier in the year, and
when he went to Phoenix, Laura went with him. It was the first of many moves for the
couple, and it established a firm policy of, quite simply, no Laura, no Steve. If Laura
couldnt travel with him, Steve wouldnt go. Their personal commitment soon became a
Bechtel policy of encouraging and paying for many wives to travel on business with their
husbands.
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Kens interests tended toward administration and financial management, although one early
job would reveal a deeper passion. His supervision of bridge construction for the Generals
Highway in Sequoia National Park was the start of a lifelong commitment to natural history
and the environment, reflected in the austere beauty of the masonry bridges fashioned from
the regions native stone. The job lost money, largely as a result of environmental guidelines
that Ken carried out to the letter. The U.S. Bureau of Public Roads required that trees be
protected in blasting areas, and Ken took considerable ribbing for the metal pants he put on
every tree trunk.
W. A. formally acknowledged the contribution of his family in 1925 by incorporating the
company, with his sons as officers, along with brother Art. At its birth, W. A. Bechtel Co.
was one of the largest and most respected construction firms in the West.
With his sons and partners overseeing much of the current business, W. A. could finally
afford to devote more of his time to developing new markets. He had long had his eye on the
power industry and was eager to find a showcase job that would demonstrate Bechtels
abilities. He found it in 1921, in the mud and waste disposal challenge of the Caribou Water
Tunnel in Plumas County, California, located high up in the Sierra Nevada range near Reno,
Nevada. Bechtel built a two-mile-long, 12-foot-diameter tunnel for Great Western Power,
which later became part of Pacific Gas and Electric (PG&E)the companys first job for a
large power utility. Here, Steve showed his prowess, too. Working on the tunnel during a
summer break from Berkeley, he devised a way to remove the waste from the excavation
more efficiently and cut the projects cost significantly. He returned to school with a
handsome bonus. The job provided the company not only an entre into the power industry,
but an introduction to PG&E, which would, over the ye ars, become one of Bechtels leading
customers.

A HISTORY OF FAMILY LEADERSHIP


Family leadership has been a hallmark of Bechtel for all of its 110 years. From founder
Warren A. Bechtel to current CEO Riley Bechtel, four generations have steered the company
and led its growth from a small road-grading business in the American West to its current
standing as a global leader in engineering and construction.

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EFFECTIVE MANAGEMENT
Managing a global corporation effectively takes considerable skill and expertise to ensure
success. Several factors affecting global businesses, in particular those affecting Bechtel
Corporation and show how the organization has continued to be profitable while managing
these controllable and uncontrollable forces are given below. Bechtel Corporation, founded in
1898 by Warren Bechtel, is a global engineering-construction organization, that provides
premier technical, management, and directly related services to develop, manage, engineer,
build, and operate installations for customers worldwide. It is the intent of the company to
bring expertise to the specific markets being serviced while applying core competencies and
skills to all the work accomplished. To do this effectively, Bechtel has many internal and
external forces that it must contend with and overcome. External factors affecting Bechtel are
numerous and constant. If companies like Bechtel are not armed with the tools to combat
these forces to help mitigate the impact, the company can suffer greatly. Here are some
examples of these forces and what Bechtel has done. Last year, Bechtel worked some 900
jobs in nearly 60 countries and reported revenues of $11.6 billion. This represents a decrease
from $13.4 billion from the previous year. The company attributes this decrease to an overall
lethargic global economy last year, which led to some customers canceling, suspending or
slowing down their projects. To compensate for this factor, Bechtel opted to focus on
integrating the finance, development and ownership segments of the company with core
processes of construction and engineering as means of protecting the business financially.
Considering the extensive amount of construction work, the environment and its protection
are a key factor in how Bechtel does business. Environmental laws and regulations can apply
to virtually every aspect of Bechtel's business. Construction activities often require
compliance with many environmental laws and regulations. These laws should be
aggressively enforced in every region in which Bechtel operates, ensuring no work is planned
that contradicts these laws. Bechtel's legal department consistently strives to ensure each
requirement is fully met and every employee performing work involving these regulations is
responsible for adherence.
One of Bechtel's chief competitors in the construction and engineering industry includes
Fluor Corporation, based in Aliso Viejo, California. This company operates at nearly the
same level as Bechtel, maintaining nearly 55,000 employees and generating some $9 billion

177

in revenues as of 2001 Also in close competition is AMEC, also a construction and


engineering services company based in the UK and also employing more than 50,000
globally.
Each of these competitors represents a threat to Bechtel at any time, making this a prevalent
thought in the minds of Bechtel senior management. Each time a contract is won, Bechtel has
ensured that it can offer the best service, technology at the best value as compared to its
competitors. With the wining of the award of the USAID contract for the rebuilding of Iraqi
infrastructures after the recent war, Bechtel was among the select few given the opportunity
to bid based on its reputation of performing above standard and ahead of its competitors.
The last external factor is the technological factors that Bechtel faces every day. To complete
the enormous projects that Bechtel takes on such as the Chunnel" as it's fondly called in
Europe, the Channel Tunnel Rail Link connecting Paris to London, it is important that the
company monitor technological advances as well as be mindful of when technology may be
lacking and a potential hindrance to completing work. In many cases, Bechtel's work
becomes the source of technology itself by creating new ways to generate power, or even
communicate. For example, Bechtel has contracted with Cingular Wireless and with AT&T
Wireless on two projects meant to improve cellular communication in more than 70 markets
in the US. Even while building to improve technology, Bechtel must be aware of how
technology can improve their work, hinder performance or be the source for more business.

HISTORICAL HIGHLIGHTS
1898
Warren A. Bechtel takes a job working on the railroad in Oklahoma Territory.

1906
W. A. Bechtel lands his first construction subcontract: making a cut for Weste rn Pacific
Railroad in California. During this project, W. A. rents, and then purchases, his first steam
shovel, a Model 20 Marion.

1919
Klamath Highway in northern California becomes Bechtels first major construction project
other than railroads. The Kla math job is also a California landmark: It is the first contract in
the state issued by the U.S. Bureau of Public Roads.

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1921
The Caribou Water Tunnel in northern California is W. A. Bechtel Co.s first job for a large
power utility. The tunnel is part of the Caribou Power Plant, which will generate 75
megawatts of electricity. A key player on the project is W. A.s college -age son, Steve.

1925
W. A. Bechtel Co. is officially incorporated, with W. A., Steve, Warren Jr., Ken, and Art
Bechtel listed as principals. W. A.s growing operation specializes in railroad projects,
including grading railroad beds, enlarging tunnels, and constructing train sheds and snow
sheds.

1926
Bechtels first foray into the dam-building business, Bowman Dam, is completed. The
cons truction site is so remote that the company is forced to construct a camp, complete with a
hospital, a hundred head of cattle, a slaughterhouse, and storage facilities, to sustain the crew
for the winter.

1929
Bechtels first pipeline, the eight-mile -long Tres PiosMilpitas in California, begins
operation. This entry into the pipeline business is championed by Steve Bechtel; over the next
six years the company lays more than 1,000 miles of pipe.

1931
A group including Bechtel begins constructing Hoover Dam. Completed in 1936, two years
ahead of schedule, the project includes four of the largest rock tunnels ever built, the dam
itself, and two giant spillways, each large enough to hold a battleship.

1933
Steve Bechtel becomes vice president of Bridge Builders, Inc., a joint venture of construction
companies that takes on the job of sinking foundations for the eastern cantilever span of the
San FranciscoOakland Bay Bridge.

1936
Industrial Engineering Co., a Bechtel subsidiary, is established to manufacture and apply a
Somastic pipe coating, which reduces corrosion and greatly increases a pipelines lifespan.

1937
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Bechtel-McCone -Parsons Corp. is formed, specializing in petroleum refinery engineering and


construction. Steve Bechtel, who anticipates rapid growth in the oil business, heads the new
corporation.

1937
Bechtel-McCone -Parsons wins a contract to engineer and build a hydrogenation plant in
Richmond, California. The plant is BMPS first refinery, as well as one of the first petroleum
refineries in the West.

1940
The 75-mile Mene Grande pipeline in Venezuela is Bechtels first project overseas. The
pipeline transports oil from the interior to tankers on the coast.
Today, the Bechtel Corporation is still owned and operated by the Bechtel family. Its current
CEO

is Riley

P.

Bechtel,

one

of

the

richest

men

in

the United

States.

WARREN BECHTEL: STEERING THE COMPANY WITH VISION


Bechtel is the world's No. 1 choice for engineering, construction, and project management.
Their diverse portfolio encompasses energy, transportation, communications, mining, oil and
gas, and government services. No matter how challenging a project or how remote its
location, chances are Bechtel can handle it. That's because the company brings an unmatched
combination of knowledge, skill, experience, and customer commitment to every job.
Bechtel has had record revenues for the past five years, and Engineer ing News-Record (ENR)
has named Bechtel the top U.S. construction contractor for 12 straight years which havent
changed since the company was founded. While the company works for governments and
commercial customers, their projects have helped grow local economies and improve the
quality of life for communities and people around the world. Time and again their work has
demonstrated that the only limits on human achievement are those that we place on
ourselves.
In 2009, we had revenues of $30.8 billion and booked new work valued at $20.3 billion and
over 57000 employees

SPECIFICS OF WORK

Airports and seaports

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Communications networks

Defense and aerospace facilities

Environmental cleanup projects

Fossil and nuclear power plants

Mines and smelters

Oil and gas field development

Pipelines

Roads and rail systems

Refineries and petrochemical facilities

ANALYSIS
Warren A. Bechtel, of San Francisco, the president of the widely known contracting firm of
W. A. Bechtel Co., and president of the Six Companies, Inc., which latter organization,
composed of contracting firms, was formed for the purpose of constructing the mammoth
Hoover Dam in Boulder canyon.
Warren A. Bechtel was born on a stock farm in Freeport, Illinois, September 12, 1872, and is
a son of the late John M. and Elizabeth (Bentz) Bechtel, both of whom were natives of the
state of Ohio. John M. Bechtel was a farmer and cattleman in Illinois until 1884, when he
removed with his family to Kansas, in which state Warren A. Bechtel graduated from high
school. The latter then went to work on the farm and afterward engaged in the cattle business
for a short period. Subsequently he made his way to the Indian Territory, where he was
employed in a railroad camp as a laborer and later filled various positions, principally in
Wyoming, Oregon and Nevada. In 1900 he became foreman on the reconstruction of the
Union Pacific Railroad in Wyoming. From 1902 until 1903 he was associated with the
engineering department of the Central Pacific division of the Southern Pacific Railroad. In
1904 he was superintendent on the construction of the Richmond Belt Line Railway, and the
grading of the Santa Fe line from Richmond to Oakland.
In 1906, Mr. Bechtel became a subcontractor on the construction of the Western Pacific
Railroad; after this, on the Natron cut-off of the Southern Pacific in Oregon; the Oakdale
irrigation district canal in California; and the Northwestern Pacific Railway through Eel river
canyon in California. He has been in business as a general contractor for himself since 1914.

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The W. A. Bechtel Co. was incorporated in May, 1925, the members of the firm being
Warren A. Bechtel and his three sons - Warren A., Jr., Stephen D. and Kenneth K.--and A. V.
Bechtel, brother of Warren A. Bechtel, who is a director of the company. Some of the
principal contracts which the company has undertaken may be noted as follows:
the Natron cut-off in 1926-27, in conjunction with the Utah Construction Company; the precast unit -built concrete train-sheds and roundhouses (the patents of which Mr. Bechtel owns)
for the Western Pacific, the Southern Pacific, the Union Pacific, and the Santa Fe Railroads;
the Bowman rock-fill dam and tunnel for the Nevada Irrigation District (California), doubletracking of the Santa Fe through New Mexico and Arizona; and reconstruction of forty miles
of the Sacramento Northern Railroad (California). As Bechtel & Palmer, they constructed in
1930 the natural gas pipe-line from Tracy to Crockett for the Standard Oil Company, and
from Milpitas to Tres Pinos for the Pacific Gas & Electric Company. In conjunction with the
Kaiser Paving Company, as the Bechtel-Kaiser Company, Ltd., they laid natural gas pipelines in Texas, Arizona, New Mexico, Kansas, Oklahoma and Montana, totaling about one
thousand miles. Also, in conjunction with the Kaiser Paving Company, as the Bechtel-Kaiser
Rock Company, they constructed in 1927 and have since operated the Oroville rock plant for
concrete aggregates and railroad ballast. With the Utah Construction Company, they have the
contract for the construction of the northern California extension of the Western Pacific
Railroad line from Keddie north to Bieber , a distance of one hundred and twelve miles.
Another recent large contract is that of the Bonita rock-fill dam in New Mexico for the
Southern Pacific.
The W. A. Bechtel Co. has achieved national recognition by being one of the group of
contracting firms organized to form the Six Companies, Inc., for the purpose of building the
Hoover Dam in Boulder canyon, and the appurtenant works. Six Companies, Inc., was
incorporated under the laws of Delaware in February, 1931, by the following contractors: W.
A. Bechtel Co. of San Francisco; Henry J. Kaiser of Oakland, California; the Utah
Construction Company of San Francisco and Ogden, Utah; MacDonald & Kahn Company of
San Francisco; Morrison-Knudsen Company of Boise, Idaho; J. F. SheaCompany of Portland,
Oregon. W. A. Bechtel is president of Six Companies, Inc. After the award of the contract for
forty-eight million, eight hundred and ninety thousand, nine hundred and ninety-six dollars,
Six Companies, Inc., organized the Boulder City Company to take care of the housing,
feeding and commissary.

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Warren A. Bechtel has consistently been interested in promoting the standards of the
contracting business. He was one of the first members of the Associated General Contractors,
and was national president in the year 1929, while in 1920 he had been influential in forming
the California chapter.
Warren A. Bechtel was married to Miss Alice West, of Indiana, and to their union four
children have been born, namely: Warren A., Jr., Stephen D., Kenneth K. and Alice. Mr.
Bechtel is a thirty-second degree Mason through both the Scottish and the York Rites, and he
is a member of the Islam Temple of the Mystic Shrine and of the Benevolent and Protective
Order of Elks. He belongs to the Masonic Club, the Commonwealth Club and the San
Francisco Chamber of Commerce.

CONCLUSION
Warren A. Bechtel was a man with a vision accompanied with a strong motivation which
drove him rig orously towards the achievement of his goals. He understood the requirements
of the age; equipped with his knowledge and strong family support he was able to steer a
company which started by providing logistics through mules to a globally recognized
trademark in construction business. In fact he didnt just keep his passion to himself but also
infused it in his children which, later, as we see, have taken over the company and made it a
huge success. Bechtel does not only work in the construction but now provides an array of
industrial services from machine manufacture to engineering designs. Their diverse portfolio
encompasses energy, transportation, communications, mining, oil and gas, and government
services and they currently have projects in dozens of locations worldwide, from Alaska to
Australia. That's because they bring an unmatched combination of knowledge, skill,
experience, and customer commitment to every job. Warren Bechtels brilliant ideas in
logistics are still implied today whenever it comes to route modeling and completion. His
strong consideration towards ethics, safety and quality provided the basic draft for several
other companies and later the constitutional rights of labor. Bechtel's culture is now grounded
in integrity and respect. Which means: adhering to the highest standards of ethics. Bechtels
quality policy meant doing the job right the first time. He left behind a portfolio of aweinspiring work. He can also be considered as a natural leader, a reliable father figure who was
known even in construction camps as a good provider. Warren Bechtel will always be
remembered as a leader in the construction and logistics paradigm who drove the little
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garage-shed company to the 3rd biggest construction company of the world. He worked on
several projects throughout his tenure but the most enduring monument Bechtel built was not
a dam or a railroad; it was the ideals embodied in the family firm that would bear his name
into the next century.

REFERENCES
http://www.articleclick.com/Article/Effective-Management-of-GlobalOrganizations/1064877
http://en.wikipedia.org/wiki/Warren_A._Bechtel
http://www.nndb.com/people/167/000207543/
http://freepages.genealogy.rootsweb.ancestry.com/~npmelton/sfbbech.htm
http://www.bechtel.com/BAC-Chapter-1.html

PIERRE OMIDYAR

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BORN: JUNE 21, 1967


AGE: 43
OCCUPATION: FOUNDER AND CHAIRMAN, EBAY INC.
NET WORTH:

$5.5 BILLION (2010)

185

THE FOUNDER OF EBAY


Pierre Omidyar is a great thinker of our time. He started a small auction site, Auction Web,
and turned it into the billion dollar enterprise that we now know as eBay.

EARLY LIFE
Pierre Omidyar is the founder of eBay. He was born in Paris in 1967, the only child in a
French-Iranian family. At the age of six, the family immigrated to the United States and he
grew up in and around Washington, D.C. Pierre became fascinated with computers while still
in high school as he used to sneak out of the gym for teaching himself on his science
teachers cheap computer. He later graduated to an Apple II and got paid to computerize the
schools library catalogue. In the mid-1980s, Pierre Omidyar went to Tufts University near
Boston. His main subject was computer science and Apple programming became his
obsession. Pierre did all his work on a Macintosh from his dorm room, rather than use the
PCs in the computer laboratory. He created his first Mac programmers utility tool for other
programmers. He got a summer job as an intern in Silicon Valley with Innovative Data
Design, a company which wrote image programmes for Macs. This led to a full-time job and
Pierre Omidyar took the following semester off to continue working. After completing a
further semester at Tufts University, he moved to the University of California-Berkeley,
where he finished his degree in Computer Science.
After graduation he worked for Claris, a subsidiary of Apple Computer, developing software
for the Macintosh. In 1991, he co-founded Ink Development Corp. with three friends. The
company included an Internet shopping segment and was later renamed eShop Inc. Omidyar
worked as a software engineer for eShop until the end of 1994, when he became a developer
services engineer for General Magic, a mobile communication platform company. In 1996,
eShop was sold to Microsoft, but Omidyar remained fascinated by the technical challenges of
online commerce.

PERSONAL LIFE
While living and working in the San Francisco Bay Area, he met Pamela Wesley, a graduate
student in biology who later embarked on a career as a management consultant. Pierre
Omidyar married Pamela in a private ceremony at the Bellagio Hotel in Las Vegas in
February 1999. He presented his new bride with an extremely rare Pez bride and groom set
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that he found on eBay, which was his favorite purchase from the auction site he founded. The
couple lives in Las Vegas, Nevada. Omidyar enjoys racquetball, backgammon, and reading,
and was awarded the Ernst & Young's Entrepreneur of the Year award in 1999.
Pierre and Pamela established The Omidyar Foundation, designed for a new style of
philanthropy dubbed venture philanthropy. The foundation benefited a small number of
causes that followed solid business plans and met certain criteria, including earning enough to
sustain the nonprofit side of their work. The couple planned to eventually donate most of
their $3.75 billion fortune to the foundation.
In a much repeated story, Omidyar originally created an online auction site to help his wife
trade and collect Pez candy dispensers. He created a simple prototype on his personal web
page, and launched an online service called Auction Web as a sole proprietorship on Labor
Day weekend in 1995. The first item sold on the site was not a Pez dispenser, but a broken
laser pointer. Omidyar was astonished that anyone would pay for the device in its broken
state, but the buyer assured him he was deliberately collecting broken laser pointers. Similar
surprises followed. The business exploded as correspondents began to register trade goods of
an unima ginable variety.
Omidyar incorporated the enterprise; the small fee he collected on each sale financed the
expansion of the site. The revenue soon outstripped his salary at General Magic, and Omidyar
decided to dedicate his full attention to his new enterprise. Business expanded through word
of mouth, and Auction Web added a Feedback Forum, allowing buyers and sellers to rate
each other for honesty and reliability. From collectibles, the site quickly expanded into a vast
range of saleable items, including furniture, electronics, home appliances, cars and other
vehicles. In 1996, Omidyar signed a licensing deal to offer airline tickets online. In 1996,
Auction Web hosted 250,000 auctions. In the first month of 1997, it hosted 2 million. By the
middle of that year, eBay was hosting nearly 800,000 auctions a day.

STARTING THE BUSINESS


Omidyar went to work with General Magic, a software company, in 1994 and made extra
money designing Web pages on the side. The girl he was dating at the time, Pamela Wesley,
who would later become his wife, collected Pez dispensers and often complained how
difficult it was to meet others passionate about her hobby on the internet. Thoughtfully,

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Omidyar appended a small online auction to his personal website so Pamela would make
contacts with other collectors as well as buy and sell.
eBay (electronic Bay, as in the San Francisco Bay area), as it was when it first appeared in
1995, operated merely as a forum for people to sell and bid on various items. Omidyar did
not back goods, mediate conflicts, or get involved if there were accusations of dishonesty or
abuse of the system. Almost immediately, collectors of Barbie dolls, Beanie babies and the
like flocked to eBay.
Three months after its launch, Omidyar had to ask his friend Jeff Skoll, also a programmer,
for help. In order to cover the new costs involved with the growth of the business, Omidyar
began charging small change to list an item on the site and took a small commission if the
item was bought.

FOUNDATION OF EBAY
Pierre Omidyar changed the company's name to eBay short for "electronic Bay" in honor of
his San Francisco Bay area home and began to advertise the service aggressively. The basic,
blackandwhite website was free to use. Omidyar, who viewed the early venture as simply a
hobby, didn't even draw a salary at the time. Publicized largely through word of mouth, the
business quickly caught on and in 1996 his Internet service provider, Best Internet, informed
him that he needed to upgrade his $30amonth system due to heavy traffic. Omidyar quit his
day job that year to devote himself to eBay's burgeoning business fulltime. The site was
easy to use, sellers and buyers came together to trade a wide variety of items from antiques to
collectibles. Omidyar settled on the auction format as a way of creating an efficient market.
In time, eBay's users suggested charging small fees for placing an item for sale to keep
people from posting items with little value. Omidyar concurred and in February 1996 eBay
began charging sellers a placement fee, starting at 25 cents, as well as a percentage of the
item's closing price. The fee system also served to make the company profitable.
eBay was incorporated in May 1996. At the time its staff consisted of only Omidyar and
Chris Agarpao, a parttime employee. Later that year Omidyar, who was still running the
business out of his home, recruited Jeff Skoll to serve as vice president of strategic planning
and analysis. It was Skoll who formulated the company's first business plan. Omidyar,
meanwhile, focused on educating himself about the evolution of the website he createdwho
was buying what and what people wanted.
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In 1996 the company moved its operations to Skoll's home and then to a temporary office in
Sunnyvale before settling in San Jose, California. One year later, the volume of email that
the three employees were getting became unmanageable, so Omidyar hired approximately
one dozen customer support personnel. In mid 1997 eBay held nearly 800,000 auctions a
day. By late 1997 more than 3 million items had been sold, valuing $94 million, and
generating $5.7 million in revenue for eBay.
Skoll and Omidyar realized that the company needed more direction than they could provide
so they turned to the venture capital firm Benchmark Capital. After receiving a $5 million
investment from Benchmark, they immediately began searching for a CEO that could provide
eBay the leadership that it required. They set their sights on Meg Whitman, general manager
of the preschool division at Hasbro Inc. Whitman was skeptical about leaving the toy giant
to join the small upstart, but after meeting with Omidyar and realizing eBay's potential, she
accepted the position in 1998.
eBay went public in September 1998 with an initial offering price of $18 per share that
climbed to $47.38 by the end of the first day of trading. With all its success, though, eBay
was not without its problems. The everexpanding list of registered users and items for
auction left eBay scrambling to update its technology and outages were frequent. Omidyar
handed the company's daytoday responsibilities to Whitman in order to pursue outside
interests, particularly philanthropy.
eBay constantly endeavored to improve its site. Its roster of merchandise categories and sub
categories expanded frequently. For example, the addition of eBay Motors, an automobile
category, was a major success for the company. It added new features, like the popular "Buy
it Now" option that enabled bidders to buy an item for a set price without waiting for the
auction to end. It also added chat rooms and bulletin boards to help users connect with each
other and talk about their hobbies, interests, or what they were looking to buy next.
He has served as Chairman of the Board since its incorporation. At first, he also served as
Chief Financial Officer, President and CEO, but he relinquished these positions one by one,
the last when he hired former Hasbro executive Meg Whitman to serve as CEO in 1998. At
the time, eBay had barely 30 employees, half a million users and U.S. revenues of $47
million.
The rapid expansion of eBay's traffic did not come without growing pains. In 1999 the

189

company suffered a number of service interruptions, one lasting 22 hours, but Omidyar
moved quickly to regain the confidence of the site's customer base. The company made
10,000 phone calls to the site's top users to apologize for the interruption and assure them that
everything possible would be done to keep the site up and running in the future. As other
online ventures fell victim to the dot.com bust of 2000, eBay continued to grow and prosper.
In 2002, eBay acquired the online payment processing firm PayPal, which it uses to process
most of its online transactions, compelling many online sellers to employ the service. At the
same time, eBay diversified its services, allowing sellers to engage in fixed-price and "best
offer" sales as well as conventional auctions. Software developers can create applications to
integrate into the site through the eBay Developers Program. In 2005, eBay opened a
category for buying and selling surplus industrial machinery and business equipment. Many
large companies now use eBay to set prices for their products and services.

PRESENTLY
Pierre Omidyar serves on the Board of Trustees of Tufts University, The Santa Fe Institute
and The Omidyar Foundation. In November 2005, Pierre and Pamela Omidyar announced
their gift of $100 million to endow the Omidyar-Tufts Microfinance Fund. At the time, it was
the largest gift in the history of Tufts University, as well as the largest private allocation of
capital to microfinance by any individual or family. The fund, administered by the Board of
Trustees of Tufts University, invests in international microfinance initiatives designed to
empower people in developing countries to lift themselves out of poverty. Ten years after
going public, eBay had expanded around the world, employing more than 15,000 persons to
serve a customer base numbering in the hundreds of millions, operating in 30 countries, with
especially large presences in China and India. In 2009, eBay reported revenues of $8.727
billion, and Forbes magazine estimated Omidyar's net worth at $3.6 billion.
Among other Omidyar family philanthropies, the Omidyar Network supports the creators of
the emergency communication technology Ushahidi (Swahili for "testimony"), an application
which allows users to create maps from data submitted by cell phone users. Originally
created in the violent aftermath of the 2007 election in Kenya, it has since been used to track
damage from the oil spill in the Gulf of Mexico and to locate trapped survivors of the 2010
earthquake in Haiti. Crowdmap, a free user-friendly web-based version of the application is
now available online, thanks to the support of the Omidyar Network. In 2010, Pierre Omidyar

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joined Microsoft founder Bill Gates and investor Warren Buffett on the list of 40 billionaires
pledging to donate at least half their wealth to charity. In fact, Pierre and Pamela Omidyar
have resolved to give away all but one percent of their fortune over the next 20 years.

SOCIAL AND ECONOMIC IMPACT


What began as a hobby for Pierre Omidyar, who was looking for an interesting way to please
his girlfriend and to dabble in cyberspace, spawned one of the Internet's most successful
companies, surviving in an environment where many failed in the dotcom downturn. eBay
was the first persontoperson trading site and enabled millions of users to create a unique
marketplace for themselves. The website evolved with the various needs of its community,
adding more categories as new interests emerged and old ones became crowded, and
empowering people in the process. The most popular shopping site on the web, eBay's
growth prospects remained strong. Business 2.0 quoted the softspoken, modest Omidyar as
he addressed a group of Pez collectors: "What eBay is today is what you've built. What eBay
will be tomorrow is what you'll create."

LEADERSHIP STYLE
Pierres personality and leadership style reflect as an inspirational leader. As he has the
ability to inspire people to reach great heights of performance and success is a skill that
leaders need. He respects everyone as a unique individual, provides his employees with an
open and safe environment which motivates them. He has a vast ability to communicate that
passion, purpose and meaning to others helps establish an inspirational culture of in his
organization. He is also known as innovative as he was the first maker of such an online
auction which today is known as eBay.

AWARDS
Pierre Omidyar received the Golden Plate of the Academy of Achievement from Academy
member Quincy Jones at the 2000 International Achievement Summit.

CONCLUSION
Pierre Omidyar started life out in Paris, France. He later moved with his family during his
teenage years to the United States. Once he obtained his degree in Computer Science, he

191

began working for an Apple Inc. subsidiary. Omidyar was 28 when he developed the basis
for what is now known as eBay. The site went live in September of 1995 and gradually the
popularity grew. Omidyar began to enhance the site and started to bring in others to help out
in order to account for the growing demand in his soon to be company. eBay has since
become a mega success with Omidyar s net worth amounting to about $2.6 billion as of
today! What started out as a simple buy/trade auction site has morphed into one of the top
sites on the internet to date. No bad for someone who didnt set out with any of this in mind!

LESSONS LEARNED
The lessons that I learned from Pierre Omidyar and the things that I found best about him are
as following:

You never know whats going to happen until you try (Pierre Omidyar had no idea his
auction site would turn into mega success eBay)

Start small and evolve over time with your audience (Omidyar concept was simple to start
and grew to meet user needs over time)

Everyday problems are great to consider when developing a product on the internet. It
makes the reach for potential users much higher.

Dont be afraid to reach out for help to fill the gaps between your skills and your vision.

Listen to your users and keep them at the front of your work.

REFERENCES
Marketing nirvana, 2008. Marketing nirvana [online]Available at:
http://mariosundar.com/2008/03/23/technologists-for-obama-pierre-omidyar/

[accessed

MARCH 23, 2008 12:23 AM ]


Wikipedia,2011. Wikipedia the free encyclopedia [Online] Available at: Wikipedia,2011.
http://en.wikipedia.org/wiki/Pierre_Omidyar
Achievement,2010. Academy of achievement [Online] Available at:
http://www.achievement.org/autodoc/page/omi0bio -1 [accessed Aug 17, 2010 12:39]
Aron

Hsiao,

2009.

[Online]

http://ebay.about.com/od/ebaylifestyle/a/el_history.htm

192

Available

at:

193

DAVE THOMAS

NAME: DAVE THOMAS


BORN: JULY 2, 1932
DIED: JANUARY 8, 2002.
OCCUPATION: BUSINESSMAN, PHILANTHROPIST
CHILDREN: FIVE
GRAND CHILDREN: SIXTEEN

194

INTRODUCTION
Dave Thomas was born in Atlantic City, New Jersey on July 2, 1932. Rex and Auleva
Thomas adopted him at six weeks old. When Dave was five, Auleva died and his early years
were spent moving from state to state while his adoptive father sought work. Daves fondest
memories of his childhood included summers spent with his Grandma Minnie Sinclair in
Michigan. She taught him about doing the right things, treating people well and important
lessons about quality and servic e all things he later used in his business life.
Dave got his first job at age 12 as a counterman at a Knoxville restaurant, and fell in love
with the restaurant business. When he was 15, he found work at the Hobby House Restaurant
in Ft. Wayne. It was then that he made what he considered his greatest mistake: he dropped
out of school to work full-time. His father and stepfamily were preparing to move again and
Dave decided to stay in Ft. Wayne, move into the YMCA and work full-time. This decision
to drop out haunted him until he went back to school 45 years later and received his GED
from Coconut Creek High School in Ft. Lauderdale. He said this was one of his greatest
accomplishments, as was being named Most Likely to Succeed by the graduating class of
1993.
Through his work at the Hobby House, Dave met Colonel Sanders, founder of Kentucky
Fried Chicken (now KFC) and the man who became one of the greatest influences in his life.
In 1962, Dave had a chance to turn around four failing KFC restaurants in Columbus, Ohio
owned by his Hobby House boss, Phil Clauss. Four years later, by using his experience and
determination, he turned the stores around, sold the restaurants back to KFC and received a
percentage of the sale a millionaire at age 35.
Dave often said he was lucky to have been born in America. Only in America, he said,
would a guy like me, from humble beginnings and without a high school diploma become
successful. America gave me a chance to live the life I want and work to make my dreams
come true. We should never take our freedoms for granted, and we should seize every
opportunity presented to us.
His rags -to-riches success story earned him the Horatio Alger Award. It was presented to
him in 1979 by Dr. Norman Vincent Peale, a man he greatly admired.Innovative Twist on an
Old-Fashioned Idea When he was a child, Dave dreamed of opening a hamburger restaurant.
On November 15, 1969 Dave made his dream come true when he opened the first Wendys
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Old Fashioned Hamburgers restaurant in Columbus, Ohio. Named for one of his daughters,
Wendys was everything Dave dreamed of: an old fashioned, homey place where families
could be together and enjoy great tasting, made -to-order hamburgers.
Daves restaurant experience and vision enabled him to devise a method to prepare fresh,
made-to-order hamburgers at a time when other quick-service restaurant chains were mass
producing their food. We dont make a sandwich until its sold, so every Wendys sandwich
is served hot-off-the-grill with the customers choice of toppings. They arent pre-made and
put under a heat lamp, Dave said. His innovative system allows Wendys to prepare
individually made sandwiches while serving millions of customers each day. Dave
revolutionized the industry in other ways as well. Wendys became known for fresh (not
frozen) ground beef hamburgers that are square rather than round. Dave explained, At
Wendys, we dont cut corners! All hamburger patties that were cooked but not sold became
chili meat. At a time when American fast food restaurants featured plain plastic chairs and
linoleum floors, Dave created an old-fashioned atmosphere by carpeting the dining rooms
and furnishing them with Bentwood chairs, Tiffany-style lamps and newsprint table tops.
Dave also created the modern-day Pick-Up Window, revolutionizing the quick service
restaurant industry.
Under Daves leadership, Wendys been the first in the quick service restaurant industry to
introduce the salad bar and baked potatoes nationwide. The restaurant industry and the
business community have applauded Daves innovation and success with Wendys. Dave
received every major industry award and was honored as a pioneer in the restaurant business.
Though business experts would point to different elements of Wendys operations as the
reason for its success, to Dave it all came down to one thing: the customers. If we take care
of our customers every day and exceed their expectations, well earn their loyalty, he said.
It all comes back to the basics: serve customers the best tasting food at a good value in a
clean, comfortable restaurant and theyll keep coming back.

AMERICAS FAVORITE HAMBURGER COOK


While his success elevated his status in the business world as a pioneer, he never lost sight of
his roots. Im just a hamburger cook, Dave said on many occasions. He was most at home
when talking with Wendys restaurant managers and operators because he understood them
and what they face every day. And to those managers and operators, Dave wasnt just the

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founder of the company; he was a role model and an example of how hard work, dedication
and commitment can lead to success.
He shared his experiences and knowledge he gained in his autobiography, Daves Way,
published in 1991. His success enabled him to travel around the world. Dave was probably
best known as the guy on Wendys TV commercials. In early 1989, Dave agreed to appear
in a few Wendys commercials. During his nearly 13-year run (and 800+ commercials) as
Wendys spokesman, Americans came to love him for his down to-earth, homey style.
This campaign made Dave one of the nations most recognizable spokesmen. The Guinness
World Records recognized the Dave Thomas Campaign as the Longest Running
Television
Advertising Campaign Starring a Company Founder.Throughout the campaign, Dave
appeared with many famous celebrities, including NHL star Mike Richter, Olympic Gold
Medalist Kristi Yamaguchi, and soap opera star Susan Lucci. Because of his honesty and oldfashioned values, Dave emerged from Wendys advertising campaign as an American folk
hero.

ADOPTING THE CAUSE


Dave believed that everyone has a responsibility to give something back to the community.
The cause closest to his heart was adoption. Adopted as an infant, Dave felt a strong personal
tie to those children who were waiting to be adopted. He said he was lucky to have been
adopted and wanted every waiting child to have a permanent home and loving family.
In 1990, President Bush asked Dave to head the White House Initiative on Adoption. With
his background as an adoptee and his stature in the business community, he accepted the
challenge of raising awareness for the cause. Dave found that there were several obstacles to
adoption: the red tape and paperwork was usually overwhelming, and the pr ocess too
expensive for prospective parents. There were families in America who wanted to adopt, but
the obstacles were often too great. With this focus, Dave set his course. He devoted time and
energy to special adoption programs
In 1992, he established the Dave Thomas Foundation for Adoption, a not -for-profit
organization that provides grants to national and regional adoption organizations for

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programs that raise awareness and make adoption easier and more affordable. He realized
many successes in his work for the cause.

GIVING BACK
While much of Daves time was focused on the cause of adoption, he actively supported
many other community organizations that improved the lives of children. He was a long-time
supporter of the Childrens Hospital in Columbus and was instrumental in creating the
Gordon Teter Chair for Pediatric Cancer Research in honor of Wendys late chairman.
Additionally, he created the Dave Thomas Family Primary Care Center at the hospital with a
$1 million donation. An earlier contribution created the Dave and Lorraine Thomas Clinical
Laboratory. Dave contributed $2 million in cash and stock to the Arthur G. James Cancer
Hospital at The Ohio State University. This contribution established the R. David Thomas
Outpatient Chemotherapy Center at the hospital. He and his wife Lorraine supported the
Childrens Home Society of Florida, providing seed money to build a temporary home for
children in Ft. Lauderdale. Called the I. Lorraine Thomas Childrens Emergency Home and
Family Support Center, the home has room for 28 children who are in protective custody.
Dave supported many other organizations including St. Jude Childrens Cancer Research
Center in Memphis, and Charity Newsies and Recreation Unlimited, two Columbus -based
organizations.
A strong believer in education, Dave established the Thomas Center at Duke University. The
Center houses the Fuqua School of Business Executive Education programs. He also
supported the Enterprise Ambassador Program at Nova University in South Florida.. Dave
was also a founder of The Wellington School, a private school in Columbus, Ohio.Daves
commitment to Wendys and to children is what motivated him to continue working when
others might have retired. He accomplished a great deal in his life, but considered his family
his wife Lorraine, their five children and 16 grandchildren his greatest accomplishment.

DAVES FIVE VALUES


Daves real genius was his simplicity. When he talked, people listened not just out of
respect, but because they knew they would learn something. His straightforward messages
about quality, integrity, respect, pride and responsibility were important lessons for
business and for life.
Here are the values by which Dave lived his life.
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I. Quality is Our Recipe


Dave loved people and he loved restaurants. And he was passionate about quality. When he
talked about quality, it wasnt just the food served at Wendys. Quality meant everything to
Dave. His passion was so strong that he made Quality Is Our Recipe a permanent part of
Wendys logo.

II. Do the Right Thing


Dave lived his life with honesty and integrity. He was a man of his word, and he believed that
if you say youre going to do something, do it. He considered personal integrity to be the
most important value one can have. He taught that it wasnt really that hard to make a tough
decision. Examine the situation, especially a difficult one, and simply choose to do the right
thing. Doing the right thing is the best choice because you earn your reputation by the things
you do every day. He knew that the reason many people make the wrong decision is because
they try to take a short cut that might save time and money. Dave, though, would say youd
probably lose in the long run.
Dave practiced what he preached and was honest about the mistakes he made in his life. And
one that really bothered him was his decision to drop out of school at age 15 to work fulltime.

III. Treat People with Respect


Dave lived by the Golden Rule: Treat others the way you want to be treated. He simplified
this by saying, Just Be Nice.
Dave loved quality and he loved people. To Dave, being nice meant talking to people
honestly. It might mean telling them news they may not want to hear. But he knew that if you
treat them with respect and dignity they are more likely to accept what you have to say. Being
nice also means being a good listener. Its a sign of respect, and youll learn more by
listening, he would always say.

IV. Profit is Not a Dirty Word


Theres nothing wrong with making a profit and taking pride in your success. To Dave, profit
in business meant growth and opportunities. It also meant being able to share your success
with your team and your community. When you take care of your business through hard

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work, a focus on quality and taking care of your customers your business will take care of
you. Dave overcame tremendous obstacles in his life, growing up as an orphan who never
knew his birth parents. He believed that teamwork was the key to success. Dave liked to say,
Theres no I in Wendys. The first two letters are WE. He believed everyone has a role to
play and every person is important. He believed leaders should give their people the tools
they need to do their job, motivate them, and then trust them to get the job done. Dave
wanted everyone to have a chance to succeed, and he created opportunities for thousands of
people to be successful.

V. Giving Back
Dave believed everyone has a responsibility to give something back to help those who
cant help themselves. Giving back doesnt simply mean giving money to charities. It also
means giving your time or sharing your special skills. Dave believed the more you give, the
more you get in return. Mentoring sharing your experiences with someone was one of
Daves favorite ways to give back. He credited several mentors in his life for making him
successful. .

DAVES FIVE LESSONS


Lesson #1: Be A Visionary
Thomas didnt just know how to cook a good hamburger; he single -handedly revolutionized
the fast food industry. He didnt want to be just another fast-food joint; he wanted to create
the type of old-fashioned family restaurant that he had dined in so many times with his father
and he wanted to serve quality food.

Lesson #2: Get Back To Basics


It all comes back to the basics, said Thomas. Serve customers the best-tasting food at a
good value in a clean, comfortable restaurant, and they'll keep coming back.

Lesson #3: Give Something Back


We have a responsibility to help others who cant help themselves, said Thomas. The
more you give, the more you get in return.

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Lesson #4: Act with Integrity


Mary Kay Ash, founder of Mary Kay Cosmetics, once told me something Ill never forget,
recalled Thomas. She said the one suggestion she got in life that helped her most was to
pretend that every single person you meet has a sign around his or her neck that says, Make
me feel important.

Lesson #5: Believe In Your Dream


When Thomas was 15 years old, he wrote an essay for school called The Pursuit of
Happiness. In it, he wrote, When I was eight years old, I dreamed that I would one day own
the best restaurant in the world. My restaurant would serve great tasting hamburgers made
just the way you like them, and all of the customers would love the food and come back again
and again.

DEATH
Thomas died at his home in Fort Lauderdale , Florida, after a decade -long battle with liver
cancer. He was 69. He was buried in Union Cemetery in Columbus, Ohio. At the time of his
death, there were more than 6,000 Wendy's restaurants operating in North America.

ANALYSIS
The young man began working when he was just twelve years old, not even a teenager yet.
He worked at many restaurants and gained a lot of experience throughout his life from his
early childhood. Though life was not looking kindly on the young Dave Thomas, he did have
joys in his life. One of Dave's biggest joys was eating at family res taurants. He loved to see
the families interacting with one another and having a good time. This would influence Dave
heavily, as he was young when he made up his mind that he wanted to open his own
restaurant. After years of hard work and perseverance, Dave's life-long dream came true
when he opened his very first Wendy's Old-Fashioned Hamburger Restaurant in Columbus,
Ohio. The name was his youngest daughter's nickname. Her real name was Melinda Lou, but
her older siblings nicknamed her "Wendy".
The three things which he thought are needed to start a business are, first know your product
better than anyone, second is know your customers and third is to have a burning desire to
succeed.
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I have learned from Dave Thomas that u should believe in your dreams. People may tell you
that you wont make it, that youre wasting your time. If you keep your dream in mind, have
done your research and are willing to work hard, you can make it come true. The five values
which I explained earlier are of great importance for an entrepreneur.
He was a very humble and kindhearted person he does not only focused on his business he
also believed in giving back. His management style was friendly and he used to share his
experience and success stories with others so they can also learn from them and become
successful.
Today, Wendy's has grown into more than five thousand restaurants in the United States and
thirty-four countries. And the name "Dave Thomas" can be equated with the terms "success."

CONCLUSION
I like Dave Thomas because he was a patriarch, a great, big lovable man. Wearing a Wendy's
apron, Thomas was one of the nation's most recognized television spokesmen. He has
appeared in almost every advertisement for the No. 3 burger chain in the United States since
1989.I liked his folksy style and his relaxed pitch for his restaurants, Thomas became a
household name. As a young boy, Dave and his adoptive father moved around a lot. It was
lonely life, but eating in restaurants gave him comfort and showed him what family life was
really like. In his adoptive family, Dave was closest to his grandmother and cherished the
time he spent with hr and the lessons she taught him. Overcoming the challenges and
hardships of his childhood and setting goals for his future drove him around success. Each
day, each effort, each experience brought him closer to his dream. He was down-to-earth. His
strong belief of giving back to the communities that support the business impressed me.
Throughout his life, he shared his energy, his time and his money. As a successful
businessman, Thomas founded numerous charities, including the Dave Thomas Foundation
for Adoption, a cause he was particularly passionate about. Daves honesty and integrity
showed in his words and his actions, and he lived his life by a strong set of values and
encouraged others to do the same.

REFERENCES
http://www.wendys.com/dave/davethomas_biography.pdf
http://en.wikipedia.org/wiki/Dave_Thomas_(American_businessman)
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http://money.cnn.com/2002/01/08/companies/wendys_obit/index.htm
http://www.essortment.com/history-wendys -restaurant-21035.html
http://www.wendys.com/

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HOWARD SCHULTZ

NAME: HOWARD SCHULTZ


BORN: JULY 19, 1953, BROOKLYN NEW YORK, USA
ETHNICITY: AMERICAN
CITIZENSHIP: AMERICA
RELIGION: JUDAISM
OCCUPATION: CHAIRMAN AND CEO STARBUCKS
SALARY: US $ 1300, 000
NET WORTH: US $ 1 BILLION
CHILDREN: 2

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HOWARD SCHLUTZ- STARBUCKS AND A SUCCESS STORY:


The murmurs of up market chat, the clicks of a neighbors laptop, the buzz of a mobile
phone, and all around the aroma of roasting coffee beans. It's the 21st century and if you're
one of Howard Schultz's coffee converts, you're no doubt sitting in a Starbucks. Howard
Schultz an inspiring entreprene ur, whose success story stems from his early life like many,
has surfaced as an inspiration for those many who aspire just the same. His success story
likewise cannot be understood in its true essence if its not started from scratch and like many
others just the same, his childhood seemed to have played a pivotal role in his being and
where he stands now. Stemming from a poor family, Howard Schultz had been subjected to
the cruel adversities of life since the earliest recollection of his childhood. Determined to
make his life better, Howard Schultz indulged in many sporting activities at which he found
himself excelling at and ultimately rewarding him a football Scholarship, earning him
admittance into the Northern Michigan University- the first member of the family to have
been admitted into a university. After graduating in 1975, Howard had the opportunity to
work at many places until he found himself a spot at the Xerox Corporations and thereafter at
the Swedish drip coffee maker company Hammerplast. I believe life is a series of near
misses. A lot of what we ascribe to luck is not luck at all. It's seizing the day and accepting
responsibility for your future. It's seeing what other people don't see and pursuing that
vision. Howard, clearly a far-sighted man, while still working for Hammerplast, found the
need to travel to Seattle and check out a popular coffee bean store chain called Starbucks that
had been purchasing the coffee makers from his company of employment. On visiting he
found himself mesmerized and overwhelmed with the way the business owners put care into
choosing and roasting the beans. He also was impressed with the owners' dedication to
educating the public about the wonders of coffee connoisseurship. "I walked away ... saying,
'God, what a great company, what a great city. I'd love to be a part of that, it is just this that
took him a whole year in convincing Starbucks into hiring him and succeeded, making him
director of marketing and operations. Another epiphany and another travel- Howard while his
stay in Italy took notice of the extensive existence of coffee shops in practically every nook
and corner of the city, serving as a mere social gathering place for the many people that lived
in the city. Thrilled by the very concept, Howard deemed it necessary to impart to his bosses
the concept that he believed would excite as many as him, but to his dismay, he didnt receive
the same response as he had anticipated and his idea remained unheeded. Howard, adamant
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and certain of the success of his idea left Starbucks and started his own company by the
name Il Giornale, which was later renamed as Starbucks after being bought off by Howard
following his success of his company. Howard a man of unfaltering and relentless
determination had dreamt of building a compa ny and he did so since the company began to
expand rapidly in the '90s and continues to do so.
Schultz always said that the main goal was "to serve a great cup of coffee." But attached to
this goal was a principle: Schultz said he wanted "t o build a company with soul leading to a
series of unprecedented practices in the retail that altered the many aspects of management
and that only hold true and unique for Howard. Howard, when asked of the key to success
this is how he recounts four principles: "Don't be threatened by people smarter than you,
compromise anything but your core values, seek to renew yourself even when you are hitting
home runs and everything matters. These four principles that Howard adheres to has pretty
much formed the basis of his management practices that has over the years translated into the
increased productivity of the company and its success.
Howard is held high for his well- meant practices in managing his people and his business
and holds high stake on his employees while he considers them the key to success. Howard
holds a prolific reputation concerning matters of his employees; insisting comprehensive
health coverage for his employees working at least 20 hours a week. He pioneered the
introduction of an employee stock option plan that persuades of his well- intended intentions
for his employees ensuring and retaining the loyalty of those responsible for the operations of
his business, the result of which were a very low turnover rate even though the salaries of the
employees were fairly low. He aspired to build a company where everyone was respectedsomething his father never got, he was beaten down, he wasn't respected," Schultz said. "He
had no health insurance, and he had no workers' compensation when he got hurt on the job."
Howard, a unbridled enthusiast with his employees, makes sure he stays in touch with each
and every employee working in his company, to be able to understand them better and
provide for them while they provide for you.

THE ROLE OF LATEST TECHNOLOGY, INNOVATION AND THE BEST FIT


Howard accentuates the importance of the latest technology facilitating his practice. He
always highlights the importance of latest technology in successful business and that is just
what he practices. Very recently he expressed his excitement in introducing wireless
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activities to its customers so that they would avail all the technological facilities while they
enjoyed a sip of their coffee and while they socialized. He believes in the need of updating
oneself according to the need of the time and when necessary because only will you be able
to succeed if you keep yourself abreast with the rest of the world. He not only believes but
practices the same altogether, bringing innovations into this management year after year to fit
those that are required under the recent trend in globalization. Schultz continues to speak to
Starbucks's heart by constantly pushing for renewal and reinvention. Despite his company's
accomplishments, he knows it is not a corporate utopia. "Being a great leader means finding
the balance between celebrating success and not embracing the status quo," he muses. "Being
a great leader also means identifying a path we need to go down and creating enough
confidence in our people so they follow it and don't veer off course because it's an easier
route to go."

PERSISTENCE IN DELIVERY:
Howard Schultz believes in persisting delivering to its customers as the company continues to
grow exponentially . The art of leadership is making sure we don't allow the scale and size of
the company to change the methodology of how we conduct ourselves," says Schultz. "We
have to be careful not to let our values be compromised by an ambition to grow, he believes
in the perseverance in committing to quality delivery and commits to it likewise.

INTEGRITY
Buying a water company and contributing a nickel from every bottle sold to organizations
that get clean water to children around the world-reinforces Starbucks's image of integrity
and reinforces the practices of the owner with integrity. Howard has often actively seen as a
participant in activities contributing to the benefits for the community, he understands the
role of being socially responsible for the world community and often a time has been seen
active in such activities.
Howard, with his success story might be improvising just the right management practices but
it comes as no surprise if at the core of those management practices lay the intention of
persistence in quality delivery, intact dignity of people and integrity and the desire to deliver
back to the community in the best possible way. For management practices with such well
meant intentions can be nothing but only just right.

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REFERENCES:
William Meyers, Conscience in a Cup of Coffee
http://www.usnews.com/usnews/news/articles/051031/31schultz.htm
Dan Skeen, Howard Schultz Secrets for Success
http://www.successtelevision.com/index2.php?option=com_content&do_pdf=1&id=3676
Howard Schultz Quotes
http://www.evancarmichael.com/Famous-Entrepreneurs/643/How ard-Schultz-Quotes.html
Chairman and chief global strategist, Starbucks Corporation
http://www.referenceforbusiness.com/biography/S -Z/Schultz-Howard-1953.html

CHARLES MICHAEL SCHWAB

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NAME: CHARLES MICHAEL SCHWAB


BIRTH DATE: FEBRUARY 18, 1862
DEATH DATE: OCTOBER 18, 1939
NATIONALITY: AMERICAN
GENDER: MALE
OCCUPATION: BUSINESSMAN, INDUSTRIALIST

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BIOGRAPHY AND CAREER


Charles Schwab was born on July 29, 1937 in Sacramento, California, USA He spent his
childhood in Woodland, California and while being a child, he suffered of dyslexia .His
parents seemed to ignore the problem entirely, and the nuns who taught at the parochial
school he attended simply thought he was a slow learner. He relied on classic comic books to
complete his reading assignments.
Against All Odds His first jobs included sacking and selling walnuts, and selling chickens
and eggs. He learned from an early age the importance of devising a profitable business
concept, and perseverance, which also helped him make it through high school. Schwab
entered Stanford University in 1955, thanks to his high grades in math and science. As a
freshman, he failed both French and English, but made it through his undergraduate years
with the aid of understanding roommates and prepared notes. While reading and writing may
have not been his forte, he possessed very strong conceptual capabilities that helped him
solve complicated business problems. Before long, Schwab discovered his aptitude for
economics and other business courses, which led to his earning a BA in Economics, in 1959.
He went on to Stanford Graduate School of Business, where he received his MBA in 1961. In
2006 the Forbes Magazine placed him and his wife among the 50th richest person in the
United States, their fortune is estimated at approximately $4.6 billion. During the years he
was the supporter of privatizing Social Security accounts, and lobbied against a new
electronic system to centralize stock trading, which could have allowed investors to find the
best prices.
He has a house in Atherton, California where he lives along his wife and they are
philanthropists. The money he earned with the help of his great intelligence is being spent
mostly on helping people with problems. The 1929 stock market crash ruined Schwab
financially. He spent his last years in a small apartment. He could no longer afford the taxes
on "Riverside" and it was seized by creditors. He had offered to sell the mansion at a huge
loss but there were no takers.
At his death ten years later, Schwab's holdings in Bethlehem Steel were virtually worthless,
and he was over US$ 300,000 in debt. Had he lived a few more years, he probably would
have seen his fortunes restored when Bethlehem Steel was flooded with orders for war

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material. He was buried in Loretta at Saint Michael's Cemetery in a private mausoleum with
his wife.

Why Is He Famous
Schwab is the founder, Chairman of the Board and Co-Chief Executive Officer of the Charles
Schwab Corporation, the first discount brokerage firm in America, which he created in 1974.
Chuck's firm was also a pioneer in the world of online investing, and today, his San
Francisco-based company employs 19,000 and serves nearly eight million client accounts
worldwide.

Schwab the Man


Charles Michael Schwab is best known as a leader, innovator, and motivator when he was at
the helm of the steel firm that no longer exists. Schwab was also human. He was a gambler,
union buster, and businessman of questionable tactics.

His Achievements

Uniting four municipalities into the city of Bethlehem

Building elegant Hotel Bethlehem for Bethlehem Steels clients to enjoy premier
lodging and dining

Instrumental in the construction of the Hill to Hill bridge, connecting the citys South
Side to the North Side and creating Liberty High School

Patron of the Bach choir

Philanthropist

Other Achievements
He was U.S. entrepreneur and steel- industry pioneer. He joined Andrew Carnegie's
steelworks at Braddock, Pa., as a laborer and rose swiftly in the Carnegie empire. In 1892
Carnegie delegated to Schwab the task of returning the plant in Homestead, Pa., to normal
production after the bloody Homestead Strike. His success in improving labor relations and
increasing production led to his appointment as president of Carnegie Steel Co. in 1897 at the
age of 35. Schwab proposed the merger of the competing steel companies that would create
the U.S. Steel Corp., and he became its first president in 1901. He resigned in 1903 to devote

211

himself to the Bethlehem Steel Corp., which he built into one of the nation's largest steel
producers of its time

LEADERSHIP INSIGHT
Chuck Schwab was a strong leader but weak manager. The leadership strengths of Schwab
include:

Schwab's ability to vision,

Achieve employee "buy-in" to the company mission,

Practice renewal,

Ability to motivate others

Highly visible values and vision.

Giving market access to people

Provide value to customers

Paid attention to good business principle

Determined to -provide customers with the most useful and ethical brokerage services in
America

His vision was reflected in to his personal values of

fairness,

empathy,

responsiveness,

service

As a weak manager there were two managerial shortcomings that include

He created a high stress environment

He did not communicate concrete

AWARDS
May 2009: Schwab ranked number 3 overall, ahead of 13 other firms, in Smart
Moneys annual survey of discount and full-service brokerages. Schwab also earned a bestof-category score in Research and was named the magazines top choice for Research.
May 2008: Schwab's High-Yield Investor Checking account was awarded Best Checking
Account by Money magazine in

its

The

100

212

Best

list.

And

Barron's ranked

Schwab number five in its annual Barron's 500, a unique ranking of the 500 largest (by sales)
publicly traded companies in the U.S. and Canada.
March 2008: Schwab ranked number four in the Securities category of Fortune's Most
Admired Companies list.

CONCLUSION
From above data it is concluded that Charles Schwab Corporation has been a leader in
financial services and made it possible through advocacy and innovation. The company has
worked to make investing more affordable, more accessible, and more understandable to
all. Charles Schwab is one of those rare cases in business in which the name of a company
and that of its founder are inseparable. He was brilliant, gleaming dramatic, remarkable, and
impulsive leader from his childhood to death he seems to be a very hard working person .he
was very motivated and dedicated towards his work. He never gave up in his life .Despite his
dyslexia, Schwab remained confident and convinced never allowing his condition to get him
down or stop him from succeeding at other tasks. He was a sort of person who was having the
ability to arise enthusiasm in people and the tools which he used for it were appreciation and
encouragement. He was a risk taker person thats why in his whole life he was ready to risk
his fortune .He was having natural ability to influence other people. Schwab influenced
people by his sentiments, contagious enthusiasm and by his personal knowledge of each man
.He was very genius and smart in management of people and machinery

LESSON LEARNED

Geographic location plays an important role in the success of the business

High return in higher risk business

Never give up if you face hardships in life

If you want to become a successful business man always act in the best interests of your
clients.

Hard work is the best investment in the business

REFERENCES
http://biography.yourdictionary.com/charles-michael-schwab
http://www.rodneyohebsion.com/charles-m-schwab.htm

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http://www.suite101.com/content/charles-m-schwab-paranormal-a36441#ixzz1GPNPG5t3

214

RICHARD CHARLES NICHOLAS


BRANSON

NAME: RICHARD CHARLES NICHOLAS BRANSON


BORN: 18TH JULY 1950 (AGE 60) BLACK HEATH, LONDON, ENGLAND
RESIDENCE: LONDON, ENGLAND
NATIONALITY: BRITISH
OCCUPATION: ENTREPRENEUR
YEARS ACTIVE: 1966PRESENT
KNOWN FOR: CHAIRMAN OF VIRGIN GROUP
NET WORTH: $4 BILLION (2010)
CHILDREN: THREE

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BACKGROUND AND HISTORY:


Richard Branson is an inspiration to many, the champion of customers and hero of many
business people. The Virgin founder is a maverick entrepreneur and hippy billionaire,
adventurer and philanthropist. He is always looking for new ways to do more for people, and
to create a better world.
In June 2008, I had the opportunity to spend a few hours with him - to interview him at the
London Business Forum - to explore what drives him, what matters most to him, and what
comes next in his amazing life.
He is one of the worlds most famous entrepreneurs, the loveable underdog with the shaggy
beard and chunky jumpers, or the loathed self-publicist out to pick a fight with big business.
Yet he is one of the most successful business people of our generation, a fantastic guy who
really cares about his people and his customers, and is now spending most of his time trying
to make a positive difference to the world.
Born in 1950 in Black heath, London, Branson excelled at sports although his mild dyslexia
meant that he struggled academically. His first business ideas, formed in the school library
involved Christmas trees and budgerigars, and writing stories about his sexual conquests.
They didnt take off, but then in 1967 his idea for a magazine called Student did. He sold
advertising space from the telephone box outside his school during break times, and was soon
able to publish the first issue. He used to ask the telephone operator to connect him to
potential clients, making it appear that she was his secretary.

VIRGIN GROUP LTD.


Virgin Group Ltd is widely known for its presence in a vast array of global markets that
include music, radio, and mobile services, among others. The leadership and management
tactics of the company are often covered by the media for its track record of success and
efficiency. The Virgin brand was founded in 1968 and is now recognized worldwide for its
success in many different industries. Sir Richard Branson is the current chairman of the
company and is well known for his colorful yet competitive leadership style. Many scholars
and business analysts attribute the Vir gin Groups success to the innovative leadership style
of Branson. He often took on risky business ventures in an attempt to diversify and add value
to the company. His business plan is to focus on very small segments of a particular market

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and doing a high quality job at providing the product or service. This concept is able to gain
small monopolies on a market share and often creates very high profit margins. Contributing
to his success was his ability to lead people to innovate and grow. This philosophy sets the
tone for the management team within the company.
The organizational culture of Virgin Group is quite complex. Virgin Group serves as a parent
company of over 100 separately run companies that operate in industries that are often
completely unrelated. The common denominator within each company is the Virgin Brand.
The brand is similar or identical within each separate operation. This symmetry serves as a
guideline for the image that each division or department is expected to represent. This image
is one of quality and innovation (Virgin). By creating an exceptional brand, the company is
able to create a high level of loyalty within its customer base. The diversity of businesses
operated by Virgin Group helps the company maintain a high level of loyalty in many
different industries. This is the ultimate reason why company has seen a high level of success
throughout is many different business ventures. Managers within the company use the
concept of innovation to inspire the employees to contribute to the company at all levels,
rather than just doing what they are told. Employees can contribute to the cutting edge
products that the company creates as well as look for new ways to increase the overall
efficiency of the company. The Virgin Group has been able to create a management style that
encourages employees to be competitive. This also gives people the desire to see the
company succeed in order to be a contributor to a fresh and creative business model.

MANAGEMENT STYLES
There is a solid distinction between leadership and management within the Virgin Group.
Transformational leadership comes from the top managers and executives within the
company. Richard Branson along with other company executives have set many common
goals for the company to achieve as a whole. These ambitious goals include expansion into
international markets, utilization of new technology, loyalty among customers, and joint
ventures with other companies. Goals of this level are voiced to all people involved with the
company. This has a benefit to the company by giving everybody involved a challenging
mission to accomplish. The highest level of management encourages employees to use their
skills in a way that will best compliment the company. The idea behind this is to promote the
philosophy that the overall benefit of the company will lead to individual benefits for each
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person involved. Group contribution will eventually lead to rewards for executives,
managers, employees, shareholders, and customers alike.
The lower level management positions tend to focus more strictly on the management side of
the company. Leadership is encouraged among managers, but it often takes strict
management to get the job done. Each management function varies within the different
divisions in the company. Managers at the Virgin Group have a wide range of goals to
pursue. Because each division within the company varies in its specialization it takes well
trained managers to run it effectively. Managers hired by the company tend to have a solid
background in their area of specialization. They also need to have a history of proven
management experience to be considered for a position. Ultimately, managers within the
Virgin Group deal with managing the day to day tasks required to keep their division running
efficiently.
Organization is a crucial component to the success of the Virgin Group. Because the
company is very complex, organization is critical step in the planning process to be
considered. First, the company has a wide range of goals it wants to ac hieve as a whole, such
as creating brand loyalty and expanding to a global level. The top executives are in charge of
determining these goals and explaining them to the rest of the company. In order for the goals
to be received well by the employees, executives must be confident that the goals can be
achieve while simultaneously making them challenging. The purpose of this is to give people
the sense that they are involved in an important and meaningful task. Second, these goals
must be organized within eac h division. Each division will have separate specialized goals on
how to increase their market share and improve their product or service in the process. As
you move down the supply chain the goals become more specific and short term. This system
of organization keeps the company on track to achieve the top level goals set by executives.
The success of the Virgin Group over the years has proven this to be an effective organization
system for the company.
The planning function of management is the first step to creating a winning team of
managers. As mentioned before, planning at the highest level is done by the top executives
within the company. The complexity of the Virgin Group requires detailed planning at
multiple levels in the business. Strategic planning is done by executives, which is voiced to
every person involved with the company. This allows all employees to understand what their
mission is in the broadest sense. From there, planning must be done for each individual
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division within the Virgin Group. For example, Virgin Trains, which is a railroad operator in
the United Kingdom, has a set of goals that is specific to the business that they deal with.
Their goals will differ substantially from that of Virgin Mobile, which will need to take much
different steps in order to become a successful business. Each division of the company shares
the same brand and is responsible for maintaining the integrity of the brand and increasing
customer awareness of the Virgin brand. Planning at every level of the company ensures that
each division has specific goals and the steps needed to complete each goal.
The organizing function is also very important to the company. A high level of organization
is needed at all levels of the operation. For example, each division needs to organize their
management structure. This is often done by trial and error to determine the most efficient
ratio of managers to non-managers. When the proper determination is made the company can
organize its management structure in order to meet the highest level of efficiency.
Leading is perhaps the most interesting and important function of management to the Virgin
Group. The leadership dynamics start with Chairman Richard Branson. He is a ver y vocal
and flamboyant leader. His mission is to inspire those who work below him to work to the
best of their abilities for the good of the company. He often pushes his belief that by
contributing to the good of the company it will increase the rewards for everybody involved.
He has stated that he tries to bring the best out of people and does this for workers at the
lowest levels as well as the top ranking executives. This philosophy is encouraged to all
managers within the company. Management is expected to embrace this principle and pass it
on to the employees that they are managing. Another aspect of Branson`s leadership style is
that he tends to give people a high level of freedom in their work (Carmichael, E). It is his
goal to first give them direction in their work, and then let them take control of the situation
there after. Freedom in their work allows them to excel without the need for
micromanagement. Richard Branson`s leadership style and vision for the company has made
him the center of attention within many business and management discussions throughout.
The controlling function of management is the least important function to the Virgin Group.
As a whole, controlling is often felt to be unnecessary by top level management. The
company believes that employees should have a certain amount of freedom to make choices
for the good of the organization. It is this freedom and decision making that has the potential
to bring out the best in an employee. Branson has stated that if an employee does not excel at

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their work they should be given another chance with a different job within the company
(Carmichael, E). This innovative thinking helps to create a healthy organization structure.
Managers can utilize many different strategies to maintain a healthy organizational structure.
My first recommendation would be transformational leadership. Transformational leadership
allows groups of people to work together for one common goal. By working together a group
can come together to achieve great things and improve their overall efficiency. This differs
with transactional leadership where individuals are rewarded for their personal performance.
This type of leadership can lead to greed and a lack of teamwork. My second
recommendation would be to utilize delegation. Delegation is a great way to develop the
skills of employees. When management can determine where a person will be most efficient
it will help those involved in the project. By putting people in the jobs that they a best suited
for it will lead to a more enjoyable and effective working environment.
In summary, there is a lot to be learned from the management and leadership of Virgin Group
Ltd. Chairman Richard Branson has created a unique management formula that has
contributed to the long term success of the company. Although there is a clear distinction
between management and leadership, the company has been able to integrate a blend of each
in many aspects of the business. The transformational leadership has proved to be a valuable
tool for executives , managers, and workers alike. Employees within the company have a
willingness to work together to expand and improve the company in order to reach their own
personal success in life.

CONCLUSION
Richard Branson is a flamboyant British entrepreneur with a seemingly insatiable appetite for
starting new businesses. His internationally recognized brand "Virgin" is splashed across
everything from credit cards, to airlines and music "megastores". Branson is continuously
seeking new business opportunities and loves a good challenge, especially when he enters a
market that is dominated by a few major players. I am highly impresses by his passion about
life and living every minute to its fullest. Since 1985 he has been getting his adrenaline
rushes through world record breaking attempts by boat and hot air balloon. Branson also has
a philanthropic streak. R ichard Branson is a very inspirational person. He has set challenging
goals and achieved every one of them. He is a true entrepreneur and a role model to not only

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business executives, but also for us, students around the world. Success is the first word that
comes to mind when Richard Branson's name is mentioned.
"Sometimes I do wake up in the mornings and feel like I've just had the most incredible
dream. I've just dreamt my life."

REFERENCES
Carmichael, E. Losing his Virginity: How Branson Achieved Success. Accessed on 6/15/08
from
http://www.evancarmichael.com/Famous -

Entrepreneurs/592/Losing-His -Virginity-How-

Branson-Achieved-Success.html
Werdigier, J. Oct 2007. Virgin Group Plans for Venerable British Bank, Now Troubled. New
York Times.
Accessed

on

6/15/08

http://www.nytimes.com/2007/10/13/business/worldbusiness/13bank.html
http://www.virgin.com/AboutVirgin/WhatWeAreAbout/WhatWeAreAbout.aspx
http://www.europeanleadershipcentre.com/download/1241181033.pdf
http://www.upxsuccess.com/leadership_richard_branson.html
http://www.ouchh.com/Articles/articles/16/1/Richard-Branson/Page1.html
http://www.thinkingmanagers.com/management/management-profile.php

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from

JEFFREY PRESTON BEZOS

NAME: JEFFREY PRESTON "JEFF" BEZOS


BORN:

JANUARY 12, 1964

RESIDENCE:

SEATTLE, WASHINGTON

EDUCATION: PRINCETON UNIVERSITY, BS, 1986


AWARDS: PERSON OF THE YEAR, TIMES, 1999
CITIZENSHIP: AMERICAN
OCCUPATION: CHAIRMAN AND CEO OF AMAZON.COM
NET WORTH:

US$12.6 BILLION (2010)

CHILDREN: ONE

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BACKGROUND & EARLY LIFE


Jeffrey P. Bezos was born in Albuquerque, New Mexico. His mother was still in her teens,
and her marriage to his father lasted little more than a year. She remarried when Jeffrey was
four. Jeffrey's stepfather, Mike Bezos, was born in Cuba; he escaped to the United States
alone at age 15, and worked his way through the University of Albuquerque. When he
married Jeffrey's mother, the family moved to Houston, where Mike Bezos became an
engineer for Exxon. Jeffrey's maternal ancestors were early settlers in Texas, and over the
generations had acquired a 25,000-acre ranch at Cotulla. Jeffrey's grandfather was a regional
director of the Atomic Energy Commission in Albuquerque. He retired early to the family
ranch, where Jeffrey spent most of the summers of his youth, working with his grandfather at
the enormously varied tasks essential to the operation.

EARLY INTERESTS
Bezos showed intense and varied scientific interests at an early age. He rigged an electric
alarm to keep his younger siblings out of his room and maintain his privacy. He converted his
parents' garage into a laboratory for his science projects. From an early age, Jeffrey displayed
a striking mechanical aptitude. Even as a toddler, he asserted himself by dismantling his crib
with a screwdriver. He also developed intense and varied scientific interests, rigging an
electric alarm to keep his younger siblings out of his room and converting his parents' garage
into a laboratory for his science projects. When he was a teenager, the family moved to
Miami, Florida. In high school in Miami, Jeffrey first fell in love with computers. An
outstanding student, he was valedictorian of his class.

CAREER & ACHIEVEMENTS


He entered Princeton University planning to study physics, but soon returned to his love of
computers, and graduated with a degree in computer science and electrical engineering. After
graduation, Jeff Bezos found employment on Wall Street, where computer science was
increasingly in demand to study market trends. His went to work at Fitel, a start-up company
that was building a network to conduct international trade. He stayed in the finance realm
with Bankers Trust, rising to a vice presidency. At D. E. Shaw, a firm specializing in the
application of computer science to the stock market, Bezos was hired as much for his overall
talent as for any particular assignment. While working at Shaw, Jeff met his wife, Mackenzie,
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also a Princeton graduate. He rose quickly at Shaw, becoming a senior vice president, and
looked forward to a bright career in finance, when he made a discovery that changed his life - and the course of business history.

IDEA GENERATION
The Internet was originally created by the Defense Department to keep its computer networks
connected during an emergency, such as natural catastrophe or enemy attack. Over the years,
it was adopted by governm ent and academic researchers to exchange data and messages, but
as late as 1994, there was still no Internet commerce to speak of. One day that spring, Jeffrey
Bezos observed that Internet usage was increasing by 2,300 percent a year. He saw an
opportunity for a new sphere of business, and immediately began considering the
possibilities.
In typically methodical fashion, Bezos reviewed the top 20 mail order businesses, and asked
himself which could be conducted more efficiently over the Internet than by traditional
means. Books were the commodity for which no comprehensive mail order catalogue existed,
because any such catalogue would be too big to mail -- perfect for the Internet, which could
share a vast database with a virtually limitless number of people.
He flew to Los Angeles the very next day to attend the American Booksellers' Convention
and learn everything he could about the book business. He found that the major book
wholesalers had already compiled electronic lists of their inventory. All that was needed was
a single location on the Internet, where the book-buying public could search the available
stock and place orders directly. Bezos's employers weren't prepared to proceed with such a
venture, and Bezos knew the only way to seize the opportunity was to go into business for
himself. It would mean sacrificing a secure position in New York, but he and his wife,
Mackenzie, decided to make the leap.

E-COMMERCE
Jeff and Mackenzie flew to Texas, where they would have ready access to the book
wholesaler, and to the pool of computer talent Jeff would need for his enterprise. They set up
shop in a two-bedroom house, with extension cords running to the garage. When the test site
was running, Jeff asked 300 friends and acquaintances to test it. The code worked seamlessly
across different computer platforms. On July 16, 1995, Bezos opened his site to the world,
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and told his 300 beta testers to spread the word. In 30 days , with no press, Amazon had sold
books in all 50 states and 45 foreign countries. By September, it had sales of $20,000 a week.
Bezos and his team continued improving the site, introducing such unheard-of features as
one-click shopping, customer reviews, and e-mail order verification.
The business grew faster than Bezos or anyone else had ever imagined. When the company
went public in 1997, skeptics wondered if an Internet-based start-up bookseller could
maintain its position once traditional retail heavyweights like Barnes and Noble or Borders
entered the Internet picture. Two years later, the market value of shares in Amazon was
greater than that of its two biggest retail competitors combined, and Borders was striking a
deal for Amazon to handle its Internet traffic. Jeff had told his original investors there was a
70 percent chance they would lose their entire investment, but his parents signed on for
$300,000, a substantial portion of their life savings. "We weren't betting on the Internet," his
mother has said. "We were betting on Jeff." By the end of the decade, as six per cent owners
of Amazon, they were billionaires. For several years, as much as a third of the shares in the
company were held by members of the Bezos family.

EXPANSION OF BUSINESS
From the beginning, Bezos sought to increase market share as quickly as possible, at the
expense of profits. When he disclosed his intention to go from being "Earth's biggest
bookstore" to "Earth's biggest anything store," skeptics thought Amazon was growing too big
too fast, but a few analysts called it "one of the smartest strategies in business history."
Through each round of expansion, Jeff Bezos continually emphasized the "Six Core Values:
customer obsession, ownership, bias for action, frugality, high hiring bar and innovation."
"Our vision," he said, "is the world's most customer-centric company. The place where
people come to find and discover anything they might want to buy online." Amazon moved
into music CDs, videos, toys, electronics and more. When the Internet's stock market bubble
burst, Amazon re-structured, and while other dot.com start-ups evaporated, Amazon was
posting profits.
In October 2002, the firm added clothing sales to its line -up, through partnerships with
hundreds of retailers, including The Gap, Nordstrom, and Land's End. Amazon shares its
expertise in customer service and online order fulfillment with other vendors through cobranded sites, such as those with Borders and Toys 'R Us, and through its Amazon Services
225

subsidiary. In September 2003, Amazon announced the formation of A9, a new venture
aimed at developing a commercial search engine that focuses on e-commerce web sites. At
the same time, Amazon launched an online sporting goods store, offering 3,000 different
brand names. Amazon.com ended 2006 with annual sales over $10.7 billion. Amazon is now
America's largest online retailer, with nearly three times the sales of his nearest rival.
Today, Jeff Bezos and Mackenzie live north of Seattle, and are increasingly concerned with
philanthropic activities. "Giving away money takes as much attention as building a successful
company," he has said. The success of Amazon has also allowed Bezos to explore a lifelong
interest in space travel. In 2004, he founded an aerospace company, Blue Origin, to develop
new technology for spaceflight. The company is based on a 26-acre research campus outside
Seattle and maintains a private rocket launching facility in West Texas. Blue Origin has
received funding from NASA and is testing New Sheppard, a multi-passenger rocketpropelled vehicle designed to travel to and from suborbital space at competitive prices. New
Sheppard will allow researchers to conduct more frequent experiments in a microgravity
environment, as well as providing the general public with an opportunity to experience
spaceflight. In its mission statement, Blue Origin identifies its ultimate goal as the
establishment of an enduring human presence in outer space.

INVENTIONS
As exciting as that prospect may be, Jeff Bezos has had more terrestrial innovations on his
mind as well. In 2007, Amazon introduced a handheld electronic reading device called the
Kindle. The device uses "E Ink" technology to render text in a print-like appearance, without
the eyestrain associated with television and computer screens. Unlike earlier electronic
reading devices, the Kindle incorporate wireless Internet connectivity, enabling the reader to
purchase, download and read complete books and other documents anywhere, anytime.
Hundreds of books may be stored on the Kindle at a time. With the introduction of the
Kindle, Amazon quickly captured 95 percent of the U.S. market for books in electronic form
-- e-books. The first major challenge to the Kindle's supremacy in the e-book market came in
2010, when Apple introduced its iPad tablet computer, which is also designed for use as an
electronic reading device. Bezos responded aggressively, cutting the Kindle's retail price and
adding new features. One model works with Wi-Fi, a second ads G3 mobile technology. The
new Kindles are thinner and lighter than their predecessors, with faster page-turning
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capability and longer battery life, are easier to read in sunlight, and cost hundreds of dollars
less than the iPad. In 2010, Amazon signed a controversial deal with The Wylie Agency.
Wylie gave Amazon the digital rights to the works of many of the authors it represents,
bypassing the original publishers altogether. This, and Amazon's practice of selling e-books
at a price far below that of the same title in hardcover, angered several publishers, as well as
some authors, who see their royalty rates threatened. But it appears that the advent of
electronic reading devices is increasing the overall sales of books, which can only benefit
readers and authors alike. By mid-2010, Kindle and e-book sales had reached $2.38 billion,
and Amazon's sales of e-books topped its sales in hardcover.

EYE ON THE FUTURE


With e-book sales increasing by 200 percent a year, Bezos has predicted that e-books will
overtake paperbacks and become the company's bestselling format within a year. Having
already revolutionized the way the world buys books, Jeff Bezos is now transforming the way
we read them as well.

CONCLUSION
Amazon is the totem stock of the Internet evangelists. Critics tell you that through smoke and
mirrors, PR, and puff, one man have succeeded Holly Becker, e-commerce analyst at Lehman
Brothers and a long-time Amazon believer switched her recommendation on the company
from a buy to a neutral. She was, she said, throwing in the towel on Amazon in making a
fortune through hyping his online business to unthought-of heights.
What he created, after all, was nothing more or less than a virtual bookshop, and one that in
its ? r s t ? ve years didnt turn a pro?t. But Amazon.com isnt a bellwether stock without
reason. Jeff Bezos is the quintessential dot-com icon. He proved to the business world that
the Internet was about more than knowledge. He proved that it is possible to overcome fears
about purchasing online, to drive down transaction costs, and to build an international ecommerce business over the Internet.
Jeff Bezos is one of the great business pioneers. He had the courage to attempt something that
people doubted could be done. Amazon has ?rmly entrenched itself as a dominant force in ecommerce and, as a result of product additions and strategic alliances, is now a virtual

227

marketplace. The question is whether it can exploit its position consistently with earning
profits.

REFERENCES
Jeff Bezos - Biography Founder and CEO, Amazon.com
http://www.achievement.org/autodoc/page/bez0bio-1
http://www.achievement.org/achievers/bez0/headers/bez0_title.gif
Jeff Bezos from Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Jeff_Bezos
Jeff Bezos 1964 Biography Developing entrepreneurial skills
http://www.referenceforbusiness.com/biography/A-E/Bezos-Jeff-1964.html#ixzz1GPWtFjc9
Pictures taken from:
http://www.achievement.org/autodoc/photocredit/achievers/bez0-006
http://www.achievement.org/autodoc/photocredit/achievers/bez0-005
http://www.achievement.org/autodoc/photocredit/achievers/bez0-002
http://www.achievement.org/autodoc/photocredit/achievers/bez0-004
http://www.achievement.org/autodoc/photocredit/achievers/bez0-008

228

HENRY ROSS PEROT

NAME: HENRY ROSS PEROT


BORN: JUNE 27, 1930 AMERICAN
RESIDENCES: DALLAS TEXAS UNITED STATE
CITIZENSHIP: UNITED STATES
OCCUPATION: COMPUTER SERVICES REAL ESTATE
NET WORTH: US 3.3 BILLION DOLLARS (2010)
RELIGION:CHRISTIAN
CHILDREN:

FIVE

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BIOGRAPHY
Ross Perot was born in Texarkana, Texas, on June 27, 1930. His father was a cotton broker
and horse dealer. The young Perot was much impressed by his father's negotiating skills and
by his mother's discipline and religious principles. He attended a private school called Patty
Hill. He graduated from Texas High School in Texarkana in 1947. One of Perot's boyhood
friends was Hayes McClerkin, later Speaker of the Arkansas House of Representatives and a
prominent Texarkana, Arkansas, lawyer.
Perot joined the Boy Scouts of America and made Eagle Scout in 1942, after only thirteen
months in the program. He is a recipient of the Distinguished Eagle Scout Award. Perot
entered the United States Naval Academy in 1949 and helped establish its honor system. By
the time he graduated in 1953 he was president of his class and battalion commander. By late
1954, Perot was made a lieutenant, junior grade. In 1955, however, Perot expressed some
discontent with his life in the United States Navy in a letter to his father. He quietly served
the remainder of his four-year commitment and resigned his commission. Perot married
Margot Birmingham of Greensburg, Pennsylvania , in 1956.

AS A BUSINESSMAN:
After he left the Navy in 1957, Perot became a salesman for International Business Machines
(IBM) . He quickly became a top employee, filling his year's sales quota in two weeks, and
tried to pitch his ideas to supervisors who largely ignored him. He left IBM in 1962 to found
Electronic Data Systems (EDS) in Dallas, Texas , and courted large corporations for his data
processing services. Perot was refused seventy-seven times before he was given his first
contract. EDS received lucrative contracts from the U.S. government in the 1960s,
computerizing Medicare records. EDS went public in 1968 and the stock price rose from $16
a share to $160 within days. Fortune called Perot the "fastest, richest Texan" in a 1968 cover
story. In 1984 General Motors bought controlling interest in EDS for $2.4 billion.
In 1974 Perot gained some press attention for being "the biggest individual loser ever on the
New York Stock Exchange" when his EDS shares dropped $450 million in value in a single
day in April 1970. Just prior to the 1979 Iranian Revolution, the government of Iran
imprisoned two EDS employees in a contract dispute. Perot organized and sponsored their
rescue. The rescue team was led by retired U.S. Army Special Forces Colonel Arthur D.

230

(Bull) Simons. When the team was unable to find a way to extract their two prisoners, they
decided to wait for a mob of pro-Ayatollah revolutionaries to storm the jail and free all
10,000 inmates, many of whom were political prisoners. The two prisoners then connected
with the rescue team, and the team spirited them out of Iran via a risky border crossing into
Turkey. The exploit was recounted in a book, On Wings of Eagle s by Ken Follett, which
became a best-seller. In the 1986 miniseries, Perot was portrayed by Richard Crenna .
In 1984 Perot bought a very early copy of the Magna Carta , one of only a few to leave the
United Kingdom . It was lent to the National Archives in Washington, D.C., where it was
displayed alongside the Declaration of Independence and the United States Constitution. In
2007, it was sold by the Perot Foundation, in order to provide "for medical research, for
improving public education and for assisting wounded soldiers and their families." The
document sold for $21.3 million USD on December 18, 2007 to David Rubenstein, managing
director of the Carlyle Group and kept on display at the National Archives. In 1988 he
founded Perot Systems Corporation, Inc. in P lano, Texas. His son, H. Ross Perot, Jr. ,
eventually succeeded him as CEO. In September 2009, Perot Systems was acquired by Dell
for $3.9 billion.

1992 PRESIDENTIAL CANDIDACY:


In 1992 he became an independent candidate for U.S. president. Appealing to voters
dissatisfied with traditional party politics, he won 19% of the popular vote, the best thirdparty presidential showing since 1912. He ran again in 1996 but received only 8% of the vote.
His Reform Party, which he founded in 1995, gradually established its autonomy from him.
In the 2000 presidential election, Perot refused to become openly involved with the internal
Reform Party dispute between supporters of Pat Buchanan and of John Hagelin . Some state
parties have affiliated with the new. America First Party; others gave Ralph Nader their ballot
lines in the 2004 presidential election.
The one exception to this came in 2005, when he was asked to testify before the Texas
Legislature in support of proposals to extend technology to students, including making
laptops available to them; additionally, changing the process of buying textbooks, by making
electronic books (ebooks) available and by allowing schools to buy books at the local level
instead of going through the state. In an April 2005 interview, Perot expressed concern about
the state of progress on issues that he had raised in his presidential runs.
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In January 2008, Perot publicly came out against Republican candidate John McCain and
endorsed Mitt Romney for President. He also announced that he would soon be launching a
new website with updated economic graphs and charts. In June 2008, the blog launched,
focusing on entitlements (Medicare, Medicaid, Social Security), the U.S. national debt and
related issues.

FAMILY:
Perot is married to Margot Bir mingham; they have five children (Ross Jr., Nancy, Suzanne,
Carolyn, and Katherine). As of 2007, the Perots have 15 grandchildren.

HONORS:
On April 22, 2009, Ross Perot was made a Honorary Green Beret at the John F. Kennedy
Special Warfare Center in Fayetteville, North Carolina , that also honored the OSS, Alamo
Scouts and the First Special Service Force , elite World War Two units that were inducted into
the "1st Special Forces" Regiment. Mr. Perot was inducted into the Junior Achievement U.S.
Business Hall of Fame in 1988.
On September 18, 2009, the Texarkana Independent School District named him (1947
graduate of Texas High School) as a 2009 Distinguished Alumnus. In May 2009, he was
appointed an honorary chairman of The OSS Society.
On October 15, 2009, the United States Military Academy at West Point awarded him with
the distinguished Sylvanus Thayer Award.
In honor of his 80th birthday, the bridge connecting Walton and University drives in
Texarkana, Texas, was named the H. Ross Perot Bridge.
On Oct. 2, 2010, Perot was given the William J. Donovan Award from the OSS Society at the
Mandarin Orie ntal Hotel in Washington, D.C. He is the 26th recipient of the award.

LEADERSHIP STYLE:
Leadership in business is another crucial ingredient for success. Perot stressed that authority
to make decisions should remain in the field instead of in the corporate bureaucracy. The
EDS procedural manual is starkly simple: Do what makes sense.

232

His personal charisma and inspirational leadership was also important. He inspired with his
tenacity and personal mottos such as Eagles dont flock. You have to find them one at a
time.
Similarly, Henry Ross Perot emphasized giving employees ownership of the company. The
companys compensation plan emphasized stock options, resulting in the creation of more
than a hundred millionaires at the company. Employees naturally responded to these financial
incentives positively: they followed the motto whatever it takes and were not afraid to put
in extremely long hours for difficult projects. In essence, they had a stake in the companys
success, and naturally would want to work hard as possible so their options would hit the
strike prices! (Options are a creative way to set financial goals for the company!)
The same applied to the companys acquisition of top talents. When the EDS stock went
public, Perot lured engineers to the company with equity participation

REFERENCES:
www.google.com
www.wikipeadia.com
http://www.infoplease.com/biography/var/rossperot.html

233

STEVEN PAUL JOBS

NAME: STEVEN PAUL JO BS


BORN: FEBRUARY 24, 1955
RESIDENCE: PALO ALTO, CALIFORNIA, USA
ETHNICITY: AMERICAN
CITIZENSHIP: USA
OCCUPATION: CHAIRMAN AND CEO, APPLE INC
NET WORTH: $8.3 BILLION (2011)
RELIGION: BUDDHISM
CHILDREN: 4

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INTRODUCTION
Steven Paul Jobs (born February 24, 1955) is an American business magnate and inventor.
He is the co-founder and chief executive officer of Apple Inc. Jobs also previously served as
chief executive of Pixar Animation Studios ; he became a member of the board of The Walt
Disney Company in 2006, following the acquisition of Pixar by Disney. He was credited in
the 1995 movie Toy Story as an executive producer.
In the late 1970s, Jobs, with Apple co-founder Steve Wozniak, Mike Markkula , and others,
designed, developed, and marketed one of the first commercially suc cessful lines of personal
computers, the Apple II series. In the early 1980s, Jobs was among the first to see the
commercial potent ial of the mouse-driven graphical user interface which led to the creation
of the Macintosh. After losing a power struggle with the board of directors in 1984, Jobs
resigned from Apple and founded NeXT , a computer platform development company
specializing in the higher education and business markets. Apple's subsequent 1996 buyout of
NeXT brought Jobs back to the company he co-founded, and he has served as its CEO since
1997.
In 1986, he acquired the computer graphics division of Lucasfilm Ltd which was spun off as
Pixar Animation Studios. He remained CEO and majority shareholder at 50.1% until its
acquisition by The Walt Disney company in 2006. Consequently Jobs became Disney's
largest individual shareholder at 7% and a member of Disney's Board of Directors.
Jobs' history in business has contributed much to the symbolic image of the idiosyncratic,
individualistic Silicon Valley entrepreneur, emphasizing the importance of design and
understanding the crucial role aesthetics play in public appeal. His work driving forward the
development of products that are both functional and elegant has earned him a devoted
following.

CAREER
BEGINNINGS OF APPLE COMPUTER
In 1976, Steve Jobs, Steve Wozniak and Ronald Wayne, with later funding from a then-semiretired Intel product-marketing manager and engineer A.C. "Mike" Markkula Jr., founded
Apple. Prior to co-founding Apple, Wozniak was an electronics hacker. Jobs and Wozniak

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had been friends for several years, having met in 1971, when their mutual friend, Bill
Fernandez, introduced 21-year-old Wozniak to 16-year-old Jobs. Steve Jobs managed to
interest Wozniak in assembling a computer and selling it. As Apple continued to expand, the
company began looking for an experienced executive to help manage its expansion.
In 1978, Apple recruited Mike Scott from National Semiconductor to serve as CEO for what
turned out to be several turbulent years. In 1983, Steve Jobs lured John Sculley away from
Pepsi-Cola to serve as Apple's CEO, asking, "Do you want to sell sugar water for the rest of
your life, or do you want to come with me and change the world?" The following year, Apple
aired a Super Bowl television commercial titled "1984." At Apple's annual shareholders
meeting on January 24, 1984, an emotional Jobs introduced the Macintosh to a wildly
enthusiastic audience; Andy Hertzfeld described the scene as "pandemonium." The
Macintosh became the first commercially successful small computer with a graphical user
interface. The development of the Mac was started by Jef Raskin , and eventually taken over
by Jobs.
While Jobs was a persuasive and charismatic director for Apple, some of his employees from
that time had described him as an erratic and temperamental manager. An industry-wide sales
slump towards the end of 1984 caused deterioration in Jobs working relationship with
Sculley, and at the end of May 1985 following an internal power struggle and an
announcement of significant layoffs Sculley relieved Jobs of his duties as head of the
Macintosh division.

NEXT COMPUTER
Around the same time, Jobs founded another computer company, NeXT Computer. Like the
Apple Lisa , the NeXT workstation was technologically advanced; however, it was largely
dismissed by industry as cost-prohibitive. Among those who could afford it, however, the
NeXT workstation garnered a strong following because of its technical strengths, chief
among them its object-oriented software development system. Jobs marketed NeXT products
to the scientific and academic fields because of the innovative, experimental new
technologies it incorporated (such as the Mach kernel, the digital signal processor chip, and
the built-in Ethernet port).
The NeXTcube was described by Jobs as an "interpersonal" computer, which he believed was
the next step after "personal" computing. That is, if computers could allow people to
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communicate and collaborate together in an easy way, it would solve many of the problems
that "personal" computing had come up against.
During a time when e -mail for most people was plain text, Jobs loved to demo the NeXT's email system, NeXTMail, as an example of his "interpersonal" philosophy. NeXTMail was
one of the first to support universally visible, clickable embedded graphics and audio within
e-mail. Jobs ran NeXT with an obsession for aesthetic perfection, as evidenced by such things
as the NeXTcube's magnesium case. This put considerable strain on NeXT's hardware
division, and in 1993, after having sold only 50,000 machines, NeXT transitioned fully to
software development with the release of NeXTSTEP/Intel.

PIXAR AND DISNEY


In 1986, Jobs bought The Graphics Group (later renamed Pixar) from Lucasfilm's computer
graphics division for the price of $10 million, $5 million of which was given to the company
as capital.
The new company, which was originally based at Lucasfilm's Kerner Studios in San Rafael,
California, but has since relocated to Emeryville, California , was initially intended to be a
high-end graphics hardware developer. After years of unprofitability selling the Pixar Image
Computer, it contracted with Disney to produce a number of computer-animated feature
films, which Disney would co-finance and distribute.
The first film produced by the partnership, Toy Story, brought fame and critical acclaim to
the studio when it was released in 1995. Over the next ten plus years, under Pixar's creative
chief John Lasseter, the company would produce the box-office hits A Bug's Life (1998), Toy
Story 2 (1999), Monsters, Inc. (2001), Finding Nemo (2003), The Incredibles (2004), Cars
(2006), Ratatouille (2007), WALL-E (2008), Up (2009) and Toy Story 3 (2010). Finding
Nemo, The Incredibles, Ratatouille , WALL-E, Up and Toy Story 3 each received the
Academy Award for Best Animated Feature , an award introduced in 2001.
In the years 2003 and 2004, as Pixar's contract with Disney was running out, Jobs and Disney
chief executive Michael Eisner tried but fa iled to negotiate a new partnership, and in early
2004 Jobs announced that Pixar would seek a new partner to distribute its films once its
contract with Disney expired.

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In October 2005, Bob Iger replaced Eisner at Disney, and Iger quickly worked to patch up
relations with Jobs and Pixar. On January 24, 2006, Jobs and Iger announced that Disney had
agreed to purchase Pixar in an all-stock transaction worth $7.4 billion. Once the deal closed,
Jobs became The Walt Disney Company's largest single shareholder with approximately 7%
of the company's stock. Jobs holdings in Disney far exceed those of Eisner, who holds 1.7%,
and Disney family member Roy E. Disney, who held about 1% of the company's stock and
whose criticisms of Eisner included the soured Pixar relationship and accelerated his ousting.
Jobs joined the company's board of director s upon completion of the merger.
Jobs also helps oversee Disney and Pixar's combined animation businesses with a seat on a
special six-man steering committee.

RETURN TO APPLE
In 1996, Apple announced that it would buy NeXT for $429 million. The deal was finalized
in late 1996, bringing Jobs back to the company he co-founded. He soon became Apple's
interim CEO after the directors lost confidence in and ousted then-CEO Gil Amelio in a
boardroom coup. In March 1998, to concentrate Apple's efforts on returning to profitability,
Jobs immediately terminated a number of projects such as Newton, Cyberdog, and OpenDoc.
In the coming months, many employees developed a fear of encountering Jobs while riding in
the elevator, "afraid that they might not have a job when the doors opened. The reality was
that Jobs' summary executions were rare, but a handful of victims was enough to terrorize a
whole company." Jobs also changed the licensing program for Macintosh clones, making it
too costly for the manufacturers to continue making machines.
With the purchase of NeXT, much of the company's technology found its way into Apple
products, most notably NeXTSTEP, which evolved into Mac OS X. Under Jobs guidance the
company increased sales significantly with the introduction of the iMac and other new
products; since then, appealing designs and powerful branding have worked well for Apple.
At the 2000 Macwor ld Expo, Jobs officially dropped the "interim" modifier from his title at
Apple and became permanent CEO. Jobs quipped at the time that he would be using the title
'iCEO.'
In recent years, the company has branched out, introducing and improving upon other digital
appliances. With the introduction of the iPod portable music player, iTunes digital music
software, and the iTunes Store, the company made forays into consumer electronics and
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music distribution. In 2007, Apple entered the cellular phone business with the introduction
of the iPhone, a multi-touch display cell phone, which also included the features of an iPod
and, with its own mobile browser, revolutionized the mobile browsing scene. While
stimulating innovation, Jobs also reminds his employees that "real artists ship", by which he
means that de livering working products on time is as important as innovation and attractive
design.
Jobs is both admired and criticized for his consummate skill at persuasion and salesmanship,
which has been dubbed the "reality distortion field" and is particularly evident during his
keynote speeches (colloquially known as "Stevenotes") at Macworld Expos and at Apple's
own World Wide Developers Conferences.
In 2005, Jobs responded to criticism of Apple's poor recycling programs for e-waste in the
U.S. by lashing out at environmental and other advocates at Apple's Annual Meeting in
Cupertino in April. However, a few weeks later, Apple announced it would take back iPods
for free at its retail stores. The Computer TakeBack Campaign responded by flying a banner
from a plane over the Stanford University graduation at which Jobs was the commencement
speaker. The banner read "Steve Don't be a mini-player recycle all e-waste". In 2006, he
further expanded Apple's recycling programs to any U.S. customer who buys a new Mac.
This program includes shipping and "environmentally friendly disposal" of their old systems.

BUSINESS LIFE
WEALTH
As of October 2009, Jobs owned 5.426 million shares of Apple, most of which was granted in
2003 when Jobs was given 10 million shares. He also owned 138 million shares of Disney,
which he received in exchange for Disney's acquisition of Pixar. Forbes estimated his net
wealth at $5.1 billion in 2009, making him the 43rd wealthiest American. Jobs has been
criticized for his lack of public philanthropy despite his wealth, particularly in recent years as
other billionaires (such as Bill Gates and Warren Buffett) have pledged significant portions of
their fortunes to charity. As of 2006, Jobs had not appeared on national tallies of charitable
donations totaling $1 million or more, as compiled by Indiana University's Center on
Philanthropy. Although he may well have donated significant sums anonymously, some have
doubted this assumption, given Jobs' equally poor track record on corporate philanthropy;

239

after resuming control of Apple in 1997, Jobs eliminated all corporate philanthropy programs
as a temporary cost-cutting measure until profitability improved. Despite the company's
record-breaking profits and $40 billion cash on hand, Jobs has not reinstated a philanthropic
division at Apple.

STOCK OPTIONS BACKDATING ISSUE


In 2001, Steve Jobs was granted stock options in the amount of 7.5 million shares of Apple
with an exercise price of $18.30, which allegedly should have been $21.10, thereby incurring
taxable income of $20,000,000 that he did not report as income. This indicated backdating.
Apple overstated its earnings by that same amount. If found liable, Jobs might have faced a
number of criminal charges and civil penalties. Apple claimed that the options were
originally granted at a special board meeting that may never have taken place. Furthermore,
the investigation is focusing on false dating of the options resulting in a retroactive $20
million increase in the exercise price. The case is the subject of active criminal and civil
government investigations, though an independent internal Apple investigation completed on
December 29, 2006, found that Jobs was unaware of these issues and that the options granted
to him were returned without being exercised in 2003. On July 1, 2008, a $7 billion class
action suit was filed against several members of the Apple Board of Directors for revenue
lost due to the alleged securities fraud.

MANAGEMENT STYLE
Much has been made of Jobs' aggressive and demanding personality. Fortune wrote that he
"is considered one of Silicon Valley's leading egomaniacs." Commentaries on his
temperamental style can be found in Mike Moritz's The Little Kingdom, one of the few
authorized biographies of Jobs; The Second Coming of Steve Jobs , by Alan Deut schman; and
iCon: Steve Jobs , by Jeffrey S. Young & William L. Simon.
Jef Raskin, a former colleague, once said that Jobs "would have made an excellent king of
France," alluding to Jobs' compelling and larger-than-life persona.
Jobs has always aspired to position Apple and its products at the forefront of the information
technology industry by foreseeing and setting trends, at least in innovation and style. He
summed up that self-concept at the end of his keynote speech at the Macworld Conference
and Expo in January 2007 by quoting ice hockey legend Wayne Gretzky:

240

There's an old Wayne Gretzky quote that I love. 'I skate to where the puck is going to be, not
where it has been.' And we've always tried to do that at Apple. Since the very beginning. And
we always will.
Steve Jobs
Floyd Norman said that at Pixar, Jobs was a "mature, mellow individual" and never interfered
with the creative process of the filmmakers.
In 2005, Steve Jobs banned all books published by John Wiley & Sons from Apple Stores in
response to their publishing an unauthorized biography, iCon: Steve Jobs . In its 2010 annual
earnings report, Wiley said it had "closed a deal ... to make its titles available for the iPad."

INVENTIONS
Jobs is listed as either primary inventor or co-inventor in over 230 awarded patents or patent
applications related to a range of technologies from actual computer and portable devices to
user interfaces (including touch-based), speakers, keyboards, power adapters, staircases,
clasps, sleeves, lanyards and packages.

PERSONAL LIFE
Jobs marrie d Laurene Powell, on March 18, 1991. Presiding over the wedding was the Zen
Buddhist monk Kobun Chino Otogawa. The couple have a son, Reed Paul Jobs, and two
other children. Jobs also has a daughter, L isa Brennan-Jobs (born 1978), from his relationship
with Bay Area painter Chrisann Brennan. She briefly raised their daughter on welfare when
Jobs denied paternity, claiming that he was sterile; he later acknowledged paternity.
In the unauthorized biography, The Second Coming of Steve Jobs , author Alan Deutschman
reports that Jobs once dated Joan Baez. Deutschman quotes Elizabeth Holmes, a friend of
Jobs from his time at Reed College, as saying she "believed that Steve became the lover of
Joan Baez in large measure because Baez had been the lover of Bob Dylan." In another
unauthorized biography, iCon: Steve Jobs by Jeffrey S. Young & William L. Simon, the
authors suggest that Jobs might have married Baez, but her age at the time (41) meant it was
unlikely the couple could have children.
Jobs is also a Beatles fan. He has referenced them on more than one occasion at Keynotes and
also was interviewed on a showing of a Paul McCartney concert. When asked about his
business model on 60 Minutes, he replied:
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My model for business is The Beatles: They were four guys that kept each other's negative
tendencies in check; they balanced each other. And the total was greater than the sum of the
parts. Great things in business are not done by one person, they are done by a team of people.
In 1982, Jobs bought an apartment in The San Remo, an apartment building in New York
City with a politically progressive reputation, where Demi Moore, Steven Spielberg, Steve
Martin , and Princess Yasmin Aga Khan, daughter of Rita Hayworth, also had apartments.
With the help of I.M. Pei, Jobs spent years renovating his apartment in the top two floors of
the building's north tower, only to sell it almost two decades later to U2 front man Bono. Jobs
had never moved in.
In 1984, Jobs purchased a 17,000-square-foot (1,600 m2 ), 14 bedroom Spanish Colonial
mansion, designed by George Washington Smith in Woodside, California , also known as
Jackling House. Although it reportedly remained in an almost unfurnished state, Jobs lived in
the mansion for almost ten years. According to reports, he kept an old BMW motorcycle in
the living room, and let Bill Clinton use it in 1998. Since the early 1990s, Jobs has lived in a
house in the Old Palo Alto neighborhood of Palo Alto. President Clinton dined with Jobs and
14 Silicon Valley CEOs there August 7, 1996.
He allowed the mansion to fall into a state of disrepair, planning to demolish the house and
build a smaller home on the property; but he met with complaints from local preservationists
over his plans. In June 2004, the Woodside Town Council gave Jobs approval to demolish the
mansion, on the condition that he advertise the property for a year to see if someone would
move it to another location and restore it. A number of people expressed interest, including
several with experience in restoring old property, but no agreements to that effect were
reached. Later that same year, a local preservationist group began seeking legal action to
prevent demolition. In January 2007 Jobs was denied the right to demolish the property, by a
court decision. The court decision was overturned on appeal in March 2010 and the mansion
was demolished beginning February 2011
He usually wears a black long-sleeved mock turtleneck made by St. Croix , Levi's 501 blue
jeans, and New Balance 991 sneakers. He is a pescetarian.
His choice of car is a silver 2006 Mercedes SL 55 AMG, which has no licence plates.
Jobs had a public war of words with Dell Computer CEO Michael Dell, starting when Jobs
first criticized Dell for making "un-innovative beige boxes." On October 6, 1997, in a Gartner
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Symposium, when Michael Dell was asked what he would do if he owned then-troubled
Apple Computer, he said "I'd shut it down and give the money back to the shareholders." In
2006, Steve Jobs sent an email to all employees when Apple's market capitalization rose
above Dell's. The email read:
Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's
stock market close, Apple is worth more than Dell. Stocks go up and down, and things may
be different tomorrow, but I thought it was worth a moment of reflection today. Steve.

HONORS
He was awarded the National Medal of Technology from President Ronald Reagan in 1984
with Steve Wozniak (among the first people to ever receive the honor), and a Jefferson
Award for Public Service in the category "Greatest Public Service by an Individual 35 Years
or Under" (aka the Samuel S. Beard Award) in 1987.

On November 27, 2007, Jobs was named the most powerful person in business by
Fortune Magazine.

On December 5, 2007, California Governor Arnold Schwarzenegger and First Lady


Maria Shriver inducted Jobs into the California Hall of Fame , located at The California
Museum for History, Women and the Arts.

In August 2009, Jobs was selected the most admired entrepreneur among teenagers on a
survey by Junior Achievement.

On November 5, 2009, Jobs was named the CEO of the decade by Fortune Magazine.

In November 2009 Jobs was ranked #57 on Forbes : The World's Most Powerful People.

In December 2010, the Financial Times named Jobs its person of the year for 2010,
ending its essay by stating, "In his autobiography, John Sculley, the former PepsiCo
executive who once ran Apple, said this of the ambitions of the man he had pushed out:
'Apple was supposed to become a wonderful consumer products company. This was a
lunatic plan. High-tech could not be designed and sold as a consumer product.' How
wrong can you be?

MY POINT OF VIEW
Steven jobs give us a good example of an entrepreneur who started his career path from
scratch. He showed himself as a good CEO, good co-worker and a leader who can manage all
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with a diversified work force. He knew who to take work from the people and who is right or
fit for the right job.
Jobs, for all of his virtues, clings to the Great Man Theory of Leadership a CEO-centric
model of executive power that is outmoded, unsustainable, and, for most of us mere mortals,
ineffective in a world of non-stop change. A Wired magazine cover story from last year made
the point well. Jobs the CEO, in search of a space in the companys crowded parking lot,
regularly leaves his Mercedes in a handicapped space, sometimes taking up two spaces. The
pattern became so noticeable that employees, according to the article, put notes on his
windshield that read, Park Different.
Jobs fabled attitude toward parking, as Kahney says, reflects his approach to business:
For him, the regular rules do not apply. That means shrouding his company in secrecy;
treating his employees to tyrannical outbursts; and refusing basic accommodations that would
make beautifully designed products more customer-friendly.
Steven Jobs is a smartest guy in the room syndrome as it pertains to manage ment at the
CEO level. Humility is not part of the Steve Jobs leadership repertoire and thats worked
out fine for him,, adding that fellow CEOs would be wise not to emulate Jobs example.

REFRENCES
http://en.wikipedia.org/wiki/Steve_Jobs#Personal_life
http://upgradeosx.com/steve-jobs-jumps-40-places-on-forbes%E2%80%99-billionaires-list/
http://thenextweb.com/apple/2011/03/01/steve -jobs -blocked-from-british-knighthood/
http://www.crunchbase.com/person/steve -jobs

244

WILLIAM LEVITT

NAME: WILLIAM LEVITT


BIRTH DATE: FEBRUARY 11, 1907
DEATH DATE: JANUARY 28, 1994
PLACE OF BIRTH: BROOKLYN, NEW YORK, UNITED STATES OF
AMERICA
NATIONALITY: AMERICAN
OCCUPATION: REAL ESTATE DEVELOPER
RELIGION: JEWISH
CHILDREN: WILLIAM JR IN 1933

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INTRODUCTION
William Levitt (1907-1994) gained national attention as the man who mass produced houses
at a rate of one every 16 minutes. He was introduced to Americans on the July 3, 1950 cover
of "Time" magazine as the "cocky rambunctious hustler" prone to exaggeration. Levitt touted
his community as a new form of ideal American life.
William Levitt's father, Abraham Levitt, was the son of a poor rabbi who immigrated from
Eastern Europe. Abraham Levitt left school at age 10, but educated himself. At the age of 20
he entered law school, specializing in real estate law. He married Pauline Biederman in 1906.
The ir first son, William Jaird was born on February 11, 1907 in Brooklyn, New York. Five
years later the couple had another son, William Levitt. As a child, William Levitt would put
on a suit, run into the living room and announce his plans to go to Manhattan to make money
and live well. Levitt attended Public School 44 and Boys High School in Bedford-Stuyvesant.
He played lacrosse and was on the swim team. Levitt majored in mathematics and English at
New York University, but left in his junior year.
Abraham Levitt represented real estate clients and occasionally bought and sold properties.
He used money that his wife made from sewing to buy vacant lots in Brooklyn. Around 1925,
he received 100 plots in Rockville Centre from a bankrupt client and financed builders who
bought the land and started to construct houses there. When the builders went out of business,
he had to take control of the partially finished houses. Abraham encouraged his sons to finish
the homes, with existing crews.

MASS PRODUCTION OF HOUSES


"Any damn fool can build homes. What counts is how many you can sell for how little."W i l l i a m L e v i t t.
William Levitt the entrepreneur was an American real-estate developer known as father of
Suburbia. He introduced mass-production techniques to construct al rge developments of
houses selling. His new idea popularized the community system which helped relatively poor
people to afford houses in or near the city.
In 1929, Abraham founded Levitt and Sons, Inc. William Levitt became company president
at the age of 22, handling the advertising, sales, and financing. Alfred Levitt, still a teenager,

246

became vice president of design and drafted plans for the first Levitt house, a six bedroom,
two bathroom Tudor style home that sold for over $14,000 in 1929. The Levitts sold 600 of
these upper middle class homes, part of the Strathmore project, in four years, even though it
was during the Great Depression.
In November 1929, William Levitt married Rhoda Kirshner. The couple had a son, William
Jr., in 1933. Levitt earned a reputation as the person to see for high-end, custom homes on
Long Island, New York's North Shore, called the Gold Coast. The company built 200 homes
in the North Strathmore development in Manhasset, which sold for $9,100 to $18,500. The
Levitts built another 1,200 homes in Manhasset, Great Neck, and Westchester County. Radio
stars, prominent journalists, surgeons, business people, and lawyers bought the upscale Levitt
houses. Selling these homes made the Levitt family rich.
Levitt & Sons chose an area Island Trees near Hempstead, Long Island as the site for its huge
building project after the war II. The Company named it *Levittown*. Levitt's new idea in
creating this planned community was to build the houses in the manner of a line. In normal
lines, the workers stay stationary and the product moves down the line. In Levitt's
homebuilding assembly line, the houses obviously could not move. Residents started moving
into Levittown in New York in 1947. Houses were sold for between $8,000 and $12,000 with
monthly payments as low as $57, which was a low price even by 1947 standards. The
residents would come to be known as Levitt owners. Levitt went on building more and more
communities but his project after Levitt Town consisted of 17,000 homes. Residents got their
possession in 1952. Levitt also developed the community *Belair at Bowie*, in Bowie,
Maryland. Levitt also built communities like Palm Coast, Florida, Richmond, Virginia and
Fairfax. In early 1960s, the company built a 5000 house community in New Jer sey called
Strathmore. Levitt sold his company to International Telephone and Telegraph for $90
million. Levitt lost his most of the wealth in unsuccessful investments. Levitt basically
brought a new idea of community housing system. It was his innovation and now we can see
all around the world community housing schemes.
After going through the William Levitt success story what Ive concluded is that he was the
founder of the community housing idea. It was his innovation which brought a great
revolution and through his several projects as mentioned up, many middle class families were
able to afford houses of their own except for paying rents to land lords. For an example we
can take Malik Riaz in Pakistan. We all know how successful he is and what an advantage we
247

got from his housing schemes. Similarly Williams is the person who built several projects by
the help of which many families got a place to live. He offered low value houses with
monthly installments which were low even at that time standards.

SOLD BUSINESS TO ITT


Levitt and Sons built 15 other projects throughout Long Island. In 1952, they brought their
mass production operation to Bucks County, Pennsylvania. After that development was
completed in 1958, Levitt went to Delaware and constructed a 12,000-home Willingboro,
New Jersey project.
Relations among the Levitt family fell apart in 1951 after Alfred divorced his wife, to marry a
19-year-old fashion model he met on a trip to Paris. The brothers split their business affairs in
1954. Alfred developed Queens Apartment complexes and Suffolk housing developments. He
died in 1966, at the age of 54.
William Levitt took his company public in 1960, but lost $1.4 million a year later as housing
demand fell and huge tracts of land near metropolitan areas grew scarce. He quickly changed
tactics, branching out to Chicago, Washington, D.C., and even France and Puerto Rico. Levitt
reduced the scale of projects, dabbled in townhouses, and delegated authority and
decentralized management. He posted a 20 percent average annual increase in sales into the
late 1960s.
After he had built over 140,000 houses around the world, Levitt sold the company to the
International Telephone & Telegraph Corp. for $92 million in July 1967. At the age of 60, he
became incredibly wealthy, getting $62 million in the form of ITT stock. ITT changed the
name of its new subsidiary to Levitt Corp. and Levitt agreed not to build in the United States
for ten years. He entered the agreement thinking he would play a role in ITT affairs, but
executives felt Levitt was too old to take on more responsibility.

LOST FORTUNE
While he was married, Levitt had an ongoing love affair with his secretary, Alice Kenny. He
married her in 1959, divorcing his wife after 29 years of marriage. In 1969, Levitt divorced
his second wife and married Simone Korchin, an art dealer from France.

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Levitt bought a 237-foot yacht, a 30-room mansion in Mill Neck, New York, $3 million in
jewelry, paintings by Renoir, Monet, Degas, and Chagall, and a Rolls Royce. To avoid
paying taxes, he had not converted his ITT stock to cash. Instead, he borrowed against it to
build subdivisions in places like Iran, Venezuela, and Nigeria. When the ITT shares crashed,
Levitt's holdings lost about 90 percent of their original value. Chase Manhattan Bank seized
Levitt's stock as collateral. When the foreign projects floundered, he was millions of dollars
in debt.
Regulators forbade Levitt from doing business in New York. They said he took homeowners'
deposits for Florida homes and money that should have been used for repairs and
maintenance. Investigators claimed that Levitt also looted at least $17 million from his
family's charities to cover personal expenses. He was forced to sell his mansion.
Levitt died in Manhasset, New York on January 28, 1994, on the verge of bankruptcy and
unable to pay his bills. In an interview shortly before his death, Levitt said he would like to
be remembered as "a guy that, I suppose, gave value for low -cost housing. Not somebody
that gave value for half -million-dollar houses. Anybody can do that." Levitt saw himself as
more than a real estate developer. He sold people the American Dream, in its cold war guise.
"No man who owns his own house and lot can be a communist," Levitt once said. "He has too

REFERENCE
www.wikipedia.com ,
www.entrepreneur.com/growyourbusiness/radicalsandvisionaries/article
197662.html
h t t p : / / w w w . a n s w e r s . c o m / t o p i c / w i l l i a m- l e v i t t- 1
http://www.dedicatedwriters.com/biographies/William_Levitt-34776.html

249

JOHN HAROLD JOHNSON

NAME: JOHN HAROLD JOHNSON


BORN: JANUARY 19, 1918
DIED: AUGUST 8, 2005(2005-08-08)
SPOUSE: EUNICE WALKER JOHNSON
ETHNICITY: BLACK
CITIZENSHIP: UNITED STATES OF AMERICAN
OCCUPATION: CEO AND FOUNDER OF JOHNSON PUBLISHING
COMPANY.

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EARLY LIFE AND EDUATION


John H. Johnson born January 19, 1918 in rural Arkansas City, Arkansas was the grandson of
slaves His father Leroy Johnson was killed in a sawmill accident when "young Johnny" was
eight years of age. His mother Gertrude Jenkins Johnson further impoverished did not give
hope and her faith they could have more than what Arkansas offered. She saved her meager
earnings as a cook and washerwoman for years until she could afford to move her family to
Chicago.
There, Johnson was exposed to something he never knew existed: middle class blacks. He
attended an all-black high school during the day and poured over self-improvement books at
night. His classmates at DuSable High were Nat King Cole, Redd Foxx and future
entrepreneur William Abernathy.

CAREER
Johnson is the founder, publisher, chairman and CEO of the Johnson Publishing Company
Inc., Chicago, Ill., and the largest black-owned publishing company in the world. Ebony is
the nation's number one African-American -oriented magazine with a circulation of 1.7
million and a monthly readership of 11 million.
Johnson Publishing Company also has a book division and employs more than 2,600 people
with sales of over $388 million.
Johnson Publishing owns Fashion Fair Cosmetics, the number one makeup and skin care
company for women of color around the world and Supreme Beauty products, hair care for
men and women and is involved in television production and produces the Ebony Fashion
Fair, the world's largest traveling fashion show, which has donated over $47 million to
charity. The show visits more than 200 cities in the United States, Canada and the Caribbean.
Johns H. Johnson serves on the boards of directors of Dillard's Inc., and he has served on the
boards of First Commercial Bank, Little Rock; Dial Corporation; Zenith Radio Corporation;
and Chrysler Corporation.

HONORS
In 1996, President Bill Clinton bestowed the Presidential Medal of Freedom on Johnson. In
1997 Johnson was inducted into the Junior Achievement National Business Hall of Fame.
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By that year, Johnson had received, besides the afore-mentioned

Presidential Medal of Freedom,

the NAACP's Spingarn Medal,

the Horatio Alger Award, and

The Wall Street JournalDow Jones Entrepreneurial Excellence Award.

ACHIEVEMENTS
In early 2001, Johnson was inducted into the Arkansas Business Hall of Fame. The founder,
publisher, chairman and CEO of the largest African-American publishing company in the
world advised the audience to, "Convince people it is in their best interest to help you." He
held the distinction of having been the first African American placed on Forbes' list of 400
wealthiest Americans. He had also been awarded honorary doctorates by the University of
Arkansas at Pine Bluff, Harvard University, the University of Southern California, Carnegie
Mellon University, Eastern Michigan University, and Wayne State University.

THE NEGRO DIGEST


Once the idea of The Negro Digest occurred to him, it began to seem like a "black gold
mine", Johnson stated in his autobiography succeeding against the Odds. Johnson remained
enthusiastic even though he was discouraged on all sides from doing so. Only his mother, a
woman with biblical faith and deep religious convictions, as well as a powerful belief in her
son, supported his vision and allowed him to use her furniture as collateral for a $500 loan.
He used this loan to publish the first edition of Negro Digest in 1942.

EBONY MAGAZINE
Although that publication achieved some success and at its height had a circulation of more
than 100,000, it could not be compared with Johnson's subsequent publication, Ebony
magazine , which was so popular that its initial run of 25,000 copies easily sold out. The
articles in Ebony, which were designed to look like those in LIFE or Look magazines,
emphasized the achievements of successful African American. Photo essays about current
events and articles about race relations were also included in the magazine. Initially focused
on the rich and famous in the African American community, Johnson expanded the reporting
to include issues such as "the white problem in America", African American militancy,

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crimes by African Americans against African Americans, civil rights legislation, freedom
rides and marches, and other aspects of segregation and discrimination. Trained historians
were recruited for the magazine's staff so that the contributions of African American
Americans to the history of the United States could be adequately documented. African
American models were used in the magazine's advertisements and a conscious effort was
made to portray positive aspects of African American life and culture. Everything in the
magazine was addressed to the African American consumer. Johnson maintained that
Ebony's success was due to the positive image of African Americans that it offered.

JET MAGAZINE
In 1950, Johnson launched Tan (a true confessions -type magazine) and, in 1951, Jet
magazine , a weekly news digest. Later publications included African American Stars and
Ebony Jr., a children's magazine. Although all of the magazines achieved a measure of
success, none was able to compete with Ebony, which in its 40th year of publication had a
circulation of 2,300,000 and was the primary reason that Johnson was considered one of the
400 richest individuals in the United States. In 1972, he was named publisher of the year by
the major magazine publishers in the United States.

LEADERSHIP EXPERIENCES
Johnson expanded his business interests to areas other than his magazines. He became
chairperson and chief executive officer of the Supreme Life Insurance Company, where he
had begun as part-time office boy. He developed a line of cosmetics, purchased three radio
stations, and started a book publishing company, and a television production company. He
served on the board of directors of several major businesses, such as the Greyhound
Corporation, and received numerous honors and awards for his achievements, including the
National Association for the Advancement of Colored People's Spingarn Medal in 1966 for
his contributions in the area of race relations.
In 1993, Johnson published his autobiography wherein he states "if it could happen to a Black
boy from Arkansas it could happen to anyone". This publication celebrated the 50th
anniversary of his publishing company.

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MANAGEMENT STYLES
Johnson had a problem with distribution until he teamed up with Joseph Levy a magazine
distributor who was impressed with him. Levy provided valuable marketing tips and opened
the doors that allowed the new digest to reach newsstands in other urban centers. Within six
months circulation had reached 50,000. This publication covered African American history,
literature, arts, and cultural issues. After several decades of publication its name was changed
to Blac k World.
Johnson expanded his business interests to areas other than his magazines. He became
chairperson and chief executive officer of the Supreme Life Insurance Company, where he
had begun as part-time office boy. He developed a line of cosmetics, purchased three radio
stations, and started a book publishing company, and a television production company. He
served on the board of directors of several major businesses, such as the Greyhound
Corporation, and received numerous honors and awards for his achievements, including the
National Association for the Advancement of Colored People's Spingarn Medal in 1966 for
his contributions in the area of race relations.
In 1993, Johnson published his autobiography wherein he states "if it could happen to a Black
boy from Arkansas it could happen to anyone". This publication celebrated the 50th
anniversary of his publishing company.

REFERENCES
http://www.woopidoo.com/biography/john.h.johnson/index.htm
http://www.good2work.com/article/1099
http://en.wikipedia.org/wiki/ john.h.johnson
http://www.bookrags.com/wiki/john.h.johnson
http://mubbisherahmed.wordpress.com/2010/04/04/ john.h.johnson management-style -andcios/

254

GORDON E. MOORE

NAME: GORDON E. MOORE


BORN: JANUARY 3, 192 9
OCCUPATION: RETIRED / CHAIRMAN EMERITUS, CO-FOUNDER AND
FORMER CHAIRMAN AND CEO OF INTEL CORPORATION INC
NET WORTH: $3.7 BILLION USD (2008)
CURRENT RESIDENCE: CALIFORNIA.
CITIZENSHIP: AMERICAN

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BACKGROUND
Gordon E. Moore, Ph.D. co-founded Intel Corporation in 1968 and served as its Chief
Executive Officer from 1975 to 1987. Dr. Moore served as the President of Intel Corporation
from 1975 to 1979 and served as its Executive Vice President until 1975. He served as the
Director of Research and Development for the Fairchild Semiconductor Division of Fairchild
Camera and Instrument Corporation. Dr. Moore serves as the Chairman of the Board of
Trustees at Gordon and Betty Moore Foundation. He served as the Chairman Emeritus of
Intel Corporation since 1997 and served as its Chairman from 1979 to May 1997. He served
as the Chairman of California Institute of Technology and serves as its Senior Trustee. He has
been an Independent Director of Gilead Sciences Inc., since January 1996. He has been a
Director of Transamerica Corporation since 1981. Dr. Moore serves as a Director of The
International Engineering Consortium. He serves as a Member of the National Academy of
Engineering and a Trustee of Conservation International. Dr. Moore served as a Member of
Gilead Sciences Inc.'s Business Advisory Board from July 1991 to January 1996. He served
as Director of Intel Corporation from 1968 to 2001, and its Director Emeritus since 2001. Dr.
Moore is widely known for Moore's Law, in which in 1965, he predicted that the number of
components the industry would be able to place on a computer chip would double every year.
In 1975, he updated his prediction to once every two years. He received the National Medal
of Technology in 1990 and the Presidential Medal of Freedom, the Nation's Highest Civilian
Honor, in 2002. He is a Fellow of the IEEE. He is a Fellow of the Royal Society of
Engineers. Dr. Moore holds a B.S. in Chemistry from the University of California at Berkeley
in 1950 and a Ph.D. in Chemistry and Physics from California Institute of Technology in
1954.

LEADERSHIP
Gordon Moore led Intel from 1975 until 1987. Moore was a naturally brilliant engineer and
was the firms primary technology innovator. In 1965, he came up with the radical Moores
Law. The observation made in 1965 by Gordon More, that the number of transistors per
square inch on integrated circuits had doubled every year since the integrated circuit was
invented. Moore predicted that this trend would continue for the foreseeable future. In
subsequent years, the pace slowed down a bit, but data density has doubled approximately

256

every 18 months, and this is the current definition of Moore's Law, which Moore himself has
blessed. Most experts, including Moore himself, expect Moore's Law to hold for at least
another two decades. Or in simple words the law stated that the hardware computing power
doubled every two years. The scientists at Intel used this law as a goal and it has ever since
then been consistently achieved by them.
Moores management style was sort of a hands -off one and focused more on the development
of technology and the integration of technology in doing work. Moore was a rather quiet
person and often allowed others to make decisions. However Moore helped mentor the
subordinates at the company and was also the mentor for Andy Grove who is now the CEO
of the company.

MANAGEMENT STYLE
Moore strongly believed in using a hands -off approach when it came to managing things. His
belief was that getting too involved in how people work, often led to them not performing to
their maximum potential and also caused them to make a number of mistakes. This is why he
believed in stating the rules, goals and laws and then got hit team to do the best that they
could, however they could. Managers who practice this style are devoted to rekindling the
human spirit within their companies by keeping their hands off their employees happiness
and allowing success to happen. These leaders recognize that real power comes from
partnering, not criticizing. In this system, each employees strengths are honored and honed
in a climate of partnership and goal- setting. The Hands-Off Manager finally provides the
solution to the age-old problem of getting the best performance out of people without
frustrating them or you.

COMMUNICATION
Moore believed that communication was quite essential to making the organization
successful. However Moore himself was not what you would call the greatest of
communicators. Nonetheless he made up for that by delivering his word with precision and
using facts and figures to spur his team and subordinates on.
He however felt that over communicating could be a problem at times, so he tried to keep his
communication to the point and then relied to his trusty hands-off approach to do the rest.

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TEAMWORK
Noyce and Gordon E. Moore (a chemist and physicist) founded Intel in 1968 when they left
Fairchild Semiconductor. The relaxed culture that Noyce brought to Intel was a carryover
from his style at Fairchild Semiconductor. He treated employees as family rewarding and
encouraging team work. His follow -your-bliss management style set the tone for many
Valley success stories.
This just goes to show, that despite having no history or background in the field of
management, Moore was still well aware of the fact that teamwork was essential to get the
most out of your employees. Throughout his career Moore has gone on to emphasize that
teamwork is crucial to get the maximum out of your employees and that without team work,
it is close to impossible for a company to progress.

CONCLUSION
Moore was one of the few entrepreneurs out there, who were actually book and street smart.
Not only was he well educated, but he also knew how the practical world around him worked.
He then felt the need to use his expertise in the world of technology, where with the help of
the Moores Law, he brought a revolution to the computer world and has ever since been
hailed as one of the greatest things to ever happen in that sector.
All in all the contributions that Moore has made to the world, have helped lead to the
technological advancements of numerous devices. It would also be harsh not to mention that
due to his contributions, Intel has become the market giant that it is today.

REFERENCES
http://en.wikipedia.org/wiki/Gordon_Moore
http://www.intel.com/pressroom/kits/bios/moore.htm
http://investing.businessweek.com/research/stocks/private/person.asp?personId=651868&pri
vcapId=11852904&previousCapId=29002&previousTitle=GILEAD%20SCIENCES%20INC
http://en.wikipedia.org/wiki/Moore%27s_law
http://enhanceyourleadership.com/index.php?blog=2&cat=2
http://www.computer.org/portal/web/awards/moore-goode

258

DONALDALD AND DORIS FISHER

259

FOUNDER OF GAP.INC
Donald and Doris Fisher founded and then transformed a single store in San Francisco
stocked with Levis, records and tapes into a thriving, nearly $15 billion global business with
more than 134,000 employees, more than 3,100 stores and a permanent place in pop cultural
history. They have been credited with inventing the specialty retail category, though they
were equally known for their commitment to philanthropy and civic work.
Throughout his distinguished career, Donald kept a sharp focus on growing Gap Inc.
thoughtfully, but always maintained a commitment to his family, his philanthropic and civic
duties and his love of the arts.
Donald had never anticipated that his once small business would grow so rapidly, that it
would revolutionize retail and transcend cultures. Hed always envisioned a modest chain of
casual wear stores maybe, as he once put it, as many as 10. His approach was led by passion
and determination doing things his own way.

GROWING UP
Donald was a third-generation San Franciscan. His great-grandfather, Samuel Fisher, arrived
in San Francisco, from New York, in the 1860s a decade after the discovery of gold
transformed California.
Donald was born to Sydney and Aileen Fisher, on Sept. 3, 1928. He was the first of three
boys. He had always considered himself extremely fortunate to have such good parents.
From his father, a cabinetmaker, Donald learned the nuances of running a businesshe was
strongly encouraged to take risks. Change or fail would become one of Donalds most
famous quotes. Hed described Aileen as having a no-nonsense approach to life, a loving
woman who encouraged her sons to make practical, smart decisions. Shed imparted a
number of family expressions that stuck in Donalds head: never say no when you can say
yes.
Donald had a comfortable, middle class upbringing, growing up in an attractive, two-story
house in San Franciscos Sea Cliff neighborhood. He had a great view of the Bay. Donald
recalled watching the Golden Gate Bridge get built, in the mid 1930s, cable by cable.

260

He especially enjoyed weekend trips to Stinson Beach, where hed found his love of the open
water. Hed often swim and fish there with his brothers. As he grew up, he became an
accomplished swimmereventually serving as captain of both the swim and water polo
teams while a senior at UC Berkeley (Cal).
At Cal, Donald earned four varsity letters in swimming and another three in water polo, a
remarkable accomplishment.
Hed learned different strokes and swimming styles as early as 8.
He moved through San Franciscos public school system, finishing at Lowell High School,
where he was a top competitive swimmer. While there, he broke the 50-yard, city free-style
record his junior year.
Donald attended UC Berkeley, where he was a member of Delta Kappa Epsilon fraternity and
from which he graduated, in 1951, with a Bachelor of Science degree in Business
Administration. He didnt have to look far for a career opportunity; it was right there in his
family.
A few years earlier, his mother, Aileen, had inherited a family business, L. & E. Emanuel
Incorporated, a mill and cabinet making firm, after her father had died. Relatives had founded
the company in 1848.
The business, which had supplied custom product showcases to such customers as Macys,
was positioned as a future for Donald and his brothers. But while taking an investments and
real estate course at Cal, Donald was struck by a fascinating professor who had filled his head
with exciting ideasideas that didnt involve the family business.
After college, Donald served as a U.S. Naval Reserve officer; with a mind full of brewing
ideas, he worked for his father in the cabinet-making business.
Donald was an accomplished swimmer whose determination would suit him well in business.
Still, he was determined to branch out on his own, to create his own futureeventually
pursuing real estate, building spec homes and converting old hotels into residences for
seniors. He never shied away from the possibility of failure, constantly pushing himself to
discover something better.
Shortly after college, Donalds life would be forever altered. Thats when he married his true
soul-mate, Doris Feigenbaum, a long-time family friend.
261

THE PATH TO GAP


While Donald both failed and succeeded as an entrepreneur during the 1950s and 60s,
something stirred in him.
He had always sought a business that wouldnt just pay the billsbut excite, no matter the
sector.
In the mid-1960s, Donald, who had been working with his father, Sydney, branched out to
start his own business: refurbishing old hotels. He bought the Capitol Park Hotel in
Sacramentothe first in a series of lucky happenings that would change his life. After
buying the building, he leased space to a Levis salesman, who opened a showroom.

THE RIGHT SIZE PANTS


One day, Donald decided to buy a handful of jeans and slacks from the salesman. The
product arrived from a distribution center. When he tried on the pants, none fit. He needed a
34-waist, 31-length. All the pants had 30-inch lengths.
So he asked if the salesman would exchange the pants for the correct sizes. He hesitated,
saying it would be a paperwork nightmare. But the salesman suggested exchanging the pants
at a city department store.
Donald took him up on the idea, and asked Doris to pay a visit to Macys, in San Francisco.
She found a Levis display table in the basement and cringed at the mess. But she sorted
through the items and reported back to Donald.
They carried only even sizes, about five pair in each size category: 34 x 32, 36 x 32 and so on
, he said.

THE FIRST GAP


That led to the creation of the first Gap store, on Ocean Avenue, which, until Doris struck
gold with the name, was going to be called Pants and Discs. The Gap was inspired by the
idea of The Generation Gap.
The store would be loaded with Levis pants as well as records and tapesall part of an
effort to appeal to the 12-to-25-year-old target customer. He surmised that an entire store
devoted to pants would capture the greatest potential in sales particularly without a similar
competitor in the San Francisco Bay Area.
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With market research, Donald outlined four important requirements for success: the right
location for the store in an area populated by people 12-25; sufficient parking; an adequate
in-stock position; and just the right employees. Two months later, they did. They called it
The Gap. In those early days, Doris, with her noted appreciation and eye for style, was a
merchant.
Donalds lack of retail experience at one point, he had asked a Levis partner, Whats a
markdown? brought innovation, a fresh way of thinking. The Fishers delivered a shopping
experience that was fun and fulfilling, one that included the first fully-enclosed dressing
rooms and wall space to display and sell the merchandise.
The public loved what they saw and experienced. The Gap grew quickly, riding a crest of
popularity to go public in 1973. Since that time, the stock has split nine times.
In 1972, in an effort to broaden Gap from a Levis-only chain, the Fishers launched the Gap
label. And that made history as the first chain in retail history to use its store name as the
brand name. The private-label approach would become a retail model copied over and over
again.
Donald and Doris were smart family business operators who, despite their accomplishments,
also knew when to bring in outside talent. In 1983, Donald hired Mickey Drexler, a skilled
merchant, who helped accelerate the process that led to Gap becoming a major label. Donald
and Mickey pushed the business forward acquiring a small, two store mail-order catalogue
business called Banana Republic, and a few years later, creating Old Navy from scratch.
Old Navy became the first retailer in history to reach $1 billion in sales in less than four
years.
Former Old Navy President Jenny Ming recalled a company culture that not only attracted
bright, passionate employees, but also was charged with energy and ideas. And it all began
with the high bar Donald had set for himself and others.
Jenny recalled a time early on when she sat down with Donald to talk about how Old Navy
was performing. At one point, Donald suggested adding 50 cents to each of Old Navys price
tickets. A $10 shirt became $10.50. The incremental change would add up significantly when
added to millions of units.

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Gap North America President Marka Hansen, a 21-year veteran of the company, attributed
Gap Inc.s success to Donalds philosophy.
When I think about it, what I really recall is Donalds vision for the compa ny, she said.
That is, building quality in absolutely everything we do, and the willingness to take a big
bet.
One of Donalds true passions was education. Donald had relinquished his CEO position in
1995, retaining leadership on the Board. In 2004, he stepped down as Chairman of the
Boardbut continued as a company director and executive in the role of Founder and
Chairman Emeritus, a role he held until his death. In 1996, Donald, humbled and surprised by
the steady growth and notoriety of his business, received the coveted Retailer of the Year
Award from the National Retail Federation.

REFERENCES:
www.wikipedia.com
www.gapinc.com/content/dam/gapincsite/documents
www.spoke.com/info/pF39DgE/DorisFisher

264

WALTER ELIAS DISNEY

REAL NAME: WALTER ELIAS DISNEY


BORN: 5 DECEMBER 1901
RESIDENCE: MARCELINE, MISSOURI
CITIZENSHIP: AMERICAN
OCCUPATION: BUSINESS
NET WORTH: $54 BILLION
RELIGION: CONGREGATIONALISTS
CHILDREN: 2 DAUGHTERS

265

EARLY EDUCATION FAMILY BACKGROUND


The creator of Mickey Mouse and founder of Disneyland and Walt Disney World was born in
Chicago, Illinois, on December 5, 1901. His father, Elias Disney, was an Irish-Canadian. His
mother, Flora Call Disney, was of German-American descent. Walt was one of five children,
four boys and a girl.
Raised on a farm near Marceline, Missouri, Walt became interested in drawing at an early
age, selling his first sketches to neighbors when he was only seven years old. At McKinley
High School in Chicago, Disney divided his attention between drawing and photography,
contributing both to the school paper. At night he attended the Academy of Fine Arts.
On July 13, 1925, Walt married one of his first employees, Lillian Bounds, in Lewiston,
Idaho. They were ble ssed with two daughters: Diane married to Ron Miller, former president
and chief executive officer of Walt Disney Productions; and Sharon Disney Lund, who
served as a member of Disney's Board of Directors and passed away in 1993. The Millers
have seven children and Mrs. Lund had three.

STARTED HIS CAREER


After the war, Walt returned to Kansas City, where he began his career as an advertising
cartoonist. Here, in 1920, he created and marketed his first original animated cartoons, and
later perfected a new me thod for combining live-action and animation.
In August of 1923, Walt Disney left Kansas City for Hollywood with nothing but a few
drawing materials, $40 in his pocket and a completed animated and live-action film. Walt's
brother, Roy 0. Disney was already in California, with an immense amount of sympathy and
encouragement, and $250. Pooling their resources, they borrowed an additional $500, and
constructed a camera stand in their uncle's garage. Soon, they received an order from New
York for the first "Alice Comedy" featurette, and the brothers began their production
operation in the rear of a Hollywood real estate office two blocks away. During a 43-year
Hollywood career, which spanned the development of the motion picture medium as a
modern American art, Walter Elias Disney, a modern Aesop, established himself and his
product as a genuine part of Americana. David Low, the late British political cartoonist,
called Disney "the most significant figure in graphic arts since Leonardo DaVinci." A pioneer
and innovator, and the possessor of one of the most fertile imaginations the world has ever
known.
266

HIS NEW CREATIONS


Mickey Mouse was created in 1928, and his talents were first used in a silent cartoon entitled
"P lane Crazy." However, before the cartoon could be released, sound burst upon the motion
picture screen. Thus Mickey made his screen debut in "Steamboat Willie," the world's first
fully-synchronized sound cartoon, which premiered at the Colony Theatre in New York on
November 18, 1928.
Walt's drive to perfect the art of animation was endless. Technicolor was introduced to
animation during the production of his "Silly Symphonies." In 1932, the film entitled
"Flowers and Trees" won Walt the first of his 32 personal Academy Awards. In 1937, he
released "The Old Mill," the first short subject to utilize the multiplane camera technique.
On December 21 of that same year, "Snow White and the Seven Dwarfs," the first full-length
animated musical feature, premiered at the Carthay Circle Theatre in Los Angeles. Produced
at the unheard cost of $1,499,000 during the depths of the Depression, the film is still
accounted as one of the great feats and imperishable monuments of the motion picture
industry. During the next five years, Walt completed such other full-length animated classics
as "Pinocchio," "Fantasia," "Dumbo," and "Bambi."
In 1940, construction was completed on Disney's Burbank studio. The staff swelled to more
than 1,000 artists, animators, story men and technicians. During World War II, 94 percent of
the Dis ney facilities were engaged in special government work, including the production of
training and propaganda films for the armed services, as well as health films which are still
shown throughout the world by the U.S. State Department. The remainder of his efforts was
devoted to the production of comedy short subjects, deemed highly essential to civilian and
military morale.
Business expanding and success
Disney's 1945 feature, the musical "The Three Caballeros," combined live action with the
cartoon medium, a process he used successfully in such other features as "Song of the South"
and the highly acclaimed "Mary Poppins." In all, 81 features were released by the studio
during his lifetime.
Walt's inquisitive mind and keen sense for education through entertainment resulted in the
award-winning "True -Life Adventure" series. Through such films as "The Living Desert,"

267

"The Vanishing Prairie," "The African Lion," and "White Wilderness," Disney brought
fascinating insights into the world of wild animals and taught the importance of conserving
our nation's outdoor heritage.
Disneyland, launched in 1955 as a fabulous $17 million Magic Kingdom, soon increased its
investment tenfold. By its third decade, more than 250 million people were entertained,
including preside nts, kings and queens, and royalty from all over the globe.
A pioneer in the field of television programming, Disney began production in 1954, and was
among the first to present full-color programming with his "Wonderful World of Color" in
1961. "The Mickey Mouse Club" and "Zorro" were popular favorites in the 1950s.
But that was only the beginning. In 1965, Walt Disney turned his attention toward the
problem of improving the quality of urban life in America. He personally directed the design
on an Experime ntal Prototype Community of Tomorrow, or EPCOT, planned as a living
showcase for the creativity of American industry.
Successes
A pioneer and innovator, and the possessor of one of the most fertile imaginations the world
has ever known, Walt Disney, along with members of his staff, received more than 950
honors and citations from every nation in the world, including 48 Academy Awards and 7
Emmys in his lifetime. Walt Disney's personal awards included honorary degrees from
Harvard, Yale, the University of Southern California and UCLA; the Presidential Medal of
Freedom; France's Legion of Honor and Officer d'Academie decorations; Thailand's Order of
the Crown; Brazil's Order of the Southern Cross; Mexico's Order of the Aztec Eagle; and the
Showman of the World Award from the National Association of Theatre Owners.

FOR THE WELFARE AND EDUCATION


Prior to his death on December 15, 1966, Walt Disney took a deep interest in the
establishment of California Institute of the Arts, a college level, professional school of all the
creative and performing arts. Of Cal Arts, Walt once said, "It's the principal thing I hope to
leave when I move on to greener pastures. If I can help provide a place to develop the talent
of the future, I think I will have accomplished something."
California Institute of the Arts was founded in 1961 with the amalgamation of two schools,
the Los Angeles Conservatory of Music and Chouinard Art Institute. The campus is located

268

in the city of Valencia, 32 miles northeast of downtown Los Angeles. Walt Disney conceived
the new school as a place where all the performing and creative arts would be taught under
one roof in a "community of the arts" as a completely new approach to professional arts
training.

FOR ENTERTAINMENT AND JOY AND PLATFORM FOR MANY INVENTIONS


Disney directed the purchase of 43 square miles of virgin land -- twice the size of Manhattan
Island -- in the center of the state of Florida. Here, he master planned a whole new Disney
world of entertainment to include a new amusement theme par k, motel-hotel resort vacation
center and his Experimental Prototype Community of Tomorrow. After more than seven
years of master planning and preparation, including 52 months of actual construction, Walt
Disney World opened to the public as scheduled on October 1, 1971. Epcot Center opened on
October 1, 1982.

ANALYSIS
Walt Disney is a legend and a folk hero of the 20th century. His worldwide popularity was
based upon the ideas which his name represents: imagination, optimism and self-made
success in the American tradition. Walt Disney did more to touch the hearts, minds, and
emotions of millions of Americans than any other man in the past century. Through his work,
he brought joy, happiness and a universal means of communication to the people of every
nation. Certainly, our world shall know but one Walt Disney.
He lived his life with honesty and integrity. His business was his passion and he was always a
threat for his competitors. He really worked hard in his early days. People made fun of him in
the begin ning but he stood upon what he thought and worked hard to reach to his goals. He
also was very kind and helpful and welcomed new ideas and thoughts.
His life tells that he was a man of real principals and he always lived for people with
sincerity. His management style shows that he loved his work and employees. He was use to
share his profits with his employees.
He also worked for the better future of art. For this he took some initiatives which are really
fruitful. He also created the Disney Land which is a major contribution. He transferred his

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leadership skills to his people and family. After his death his family and daughter played
major role in the business.

ABOUT DISNEY
David Low, the late British political cartoonist, called Disney "the most significant figure in
graphic arts since Leonardo DaVinci."
Said Disney, "I don't believe there is a challenge anywhere in the world that is more
important to people everywhere than finding the solution to the problems of our cities. But
where do we begin? Well, we're convinced we must start with the public need. And the need
is not just for curing the old ills of old cities. We think the need is for starting from scratch on
virgin land and building a community that will become a prototype for the future."
Walt once said, "It's the principal thing I hope to leave when I move on to greener pastures. If
I can help provide a place to develop the talent of the future, I think I will have accomplished
something."

REFERENCING
http://www.chacha.com/question/what-is-the-net-worth-of-the -walt-disney-world -company
http://www.norsknettskole.no/fag/ressurser/itstud/fuv/gunnargrodal/bio.htm
http://www.chacha.com/question/what-religion-did-walt-disney-follow
http://www.google.com.pk/images?q=walt+disney&um=1&ie=UTF8&source=univ&sa=X&ei=zWVTbP6OInPhAec4tDzBg&ved=0CG8QsAQ&biw=1366&bih=677

270

WILLIAM HENRY BILL GATES

271

BACKGROUND OF THE SUCCESSFUL BUSINESS LEADER


William Henry "Bill" Gates III, (born October 28, 1955) is an American business magnate,
philanthropist, and author and is chairman of Microsoft the software company he founded
with Paul Allen. He is consistently ranked among the world's wealthiest people and was the
wealthiest overall from 1995 to 2009, excluding 2008, when he was ranked third. During his
career at Microsoft, Gates held the positions of CEO and chief software architect, and
remains the largest individual shareholder with more than 8 percent of the common stock. He
has also authored or co-authored several books.
Gates is one of the best-known entrepreneurs of the personal computer revolution. Although
he is admired by many, a number of industry insiders criticize his business tactics , which they
consider anti-competitive, an opinion which has in some cases been upheld by the courts.
When he was in the eighth grade, the Mothers Club at the school used proceeds from
Lakeside School's rummage sale to buy an ASR-33 teletype terminal and a block of computer
time on a General Electric (GE) computer for the school's students. Gates took an interest in
programming the GE system in BASIC and was excused from math classes to pursue his
interest. He wrote his first computer program on this machine: an implementation of tic-tactoe that allowed users to play games against the computer. Gates was fascinated by the
machine and how it would always execute software code perfectly.
Gates graduated from Lakeside School in 1973. He scored 1590 out of 1600 on the SAT and
enrolled at Harvard College in the autumn of 1973. While at Harvard, he met Steve Ballmer,
who later succeeded Gates as CEO of Microsoft. In 1975 they saw the release of the MITS
Altair 8800 based on the Intel 8080 CPU, and Gates and Allen saw this as the opportunity to
start their own computer software company. He had talked this decision over with his parents,
who were supportive of him after seeing how much Gates wanted to start a company i.e.
Microsoft corporation.

VISION
The vision of bill gates is thorough enough and covers long term goals. His vision is as
following:
A computer on every desk and Microsoft software on every computer.

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MISSION
The mission statement of bill gates and his business is as following:
"To enable people and businesses throughout the world to realize their full potential.

ANALYSIS
Now that we have had enough of the introduction, background and other important areas, so
now I will be more specific and precise towards the assignment. I will now directly target the
management style practices strengths of the successful leader. This ana lysis will help to make
certain comments relating to the business leaders.

STRENGTHS
Bill gate has two very important strengths. The first is curiosity. He is truly fascinated with
advances in science related to computing. He studies them and he has a good eye for seeing
how those advances can be integrated together in powerful ways in a combination of software
and hardware. The second strength is his ability to see how to position his company to play a
central role in personal computing. He spotted the opportunity for Microsoft to supply and
control the operating system for IBM's original PC.
He recognized the strength of creating an ecosystem around DOS and, later, Windows, rather
than keeping a closed system, like Apple did and also recognized the importance of
producing a set of productivity software where the applications were integrated and sold as a
package.
Bill Gates is so strong in injecting his knowledge that he entered in to the entertainment side
that is the personal computer games. He introduc ed these games and they resulted in
capturing another market segment of youngsters. There are many strategic games that are
amongst the best when compared to the overall pc games. This also resulted in a great interest
of youngsters towards the field of software.

273

LEAERSHIP STYLES
AUTHORITATIVE LEADER
Authoritative leaders can be summarized as being experts in their field of work, and
individuals that are able to clearly articulate a vision and the path to success.
Bill Gates was able to mobilize people towards a vision. This leadership style is most
effective when a new vision is needed, or when the path to that vision is not always clear.
One of the interesting aspects of this style is that even though the leader is considered an
authority, they allow the ir followers to figure out the best way to accomplish their goals. Bill
Gates was able to successfully move Microsoft in the direction he saw the industry going. He
had a vision, he told the world, and he aligned the resources of Microsoft with that vision.

PARTICIPATIVE LEADER
Participative leadership theories suggest that the ideal leadership style is one that takes the
input of others into account. Bill gates always encourage participation and contributions from
group members and help group members feel more relevant and committed to the decisionmaking process. And another important thing is that only communication among the
employees can bring in wonders. Microsoft employees say that they find it comfortable being
with the company, adding that no matter how huge Microsoft is, there is still a small
company feel, with open communications between management and the employees

TRANSACTIONAL LEADER
Management theories, also known as transactional theories, focus on the role of supervision,
organization and group performance. These theories base leadership on a system of rewards
and punishments. Managerial theories are often used in business; when employees are
successful, they are rewarded; when they fail, they are reprimanded or punished. Learn more
about theories of transactional leadership. Like once an employee of bill gates was prese nting
and bill gates suddenly interrupted and said that it was the most stupid thing he ever heard
and said that if it is the way you go then improve it. The employees had to convince him at
any cost. Gates firmly believed in financial incentives. Just as he made himself rich, so he
made his managers extremely rich. According to some reports, about a third of company
employees were thought to be millionaires.

274

RELATIONSHIP LEADER
Relationship theories, also known as transformational theories, focus upon the connections
formed between leaders and followers. Transformational leaders motivate and inspire people
by helping group members see the importance and higher good of the task. These leaders are
focused on the performance of group members, but also want each person to fulfill his or her
potential. Leaders with this style often have high ethical and moral standards. There are four
tips which bill gave and they are following:
The first tip is about taking two retreats every year to recharge ones own batteries, and to
refresh the focus and perspective of things. The second tip encourages people to read books
on various other topics to broaden the mind, such as materials that are not necessarily about
the profession that one is in. This means that a leader has to study other industries apart from
the one he belongs in, so as to glean the impact these have on his industry as there is a certain
interconnection in the entire value chain. The third leadership tip is about identifying
problems at the soonest possible time. Beyond that, a leader has to promptly act on solving
these problems that have been identified. This problem tracking should be done with the
latest and most scientific metrics that are at the leaders disposal. The fourth leadership tip
that Bill Gates gives is to stop at the end of the day. This is for the purpose of analysis and
clearing ones mind, to see where the chokepoints had been during the day in terms of
inefficiency and ineffectiveness over the last 24 hours.
Transformational leadership of Bill gates are:

Idealized influence (or charisma)

Inspirational motivation,

Intellectual stimulation

Individualized consideration

IDEALIZED INFLUENCE:
Bill gates as a leader Predominate and whether he is manipulative.

Inspirational motivation:
Bill gates inspirational motivation of transformational leadership provides followers with
challenges and meaning for engaging in shared goals and undertakings. The inspirational

275

appeals of the authentic transformational leader tend to focus on the best in people on
harmony bill gates donates money through his charitable foundation, the bill & Melinda gates
foundation is also one of the most generous givers.

Intellectual stimulation:
Bill gates intellectual stimulation of transformational leadership incor porates an open
architecture dynamic into process of situation evaluation, vision formulation, and patterns of
implementation.

Individualized consideration:
The transformational leader treats each follower as an individual and provides coaching,
mentorin g and growth opportunities. In this aspect followers are treated as ends or means,
whether or not their unique dignity and interests are respected.

Situational Leader
Bill gates introduced windows when there was boom for computers and other softwares
when the market was budding up in the late 80s. If bill gates would not have bought that
technology in that time he would not have situation to introduced them later. Its like in early
days bill gates already made all important decisions. Hence it is a situation based leadership.

LEGENDARY LEADER
Gates leadership style and management practice are legendary. He is known for detail which
is quite logical for a computer programmer and astute businessman. Control is basic to Gates
nature. This is apparent in his management practice. He is obsessed with detail and followthrough.
As he would reward himself for being a good influence on his entrepreneurial endeavors,
Gates firmly believed in financial incentives. He made his managers extremely rich.
According to some reports, about a third of company employees were thought to be
millionaires. The cream of the crop could have been worth $100 million. Microsoft
employees say that they find it comfortable being with the company, adding that no matter
how huge Microsoft is, there is still a small company feel, with open communications
between management and the employees

276

MANAGEMENT PRACTICES
From Microsoft's founding in 1975 until 2006, Gates had primary responsibility for the
company's product strategy. He aggressively broadened the company's range of products, and
wherever Microsoft achieved a dominant position he vigorously defended it. He gained a
reputation for being distant to others; as early as 1981 an industry executive complained in
public that "Gates is notorious for not being reachable by phone and for not returning phone
calls."
As an executive, Gates met regularly with Microsoft's senior managers and program
managers. Firsthand accounts of these meetings describe him as verbally combative, berating
managers for perceived holes in their business strategies or proposals that placed the
company's long-term interests at risk. He often interrupted presentations with such comments
as, "That's the stupidest thing I've ever heard!" and, "Why don't you just give up your options
and join the Peace Corps?" The target of his outburst then had to defend the proposal in detail
until; hopefully, Gates was fully convinced. Gates also appeared in a series of ads to promote
Microsoft in 2008. There are following import ant management tactics he used:
1. Concentrate your effort on a market with huge potential but few competitors.
2. Get in early and big.
3. Strive to become the industry leader.
4. Strategies of Market Leaders.
5. Set the industry standard to become the industry leader.
a. Make your product the best.
b. Make your product the most useful.
c. Make your product the cheapest.
6. Establish a proprietary position own what you sell and protect this position.
7. Make your customers and strategic alliances offers they cannot refuse.
8. Continually invest in innovation to improve your products and services.
9. Never stop learning.
Learning is an essential ingredient of any successful business. As soon as you close your
mind to the possibility of another reality, you are closing yourself off to other greater
opportunities that lie waiting for you. In this business, by the time you realize youre in
trouble, its too late to save yourself, says Gates. Unless youre running scared all the time,
277

youre gone. In order for Microsoft to have maintained its competitive edge for the past
three decades, it was crucial for Gates and all his employers to engage in a process of
continual learning. For Gates, I dont know had become I dont know yet.
The ability to be open to change and to continue to try and improve oneself and ones
business is crucial to success, according to Gates. People always fear change, he says.
People fea red electricity when it was inventedthere will always be ignorance, and
ignorance leads to fear. If you ignore your surroundings and stop asking questions about
how to improve, you will be destined to failure. In the highly competitive world of computer
technology, where the likes of Google and Apple are becoming bigger threats to Microsoft, it
is not difficult for Gates to stay on his toes.

COMMENTS/RECOMMENDATIONS
As I am a student and I am no one to give comments/recommendation to such a successful
leader, still I can try few and those are following:
The most prominent thing I noted is that one must not interrupt any one while he is
delivering, so there are many other ways to correct employees like by being polite.
The other styles of leadership are perfect but now a days authoritative style is the one used in
armed forces but not in the private organizations.
Such a famous personality should not do such business practices that force them to in
litigation.

CONCLUSION
This is now very clear that William Henry Bill Gates is one of the worlds famous leader and
inspiration due to his leadership and style of management so one thing is clear that the reason
for his success is his behavior, conduct and presence of mind along with his in born skills of
intellig ence and leadership. The best part done in the strengths he has and how he uses them.
More over the other good things were the timely implementation of Gates smart management
and situational leadership stance which others can adopts. So if we start from today following
the steps which Gates took, even we can become very successful in our own professions.
INSHALLAH.

278

REFERENCES
http: //www.rediff.com
http: //www.buzzle.com
http: //www.google.com
http: //www.docstoc.com
http://www.facebook.com
http://www.money-zine.com
http: //www.worklifecoach.com
http: //www.thinkingmanagers.com

279

FREDERICK WALLACE SMITH

NAME: FREDERICK WALLACE SMITH


BORN: AUGUST 11, 194 4
EDUCATION: YALE UNIVERSITY, BA, 1966.
RESIDENCE: MEMPHIS, TENNESSEE, UNITED STATES
ETHNICITY: WHITE
CITIZENSHIP: AMERICAN
OCCUPATION: FOUNDER OF FEDEX
NET WORTH: $2.1 BILLION
CHILDREN: TEN

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BACKGROUND AND HISTORY:


Smith was born in Marks, Mississippi, on August 11, 1944. The younger of two sons, Smith
was named after his father, an entrepreneur and businessman who established the Dixie
Greyhound Bus Lines, later a part of Greyhound Bus Lines.
In 1948, when Smith was only four years old, his father died. From early childhood, Smith
was troubled by a birth defect known as Calve Perthes disease, a peculiar form of childhood
arthritis of the hips caused by a temporary loss of blood supply to the hip. However, by the
time he was 10, Smith had out grown the disease. Smith attended Memphis University Prep,
where he participated in athletics and was an excellent student. He also developed a keen
interest in the American Civil War. But Smith's true passion was flying; by the age of 15 he
became an amateur pilot as a teen. In 1962, Smith entered Yale University. While attending
Yale, he wrote a paper for an economics class, outlining overnight delivery service in a
computer information age. Folklore suggests that he received a C for this paper, although in a
later interview he claims that he told a reporter, "I don't know what grade, probably made my
usual C", while other tales suggest that his professor told him that, in order for him to get a C,
the idea had to be feasible. The paper became the idea of FedEx (for years, the sample
package displayed in the company's print advertisements featured a return address at Yale).
Smith became a member of Delta Kappa Epsilon fraternity and the secret society Skull and
Bones. He received his Bachelor's degree in economics in 1966. In his college years, he was a
friend and DKE fraternity brother of George W. Bush. Smith was also friends with John
Kerry and shared an enthusiasm for aviation with Kerry and was a flying partner with him.
Smith's business acumen started early; while in high school, he and a group of friends
founded the Ardent Record Company, a small recording studio that later went on to become a
legitimate company. In 1962 Smith left Memphis to attend Yale University.

CHILDHOOD
Frederick Smiths was autonomous, in the main. His father passed away when he was four.
He had a lovely mother, but not having a father influence, he learned a lot of things on his
own. He thinks that would be the best characterization of it.

281

HOW DID HE LEARN THINGS?


He had a couple of uncles that were very helpful, but he was not around them every day. But
in the summers and so forth they were very good to him in terms of teaching him a few things
about life. Certainly, his coaches were very important to him. His high school football coach
was very important to him, in setting him straight on a few things.

SIBLINGS:
Frederick Smith had a half-brother and another half-brother who passed away. He had an
adopted sister and a half-sister, but he never lived with them.

AS A STUDENT:
Frederick Smith was a good student. He liked to read enormously. He loved history. It was
not difficult for him to make good grades.

HOW DID HE SPEND YOUR SPARE TIME?


Frederick Smith always loved to play sports and that was the biggest avocation he had as a
youngster. He suspects that he was unusual in the amount of reading he did. He loved to read
when he was young and still does.

HE NEVER LOST CONFIDENCE:


Frederick Smith never lost confidence because he never believed that the consequences of
losing were as bad as some other people might have thought that they might their money or
what they have. He was very sure that what he was doing was extremely important and was
destined to be successful. He focused on something that he be lieved far beyond what they
probably should.

FEDERAL EXPRESS:
FedEx Express is a cargo airline based in Memphis, Tennessee, United States. It is the
world's largest airline in terms of freight tons flown and the world's second largest in terms of
fleet size. It is a subsidiary of FedEx Corporation, delivering packages and freight to more
than 375 destinations in nearly every country each day.

282

In 1971 Frederick Wallace (Fred) Smith came up with a revolutionary idea: delivering
packages reliably overnight. With the creation of Federal Express Corporation, Smith not
only offered an alternative to the mail and more traditional and slower delivery services, but
he also created an industry that almost single-handedly changed the way business was
conducted. In the process, Smith's company became the first American business to earn $10
billion in profits. By 2004 FedEx was delivering to 210 countries using over six hundred
aircraft, 46,000 vehicles, and 141,000 employees. But Federal Express and Smith were not
just about providing fast and dependable deliveries to clients worldwide.

MANAGEMENT STYLES:
Frederick W. Smith conceived the idea of an overnight delivery business while an
undergraduate at Yale University. His amazing management styles leads to the countless
awards that are presented to both Smith and the FedEx organization by the industry quality
and performance agencies. Smith is widely regarded as an icon of American business.
Fred Smiths values were influenced by his experiences, and none of his experie nces were
more influential than his service in the U.S. Marine Corps. Smith said,
The Marine Corps is the best when it comes to teaching people how to lead other folks.
Smith made the most out of his military training, which was a foundation for his ultimate
success at shaping and maintaining FedEx. This Marine influence has molded Smith into the
leader he is today. Mr. Smith embraces this principle through the development of progressive
Human Resources programs that reward and recognize the contributions of his team at every
level in the organization. Smith worked hard at being accessible to his employees and clients
with a management style that combined:

Vision,

Risk-taking,

Trust

A sense of community

A tough-minded approach.

Rewards

283

VISION:
When the founder of FedEx e wrote a paper proposing an overnight delivery service while a
student at Yale, his professor commented, The concept is interesting and well-formed, but in
order to earn better than a C, the idea must be feasible. Little did the professor know that
Smiths idea would later become a $25 billion company with 240,000 employees operations
in 215 countries, that virtually invented an entire industry, transformed other sectors as
diverse as manufacturing, retail, and transportation, and heightened expectations of
globalization that reaches all over the world.
By starting his vision with a clear theme, Smith was able to envision a unique and profitable
future with multiple possibilities. Smith has a willingness to perform above and beyond the
call of duty and share hardship. This is true no matter how intricate or inconsequential the
task. His willingness ripples throughout the entire organization, inspires higher levels of
performance at all levels, and creates an undeniable credibility for the leader through actions,
not words. Smith demonstrates this every day that he is at the office. He is a hands-on
manager who takes an active role in every aspect of the operation. Smith has performed
every function in the company and is willin g to do so at anytime. A never -ending
commitment to recruiting, training, and mentoring develops, at all levels, confident,
aggressive leaders who have initiative and integrity that drive success. Feedback is clear,
constructive, candid, and regular; guidance is specific, thoughtful, individually tailored, and
intended to help the recipient grow both personally and professionally.
Smith is considered a keynote speaker not only in business and legislative concepts but also
in leadership: when he speaks, many listen. However, he credits himself as being a good
listener as well. This is evident by the credit he gives his past chief information officers
throughout the years. He credits them with constantly having a vision that FedEx should
have real-time business processes and making that information available to their customers,
which allows them in turn to have more efficient business processes.

Experiment And Take Risks While Learning From Mistakes:


More evidence shows that a great part of success doe s not fear failure. Mr. Smith launched
Zapmail, a program to electronically transmit documents between FedEx offices. Mr. Smiths
idea was to put a fax machine in every FedEx office would radically reconfigure the center of
their network, thus slashing costs. The idea was a costly failure: two years and hundreds of
284

millions of dollars later, FedEx pulled the plug on Zapmail, allowing it to vanish without a
trace. I'm not afraid to take a swing and miss, said Smith in an interview (Smith, 2002).
Smith feels it is important to groom an employee team thats willing to take smart risks. He
goes on to add that if your organization is extensive with internal turf battles, bureaucracy,
lackadaisical customer service, and a lack of accountability, your people w ill have no
motivation to innovate. However, if you reward innovative behavior from the top down and
bottom up, and if you give recognition and financial rewards, you encourage risk-taking
throughout the organization. You have to dedicate sufficient resour ces to innovation,
including training and empowerment of your entire team.

Foster Collaboration By Prompting Cooperative Goals And Building


Trust:
Fred Smith believes that you have to surround yourself with people who will tell you the
truth. If you don't, as your organization gets bigger, you'll fall out of touch with what's going
on. Smiths top leadership is comprised of many individuals who have been CEOs of other
companies and have been groomed through the FedEx ranks. Smith encourages these
Improving Software Support Service 27 players and key staff to hash out any conflicts among
themselves and rarely intervenes. Smith trusts his people and expects more from this team
than outsiders. Smith has created a style that participants describe as straight shooting with
no second-guessing. Through the aggressive use of emailing, he has tried to prevent the
development of closed-loop communications. In the next section, the focus is on exposing
and enhancing teamwork skills, including creating high-performing teams, team development
stages, team leadership, and team dynamics

A SENSE OF COMMUNITY:
Smith believes success understands the importance of keeping employees happy and
promotes and rewards actions taken by employees to improve quality and cust omer
satisfaction. A couple of the most popular programs at FedEx include:

Bravo Zulu: (U.S. Navy semaphore signal for well done).

Managers reward

employees for outstanding efforts and achievement on the spot. Rewards include quick
cash bonuses, the atre tickets, dinner gift certificates, and other gifts of similar value.

285

Golden Falcon Award: Results from a complimentary report from a customer praising
employee efforts above and beyond the call of duty. The award consists of 10 shares of
Federal Express stock and a congratulatory visit or phone call from a senior executive.

Smith has impleme nted an Open Door Policy throughout FedEx which promotes
accessibility. This policy allows employees to submit questions or put forward a complaint
about matters of corporate policy such as benefits, hiring, seniority, or vacation.

An

employee submits the complaint or questions in an open-door forum, which is routed by


employee relations to the management person best able to respond to the issue. The person
receiving the open door enquiry must respond within 14 calendar days. Smiths values were
shaped by his experiences in business as well as his life experiences in the Marines. Smith
has created an organization in FedEx that understands the corporate culture based on his
beliefs. These personal values, and thus the climate, can be summed up as follows:

Customer Obsessed: Meet and exceed needs of customers to ensure loyalty

Trust Honesty: Integrity, ethics, and accountability coupled with a freedom to perform

Team Spirit: Understand that the corporation is a team and all must participate to
succeed

Relentless Achievement: Setting the bar higher for self and teammates

Innovation: Embrace change, challenge the status quo

Zeal: Passion for business and commitment to the team

These values are shared, understood, and embraced in the organization. There are countless
examples where Smith has walked the walk in support of the values he holds so dear. A
good example of this alignment can be found at the FedEx Institute of Technology. FIT was
established as world class research facility used to solve real world business problems as well
as provide a world class recruitment pool for professionals. This organization shows Smiths
commitment to innovation and achievement as well as pressing the boundaries to find an
even more superior solution to solving world business problems.

A TOUGH MINDED APPROACH:


A challenge Smith faced was how to share these values with all FedEx employees. One of the
first things he did at FedEx was sit down and record these core values and the lessons learned
in written form. These writings became the FedEx Manager's Guide, which has been a
mainstay for all managers for decades. The Manager's Guide is noteworthy because through
286

the written word, Smith has been able to establish a common culture and leadership
philosophy across his global organization. The importance that all FedEx managers attribute
to it is impressive; it is the de facto authority on leadership-related issues at the company.
This represents the alignment of values and actions.
Smith used this skill to effectively lead his organization to success and competitive
advantage. Fred Smith and FedEx are consistently recognized for progressive and innovative
policies, programs, benefits, and stimulating working environments. The culture fosters an
environment where a person's performance is what counts and productivity is highly
rewarded. Federal Express under the guidance of Fred Smith has been named the Top
Corporation of the Decade by Fortune magazine (Dumain, 2004). Smith was determined to
make employees an integral part of the decision-making process, due to his belief that
when people are placed first they will provide the highest possible service and profits will
follow.
Resulting from this principle is the FedEx corporate philosophy:
People-Service-Profit
These

three

corporate

goals

form

the

basis

for

all

business

decisions.

FedEx implemented a Survey Feedback Action (SFA). This is an annual employee survey
that provides a statistical measurement of employee satisfaction, as well as subordinates'
opinions of management's leadership performance. Each April, every employee is asked to
participate in the on-line survey. Results are tabulated, and managers then hold feedback
sessions with their employees to discuss the survey findings and identify problems within and
outside of their department. As a group, they develop formal, written action plans for solving
these problems. Groups usually review plans throughout the year to determine whether
problems were solved satisfactorily. SFA has become a problem-solving tool that operates
throughout the organization. If employees still have a complaint with management, they can
take advantage of the respected and benchmarked grievance system, Guaranteed Fair
Treatment (GFT). The program provides three levels of managerial review and appeal for
employee grievances, including an ultimate review by Smith and other top corporate officers.

287

Rewards:
The rewards and benefits account for 50% of FedEx spending. Those rewards include (FedEx
2005):
Salary Increases - Salary increase based on individual performance
Variable Pay - Incentives to reward individual and team contribution
Tuition Assistance - Subsidy for continuous learning and education
Paid Time Off and Vacation Includes paid leave for marriage, maternity, and paternity
Retirement Scheme - Financial security in retirement
Health Insurance - Healthcare
Life and Accidental Death Insurance - financial protection for beneficiaries
Reduced Shipping Rate - Exclusive discounts for personal shipping
Discounted Travel Discounted airfares
Jump seat - Free travel on FedEx aircraft

CONCLUSION:
The crucial challenge in business and public life is to find ones own voice and inspire others
to find theirs. Fred smith integrated air and ground system, which had never been done. And
to operate not on a linear basis, where you try to take things from one point to another, but
operate in a systemic manner. He is a very inspirational person. He never lost confidence
because he never believed that the consequences of losing were as bad as some other people
might have thought and he was very sure that what he was doing was extremely important
and was destined to be successful. Inside FedEx criticism is a real opportunity to improve.
When they do something wrong for a customer, that's when they really have a chance to learn
how to do things better. He is a true entrepreneur and a role model to not only business
executives, but also for us, students around the world.

REFERENCES:
http://en.wikipedia.org/wiki/Frederick_W._Smith

288

Buttner, Brenda, "FedExCEO Interview," America's Intelligence Wire , December 30,


2003.
Fred

Smith

1944

Biography

Early

life,

The

road

fedex http://www.referenceforbusiness.com/biography/S -Z/Smith-Fred1944.html#ixzz1GPtWA4Uc


http://www.referenceforbusiness.com/biography/S-Z/Smith-Fred-1944.html
http://ectd.du.edu/source/uploads/7391833.pdf
http://www.evancarmichael.com/Famous -Entrepreneurs/764/Fred-Smit h-Quotes.html

289

to

DONALD JOHN TRUMP

NAME: DONALD JOHN TRUMP


BORN: 14 JUNE 1946 (AGE 64)
QUEENS, NEW YORK, U.S.
CITIZENSHIP: AMERICAN
OCCUPATION: BUSINESSPERSON & CEO OF THE TRUMP EMPIRE
NET WORTH: US$2.7 BILLION (2011)
RELIGION: CHRISTIAN
CHILDREN: FIVE

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Trump is an American business entrepreneur, author, socialite and television personality. He


is the chairman and CEO of the Trump Organization, as well as a famous real-estate
developer.

TRUMP'S "IN-YOUR-FACE" STYLE MOTIVATES LEADERSHIP


In truth, it seems The Donald may not be as much of a prick as the world makes him out to
be. Although it may come as a surprise to most of America, Donald Trumps long time
employees describe him as a strong yet merciful leader. According to insiders, Trump is a far
more righteous leader than he is given credit. Not only is he fair, but he is absolute. When
hes forced to make a decision he thinks about it carefully, and just as he does in the show,
Mr. Trump will confer with the appropriate personnel whenever theres an unproductive or
anti-productive issue to be resolved. If he werent a successful real estate developer, I think
Mr. Trump would make an excellent Supreme Court judge, an anonymous associate of the
Trump Organization confides. Several other employees of the Trump Organization were also
fast to defend their leader's integrity, an act that speaks volumes concerning Trumps in your
face management and leadership style. According to Donald Trump employees, hes very
much like the man you see on the show, but hes also a man filled with genuine compassion
beyond anything the cameras could ever show yet the media never picks up on the good
press. Donald Trump employees say Trump works hard to keep his kindness out of the
spotlight, but in truth he is far more generous than his reputation would lead anyone to
believe.

TRUMP'S LEADERSHIP STYLE IS A MAGNET


On the season premier of The Apprentice, a member of the winning team asked Trump
about the story of a middle aged couple who stopped to help when Donalds trusty limo broke
down on a deserted highway outside New York City. Trump showed genuine signs of
humility as the contestant asked if he had really paid off the mortgage on that helpful
couples home after they rescued him.
Seeming almost embarrassed, Trump admitted to the kind act, but most people refuse to
believe this stern business tycoon could ever show compassion beyond that of his immediate
family and inner circle cronies. So while this Boss Hog persona would seem to be a
handicap for most marketers, Trump has turned it into a true windfall of money and respect.

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Donald Trumps leadership style has turned The Apprentice into a powerful magnet for
thousands of young entrepreneurs, many of whom credit Trump with teaching them
important lessons for business success.

10 MANAGEMENT LESSONS FROM DONALD TRUMP


MSNBC ran an interview with the Don at The Wharton School in front of a bunch of students
at which he summarized the points from his recent book. Donalds top ten lessons:

1. Work Hard - He basically said that everyone he knew that made a lot of money and
was ultra successful, worked 7 days a week. He suggested to the audience that if they wanted
to succeed, they should be prepared for 80 hour weeks for a long time. I wish it were not the
case, but most of my friends that have reached lofty career goals are workaholics.

2. "Love" What You Do He discouraged the audience from joining or switching to a


hot "industry" (i.e. hedge funds) or from going into consulting in favors of getting involved
with an industry you love (antiques, baseball, marketing), even if that industry is not
currently doing well as a whole. His message was that you will perform so well in your
imperfect industry that you will rise above the fray and end up being a star in the top 1% of
that industries earners, but if you joined an industry you weren't passionate about, you'd end
up in the 50th percentile of earners in that industry. He thought the pay in the top 1% of a
crappy industry (in a job you love) would top the 50th percentile in a hot industry.

3. "Know" What You Do - Whatever industry you are in and whatever role you play in
that industry, work hard to become a world class expert in it. For example, if you are a
Marcom manager in a security software company, he suggested that you ought not just focus
on getting good at SEO and email marketing campaigns horizontally, but that you ought to
become an expert in that security industry yourself, so that you can communicate with all
levels of people about the technolo gy simply, so that you can have detailed conversations
with analysts, so that you can write credible blog articles, so that you can explain the future
competitive dynamics to potential investors, etc.

4. Luck - According to Don, "The harder I work, the luckier I get."


5. Education - A huge advantage that is expensive in the short run, but cheap in the long
run. Don's perspective reminds of a quote from Derek Bok, the former president of Harvard,
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when asked about the rising cost of education, "If you think getting an education is
expensive, try ignorance."

6. Management - Donald fought the platitude pattern and said "You want to be smarter
than your people." He thought the notion that you should hire people smarter than you was a
poor one.

7. Persistence - He talked a lot about riding the ups and downs of the real estate market,
losing everything, and coming back. He credited his success and the demise of many of his
competitors to being patient and persistent over long periods of time to wait out market
fluctuations. This one might be more relevant to Donald's business than most, but still
interesting.

8. Negotiation - Always do it face-to-face. In this era of telephones, teleconference, and


video conference, Donald suggests that if it's an important negotiation, you should do it faceto-face, so you can read the other person's body language.

9. Middle men - Donald is not a fan of middle men who do not add value and who extract
outsized returns. He tells the story of how he "goes around" a broker on a billion dollar (that's
the number of zeros the Don deals in these days) deal where he was losing a negotiation and
flew to Dubai to deal directly with the principal and struck a great deal.

10. Marriage - Marry someone who understands #1 above and make sure to get a
prenuptial agreement.

BREAKING NEW GROUND: TRUMPS SUCCESS FACTORS


What separates the winners from the losers is how a person reacts to each new twist of fate,
says Trump. He has reacted to the twists and turns in his life with optimism, becoming CEO
of the largest privately held company in New York, with over 22,000 employees and
estimated revenues in excess of $10 billion. What did he use to get ahead?

FEROCITY: What I admire most are people who put themselves directly on the line, says
Trump. Never one to back away from a challenge, Trump was aggressive and unforgiving in
making his business deals. Even if it were costly and difficult and risky, Trump would
continue to fight to get the best terms he could. And, he would settle for nothing less.

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PASSION: I dont make deals for the money, says Trump. Ive got enough, much more
than Ill ever need. I do it to do it. Trumps love affair with real estate began at an early age
and never diminished. Having passion for his work is the only thing that kept Trump going
despite the personal failure of divorce, bankruptcy and failed deals. To those wondering how
to balance both work and pleasure, Trump says to stop wondering. Instead, he advises to
make your work more pleasurable.

IDEALISM: I wasn't satisfied just to earn a good living, says Trump. I was looking to make
a statement. The Trump Organization has become synonymous with luxury, lavishness,
class and extravagance. It didnt get that way by following its competitors. It got that way
because Trump was not afraid to think big, to do what hadnt been done before and in a way
that many couldnt even imagine. His ability to blur the line between fantasy and reality
helped push Trumps company into a league above the rest.

PERCEPTION: Watch,

listen, and learn, advises Trump. Indeed, Trumps success came

about largely as a result of his own ability to observe others and thereby learn how to
manipulate their actions. By convincing others they could not do without him, Trump truly
refined the deal-making process into an art. It was by mastering this art that Trump was able
to rise to the top of his game.

INSTINCT: It pays to trust your instincts, says Trump and in his case, it paid off remarkably
well. When sellers, banks, consultants and even friends were telling him one thing, Trump
knew he had to go with his gut. By having confidence in himself and the courage to follow
through, Trump was able to make difficult and risky decisions when others might have
simply given way to the pressure.
Trumps instincts are now worth over $2 billion but he has no plans of retiring, saying,
Anyone who thinks my story is anywhere near over is sadly mistaken. The Trump
Organization is still expanding, with a revenue growth of 22% between 2004-05 and Trump
continues to demonstrate his ability to draw a good hand, pulling out the Trump card every
time.

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LESSONS WE CAN LEARN FROM HIM ARE:


FOCUS ON THE PRESENT
I try to learn from the past, but I plan for the future by focusing exclusively on the present.
Thats where the fun is.

FAIL FORWARD
Sometimes by losing a battle you find a new way to win the war.

THINK BIG
As long as youre going to be thinking anyway, think big.

STAY POSITIVE
What separates the winner from the loser is how a person reacts to each new twist of fate.

PASSION IS LOVE
Without passion you dont have energy, without energy you have nothing.

EXPERIENCE IS PRICELESS
Experience taught me a few things. One is to listen to your gut, no matter how good
something sounds on paper. The second is that youre generally better off sticking with what
you know. And the third is that sometimes your best investments are the ones you dont
make.

REFERNCES
http://emol.org/celebrities/trump/niceguy.html
http://www.evancarmichael.com/Famous -Entrepreneurs/560/Breaking-New-Ground-TrumpsSuccess-Factors.html
http://blog.hubspot.com/blog/tabid/6307/bid/3367/10-Management-Lessons-From -DonaldTrump.aspx
http://www.slideshare.net/bright9977/my-10-success-lessons-donald-trump

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SAM WALTON

NAME: SAM WALTON


BORN: MARCH 29, 1918
OCCUPATION: FOUNDER OF WALT-MART
CITIZENSHIP:

US

ETHNICITY:

AMERICAN

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BACKGROUND:
Sam Walton, the founder of Wal-Mart, grew up poor in a farm community in rural Missouri
during the Great Depression. The poverty he experienced while growing up taught him the
value of money and to persevere.
After attending the University of Missouri, he immediately worked for J.C. Penny where he
got his first taste of retailing. He served in World War II, after which he became a successful
franchiser of Ben Franklin five -and-dime stores. In 1962, he had the idea of opening bigger
stores, sticking to rural areas, keeping costs low and discounting heavily. The management
disagreed with his vision. Undaunted, Walton pursued his vision, founded Wal-Mart and
started a retailing success story. When Walton died in 1992, the family's net worth
approached $25 billion.
Today, Wal-Mart is the world's #1 retailer, with more than 4,150 stores, including discount
stores, combination discount and grocery stores, and membership-only warehouse stores
(Sam's Club). Learn Walton's winning formula for business.

Rule 1: Commit to your business


Believe in it more than anybody else. I think I overcame every single one of my personal
shortcomings by the sheer passion I brought to my work. I don't know if you're born wit h this
kind of passion, or if you can learn it. But I do know you need it. If you love your work,
you'll be out there every day trying to do it the best you possibly can, and pretty soon
everybody around will catch the passion from you like a fever.

Rule 2: Share your profits with all your associates, and treat them as
partners
In turn, they will treat you as a partner, and together you will all perform beyond your wildest
expectations. Remain a corporation and retain control if you like, but behave as a servant
leader in your partnership. Encourage your associates to hold a stake in the company. Offer
discounted stock, and grant them stock for their retirement. It's the single best thing we ever
did.

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Rule 3: Motivate your partners


Money and ownership alone aren't enough. Constantly, day by day, think of new and more
interesting ways to motivate and challenge your partners. Set high goals, encourage
competition, and then keep score. Make bets with outrageous payoffs. If things get stale,
cross-pollinate; have managers switch jobs with one another to stay challenged. Keep
everybody guessing as to what your next trick is going to be. Don't become too predictable.

Rule 4: Communicate everything you possibly can to your partners


The more they know, the more they' ll understand. The more they understand, the more they'll
care. Once they care, there's no stopping them. If you don't trust your associates to know
what's going on, they'll know you really don't consider them partners. Information is power,
and the gain you get from empowering your associates more than offsets the risk of
informing your competitors.

Rule 5: Appreciate everything your associates do for the business.


A paycheck and a stock option will buy one kind of loyalty. But all of us like to be told how
much somebody appreciates what we do for them. We like to hear it often, and especially
when we have done something we're really proud of. Nothing else can quite substitute for a
few well chosen, well timed, sincere words of praise. They're absolutely free and worth a
fortune.

Rule 6: Celebrate your success


Find some humor in your failures. Don't take yourself so seriously. Loosen up, and
everybody around you will loosen up. Have fun. Show enthusiasm always. When all else
fails, put on a costume and sing a silly song. Then make everybody else sing with you. Don't
do a hula on Wall Street. It's been done. Think up your own stunt. All of this is more
important, and more fun, than you think, and it really fools competition. "Why should we
take those cornballs at Wal-Mart seriously?"
Rule 7: Listen to everyone in your company and figure out ways to get them talking
The folks on the front lines the ones who actually talk to the customer are the only ones who
really know what's going on out there. You'd better find out what they know. This really is
what total quality is all about. To push responsibility down in your organization, and to force

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good ideas to bubble up within it, you must listen to what your associates are trying to tell
you.

Rule 8: Exceed your customer's expectations


If you do, they'll come back over and over. Give them what they want and a little more. Let
them know you appreciate them. Make good on all your mistakes, and don't make excuses
apologize. Stand behind everything you do. The two most important words I ever wrote were
on that first Wal-Mart sign: "Satisfaction Guaranteed." They're still up there, and they have
made all the difference.

Rule 9: Control your expenses better than your competition


This is where you can always find the competitive advantage. For twenty-five years running
long before Wal-Mart was known as the nation's largest retailer we've ranked No. 1 in our
industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes
and still recover if you run an efficient operation. Or you can be brilliant and still go out of
business if you're too inefficient.

Rule 10: Swim upstream


Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way,
there's a good chance you can find your niche by going in exactly the opposite direction. But
be prepared for a lot of folks to wave you down and tell you you're headed the wrong way. I
guess in all my years, what I heard more often than anything was: a town of less than 50,000
populations cannot support a discount store for very long.

SAM WALTONS SUCCESS SECRET AS LEADERS FIGURE OF WALT-MART:


At first, Sam Stores are franchised stores from The Butler Brothers. With the help of Bud
Walton, in-law and brother-in-law, Sam opened the store in Ruskin Heights, near Kansas in
the shopping center. Then open a larger store called Waltons Family Center and finally Sam
with Bud founded Wal-Mart. Initial strategy was used to discount stores. This strategy is the
first in the world. Five years later, Walt-mart has 24 branches with sales of 12.6 million
dollars. In 1970, Wal-Mart opens first distribution center and headquarters in Bentonville,
Arkansas, and trade shares of the first time. Then Wal-Mart approved and listed on the New
York Stock Exchange. In 2003, the company has operations in more than 4000 stores

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worldwide. In 1999, with business partners 1,140,000, Wal-Mart became the largest private
companies in the world.
The simple act of leader, however cause Big Impact. Every leader must have the force and
power of each. A Sam Walton was known to be rather revealing the positive side of someone,
then say thank you to someone because of their privilege to do.
Walton also was the one who appreciates the input from others. He was always asking
questions to anyone who can give input considered. Would you visit our distribution
centers? After that, please tell me, what needs to be improved. How do you think of our
new store concept? What will we do Wal-Mart? This shows that Waltons very open to
feedback and even criticism directed at him, while quite a lot of leaders feel allergic to
criticism of others. This simple act turned out to have a real impact for customers and
partners.
Sam Walton was not a man who likes to waste time and energy. The suggestions from
customers not only accommodated without a clear follow-up, but he wrote in a notebook he
always carried, or recorded in the cassette. After that he took the action based on that advice.
This action ultimately proved his concern for the customer.
Walton was very close to the employees. Often vanity top executives have led to the collapse
of a company. They tend to build a distance (gap) with front-line employees. The biggest of
the company, usually the greater the possibility of these leaders have lost contact with the
front-line employees. But not so with Sam Walton, he was a leader who was humble and
modest. Throughout his life, he often visited the front lines of every store. Sam Waltons
leadership style is close to the employee coloring corporate culture of Wal-Mart today.

SAM WALTONS SUCCESS SECRET:


Waltons leadership success according by Michael Berg Dahl, author of The 10 Rules of Sam
Walton, is that Walton is a person who has a vision, never give up, and optimistic. He is also
constantly learning from its competitors but by doing its own way, he does not like to follow
the style of others. Sam Walton was also the man who dared to take risks, even though he
admitted that the first 90% he always failed when taking a risk. For Sam Walton, his failure is
a lesson to achieve success.

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In the book Successful Business Leaders of Investors Business Daily, there are some secrets
of Waltons success that we can learn, namely:

1. Constantly trying to improve


If we ask him about the way to run business, the n he is a man who was never satisfied. For
example, in 1966, Walton has five Walt-mart stores in a few small shops, and five shops were
producing an income of $ 10 million in sales per year. But, he continued to look for ways to
improve and expand his business and make it more efficient. He began to read about
computers and even register in the school IBM Corp., and hire some computer experts. Initial
emphasis on the technology turned out to be one of the key developments of Wal-Mart
business in the future.

2. Happy employees mean happy customers


Walton admitted that initially he was so stingy and did not give good pay to his employees.
But eventually he realized that he should give a larger payment to his employees because
they are considered as business partners. According to Walton, who treated the way
management is the same business partner in a way that applied to the consumer. If the
business partner treats their customers well then the consumer will come again and again
therein lays the advantage and business success.
Walton also often visited his shop and asked for their opinions, especially employees who are
on the front lines, those who actually faced and talking with customers, as people who know
the real situation on the ground.

3. Learning from competitors


Walton always tried to investigate its competitors. He will walk into Kmart with a yellow pad
or tape recorder. He saw the thirst of goods, goods on display and how the store does
business. Walton did not learn of its competitors because wanted to beat their price, but he
learn from these competitors.

4. Doing things with own way


Walton has a principle, that we can learn from its competitors, but do not follow them
completely. We must find opportunities to do so in different ways.

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5. Self-criticism with the worst criticism


According to Walton, one of reason why Wal-Mart could still standing is because he and the
store managers to consistently dared to criticize their selves. If you make a mistake, it will be
recognized, discussed and seek know how to fix them.

6. Having fun
Walton run his business very seriously, but he was not afraid to laugh at himself. In the
schedule of meetings with his managers, he sometimes invited unexpected guests, such as
Executive Chief General Electric Jack Welch or a well-known singer. Annual meeting of
shareholders packed in the form of golf, tennis, or sightseeing. According to Walton, we need
to relax the tension, have fun and always show enthusiasm.

7. Do what you love


Enthusiasm will be easy to do if we love what we do. Waltons retail world is enjoying. For
the love of his work, then working long hours is not an obstacle. He often began his day in
the office at 04.30. According to Walton, if we love our jobs, then we will always try to do
the best that can be done, so that the people around us will feel the passion that we have.
Good luck of Sam Walton was because he loved the business. Hes tireless search for new
ways to serve customers. As the growth of the company, he also grew to respect the people
who realize that growth. Sam knew the customer is everything to the company. He applied
this belief in every action. And in doing this, he left the trail to follow all the people.
The success of Sam Walton to raise Wal-Mart had it enjoyed until the end. In 1992, he died
because of cancer and remained as the richest man in the world. He also won awards from the
President of the United States in the form of Medal of Freedom. If Sam Walton were alive
today, his performance could be paired with successful entrepreneurs other world level such
as Warren Buffet or Bill Gates. We can learn how Wal-Mart was elected to the Companys
eleven ranked the worlds most amazing version of Fortune magazine.

SAM WALTON QUOTES:


Sam Walton was not just any businessman; he was a visionary. At a very early stage in life,
he taught himself to take life's challenges head on. Sam Walton was one to pursue his
dreams. He was the creator of the retail industry. Decades later, Sam Walton's giant retail

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business Wal-Mart ranks numero uno in the reta il industry. Learn a few lessons of business
from these Sam Walton quotes.
Appreciation
Appreciate everything your associates do for the business. Nothing else can quite substitute
for a few well-chosen, well-timed, sincere words of praise. They're absolutely free and worth
a fortune.

Vision
Capital isn't scarce; vision is.

Expectation
High expectations are the key to everything.

Perseverance
I had to pick myself up and get on with it, do it all over again, only even better this time.

Leadership
Outstanding leaders go out of their way to boost the self-esteem of their personnel. If
people believe in themselves, it's amazing what they can accomplish.

Business
The key to success is to get out into the store and listen to what the associates have to say.
It's terribly important for everyone to get involved. Our best ideas come from clerks and
stock-boys.

REFERENCES:
Sam Walton; John Huey (1992). Sam Walton: Made in America . Doubleday.
Townley, Alvin (2006-12-26). Legacy of Honor: The Values and Influence of America's
Eagle

Scouts.

Asia:

St.

Martin's

Press.

http://www.thomasdunnebooks.com/TD_TitleDetail.aspx?ISBN=0312366531.
2006-12-29.

303

pp. 8889.
Retrieved

"Distinguished

Eagle

Scouts".

Scouting.org.

http://www.scouting.org/filestore/pdf/02-

529.pdf. Retrieved 2010-11-04.


Daniel, Gross; Forbes Magazine Staff (August 1997). Greatest Business Stories of All Time
(First ed.). New York: John Wiley & Sons, Inc.. p. 269.
Walton, Sam; John Huey (1992). Made in America: My Story. New York: Doubleday. p. 30.
Daniel, Gross; Forbes Magazine Staff (August 1997). Greatest Business Stories of All Time
(First ed.). New York: John Wiley & Sons, Inc.. p. 272.
Abraham; Kathawala, Heron. "Sam Walton: Walmart Corporation". The Journal of Business
Leadership, Volume I, Number 1, Spring 1988. American National Business Hall of Fame.
http://www.anbhf.org/laureates/swalton.html. Retrieved 2009-11-23.
Richard S. Tedlow, Sam Walton: Great From the Start (July 23, 2001), Harvard Business
School

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SCOTT G.MC NEALY

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INTRODUCTION & BACKG ROUND:


McNealy is an unlikely Silicon Valley visionary. He is no technocrat.. He didn't drop out of
college to found Sun Microsystems. In fact, his background is in Midwestern manufacturing,
where his father worked as a top executive in Detroit's automotive industry. Since a twist of
fate brought him to California and the helm of Sun, McNealy has worked tirelessly to build
the company into one of the world's leading corporations, based on the idea of network
computing and a universal ope rating language. For more than a decade, he nearly singlehandedly led the fight against Microsoft and Bill Gates and helped persuade the Justice
Department to file historic antitrust charges against the software giant.
McNealy is a product of the Rustbelt, but with an Ivy League twist. Born in Columbus,
Indiana, on November 13, 1954, he was raised in the upper-class suburb of Bloomfield Hills,
Michigan. McNealy attended Cram brook Kingwood School, a prep school north of Detroit.
A model student and athlete, McNealy captained the school's championship tennis team and
excelled on the golf and hockey teams.
McNealy's early business education came at the hands of his father, William McNealy, a
vice-chairman at American Motors Corporation. As a youngster, McNealy spent evenings at
home discussing company strategy with his father. On weekends, while his dad caught up on
paperwork, McNealy would walk around the factory floor. He picked up more lessons in
corporate wisdom on the golf course, joining golf outings with famous automotive executives
such as Lee Iacocca. Early on, McNealy recognized that AMCs troubles stemmed from an
insufficient market share. The car manufacturer did not have the financial, marketing, or
technological fire power to shape the direction of the industry.
Following in his father's footsteps, McNealy attended Harvard University and majored in
economics, but he now jokes that he minored in beer and golf. In fact, he captained the
Harvard golf team and missed the cut for the 1976 NCAA championship by one stroke. After
a less than stellar undergraduate career, McNealy tried to get into business school, but was
turned down by Harvard and declined twice by Stanford. Always deeply interested in
manufacturing, he took a job as a foreman at the Rockwell International Corporation plant in
Ashtabula, Ohio in 1976. The company, which built truck hoods, was preparing for an
impending strike. The young manager worked 14-hour days for two months, landing in the
hospital for six weeks with a case of hepatitis.

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Early Experience
Growing up, McNealy gained exposure to the business world through his interest in his
father's job as a manager at American Motors. His father eventually became vice chairman of
the company, and the experience of watching American Motors decline was important in
shaping the younger McNealy's understanding of business. Sports were also important in
McNealy's early life. He developed early passions for hockey and golf, which continued into
adulthood; McNealy was named the top CEO golfer by Golf Digest in 2002, and he continued
to play hockey into his 40s. When the McNealy family settled in Bloomfield Hills, Michigan,
McNealy attended the elite Cranbrook prep school. He valued the atmosphere at the school,
especially the experience of being around bright people and being treated as an adult, which
he said better prepared him for life at college. Although he was not a dedicated student,
McNealy was able to gain entrance to Harvard. He enrolled as a premedical student,
intending to become a doctor, but switched to economics. This was due mainly to the
influence of an economics teacher, Bill Raduchel, who was later to join him as chief
information officer at Sun. Despite listing his main interests at college as beer and golf,
McNealy managed to gr aduate from Harvard in 1976.
While trying to gain entrance to Stanford Business School, McNealy spent two years working
as a plant foreman at Rockwell International, in a factory that made body panels for tractors.
This practical experience in a manufacturing environment proved to be extremely valuable.
McNealy later said that this was better preparation for running a company than anything he
learned at Harvard or Stanford. Eventually accepted into Stanford, on his third attempt,
McNealy was one of the few MBA students to concentrate on manufacturing, rather than
finance. Upon graduation in 1980 McNealy went to work for FMC Corporation, building
Bradley tanks for the U.S. Army. In 1981 he took a job as manufacturing manager with
Onyx, a small company manufacturing computers. While he had no technical knowledge of
the computer industry, Mc -Nealy's manufacturing experience and people skills impressed the
CEO at Onyx, Doug Broyles: "We brought him on as director of operations, and put
manufacturing and purchasing under him. Within a couple of weeks, Scott had the 50-yearold manufacturing guy's respect and they were working as a team. Scott went out on the line
and talked to people" ( High Noon ). Throughout his career, and despite his privileged
background, McNealy cultivated an image as a down-to-earth, blue-collar workingman,
which appealed to many people.
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Stanford University Network


McNealy's manufacturing experience did not make him an obvious candidate for founding a
Silicon Valley start-up company. However, in 1982 a college friend from Stanford made
McNealy an exciting offer. Vinod Khosla was a passionate and driven entrepreneur, with an
exciting vision for the future of computing. He met Andy Bechtolsheim, a PhD student who
was working on a project called the Stanford University Network, or SUN. Khosla
recognized that Bechtolsheim's work could provide the solution to his idea of a powerful
workstation to replace the minicomputers that software engineers were using. This
workstation would operate while plugged into a computer network, allowing for electronic
collaboration. Khosla invited McNealy to join the project because of his valuable business
and manufacturing experience. A fourth member of the team, Bill Joy, was brought in for his
programming genius to develop a Unix operating system for the prototype workstation.
The four men, all in their 20s, had very little business experience between them, but they had
passion and ambition to make Sun Microsystems a success. The first Sun-2 workstations hit
the market in late 1982. Few people in the industry took the upstarts seriously. At the time,
Apollo Computers dominated the workstation market, and its staff joked about the "kids" at
Stanford. But after Sun beat out Apollo for a crucial deal to supply works tations to
Computervision, it was apparent that they had to be taken seriously. Sun's aggressive
campaign for the contract, even after Computervision had originally decided to go with
Apollo, became a hallmark of Sun and of McNealy's business style.
Initially, McNealy's position within the company was as vice president of manufacturing.
Khosla, as the visionary force behind the new company, was CEO. But it soon became
apparent that it was McNealy, not Khosla, who was providing leadership to the company's
expanding workforce. Of the four founders, only McNealy had the personal skills and
experience to deal with the varied demands of running a company. As McNealy described his
role in these early days, "I couldn't program anything. I still can't program anything. I wasn't
the technical guru. I wasn't the visionary. I was kind of the glue that kept everybody together
and helped enunciate what our goals were, how we're going to get there, and kind of cleaned
up after the engineers and made sure the customers got what we promised them" ("Scott
McNealy Oral History"). This ability to crystallize and implement the vision of others
became one of McNealy's strengths throughout his career.

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Increasing dissatisfaction among staff and board members over Khosla's performance as CEO
led to his leaving Sun in 1984. As the only obvious successor, McNealy was named interim
CEO, but the board was concerned that this brash young man, who often lacked tact or
discretion, did not have the business acumen required to run the company. A search outside
the company failed to produce a suitable alternative, however, and the board decided to stick
with McNealy. This was a big gamble, as McNealy was inexperienced, had little technical
knowledge of the industry, and had a reputation for cockiness and arrogance. However, his
confidence, energy, and total commitment to making the company succeed helped convince
the board that he could do the job. Their faith proved well founded. As Sun Microsystems
developed from a brash renegade into an industry powerhouse, so too did its CEO.

LEADERSHIP STYLES
He used participative, charismatic and transformational leadership styles.
Scott McNealy, Chairman and CEO, co-founded Sun Microsystems in 1982. Since the
founding of Sun, the company has become one of the world leaders in computing network
solutions. By using McNealys participative, charismatic and transformational leadership
styles, Sun is sure to continue its hold in the industry. A charismatic leader is one who has a
compelling vision or sense of purpose, and ability to communicate that vision in clear terms
that followers can understand. They also demonstrate a consistency and focus in pursuit of
the vision, and an understanding of his or her own strengths. Through McNealys writings he
conveys his vision of what technology should be and where it should go in the future. His
willingness to take on controversial issues in the industry, head on, shows his belief and focus
on his visions. McNealy states, Without choice, there is no competition. Without
competition, there is no innovation. And without innovation, you are left with very little in
support of the U.S. Anti- trust Law. The companys mission statement is also an example of
the clearly defined vision of where McNealy wants Sun to go in the future. One who has a
participative leadership style actively seeks input from followers for many of the activities in
organization. As bright a star that McNealy is one must realize that he couldnt have done
this all himself. The fast-paced, ever evolving computing industry requires more than just one
individuals input on an organizations direction. The book defines a transformational leader
as one who inspires followers to transcend self-interests for the good of the organization and
who is capable of having a profound and extraordinary affect on followers. McNealy has
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proven himself to be this type of leader. Not only has he had a profound effect on his
company but also on the IT industry. 60 Minutes described him as one of the most
influential business men in America. Throughout Suns existence they have been
consistently introducing innovative ideas. With Scott McNealy at the forefront of Sun he will
continue to be an asset to Sun and the rest of the network computing industry. NEW YORK
(CNN) -- Sun Microsystems Chairman Scott McNealy sums up his leadership style by saying
"sharing is a good thing." It may not be what Wall Street wants to hear but McNealy believes
he can use Sun power to eliminate the global digital divide. McNealy talked to CNN's
Maggie Lake about his goal of creating an open source society and educating the next
generation of tech superstar.

CHALLENGES
McNealy faced many challenges over the next two decades. His abilities were questioned at
times and his response to these challenges highlighted some of his main attributes as a leader.
One of the first major trials McNealy faced as CEO came in 1989, when, after several years
of rapid growth, Sun posted its first quarterly loss. The company had grown at a phenomenal
rate, surpassing its main competitor in 1987 and reaching $1 billion in revenue in 1988, but
such rapid growth caused difficulties. Under McNealy's leadership, Sun had placed heavy
emphasis on gaining market share, often at the expense of profit margins. Problems with
internal systems meant that it was unable to manage production and keep up with demand for
its products. At the same time, several key executives left the company, raising questions
about McNealy's management style. Some business analysts suggested that the company had
outgrown McNealy's abilities as CEO.
In response, McNealy instituted changes in the company's strategy that showed his maturity
as a business leader. He put new focus on the importance of costs as well as growth and
developed new internal accounting processes that controlled spending. He also made the
crucial decision to consolidate Sun's products, basing everything around the new
microprocessor developed by Sun's own engineers, the SPARC chip. Other products based on
the Intel chip or Motorola technologies were discarded. This was risky, as market acceptance
of Sun's new technology was not yet established.
McNealy also initiated an important restructuring of the company during the early 1990s. He
reorganized the company into seven planets, each of which represented sales and marketing

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focused around a specific product line. The new decentralized structure had positive and
negative outcomes, which highlighted McNealy's strengths and weaknesses as a leader.
While most people agreed that transformation was necessary, in practice executives bickered
with each other over their own agendas. Rather than provide his team with practical guidance
on how each planet was supposed to interact with the others, Mc-Nealy preferred to move on
and focus on the next challenge, the next big sale. He often gave more attention to the newer
technologies, while neglecting the older, more established parts of the business. This resulted
in jealousy and tension between different areas. Nevertheless, the new structure did allow the
various businesses within Sun to focus on establishing their own markets, without
interference from the others. Many believe that the reorganization enabled the company as a
whole to foster innovation in a way that would not have been possible in a more centralized
business.

"The Network Is The Computer"


At the same time, Sun repositioned itself and carved out a new market away from
workstations. Since the company's inception, McNealy had been a strong proponent of the
slogan "the network is the computer." This meant that the true value of the computer did not
come from the machine you could see on your desk, but instead from the power it derived
from being connected to ot her computers. Sun's commitment to this model meant their
machines had always been built with network capabilities, and they were much more
powerful than PCs. As businesses began to understand the benefits of data networking in the
early 1990s, Sun's workstations were ideally positioned to evolve into network-server
computers. With the rise of the Internet, Sun's network slogan finally became clear to most
people, and Sun's servers were at the center of the Web revolution. As the Merrill Lynch
analyst Steven M. Milunovich claimed in a 1999 Business Week article, "If you want to know
where the computer industry is going, ask Sun" (January 18, 1999). McNealy's long-term
dedication to the network vision had finally paid off.
The launch of Java also identified Sun as a leader of Internet-based technology. Java was a
programming language developed by Sun's software engineers in the early 1990s. It was
unique because it was not tied to a particular computer operating system. This meant it could
be run on almost any computer at any time, provided that the computer had a Java interpreter.
Therefore, it was ideal for the Internet environment, where millions of computer users needed
to be able to talk to each other in one universal computer language. McNealy saw Java as the
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basis of a completely new platform for the computing world, one that could challenge the
dominance of Microsoft. Inevitably, this would bring him into direct conflict with Microsoft.

THE BATTLE WITH MICROSOFT


When McNealy helped to found Sun, Microsoft had little presence in the industry. Before
long, however, the industry would have to grapple with the growing dominance of
Microsoft's Windows operating system combined with the Intel computer chip, an alliance
that became known as Wintel. Mc-Nealy was quick to recognize that Wintel technology
would eventually threaten Sun's key markets. As he saw it, Microsoft's CEO, Bill Gates, had
a flawed vision for computing that dominated the industry due to Microsoft's unfair business
practices. Never one to shy away from directly criticizing his competitors, McNealy's rhetoric
reached new heights in the battle against Microsoft.
McNealy's attacks on the company certainly won Sun publicity, but not all were convinced
that this was necessarily positive attention. Some people felt that McNealy's anti-Microsoft
zeal crossed the line into obsession. For instance, banning all Sun employees from using
software such as Microsoft PowerPoint was not popular, as staff needed to be able to operate
with Microsoft products when dealing with customers. Many customers were also worried by
McNealy's attacks on Microsoft and his apparent inflexibility over the issue of Wintel
technology. What they wanted was to be able to run both kinds of technology, not to have to
choose between them. McNealy's stubborn insistence that Sun would stand apart from
Microsoft was in some senses ignoring the real world in which people needed to be able to
operate with both.
The case of Java indicated how difficult cooperation between the two companies was. In
1996 Sun and Microsoft worked out a deal that licensed Microsoft to include Java in its
Windows operating system. As the vast majority of desktop computers were running
Windows, Sun needed Microsoft to incorporate Java if it was to become a truly universal
computer language. At the same time, Microsoft had to use Java because it had been slow to
reposition itself in the new world of Internet computing. The deal quickly collapsed,
however, with Sun alleging that Microsoft violated the contract by making changes to Java
that were incompatible with Sun's own systems. Inevitably, Sun sued Microsoft for breach of
contract in 1997.

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THE NEW MILLENNIUM


The 1990s had proved to be a great decade for Sun and McNealy. The company had been
transformed into an innovative leader in the information-technology industry, and in Java it
had one of the most exciting new technologies of the era. McNealy's vision for the
Information Age and his crusade against Microsoft's monopoly gained him an appreciative
audience. He became one of the most high-profile high-tech CEOs, winning over audiences
with his willingness to poke fun at himself as well as his competitors. In a 1996 Business
Week article, Sun's former treasurer, Thomas J. Meredith, saw this as one of McNealy's key
strengths: "His humor and ability to raise a crowd to its feet is in many respects exactly what
you need in CEOs and leaders of today's industry" (January 22, 1996).
However, the year 2000 heralded the beginning of Scott McNealy's most difficult period as
CEO. With the crash of the dot.com and telecommunications industries and an economic
recession exacerbated by the September 11, 2001, terrorist attacks, technology spending
plummeted. Sun faced increased competition in its server market from companies producing
cheaper alternatives. Sales of Sun products were also badly affected by the Linux operating
system, an open-source software that was free to anyone who could download it off the
Internet. By 2004 Sun faced 12-consecutive quarters of shrinking revenues, and it had been
posting losses since 2002. The credit-rating agency Standard & Poor's dropped Sun's rating
again in 2004, and substantial staff layoffs were announced. McNealy faced criticism for his
apparent inability to return the company to profitability. Some analysts predicted the eventual
demise of the company.
These factors were behind the shocking announcement in April 2004 that Sun and Microsoft
were calling a truce. Microsoft would pay Sun $2 billion to resolve lawsuits, and the two
compa nies agreed to work toward making their technologies more compatible. Many in the
industry read the deal as a capitulation by McNealy. It also sparked speculation that he was
approaching the end of his time as Sun CEO. Analysts questioned whether McNealy could
work closely with Microsoft, when so much of his earlier motivation had come from trying to
prevent Microsoft from gaining total control of the industry. There was little doubt that Sun
needed to be taken in a new direction if it was to survive, and some people were unsure if
McNealy was the right person to do this. McNealy's name was also mentioned as a possible
successor at Oracle Corporation if Larry Ellison were to step down as CEO. But McNealy

313

continued to lead the company that he helped to found, relying on continued innovation and
new products to return his company to profitability.

UNIQUE CONTRIBUTION AS LEADER & MANAGER


By all accounts, Suns Chairman and former CEO, Scott McNealy , was a great leader and
manager. According to Forbes, 75 CEOs were managed by McNealy at one time or another,
including Googles Eric Schmidt and Yahoos new chief, Carol Bartz.
Thats impressive to be sure. In the same Forbes article, McNealy talks about the
management tricks he used to grow the company to $10 billion. Again, an impressive feat
few have matched. I said it myself, in a 2007 CNET post:
By any measure, quantitative or qualitative, Scott [McNealy] was an extraordinary leader and
manager. Excluding the [dot-com] bubble (I always exclude the bubble), he led Sun from
startup to roughly $20B in market cap, an extraordinary achievement.
Lets pause there for a moment. Sounds like a love fest , doesnt it? But theres a flip side to
the story. Read on:
But over the next decade - again, excluding the bubble - the stock essentially flat lined,
significantly underperforming its peers and all major market indices. Suns stock price today
is roughly the same as it was ten years ago.
The second half - an entire decade - of Suns performance as a public company has been
poor, to say the least. If you bought [JAVA] in the past ten years, youre not likely to be a
happy camper. That affects lots of shareholders and employees - numbers with lots of zeros at
the end.
Since then, shares of Sun have plunged 80 percent, far worse than peer companies and broad
market indices. To be fair, Jonathan Schwartz has been running the company for over two
and a half years now. But wasnt Schwartz also a McNealy disciple, not to mention Scotts
choice to replace him? How about that?
Dont get me wrong, McNealy built Sun and, for a time, it was an important, profitable, highgrowth company. But that ended long ago. Today, Suns business model is essentially
broken, and thats been the case for a very long time. Moreover, its death by a thousand
cuts multi-year restructuring has failed.

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Look, I think its great that Scott McNealy trained 75 CEOs for other companies. Maybe he
should have been an executive coach. But the true measure of corporate success is building
long-term shareholder value. In that sense, he failed. He couldnt do for his own company
and its shareholders what some of his disciples have done for theirs. And in that context, the
horrendous performance of Jonathan Schwartz is truly ironic.
In the Forbes interview, McNealy said, A lot of those good leaders who came out of Sun
understood and knew what I was trying to do when I picked an enemy, or when I picked a
cause or when I put all the wood behind one arrowhead. It was about trying to align a bunch
of really different people around a commonality of purpose. Thats what really great leaders
do.
Maybe thats what really great leaders do, but really great CEOs create long-term
shareholder value. He was raised in the upper-class suburb of Bloomfield Hills, Michigan.

UNIQUE LEADERSHIP
With three other young entrepreneurs, Scott G. McNealy founded Sun Microsystems in 1982.
Despite having no technical background, McNealy's leadership helped to develop Sun into
one of the world's leading computer companies. The success of the business rested upon
McNealy's determination, business acumen, and ability to motivate those who worked around
him. Many analysts commented on McNealy's willingness to take risks and reinvent the
company in order to adjust to changing industry conditions. In particular, McNealy's
dedication to the company vision, "the network is the computer," me ant that Sun was ideally
placed to take advantage of the rise of the Internet in the mid-1990s.
McNealy gained a reputation as a brash and aggressive CEO, notorious for his outspoken
comments about his business rivals. McNealy was Microsoft's harshest and most vocal critic
throughout the 1990s, and he was called on to testify during congressional hearings into
competition in the software industry. His willingness to poke fun at himself and his rivals
resulted in memorable wisecracks and some colorful publicity stunts, making him one of the
more unconventional CEOs in corporate America. However, despite the loud public persona,
those who worked closely with McNealy emphasized his business insight, his appreciation of
his coworkers, and his ability to relate to many different types of people. While McNealy
could not be regarded as a typical CEO, the company he built in many ways typified the

315

phenomenal growth and technological achievement that was associated with Silicon Valley
during the last two decades of t he twentieth century.

REFERENCES
Scott G. McNealy 1954 Biography - Early experience, Stanford university network,
Challenges, The network is the computer http://www.referenceforbusiness.com/biography/MR/McNealy-Scott-G-1954.html#ixzz1GVpMPjhX
http://www.answers.com/topic/scott -mcnealy#ixzz1GViiu7F0
http://en.wikipedia.org/wiki/columbus,
www.bnet.com
www.123helpme.com

316

SECTION B: STUDY OF
INTERNATIONAL CORPORATIONS

317

ORASCOM TELECOM

318

ORASCOM TELECOM MISSION STATEMENT


We exist to enrich our customers lives through accessible communication services. Ensure
our shareholders returns with the highest yields. Expand our employees horizons with
exceptional growth opportunities. Enable our communities development and prosperity by
always giving back.

ORASCOM TELECOM VISION STATEMENT:


To harness our networks to provide millions of connected customers with solutions that
empower their personal and professional lives.

BRIEF HISTORY OF ORASCOM TELECOM


Orascom Telecom is part of the Orascom group of companies, which was established in
1976. Orascom entered the field of Information Technology and Telecommunications by
trading and distributing IT and telecom equipment in Egypt. It became the market leader
representing the most important companies in these sectors such as Microsoft, Hewlett
Packard, Compaq, IBM, Lucent Technologies (AT&T), Oracle and Novell. Orascom built its
solid foundations in IT and telecommunication hardware over a period of ten years. In 1994,
it acquired an interest in Egypts first ISP, In Touch, marking its first step in offering services
in the communications marketplace. As the communications sector in Egypt began to be
privatized, Orascom continued to add more service companies to its portfolio, and was a
participant in a joint venture that was awarded Egypts first license for VSAT technologies,
and a lead member of a cons ortium formed to create Egypts first private payphone network.
By 1997, Orascom was in a position to participate in the bidding process for a GSM license
in Egypt, having proven itself in the marketplace as an IT and telecom hardware leader, in
addition to building up the know-how and skills in managing large scale projects and
understanding local markets. On July 27th, 1997, OTH was incorporated to consolidate the
telecommunications and technology interests of the Orascom family of companies and the
controlling shareholders, the Sawiris family. By 1998, OTH was the only company in Egypt
with licenses in all three privatized sectors: wireless, fixed line payphones and VSAT
technologies. OTH entered into the GSM business in 1998 through a series of acquisitions.

319

ABOUT ORASCOM TELECOM


From 200,000 subscribers in 1998 to more than 120 million subscribers, through its parent
company Weather Investments, Orascom Telecom (OTH) established itself as a global
brand and is considered today to be one of the largest and most diversified telecom operators.
Operating in eleven emerging markets, the company has a population under license of
approximately 512 million with an average mobile telephony penetration of approximately
50% as of June, 2010. Orascom Telecom operates GSM networks in Algeria ("OTA"),
Pakistan ("Mobilink"), Egypt ("Mobinil"), Bangladesh ("banglalink"), Burundi (Leo
Burundi), Namibia (Leo Namibia), Central African Republic (Telecel CAR), North Korea
(koryolink) and Canada (Wind Mobile) through its indirect equity shareholding in
Globalive Wireless and its indirect equity ownership in Telecel Zimbabwe (Zimbabwe). In
2009, the company was also awarded the management contract of one of the two Lebanese
mobile telecommunications operators ("Alfa") from the government of the Republic of
Lebanon.
OTH's first operation was the Egyptian Company for Mobile Services commonly known as
(Mobinil). Mobinil is a market leader serving over 26 million subscribers representing a
market share of 40% (as of June 2010). Mobinil is one of Egypt's five largest companies on
Cairo & Alexandria Stock Exchange (CASE) in terms of market capitalization.
OTH witnessed success as Orascom Telecom Algeria SPA (OTA) was launched in February
2002. It grew to become the market leader in terms of both subscriber numbers as well as the
quality of telecommunications services provided. OTA serves over 15 million subscribers on
its network and has a 59.1% market share (as of June 2010).
Pakistan Mobile Communications Ltd (Mobilink) started its operations in Pakistan in 1994.
In April 2001, OTH took over management control of the company. As the market leader,
Mobilink serves over 32 million subscribers, representing a market share of 32.6% (as of
June 2010).

ENGAGING OUR STAKEHOLDERS


Disclosure of Orascom Telecoms CSR activities and related achievements to fulfill the
companys accountability to stakeholders, as well as improving business operations and
earning the trust of its employees, shareholders, business partners, local NGOs partners,
320

government and international organization representative through communication, are also


important social responsibility.

INTERNAL ENVIRONMENT
CEOS

Ahmed Abou

DomaEzz Heikal

Hassan Kabbani

Ken Campbell

Rashid Khan

Tamer El Mahdy

MARKETING
All over the world, there are millions of people who deserve to be heard; who have
something to say that's worth listening to; who have something to offer. People caught up in
wars not of their making; people with hopes and aspirations; people that are hungry or
homeless; talented people who want to realize their potential. All for the want of a means to
communicate. For many, their voices have no echo. Our business is communications.
Orascom Telecom designs and builds complete communication infrastructures. We also
operate them. And because our business is communications, we make it our business to
listen. Only by feeling what the world wants to say we can provide the best means for saying
it.
Today, Orascom Telecom operates in seven countries and helps more than 30 million people
voice their hopes, fears, ambitions and feelings. And through our parent company Weather
Investments, we now reach an additional 15 million customers in Italy. Our family of more
than 15 thousand employees strives everyday to make sure tha t the world will hear the
people's voices.

To all the unheard millions still out there, we are coming.

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INVESTOR RELATION
Orascom Telecom is a leading international telecommunications company operating GSM
networks in high growth markets in the Middle East, Africa and Asia, having a total
population under license of approximately 506 million with an average mobile telephony
penetration of approximately 48% as of September 30th, 2010. Orascom Telecom operates
GSM networks in Algeria ("OTA"), Pakistan ("Mobilink"), Egypt ("Mobinil"), Bangladesh
("banglalink"), North Korea (koryolink) and Canada (Wind Mobile) through its indirect
equity shareholding in Globalive Wireless. In addition it has an indirect equity ownership in
Telecel Zimbabwe (Zimbabwe) and through its subsidiary Telecel Globe; OTH also operates
in Burundi, the Central African Republic and Namibia. Orascom Telecom reached almost 98
million subscribers as of September 30th, 2010. Orascom Telecom is traded on the Egyptian
Exchange under the symbol (ORTE.CA, ORAT EY).

FINANCIALS
Orascom Telecom is a leading international telecommunications company operating GSM
networks in high growth markets in the Middle East, Africa and Asia, having a total
population under license of approximately 506 million with an average mobile telephony
penetration of approximately 48% as of September 30th, 2010. Orascom Telecom operates
GSM networks in Algeria ("OTA"), Pakistan ("Mobilink"), Egypt ("Mobinil"), Bangladesh
("banglalink"), North Korea (koryolink) and Canada (Wind Mobile) through its indirect
equity shareholding in Globalive Wireless. In addition it has an indirect equity ownership in
Telecel Zimbabwe (Zimbabwe) and through its subsidiary Telecel Globe; OTH also operates
in Burundi, the Central African Republic and Namibia. Orascom Telecom reached almost 98
million subscribers as ofSeptember30th, 2010. Orascom Telecom is traded on the Egyptian
Exchange under the symbol (ORTE.CA, ORAT EY), and on the London Stock Exchange its
GDR is traded under the symbol (ORTEq.L, OTLD LI).

Five Year Financial Highlights


Year

Year

Year

Year

Year

ended

ended

ended

ended

ended

31/12/2008

31/12/2007

31/12/2006

31/12/2005

31/12/2004

US$ mn

US$ mn

US$ mn

US$ mn

US$ mn

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Consolidated

Income

Statement
Revenues

5,327

4,727

4,727

3,906

1,966

EBITDA

2,384

2,073

2,073

1,704

958

EBITDA Margin (%)

44.70%

43.80%

43.6%

42.3%

48.70%

EBT

906

1,617

760

927

550

Net Income

503

2,083

721

667

295

4,803

4,027

2,362

1,389

Consolidated

Balance

Sheet
Property & Equipment 5,057
(net)
Total Non-Current Assets

8,155

7,743

7,082

5,873

2,992

Cash

652

1,239

756

287

513

Total Current Assets

1,765

3,688

1,593

1,044

1,076

Total Assets

9,920

11,431

8,675

6,917

4,068

Long-Term Loans

5,205

3,379

3,580

1,548

996

Non-Current 5,720

3,896

3,817

1,812

1,130

1,840

609

1,697

385

Total
Liabilities
Short -Term

Loans

& 530

Banks' Facilities
Total Current Liabilities

2,999

4,293

2,670

3,433

1,393

Total Equity

1,201

3,242

2,189

1,672

1,545

Total Equity & Liabilities

9,920

11,431

8,675

6,917

4,068

1,552

1,718

1,265

730

(950)

(3,011)

(1,947)

864

Consolidated Statement of
Cash Flows
Net Cash Provided by 1,423
Operating Activities
Net

Cash

Used

in 376

323

Investing Activities
Net Cash Provided by

(2,343)

(152)

1,755

449

(587)

450

463

(233)

353

(Used in) Financiag


Activities
Net Cash Movement

MANAGING OUR CORPORATE SOCIAL RESPONSIBILITY:


In general CSR management at OTH is designed to follow a stakeholder sensitive system.
The system covers various aspects of our commitment to shareholders and investors, business
partners, communities, employees, etc., in a rights based approach. To this end various
elements of CSR management practices are divided among our internal departments yet
management of the system and its monitoring is handled through the newly founded CSR
central division.
In 2008, OTH established the CSR Division within the PR & Communication Department.
This unit oversees and coordinates the promotion of CSR both at the Holding and across
subsidiaries. A team in charge of CSR insures that our CSR activities are conducted in an
integrated, cross -organizational manner. The CSR team, directed by the chairman defines the
direction of the Holding's CSR activities and monitors their execution.
Given the fact that all direct operations in various areas around the world is handled by our
subsidiaries, our CSR division at OT has developed a commitment to mobilize, motivate and
support OTs subsidiaries to further enhance their commitment to compliance based
processes and impactful social investment.. To this end, the CSR division conducted various
trainings and networking sessions. The activities also included creating communication
channels and an internal community of practice among our subsidiaries on the practice of
CSR.

EXTERNAL FACTORS
External factors that can affect the environment of caterpillar are as follows:

Slowdown in growth

Customer Loyalty
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Bargaining Power

Dollar Value

CULTURE OF ORASCOM TELECOM


Orascom Telecom is considered as a leader of competitive market environment which means,
first of all, to look for new ways of business growth and raising profit margins. Such a
constant search for cultural change has been institutionalized at Orascom since the start, when
its management started to embed the 6 Sigma continuous innovation strategies throughout the
company. The strategy enables Orascom to engage teams of employees in brain storming to
solve multiple problems such as long-term planning of production and sales, enhancing
product quality and competitiveness, improvements in after-sales services and spare parts
supplies, and savings in distribution and logistics related costs. By setting the global standard
of the 6 Sigma businesses culture for large companies Orascom has confirmed its leadership
position as a company that is developing effectively even in the currently recessionary world
economy.

FACTORS CONTRIBUTING TO INTERNATIONAL SUCCESS


Following are some factors which I think contributed a lot in the international success of
caterpillar:

Companys global growth vision to be First in Customer Value.

Company always looked for new ways of business growth and raising profit margins.

Constant search for cultural growth

Marketing strategy of caterpillar (customer oriented)

Companys customer satisfaction strategy (realized through a global network of independent


dealers)

SWOT ANALYSIS
Basically Orascom hire from reference so SWOT analysis is based on this source. What they
lose due to this source and what are the advantages of this source are discussed below

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STRENGTHS:

Considered very strong and reliable

Captured most of the potential customers

Covering over 10,000 cities, towns and villages only in Pakistan

Orascom telecom has signed bilateral roaming agreements with 50 operators around the

(28 million and growing)

world to have true roaming service operational in over 42 countries of the world.

In order to facilitate its international Roaming subscribers traveling to USA and Canada,

Orascom telecom's short message service center allows Vehicle Tracking and Fleet (VTF)

Management services

Large number of corporate customers

Economy of scale.

Orascom telecom and Muslim Commercial Bank have made a combined effort in order to
maximize the ease and the satisfaction of their respective customers by offering them all
banking services from their very own mobile handset.

WEAKNESS

Currently providing not good quality service because of changing their network from 900
MHz to 1800 MHz.

Fewer advertisements now days.

Most expensive telecom company both in call rates and SMS

Engineering department of Orascom telecom is not that well competent as compared to its
new Competitors

OPPORTUNITIES

Can expand its networks in the uncovered areas

Services in the future can be

Telephone

Wireless
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Calling Cards

Mobile Phone Banking

Before start of new companies can target as many new customers as they can.

Can lower prices to make business difficult for new companies

THREATS

New market players are coming in near future.

New companies can offer packages for corporate customers in better way

Wireless local loop service providers too targeting areas which are less developed.

Current price war may reach at a position where only brand names survive

Due to expensive quality of service now a days customers can shift to other companies.

Employee retention is also issue because Orascom telecom fired 1000 employees n
October 2008. Loss of loyal customer

REFERENCES
http://www.otelecom.com/about/Contents/default.aspx?ID=765
http://www.otelecom.com/regional_Presence/default.aspx
http://careers.otelecom.com/ot_careers/
http://www.otelecom.com/media/Contents/default.aspx?ID=525

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NIKE

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BRIEF HISTORY
Nike, the largest seller of athletic footwear and athletic apparel in the world with subsidiaries
in over 200 countries across the world, has attempted to keep itself on the cutting edge of
technology. Nike has been launching new technically advanced shoe models from time to
time, backed by innovative advertisements, celebrity endorsements, successful associations
and event sponsorships.
Nike was begun in 1964 as Blue Ribbon Sports; the name was changed to Nike in 1978. It
began as a partnership between an MBA candidate and a former track coach who had
manufactured running shoes in his spare time. The company built its reputation on its
technological breakthroughs in athletic shoes, and helped to introduce specialized shoes for
different sports. Prior to companies such as Nike bringing forth this concept, most athletes
used general purpose athletic shoes regardless of the sport in which they were participating,
or the strains it put on their feet.
In addition to technology, Nike also brought comfort and fashion to the industry, although
Reebok, a competitor, was more closely attuned initially to the effect that stylish shoes could
have on fashion-conscious consumers. The company has a high profile in the international
market, and ranked number one among American athletic shoe manufacturers in 1990.
Nike Inc. is a major publicly traded sportswear and equipment supplier based in the United
States. It is the world's leading supplier of athletic shoes and apparel and a major
manufacturer of sports equipment. The company takes its name from Nike, the Greek
goddess of victory. Nike markets its products under its own brand as well as Nike Golf,
Nike Pro, Nike+ , Air Jordan, Nike Skateboarding and subsidiaries including Cole Haan,
Hurley International, Umbro and Converse. Nike also owne d Bauer Hockey (later renamed
Nike Bauer) between 1995 and 2008. In addition to manufacturing sportswear and
equipment, the company also operates retail stores under the Nike town name. Nike sponsors
many high profile athletes and sports teams around the world, with the highly recognized
trademarks of "Just do it" and the Swoosh logo.

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INTERNAL ENVIRONMENT
Establishment of Standards
A comprehensive establishment of profitability standards has assisted Nike in our evaluation
of individual performance as well as a comparison to other competitors. Nike utilizes
standards such as net profit, earnings per share, return on investment, return on equity, sales
growth and asset growth. Performance standards are also established and checked regularly.
Some of the areas in which our company has established standards are productivity of
productions sites, competitive position in the United States relative to the global market,
technological leadership in comparison to competitors and overall social responsibility and
the publics perception.

Evaluation of Performance
Nike thoroughly examines and compares the aforementioned performance standa rds to the
actual results that have occurred as a result of implementing strategies to meet or exceed
performance standards. These standards are important to Nike as a comparison of past
performance to present performance as well as in our attempt to forecast future results in
these areas.

Correction of Deviation
Though Nike has established profitability and performance standards, correction of
discovered deviations has been a slower and less timely process. Managements slow
response time can be attributed to the careful analysis that is performed prior to making any
decisions. While in general this is a good policy to abide by, at times Nike would be better
served by a management team that can react more quickly to given information.

EXTERNAL ENVIRNOMENT
POLITICAL DIMENSION
The domestic and international political environment has a major impact on every
multinational company. Today NIKE has offices in more than 180 countries so it should keep
in minds the political dimensions of those countries.

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ECONOMIC DIMENSION
Social Responsibility
In response to accusations by consumer groups over unfair labor practices, Nike has
developed a Corporate Responsibility Policy that discusses how organization improve
working conditions for own international employees. The Policy outlined to lead in corporate
citizenship through operations that reflect caring for the world family of Nike, our
teammates, our consumers, and those who provide services to Nike." The policy includes, but
is not limited to the following initiativ es: raising age limits in factories to 18 years, securing
independent monitoring for our factories, extending a commitment to the environment,
improving safety and health conditions, and developing programs to provide educational
programs. The policy shows Nikes commitment to responding to the concerns of consumers,
as well as a commitment to our employees around the world.

TECHNOLOGICAL DIMENSION
Distribution through E-commerce
Nike has taken the lead in e-commerce by being the first to market with its e-commerce website. Nike launched its e-commerce site in April 1999 by offering 65 styles of shoes to the
U.S. market for purchase. Nike increased its e -commerce presence by launching NIKE ID in
November 1999. NIKE ID enables online consumers to design key elements of the shoes they
purchase. The program represents the first time a company has offered mass customization of
footwear. Nikes future plans include opening an online shop for the Japanese market next
year followed by global rollout. By being the first to market, Nike enables itself to become
established while competitors rush to competed.

Advertising and Promotion


Nikes brand images, including the Nike name and the trademark Swoosh, are considered to
represent one of the most recognizable brands in the world. This brand power translates into
bottom-line revenues. The Nike name and associated trademarks have appeared everywhere
from players' shirts, pants, and hats to stadium banners and walls. Aggressive advertising
campaigns, celebrity endorseme nts, and quality products enhance the brand. Nike
demonstrated an example of Nikes brand presence at the 1999 NCAA Basketball tournament
when 42 of the 64 teams participating wore shoes provided. Nike's most recent brand331

building endeavors are focused on strengthening our association with womens sports. Some
examples are our sponsorship of the 1999 Women's World Cup Soccer Tournament and our
sponsorship of the U.S. Speed skating team in the upcoming 2002 Winter Olympics.

MANAGEMENT PRACTICES
Management practice encourages and creates a feeling among the employees that their
suggestions are being valued by the management, resulting in showing real interest in work.
The involvement of stakeholders at all levels of an organization in the analysis of problems,
development of strategies, and implementation of solutions. Employees are invited to share in
the decision-making process of the firm by participating in activities such as setting goals,
determining work schedules, and making suggestions. Other forms of participative
management include increasing the responsibility of employees forming self-managed teams,
quality circles, or quality-of-work-life committees; and soliciting survey feedback.
Nike, Inc. emphasizes the need for information flow from the bottom of the company to the
top. This results in senior management having a largely supervisory rather than hands-on
approach. As a result, it has been noted that policy is often originated at the middle -levels of
a company before being passed upwards for ratification. The strength of this approach is
obviously that those tasked with the implementation of decisions have been actively involved
in the shaping of policy. The key task for a manager of Nike Japan is to provide the
environment in which the group can flourish. In order to achieve this he must be accessible at
all times and willing to share knowledge within the group. In return for this open approach,
he expects team members to keep him fully informed of developments. This reciprocity of
relationship forms the basis of good management and teamwork.

INTERNATIONAL SUCCESS FACTORS


Nikes planning and organizing began in 1962 when an idea to bring low-priced, high-tech
athletic shoes from Japan to dislodge German domination of the U. S. athletic footwear
industry, formed a partnership and introduced Nike, a new brand of athletic footwear named
for the Greek winged goddess of victory. Leading its employees and controlling, monitoring
the companys worldwide operations, along with on-going planning and organizing as new
goals are established, has made Nike, Inc. one of the largest sports and fitness company in

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future.

Globalization
When Nike first started selling in the foreign market in 1972, the company had to assess the
economic trends of domestic and international markets during the planning stage. This would
include the impact of the global market, technological advancements, and e-business which is
rapidly growing. The planning and organizing process also has to be specific to the region
where a new factor y was to be built. For example, resources may be more available in the
Nike Americas Region than in the Europe, Middle East, and Africa (EMEA) Region;
government regulations may be stricter in the Asia Pacific Region.
To be successful in the leading or mot ivating process, Nike would have to assess a countrys
culture and economic status.
Technology
Nike, technology refers to product technology; new innovations in footwear, apparel, and
equipment. As fitness evolves, Nikes products are planned to give consumers a competitive
edge and help athletes perform better. Each part of the manufacturing process is designed to
accomplishing the goal of providing the worlds best athletic gear. When Nike Air was
introduced, it made a revolutionary impact on the sports world for its versatility. Beyond its
basic function of impact protection, it can be shaped and tuned to meet the specific demands
of contemporary athletes.

INNOVATION
Although Nike is one of the largest sports and fitness companies in the world, Nike still has
to challenge its competitors with new product ideas. In the planning process, Nike must
continue to evaluate consumer demands. Recently, Nike decided to collaborate with Apple
and bring sports and music together. The Nike + iPod Sport Kit is a wireless system that
connects to the iPod Nano to give people a personal running and workout experience. Nike is
planning to make many of their footwear and apparel styles iPod ready. Some of the designs
now include jackets, tops, shorts and armbands designed specifically to carry iPods.

DIVERSITY
Nikes strategy focuses on diversity in the workplace. In 2003, Nike created the Office of
Global Diversity. Surveys are one way top-level managers communicate and receive
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feedback from Nikes employees. The organization wants to know how satisfied the
employees are and the effectiveness of management. Work teams and workshops are
established to address employee recommendations. The workshops emphasize employee
interaction. Management is constantly monitoring the engagement of stakeholders and
employees.

WAYS IN WHICH STRENGTHS ARE EXPLOITED


Research and Development

Focus - Strength
Although Nike conducts continuous, basic research that benefits numerous facets of the
sports and fitness industry, our primary focus is directed towards applied research. Applied
research focuses on short-term initiatives such as successfully developing new product lines.
This proves to be a strength in that this method of research is less costly than basic research,
and less risky due to the short-term nature. Successful projects can realize immediate
profitability while unsuccessful projects may be discontinued without enduring materially
large losses.

Focus Weakness
Focusing on applied research can be a weakness as well. Many new, innovative ideas come
into existence as a result of basic, unspecific research. Though more risky and expensive,
Nike would benefit from increasing the amount of basic research we conduct with hopes of
uncovering potential opportunities of which Nike could take advantage.

Posture - Strength
Our posture is primarily innovative, Innovation has been the key to aiding Nike in securing
its position as the leader in the market. Due to the lead Nike possesses in the industry, we can
afford to look long-term and place a greater emphasis on innovation as opposed to other
companies with a short-term outlook attempting to improve upon existing products and
services.

Increasing the minimum age of footwear factory workers to 18, and minimum age for all
other light-manufactur ing workers (apparel, accessories, equipment) to 16.

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Expanding education programs, including junior and high school equivalency courses, for
workers in all Nike footwear factories.

Increasing support of its current micro-enterprise loan program to 1,000 families each in
Vietnam, Indonesia, Pakistan, and Thailand.

While establishing these policies is a step in the right direction for Nike, the difficult task at
hand will be the implementation of the aforementioned goals of the new labor initiative to
ensure the success of the program.

SWOT ANALYSIS
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage
of planning and helps marketers to focus on key issues. SWOT stands for strengths,
weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors.
Opportunities and threats are external factors.

STRENGTHS

Nike is a globally recognized for being the number one sports wear brand in the
World.

Nike being a competitive organization has a healthy version towards its competitors in
field of Atlantic and Olympics, Reebok expensed on sponsoring the games; Nike
however, sponsored the top athletes and due to this step, it gained valuable coverage.

Nike has no factories, rather it uses contract factories to get the work done which
makes it quite a incline organization. It has contracts with above 700 shops globally in
about 45 different countries.

Nike is quite strong regarding its research and development quite evident regarding
its evolving and innovative product range.

They manufacture high quality at the lowest possible price, if prices rise due to price
hike then the production process is made cheaper by changing the place of production.

WEAKNESSES

The retail sector is price sensitive, retailers usually tend to offer a very similar
experience to the consumers with another cheaper product, which in return tends to
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get squeezed as retailers try to pass some of the low price competition pressure onto
Nike.

Nike was for quite some time unwilling to disclose any type of information
concerning its partnering companies.

It was charged with the violation of overtime and minimum wage rates in Vietnam,
1996, that was seen as having poor working conditions, and that it was also charged
for exploiting cheap workforce overseas.

Nike was also reported to have applied child labor in Pakistan and Cambodia to
produce soccer balls.

It was positioned as a subject of criticism by anti-globalization groups due to its


unruly and exploited manner that was quite a disaster for its reputation.

CONCLUSION
After a lot of research on Nikes business and their overall integrity, I came to my conclusion.
While Nike has been criticized for their employment and hiring, customer service, and
environmental issues they have maintained a respectable record in financial stability and have
recently made great strides to become a much more responsible company that continues to
improve, however I dont believe most of their employees overseas are being treated fairly
therefore, Nike has greatly reduce the amount of money that contribute to them only because
they have a great enough impact on their company overall brand image in global market.
According to Nike.com , their overall goal is to develop products that help athletes of every
level of abilit y reach their potential, to create business opportunities that set Nike apart from
the competition and provide value for their shareholders that resulting in more pressure than
ever before to achieve high profit through effective global sourcing practices.

REFERENCES
www.nike.com/
http://en.wikipedia.org/wiki/Nike,_Inc.
http://www.lotsofessays.com/viewpaper/1693757.html
http://condor.depaul.edu/aalmaney/StrategicAnalysisofNike.htm

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http://www.lotsofessays.com/viewpaper/1693751.html

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HONDA

338

HISTORY
From a young age, Honda's founder, Soichiro Honda had a great interest in automobiles. He
worked as a mechanic at a Japanese tuning shop, Art Shokai, where he tuned cars and entered
them in races. A self-taught engineer, he later worked on a piston design which he hoped to
sell to Toyota. The first drafts of his design were rejected, and Soichiro worked painstakingly
to perfect the design, even going back to school and pawning his wife's jewelry for collateral.
Eventually, he won a contract with Toyota and built a factory to construct pistons for them,
which was destroyed in an earthquake. Due to a gasoline shortage during World War II,
Honda was unable to use his car, and his novel idea of attaching a small engine to his bicycle
attracted much curiosity. He then established the Honda Technical Research Institute
in Hamamatsu, Japan, to develop and produce small 2-cycle motorbike engines. Calling upon
18,000 bicycle shop owners across Japan to take part in revitalizing a nation torn apart by
war, Soichiro received enough capital to engineer his first motorcycle, the Honda Cub. This
marked the beginning of Honda Motor Company, which would grow a short time later to be
the world's largest manufacturer of motorcycles by 1964.
The first production automobile from Honda was the T360 mini pick-up truck, which went on
sale in August 1963. Powered by a small 356 cc straight-4 gasoline engine, it was classified
under the cheaper Kei car tax bracket. The first production car from Honda was
the S500 sports car, which followed the T360 into production in October 1963. Its chain
driven rear wheels point to Honda's motorcycle origin
Honda has been the world's largest motorcycle manufacturer since 1959, as well as the
world's largest manufacturer of internal combustion engines measured by volume, producing
more than 14 million internal combustion engines each year. Honda surpassed Nissan in 2001
to become the second-largest Japanese automobile manufacturer. As of August 2008, Honda
surpassed Chrysler as the fourth largest automobile manufacturer in the United States. Honda
is the sixth largest automobile manufacturer in the world.
Honda was the first Japanese automobile manufacturer to release a dedicated luxury
brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda
also manufactures garden equipment, marine engines, personal watercraft and power
generators, amongst others. Since 1986, Honda has been involved with artificial
intelligence/robotics research and released their ASIMO robot in 2000.

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SWOT ANALYSIS OF HONDA


SHORT INTRO

Market leader in the two wheeler segment not only in India but also is the number one
two wheeler companies in the world.

The companys name is synonymous with fuel-efficient bikes and longevity .

The company has a presence in all bike segments viz. economy(CD 100SS,CD Dawn),
executive(Super Splendor, Splendor+) and premium (Karizma, CBZ & Hunk ).

Splendor is the most successful product of the company and accounts for almost 50% of
the companys turnover

Joint venture agreement be tween the Munjal familys Hero Group and Honda Motor
Company (HMC) of Japan, each having 26%

Stake in the company.

STRENGTHS

High and powerful research and development R&D

Innovation

Best market share leadership

Strong and powerful brand equity

One major strength is the revolutionary engine technology with the help of which Honda
is gaining success day by day

Popularity is termed as one of the best strength which results in betterment for the
company

Huge brand equity/reputation among customers

Research and development- joint venture with Japanese

giant HONDA

Models/products in almost every bike segment

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Healthy growth in profits

Brilliant relations with customers and dealers

Strong Resale Value

International Technology with international collaboration

3 world-class advanced manufacturing plant (Hardwar,

Darukhera & Gurgaon)

Strong Research & Development

Quality product for each category

Dedicated Human Resource

Awareness in the people

Highly competitive features

WEAKNESS

Cost structure of Honda is high as compare to other automobile manufacturers

Apart from Nissan & Toyota, Honda requires privileged purchase deposit

Honda focus more on international deposits as compare to domestic deposits

Civic model is consider as one of the major weakness for Honda Company

Honda products are termed as inoffensive in terms of style and design

Prices for non-luxury vehicles are far high as compare to other manufacturers

In truck line, Honda Company is not offering strong products and proposals

Hero is very much dependent on Honda

Low cash reserves due to massive dividend payouts

Very difficult to cop up if contract discontinues

Virtual absence in the highly lucrative bike segments

Imports >31% of its spare parts requirements

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Slow to react to market changes- Slow innovation- late

entrants into the 125cc segment

Too much dependence on few models

Absence of digital speedometer except Karizma

Absence of variants except Hunk

Honda has the best opportunity to use its R&D in producing cars according to the needs
and demands of their customer.

OPPORTUNITIES

Bikes Segment is still a fast growing sector

HHML can still make it up by launching a strong model in

150cc segment

125cc bike segment - This segment is yet to pick pace

Exports market is yet to be properly exploited

Cruiser bike segment is unexplored by HHML

Variants can be launched to increase the market share

Hero Honda is the most reliable bike manufacturer in India

Strong brand follower

THREATS

Hero Honda will need to have a bigger presence in the

executive segment

It will be a great threat for Hero is the collaboration breaks Up

All major bike makers in the world are lining up for India

Absence in 150cc could harm the growth plans of HHML as

future lies in the 150cc and 125cc markets

Low cash reserves


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HHML is losing a foothold in the exports market which is

now dominated by Bajaj

Strong competition from Bajaj, Yamaha & TVS

Different and unique products

INTERNAL ENVIRONMENT ANALYSIS


RESOURCES
Tangible
Established manufacturing facilities globally, Highly trained manager, R&D facilities.

Intangible
Well known brand name associated with Industry Revolution and American Dream.

Capabilities
Ability to manufacture sufficient number of cars to meet demands globally.
Capable of providing innovative products with Safety and Convenience features.

Core Competencies
Strong Engineering Capabilities.

Competitive Advantage
Strong brand portfolio. Large network of dealers and suppliers globally strategic alliances
formed with auto manufacturers in different countries.

Value Chain
Inbound Logistics: Receiving, warehousing and input control of materials or parts.
Operations: Transforms inputs raw material and parts to finished automobile.
Outbound Logistics: Activities involved in delivering the automobile to customers and order
fulfillment.

Marketing and Sales:


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Attracting the customers to buy the products including distribution channel selection and
advertising.

After Sales Service


It includes customer support and repairs which will maintain or enhance the automobiles
value.
It is clear from the above table that Fords Automotive division is suffering from high
inefficiencies. During past three years, Cost of Sales and Expense have always been
exceeding the sales thus generating heavy losses.

Strategic Intent

To realign its capacity to refle ct the realities of the market.

To take full advantage of its global resources and growing world markets.

Strategic Mission
To be the company that makes difference in peoples lives one that inspires its employees,
delights its customers, rewards its shareholders and makes the world a better place.

ORGANIZATIONAL CULTURE AND HONDA


Honda was a good leader who was able to deal with all team work issues. He realized that
although team work and team building suppose many challenges, the final result from a high
performance team is worth all the efforts and time spent on achieving it. Honda understood
the way a team plays as a whole determines its success and he treated others as equal and
often worked in a workshop with his employees being the owner of a corporation. During the
last two decades the notion of organizational culture has achieved wide acceptance as a
method to understand human systems and as one of the central concepts in the human
resource management. The research of the data shows that every element of organizational
culture can be seen as an important environmental condition influencing the system and its
subsystems. One of the major duties of strategic leaders is to build and support the
organizational elements that make up the collective work. Organizational culture is the most
fundamental element of the collective work. It includes the attitudes, beliefs, experience and
values of the company. Hill & Jones (2001, p. 68) define organizational culture as the
specific collection of values and norms that are shared by people and groups in an

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organization and that control the way they interact with each other and with stakeholders
outside the organization. Organizational values are beliefs and ideas about what kinds of
goals members of an organization should pursue and ideas about the appropriate kinds or
standards of behavior organizational members should use to achieve these goals. From
organizational values develop organizational norms, guidelines or expectations that prescribe
appropriate kinds of behavior by employees in particular situations and control the behavior
of organizational members towards one another. Soichiro Honda is an exemplary leader. He
was a simple man and people followed him as he inspired them. He demanded practical
results, and he found how to achieve these results. Honda was a person with vision and
passion. He learned to see failures as necessary steps toward success. Soichiro Honda
instilled in his employees the drive to learn without fear of failure, having built the roa d to
success. Honda was a good leader who was able to deal with all team work issues. He
realized that although team work and team building suppose many challenges, the final result
from a high performance team is worth all the efforts and time spent on ac hieving it. Honda
understood the way a team plays as a whole determines its success and he treated others as
equal and often worked in a workshop with his employees being the owner of a corporation.
During the last two decades the notion of organizational culture has achieved wide
acceptance as a method to understand human systems and as one of the central concepts in
the human resource management. The research of the data shows that every element of
organizational culture can be seen as an important environmental condition influencing the
system and its subsystems. One of the major duties of strategic leaders is to build and support
the organizational elements that make up the collective work. Organizational culture is the
most fundamental element of the collective work. It includes the attitudes, beliefs, experience
and values of the company. Hill & Jones (2001, p. 68) define organizational culture as the
specific collection of values and norms that are shared by people and groups in an
organization and that control the way they interact with each other and with stakeholders
outside the organization. Organizational values are beliefs and ideas about what kinds of
goals members of an organization should pursue and ideas about the appropriate kinds or
standards of behavior organizational members should use to achieve these goals. From
organizational values develop organizational norms, guidelines or expectations that prescribe
appropriate kinds of behavior by employees in particular situations and control the behavior
of organizational members towards one another. Soichiro Honda is an exemplary leader. He
was a simple man and people followed him as he inspired them. He demanded practical
345

results, and he found how to achieve these results. Honda was a person with vision and
passion. He learned to see failures as necessary steps toward success. Soichiro Honda
instilled in his employees the drive to learn without fear of failure, having built the road to
success.

EXTERNAL ENVIRONMENT OF HONDA


As an analysis of external environment the marketing environment surrounds and impacts
upon the organization. There are three key perspectives on the marketing environment,
namely the 'macro-environment,' the 'micro-environment' and the 'internal environment'. This
environment influences the organization directly. It includes suppliers that deal directly or
indirectly, consumers and customers, and other local stakeholders. Micro tends to suggest
small, but this can be misleading. In this context, micro describes the relationship between
firms and the driving forces that control this relationship. It is a more local relationship, and
the firm may exercise a degree of influence. The organization has strong ethical values and an
ethical mission statement as follows, 'Starbucks is committed to a role of environmental
leadership in all facets of our business.' The company has the opportunity to expand its global
operations. New markets for coffee such as India and the Pacific Rim nations are beginning
to emerge. Co-branding with other manufacturers of food and drink, and brand franchising to
manufacturers of other goods and services both have potential. The macro-environment this
includes all factors that can influence and organization, but that are out of their direct control.
A company does not generally influence any laws (although it is accepted that they could
lobby or be part of a trade organization). It is continuously changing, and the company needs
to be flexible to adapt. There may be aggressive competition and rivalry in a market.
Globalization means that there is always the threat of substitute products and new entrants.
The wider environment is also ever changing, and the marketer needs to compensate for
changes in culture, politics, economics and technology. In today's economy every business is
trying to stay competitive and avoiding going out of business. The auto industry in particular
which have been hit the hardest the past few years, with the big 3 Ford, GM, and Chrysler
suffering the most, has every automaker running to be number 1 in the industry. Other major
player have such as Honda, has taken advantage of the Big three's slump to get a piece of the
market share. Honda Motors, which began operating in 1948, is one of the largest motorcycle
producers and has become one of the leading automakers in the automotive market since
entering the automotive market in 1959 (http://world.honda.com/history) Honda has grown
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over the years be way introducing one of the most economical and environmental vehicle in
the market today, the Honda Accord line. Maintaining a successful company not only does it
take a good product, its strategic audit of the corporation's current performance, strategic
posture, board of directors and top management must all be in sync to avoid failure. Current
Performance Honda Motor Co. is engaged in the development, production and sales of motor
products. Four main segments compose the company. First are the two wheel vehicles, all
terrain vehicles, and personal watercrafts.

Second are the four wheel vehicles and related

products. Third are the financial and insurance products.


products.

Fourth are general purpose

All the following financial statistics are based on the trailing twelve [Numbers

higher than 9 are expressed in numerals]

months with information obtained from

www.toolbox.investools.com, HMC (Honda Motor Corp) Management effectiveness with a


Return on Investment was 8.26% stating that for every dollar spent, 8.26 cents was added to
the initial dollar spent. The rate of return on inve stment for the past 12 months was -15.94%.
For every dollar an investor placed in Honda, a loss of $15.94 was incurred.

WAYS IN WHICH STRENGTHS ARE EXPLOITED BY


HONDA COMPANY
Honda motor company is not your average Japanese car manufacturer. Originally know for
motorcycles, Honda has managed to elude the dominate keiretsu system in Japan and become
one of the dominant automobile manufacturers in the world. There is much strength to
Honda. Honda has a reputation for producing high quality products from ca rs to motorcycles
to lawn mowers. In fact they are the largest manufacturer of motorcycles in the world. Honda
has won many awards for initial quality and customer satisfaction. Their automobiles are
reliable and generally fuel efficient. Their research ha s afforded them competitiveness in
innovative products. The cutting edge Asimov robot and a successful motor sports programs
provide innovations that are passed to consumers as well as press recognition. Honda won
the MotoGP manufacturers title and came in second in the F1 constructors championship.
While these race cars and motorcycles are much different than production vehicles , the
lessons learned on the track transfer to better performance and engineering of future
consumer vehicles. They were a pioneer in engineering low emissions internal
combustion and hybrid technology. Honda is the only other manufacturer outside of
Mitsubishi

to

branch

out

into

many

other

areas

outside

of

automobiles.

However there are weaknesses, Hondas products are fairly bland and inoffensive in terms of
347

styling. Their prices are higher for non-luxury vehicles than comparable modes by other
manufactures. They do not have a strong offering in a truck line. Their vehicles also have a
reputation for being underpowered or pokey econo-boxes. Even for a broadly diversified
company like Honda, there exist opportunities. An offering in a pickup type truck would be
profitable, even if priced under competitors. These are types of vehicles have among the
highest profit margins. Another opportunity would be to continue progressing low emission
vehicles and alternative power sources. While they have made progress in this area, the
technology is still overpriced for the consumer, and the infrastructure does not exist. Another
area of opportunity would be developing nations like china and India. These are large
markets, and cheap dependable transportation would be a hot seller. Hondas success has not
gone unnoticed by its competitors. Like racing, if you dont come up with something new this
year, competitors will beat you with last years technology. Not that other companies are
taking Hondas technology, but for others to catch up is for Honda to fall behind. While once
upon a time Honda cut the low emissions trail, now they are no longer at the vanguard.
Hondas strategy is to create value through expanded sales via innovation in research and
manufacturing. Instead of having one large manufacturing plant Honda uses an idea of
manufacturing products where they are sold. In this way manufacture is increased in areas
where sales increase. This practice has led to over one hundred manufacturing plants in over
thirty countries, a process they call globalization. They also are guided by a commitment to
the future. This ideal is reflected in several ways. Low emissions vehicles are one example,
anther are manufacturing plants that are focused on environmental friendliness as well as
efficiency and quality. Honda needs to come out with a truck, which evidently is in the
making (the Ridgeline coming spring 2005) and progress with efficient low emissions
vehicles. It also wouldnt hurt if they were to come up with some sort of distinctive styling.
Research should be continued because that has provided the innovative and competitive
products, and Hondas diversification into areas other than automobiles should also be
continued as this has been historically and asset by providing synergies in technology and
distribution as well as name recognition. Also as mentioned earlier, a simplified inexpensive
transportation is it motorcycle or car would sell like hotcakes in China and India. After
further review Hondas extensive web site, it appears that they are expanding into India and
China. China expansion includes a new plan that will quadruple production by 2006.
Meanwhile in India production has started on a motorcycle that will cost less than two
thousand US dollars. This appears to be the right move and is in line with Hondas
348

production in the location of sales. These actions should put Honda in a pos ition for much
more sales. As far as new low emissions vehicles, they need to put something on the market
soon to recapture their image as the green leader. The new hybrid Accord looks to fill that
gap on paper. However even higher performance than the regular Accord; the hybrid is well
just uninspiring. Yes is quicker and gets better mileage and has more power, but it looks the
same, a car your parents would drive. The expansion into China and India will provide
increased sales and spread the image of Honda. However caution should be taken. If Honda
can put a affordable transportation in the hands of the masses then great, but if instead of
affordable they opt for cheap, then the two largest concentrations of people on the planet will
know Honda as crap.

BEST MANAGEMENT PRACTICE IN HERO HONDA COMPANY


Honda Parts
Honda auto parts, Honda performance parts, Honda motorcycle parts
Honda is among the worlds most renowned brand of automobiles and motorcycles that truly
raved enthusiasts. Over the years it has maintained its top notch stance through production of
innovative yet cost-effective products that enhances mobility and satisfies the specific needs
of customers. With their basic philosophy of maintaining a global standpoint of supplying the
highest quality and impressive automobiles and other products, it has become a benchmark of
elite automobiles as well as motorcycles. Hondas ambition for youthfulness and modern
solutions gave way to the production of automobiles and motorcycles that truly meets
customer satisfaction. Behind every Honda vehicle and motorcycles astounding performance
are their high performance Honda parts and Honda motorcycle parts. These are the true
workhorses that provide for their road power, endurance and agility under all conditions.
These parts are made to perfection thru rigorous designing, engineering and testing.
Hendricks Charleston Honda
Hendricks Charleston Honda is a leading Certified Honda Dealership located in Charleston,
SC. We sell new Honda vehicles, Certified pre owned Hondas, Honda parts and accessories
Ed Mapleton Honda
Ed Mapleton Honda of Oak Lawn is the leading Honda dealer in Chicago, with the lowest
prices on Brand New Honda vehicles.
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Front Range Honda


Front Range Honda, a Honda dealer serving the Colorado Springs area offering a wide
selection of Sedans and SUVs including the Honda Accord, Civic and more
Causeway Honda
Honda motorcycle dealer and sales of Honda accessories and products Perth, Western
Australia

FACTORS CONTRIBUTING TO ITS INTERNATIONAL


SUCCESS
What do customers want?

Affordable price

High mileage

Low maintenance

Low cost

Good services

Aesthetic

Sporty look

Load carrying

Capacity

Engine capacity

Stroke

Ignition

Resale value

Engine power

Weight

Color

Intelligently design breaking system


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How do firms survive competition?

Technologically up gradation

Niche marketing also witnessing intense competition

Increasing focus on sports

Intensity of price competition depends on number and proximity of competition

Key success factors

To keep your customer satisfied and loyal

Clientele

Product design

Market segmentation

Differentiation servicing

Low cost factors

351

TOYOTA

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HISTORY
Toyota Motor Corporation, commonly known simply as Toyota and abbreviated as TMC, is a
multinational corporation headquartered in Japan. In 2009, Toyota Motor Corporation
employed 71,116 people worldwide (total Toyota 320,808). TMC is the world's largest
automobile manufacturer by sales and production.

TOYOTA AS A MULTINATIONAL
Toyota is the perfect example of the multinational company, because of its presence in every
continent, with the employee from every culture and regions. Toyota has factories in most
parts of the world, manufacturing or assembling vehicles for local markets. Toyota has
manufacturing or assembly plants in Japan, Australia , India , Sri Lanka, Canada , Indonesia ,
Poland, South Africa , Turkey, Colombia , the United Kingdom , the United States, France,
Brazil, Portugal, and more recently, Argentina , Czech Republic , Mexico, Malaysia ,
Thailand, Pakistan, Egypt, China, Vietnam, Venezuela , the Philippines, and Russia.
But I am taking Toyota Japan and Toyota America for the comparison.

TOYOTA MANAGERIAL VALUES


Toyota's management philosophy and Toyota's managerial values and business methods are
known collectively as the Toyota Way.
In April 2001 the Toyota Motor Corporation adopted the "Toyota Way 2001," an expression
of values and conduct guidelines that all Toyota employees should embrace. Under the two
headings of Respect for People and Continuous Improvement, Toyota summarizes its values
and conduct guidelines with the following five principles :

Challenge

Form a long-term vision and meet challenges with courage and creativity.

Improvement

Improve business operations continuously, always driving for innovation and evolution.

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Go and see

Go to the source to find the facts to make correct decisions build consensus and achieve
goals at best speed.

Respect

Respect others. Make every effort to understand each other, take responsibility and do
your best to build mutual trust.

TEAMWORK
Stimulate personal and professional growth, share the opportunities of development and
maximize individual and team performance.
According to external observers, the Toyota Way has four components:

Long-term thinking as a basis for management decisions.

A process for problem-solving.

Adding value to the organization by developing its people.

Recognizing that continuously solving root problems drives organizational learning.

TOYOTA CORPORATE GOVERNANCE:


Specifically, Toyota has introduced a unique management system focused on prompt decision
making for developing our global strategy and speeding up operations. Toyota also has a
range of long-standing in -house committees and councils responsible for monitoring and
discussing management and corporate activities to ensure heightened transparency and the
fulfillment of social obligations. Furthermore, Toyota ha s a unique corporate culture that
places emphasis on problem solving and preventative measures. Toyota's approach is to build
in quality through manufacturing processes, enhancing the quality of everyday operations and
consequently strengthening corporate governance. Toyota's management team and employees
conduct operations and make decisions founded on that common system of checks and
balances and on high ethical standards.

354

TOYOTA JAPAN VS TOYOTA UNITED STATES


Culture and management
There is no significant difference among different countries like Toyota Japan and Toyota
America.

Centralized vs. decentralized decision making:


Toyota used centralized decision making style, because of the huge number of employees and
the presence around the globe.

Safety vs. risk:


There are very strict rules of safety and risk, no doubt all the employees are insured but they
also prefer health than work. I find in the article that they have the policy to fire the employee
if they not consider their health first.

Individual vs. group reward:


They have both policies regarding rewards, based on the nature of work/target.

High vs. low organizational loyalty:


Toyota employee has a very high loyalty among employee even the CEOs serve their whole
career with the Toyota.

Cooperation vs. Competition:


They have the culture of cooperation and teamwork; in fact there is solid point in the Toyota
way named teamwork that we all have to corporate whatever the situation is.

Strategic Predisposition
Toyota is using Ethnocentric Predisposition because their management styles, values, interest
and culture are almost same like the parent company strategic decisions throughout the world.
To actually study the management styles and culture or environment of any MNC we have to
study the related particulars of that country for the better understanding.

355

Toyota business Culture in Japan vs. America


After consulting different representatives of Toyota Pakistan and findings from different
articles on internet I find that Toyota has almost a similar bus iness structure around the world
because of their great value system like organized hierarchically with individuals knowing
their positions w ithin the group and with regard to each other. They produce the sense of
belonging to the group that gives Japanese companies their strength and purpose. Group
orientation and team working are not merely concepts and phrases in Toyota but a way of life
which permeates all aspects of corporate life at all levels.

Toyota management styles in Japan vs. America


They have very similar styles around the globe; their management emphasizes the need for
information flow from the bottom of the company to the top. This results in senior
management having a largely supervisory rather than "hands-on" approach. As a result, it has
been noted that policy is often originated at the middle-levels of a company before being
passed upwards for ratification. The strength of their approach is obviously that those tasked
with the implementation of decisions have been actively involved in the shaping of policy.
The key task for their manager is to provide the environment in which the group can flourish.
In order to achieve this he must be accessible at all times and willing to share knowledge
within the group. In return for this open approach, he expects team members to keep him
fully informed of developments. This reciprocity of relationship forms the basis of good
management and teamwork.
Their subordinate will second-guess the boss's wishes and react accordingly. It is, therefore,
often necessary to ask for clarification if tasks seem vague or unclear. It is better to seek clear
understanding at the outset that to allow misunderstandings to produce poor results or tension
in the relationships.

REFRENCES
http://www2.toyota.co.jp/en/news/10/11/1105_2.html
http://www.toyota.co.jp/en/index_responsibility.html
http://www.toyota.co.jp/en/csr/organization/index.html#promote
http://www.toyota.co.jp/en/csr/governance/index.html#governance

356

PEARSON PLC

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INTRODUCTION
Pearson plc (LSE : PSON; NYSE: PSO) is a global media and education company
headquartered in London, United Kingdom. It is both the largest education company and the
largest book publisher in the world, with consumer imprints including Penguin , Dorling
Kindersley and Ladybird. It also owns the Financial Times Group, which is the publisher of
the Financial Times.

HISTORY:
The Company was founded by Samuel Pearson in 1844 as a building and engineering
concern operating under the name of S. Pearson & Son. In 1880, control passed to his
grandson Weetman, an engineer, who in 1890 moved the business to London and turned it
into one of the world's largest construction companies.
In 1919 the firm acquired a 45% stake in the London branch of merchant bankers Lazard
Brothers, an interest which would be increased to 80% in 1932 during the depression years.
Pearson continued to hold a 50% stake until 1999.
In 1921 Pearson purchased a numbe r of local newspapers in the United Kingdom, which it
combined to form the Westminster Press. In 1957, it bought the Financial Times and acquired
a 50% stake in The Economist. It purchased the publisher Longman in 1968.
The Company was first listed on the London Stock Exchange in 1969. It went on to acquire
the Penguin Group in 1970.
In 1986, Pearson participated in the British Satellite Broadcasting consortium. BSB, choosing
expensive methods and technology, was out -manoeuvered by Rupert Murdoch's Sky
Television, which used proven and simpler technology, and leased transponders on Astra
satellites. Sky gained an important foothold in the multichannel market and the eventual
"merger" was effectively a takeover of BSB by Sky, the new company being rena med British
Sky Broadcasting (BSkyB) a few years later.
During the 1990s, Pearson acquired a number of TV production and broadcasting assets and
rid itself of most of its non-media assets.
Pearson acquired the education division of Simon & Schuster in 1998.

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In September 2000, Pearson acquired National Computer Systems (NCS, Inc.) and entered
the educational assessment and school management systems market in the United States.
In January 2003, Pearson sold their 22% stake in RTL Group, the largest commercial
television and radio broadcaster in the EU.
Also in 2003 it secured control of Edexcel, the testing and assessment company. Pearson
subsequently purchased a series of other testing and assessment businesses, beginning with
Knowledge Technologies in 2004, [ AGS in 2005, and National Evaluation Systems and
Promissor in 2006. The combination of acquisitions and organic growth have made Pearson
the largest assessment and testing provider in the United States.
Pearson sold its international government services (Pearson Government Solutions) division
to Veritas Capital in March 2007. The new stand-alone company, Vangent, Inc, has its
international headquarters in Arlington, VA, with offices in London, Rotherham, Yorkshire,
and Canada.
In May 2007 Pearson announced that it had agreed to acquire Harcourt Assessment and
Harcourt Education International from Reed Elsevier for $ 950 m in cash. Due to Pearson's
market-leading position in the US textbook market they were not interested in the main
Harcourt business on account of regulatory concerns. Pearson completed the acquisition of
Harcourt Assessment on January 30, 2008, merging the acquired businesses into Pearson
Assessment & Information.
In February 2008 Pearson announced the sale of its Pearson Data Management Division.

STRENGTHS:
Internally generated long term advantage in the industry. Strength gives a company a long
term advantage over its rivals. Examples include: great brand name or economies of scale.
John Makinson is the Chairman and Chief Executive of the Penguin Group, the international
publishing company. He was the Finance Director of Pearson, Penguins parent company,
between 1996 and 2002, and is a member of the Pearson Board.
All the members in the company hierarchy have strong background and experience which is a
positive key factor for the company for achieving its goals.

359

Use external recognition of our environmental management as a measure of our performance.


As well as achieving accreditation for our UK operations under the environmental
management standard ISO 14001.
Help in developing employees skills and hidden talent.
We aim to be brave, decent and imaginative in everything we do and have a longstanding
commitment to high standards of product quality
Highest possible standards of ethical and professional journalism.
Provide accurate and reliable news and analysis, the FT also lends its editorial weight to
discussion of key contemporary issues affecting global business, finance, politics and society.

WEAKNESSES:
Moderate time management skills
Long term / fundamental business concern that is internally generated. A weakness is
something that causes issues for the underlying business, which take considerable time and
effort to fix and are internally generated or controlled. SWOT examples include: ineffective
corporate culture, inefficient tax system, etc.

Less knowledge of workers stress

Workers are usually stressed out with the load of work.

Low probability of achieving the goals for workers.

Some new employees may not be able to cope up with the changed culture and how to handle
people.

INTERNAL ENVIRONMENT:
In the changing and sometimes volatile world in which organizations operate and do
business, management accounting and management accountants are responsible for the
costing, control, and performance information that support management decision-making; the
optimizing of organizational performance; and the managing of business risk exposure. The
strategic choices of these organizations determine the sources and types of relationships that
organizations will engage in, both within their internal operating environments and their
external business environments.
360

Organizations have a greater capacity to control their internal operating relationships


(whether these are organization to people, people to people, people to physical assets, or
physical assets to physical assets) than they do their external business relationships, which
have different sources and types of uncertainty and risk.
Environment for employees is very friendly and they are been given technical training, In
case of hierarchy employees are in free environment and can discuss anything regarding new
ideas and knowledge.

EXTERNAL ENVIRONMENT:
The UK (GBP) has a highly productive, capitalist economy with a strong financial services
industry. UK's Fundamental Currency Analysis (short term investment): The British Pound is
undervalued on a global basis. The purchase price parity indicates that the British Pound
should fall in value over time, but high investment flow potential means the currency will
increase in value. UK's Value Investor Survey (short term investment): The UKs economic
environment is very favorable for long term economic growth due to high scores on
economic freedom , government transparency, and economic diversity. UK's Currency
Trading Strategy: An undervalued currency, moderate investment flow potential and very
favorable business environment leads to a positive outlook for UK investments.
Few factors involved:

Socio -cultural conditions - expectations of society (values, customs and tastes)

Demographic conditions - trends in the physical characteristics of a population

Technological conditions - most rapidly changing aspect of the general environment

Global conditions - increasing number of global competitors and consumer markets

Specific environment - includes those constituencies that have a direct and immediate impact
on managers decisions and actions

customers - absorb organizations outputs

suppliers - provide material and equipment

competitors - provide similar services/products

pressure groups - special-interest groups


361

ORGANIZATIONAL CULTURE:
Company products, customers and technologies are changing fast but s ome things in Pearson
stay the same. In everything we do, we aspire to be brave , imaginative and decent.
So it was Penguin, for example, that published Ulysses, Lady Chatterley's Lover and Lolita,
despite the serious legal and public consequences. And it w as the Financial Times that set out
its stall as long ago as 1888, declaring itself: "The friend of the honest financier, the bona fide
investor, the respectable broker, the genuine director, the legitimate speculator. The enemy of
the closed stock exchange, the unprincipled promoter, the company wrecker, the guinea pig,
the bull, the bear, the gambling operator."
We are committed to supplying the highest possible quality of product and service to our
customers, which means delivering measurable impacts in our educational services as well as
finding the most environmentally-friendly way we can of making our books, newspapers and
magazines.
Our core values strongly influence the way we see our companys place in the world too we
believe it to be our duty to use our resources to help further education and literacy, and to
support our people wherever we can in their own charitable endeavours. Our charitable arm,
the Pearson Foundation, partners with other innovative organizations to promote literacy,
learning and great teaching on an international scale, and we run a number of volunteer
schemes to help staff donate some of their working day to local programmes.

MANAGEMENT PRACTICES:
During 2000, Pearson, along with other companies, signed a 'global compact' at the United
Nations which sets out a series of principles on labour standards, human rights and the
environment. Since 2001 we have put in place our commitments and ways to monitor our
performance against these principles, and report annually on our progress
Some of the Global Compact principles concern the environment and are covered by our
environmental policy. One principle relates to anti-corruption and our Code of Conduct
describes the standards that we set ourselves in that area. Others refer to labour standards and
human rights. They are:

362

Labour standards

Freedom of association and the right to collective bargaining.

The elimination of all forms of compulsory labour.

Human rights

The elimination of discrimination in employment and occupation.

To support and respect international human rights within our sphere of influence.

To ensure that we are not complicit in human rights abuses.

HEALTH & SAFETY


The health and safety of our people is of overriding concern to us. We believe that good
safety and health practices in the workplace contribute to the success of a business. Through
our operating companies, we are committed to maintaining and improving our standards.
Health and Safety policy
Our global policy was adopted in 2005 following consultation with our operating companies.
The global policy provides a framework against which our operating companies adopt and
review their own policies, procedures and specific objectives

HEALTH AND SAFETY PERFORMANCE


We continue to introduce new and improved procedures to encourage employees to report
incidents. Against this backdrop, we are pleased that the relatively low level of incidents
reported in 2008 has continued into 2009. The enforcement notice issued in 2009 related to a
motor accident in our business in India. This has been investigated with a view to ensuring
we learn the appropriate lessons from the incident.
Pearsons scale and our commitment to learning means we have to take care of much more
than producing good products, serving customers well and generating strong growth. Were
determined to do all those things, but we have wider responsibilities. We play a part in
educating children, making the news and informing the public debate. That means we occupy
a privileged position in society and we aim to earn (and constantly re-earn) commercial
success and public trust.

363

FACTORS CONTRIBUTING TO THE INTERNATIONAL SUCCESS:


Pearson has operations in over 60 countries around the world and we are proud of the
contribution that our services in education, entertainment, testing, and comment and analysis
make in helping emerging economies sustain a workforce for their commercial success.
As an international company, they offer people opportunities in different markets, but we also
know that it takes a lot of courage and coordination to go to live and work in a different part
of the world. Thats why we created NewDirections a programme that matches short term
business opportunities in different countries with people who want to experience working and
living in a different place.
So far, they helped over 150 people take on a secondment or a project of less than six months
in another part of the world. We will continue to encourage colleagues to work in our
emerging markets where we can share the experience from our established markets, and bring
home new ideas too. They believe that people at every level of our organization can take the
lead. They encourage each staff to think about their own career aspirations and we try to help
them achieve their goals. Outside of formal training programmes, and suggest our people take
advantage of cross-function meetings, innovation workshops and lunch and learn
programmes to further their leadership experience. Company check that employees are doing
all to motivate our colleagues and give them challenging assignments that expand their
repertoire. Everyone has an annual appraisal or performance review so that they can get
feedback from colleagues on how theyre doing and set objectives for the future.
Every year, the senior teams in Pearson discuss the talented people across our businesses to
make sure we identify the potential future leaders of the company; we set ourselves the target
of having at least one successor for each of the top roles across Pearson.
Pearson recognise the need to keep reinventing our company to keep it competitive and
vibrant - its likely that the challenges our people will be facing in five years time do not yet
exist. As an international company with world-leading businesses, we need to help our people
adapt to those challenges and seize new opportunities
Company actively encourage mentoring within Pearson and there are several structured
programmes in place around the world. Some are to mix people within a particular business
and location, while others have been set up to introduce people within the same department or
function across different regions and businesses. We have also set up some upwards
364

mentoring relationships, so that more senior colleagues are mentored on a particular topic such as digital technology - by someone who has less experience in general, but more
experience in a particular field
Companys vision is to be a company that reflects the world in which we operate; we took the
lead in our industry as the first media company to establish a proactive diversity and
inclusion team and policy.

REFERENCES
http://www.pearson.com/about -us/our-history/
http://www.pearson.com/our -people/
http://www.pearson.com/responsibility/sustainable -business-practice/health-safety/
www.pearsoned.co.uk/

365

MITSUBISHI GROUP

366

HISTORY:
The Mitsubishi Company was first established as a shipping firm by Yataro Iwasaki in 1870.
In 1873, its name was changed to Mitsubishi Shokai. The name Mitsubishi consists of two
parts: "mitsu" meaning "three" and "hishi" which becomes "bishi" meaning "water caltrop"
also called "water chestnut", and hence "rhombus", which is reflected in the company's
famous logo. It is also translated as "three diamonds".
Mitsubishi had been established in 1870, two years after the Meiji Restoration, with shipping
as its core business. Its diversification was mostly into related fields. It entered into coalmining to gain the coal needed for ships, bought a shipbuilding yard from the government to
repair the ships it used, founded an iron mill to supply iron to the shipbuilding yard, started a
marine insurance business to cater for its shipping business, and so forth. Later, the
managerial resources and technological capabilities acquired through the operation of
shipbuilding were utilized to expand the business further into the manufacture of aircraft and
equipment. Similarly, the experience of overseas shipping led the firm to enter into a trading
business.
The company bought into coal mining in 1881 by acquiring the Takashima mine
and Hashima Island in 1890, using the production to fuel their extensive steamship fleet.
They also diversified into shipbuilding, banking, insurance, warehousing, and trade. Later
diversification carried the organization into such sectors as paper, steel, glass, electrical
equipment, aircraft, oil, and real estate. As Mitsubishi built a broadly based conglomerate, it
played a central role in the modernization of Japanese industry.
The merchant fleet entered into a period of diversification that would eventually result in the
creation of three entities:

Mitsubishi Bank (now a part of the Mitsubishi UFJ Financial Group) was founded in
1919. After its mergers with the Bank of Tokyo in 1996, and UFJ Holdings in 2004, this
became Japan's largest bank.

Mitsubishi Corporation founded in 1950, Japan's largest general trading company

Mitsubishi Heavy Industry, which includes these industrial companies.


o Mitsubishi Motors, the 6th largest Japanese auto manufacturer.

367

o Mitsubishi Atomic Industry, a nuclear power company.


o Mitsubishi Che mical, the largest Japanese chemical company.
o Mitsubishi Power systems , a power generation division

STRENGTH AND WEAKNESS


SWOT is an acronym for the internal strengths and weakness of a firm and environmental
opportunities and threats facing by that firm. SWOT analysis is a widely used technique
through which managers create a quick overview of a companys strategic situations. The
technique is based on assumption that an effective strategy derives from a sound fit
between a firms internal resources (strength and weaknesses) and its external situations
(opportunities and threats). A good fit maximizes a firms strengths and opportunities and
minimizes its weaknesses and threats. Accurately applied, this simple assumption has
powerful implications for the design of successful strategy.

Internal

Strengths

Weaknesses

Leadership

in

Japanese

financial services industry

Largest

overseas

network

Fluctuating margins and cash


flows

owned by a Japanese banking

Overdependence

on

Japanese markets

company

Strong

capital

based

management

External

6 th largest auto manufacturer

Opportunities

Threats

Growing retail banking in Asia

Impeding regulatory reforms

pacific

US subprime impact

Buoyant Japanese global asset

Increasing competition

management industry

368

the

Opportunities

in

corporate

investment banking.

Mitsubishi Corporation (Mitsubishi) is a Japan based general trading company. The company
operates through six business groups, which includes, Energy Business Group; Industrial
Finance, Logistics & Development Group; Metals Group, Machinery Group, Chemicals
Group and Living Essentials Group. Mitsubishi, along with its subsidiaries, serves its
customers across the world, such as, energy, metals, chemicals, machinery, food and general
merchandise. Mitsubishi has presence in more than 80 countries, 500 subsidiaries around the
globe, and operates through 200 operational bases. The company is headquartered in Tokyo,
Japan.
Mitsubishi Corporation Key Recent Development

Feb 16, 2011: SBM Offshore and Mitsubishi Sign Long-Term Cooperation Agreement

Jan 26, 2011: Ofgem Announces Eight Bidders for Three Offshore Transmission Projects

Jan 25, 2011: JGC Secures $1.7 Billion EPC Contract for Donggi-Senoro LNG Project in
Indonesia

Jan 24, 2011: Mitsubishi Announces FID on DSLNG Project in Indonesia

Jan 20, 2011: Japex Starts Oil Production from Pagerungan Uta ra Field in Indonesia

INTERNAL & EXTERNAL ENVIRONMENT OF MITSUBISHI:


Basic Stance and Creating Environment to Utilize a Diverse Workforce
MC's greatest assets are its employees. Their basic human resources policy is to provide good
jobs and working environments that maximize the skills and realize the potential of
individual employees so that they can enhance their value. MC's HR policies on recruitment,
training, assignment, evaluation and remuneration are supplemented by programs designed to
strengthen the organization and corporate culture, and to improve working environments.
These programs form the core of efforts to develop and build MC's human capital. MC will
continue to create systems and a global working environment that enables its diverse

369

workforce to realize their potential. They believe this will motivate their people and help
them in recruiting, retaining and nurturing employees who can support their growth.
MC's businesses are conducted by more than 500 consolidated business entities globally. MC
thus places the utmost importance on recruiting and training managers to run these firms and
implement the required internal controls. To develop the necessary human resources, MC
organizes business -related seminars, lectures and training courses at all levels across the MC
Group, including managers, accounting managers, HR executives and young executives with
leadership potential. These efforts strengthen the management of Group companies.

Measures to Promote Positive Working Environment


In October 2007, MC established the Working Environment Support Office which primarily
focuses on three areas - overtime periods and leave; the mental and physical health of
employees; and gender-neutral employment support. The main goal for this Office is to create
working environments that boost the enthusiasm and vitality of all employees.
In May 2008, the Japanese Ministry of Health, Labor and Welfare (MHLW) awarded an
accreditation mark to the company for its childcare support -related HR policies, signifying
that MC's initiatives and plans in this area are in line with Japanese laws which are aimed at
increasing the country's overall birth rate. In April 2009, MC broadened the scope of its
systems to better meet employee needs. Examples include the elimination of partner
requirements in their childcare system (that previously limited use of the system to only those
employees whose partners could not provide full-time childcare), in order to encourage male
participation in childcare, and extending the staggered working hours and flexi-time systems
for employees providing long-term care to family members from a period of one year to as
long as the long-term care is necessary.
MC offers mental health consultations to employees through in-house clinics and counseling
rooms. In the fiscal year ended March 31, 2009, they also established the Employee
Assistance Program (EAP) in Japan to provide an external counseling service to employees
working outside the head office. The service is also available to family members of
employees. A separate counseling service was established at the same time to any employees
caring for parents or other family members.

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Developing a Diverse Global Workforce


As a global enterprise, MC actively strives to promote equal employment opportunities for its
diverse workforce. Global HR development functions comply with national laws and
regulations while remaining sensitive to differences in working environments, among other
cultural aspects. In particular, MC is focusing on promoting HR development, including the
creation of training systems, for those working in consolidated subsidiaries and local staff
employed at overseas operations.
MC continues to pursue a policy of dynamic personnel assignment so that each individual
employee can gain a variety of experiences and career opportunities. Measures include staff
rotation between corporate departments and business groups, sending staff recruited overseas
to Japan on assignment or as trainees, and transferring personnel between overseas bases.
MC also prom otes a bilingual approach to internal communications based on the use of
Japanese and English. The company's in-house magazine RYOWA and its intranet portal site
are provided in both languages. Employees working in MC's network of overseas offices can
choose to receive an e-learning program to help learn Japanese.
MC is also implementing measures on an ongoing basis to employ people with disabilities.
For example, Mitsubishi Shoji & Sun Co., Ltd., a designated special subsidiary of MC
established in Beppu, Oita Prefecture, in 1983 offers employment opportunities to the
disabled. Furthermore, across Japan joint recruitment interviews have been organized for
Group companies in partnership with Japan's MHLW's Employment Security Bureau.

Promotion of Bilingual Communications


MC is promoting a bilingual approach to internal communications based on the use of
Japanese and English. Published every other month, the company magazine RYOWA covers
the same subject matter in both languages. The intranet portal site also has a bilingual design.
Locally recruited employees working in MC's network of overseas offices can choose to
receive an e -learning program to help learn Japanese.

Dynamic Personnel Assignment


To realize the goals contained in the Innovation 2009 plan, MC is pursuing a policy of
dynamic personnel assignment to rotate people between central departments and business

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groups so that each individual employee can gain a variety of experience and career
opportunities.
This dynamic HR approach also includes a policy of increasing the numbers of staff recruited
overseas that are sent to Japan on assignment or as trainees, in addition to transferring more
personnel between overseas bases.

Expanding Global Environmental Management


In order to fulfill its responsibilities as a corporate group carrying out business globally, the
Mitsubishi Electric Group aims in its 6th Environmental Plan (fiscal 20102012) to establish
and continuously improve a uniformly high level of quality in environmental management
across all organizations within the Group.

ENVIRONMENTAL GOVERNANCE
Environmental management and environmental governance are key links in the business
management of the Mitsubishi Electric Group, and are applicable to the company, its
consolidated subsidiaries, and its affiliated companies (Mitsubishi Electric, and 163 affiliated
companies in Japan and overseas, as of March 2009).
All levels of the organization from head office management divisions to management and
business groups, workplaces, and affiliated companies work within the scope of their
management responsibilities to oversee the environmental performance and the status of
environmental management execution within their downstream organizations, leading the
way for the Group as a whole.
The environmental management promotion structure is an integral part of the corporate body,
and accordingly receives the participation of all employees within applicable organizations.

MANAGEMENT STRUCTURE
A full-participation environmental management promotion structure integrated with the
corporate organization

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The Mitsubishi Electric Group has established a full-participation environmental


management promotion structure integrated with the corporate organization. This structure is
the responsibility of the Executive Officer in Charge of Environment and is assisted by the
General Manager of the Corporate Environmental Sustainability Group, all under the
Executive Officers' Meeting chaired by the President. The structure places environmental
managers within all business groups, management divisions, branches, business units, works,
and affiliated companies, to establish and operate environmental management systems (EMS)
at the corporate organization and regional level, promoting environmental activities
throughout the Group.

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Group Operation of Environmental Management system (EMS)


In its 5th Environmental Plan (fiscal 20072009), the Mitsubishi Electric Group established a
structure aimed at the group-wide integrated operation of Environmental Management
Systems (EMS), launching operations from fiscal 2009.
Environmental management, an aspect of business management based on the Mitsubishi
Electric Group Environmental Policy, is executed according to the requirements of the
international standard ISO 14001. Each organization takes the achievement targets for the
year from the Environmental Plan (currently the 6th Environmental Plan) and sets those as its
environmental goals. In this way, environmental management vectors are aligned and the
EMS of the Mitsubishi Electric Group is implemented in integrated fashion, while specific
environmental targets and implementation plans are set by each organization.

ENVIRONMENTAL AUDITS AND INSPECTIONS


Multi-faceted monitoring of activities with three types of environmental audits and on-site
inspections

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In Japan
To ascertain the operational status of Environmental Management Systems (EMS) and
compliance with environment -related legislation at sites in Japan, we carry out three types of
audits: internal environmental audits conducted by works, R&D centers, and affiliated
companies; management system evaluation conducted by certification bodies based on ISO
14001; and environmental audits led by the head office to verify legal compliance and
progress on the Environmental Plan of the Mitsubishi Electric Group.

Outside Japan
Primarily targeting production sites, we use a shared global checklist to conduct on-site
environmental inspections from a risk management perspective, and discuss ways to resolve
issues.
Activity Flow (Management Cycle)

Continual verification of activity results

Setting a cycle (management cycle) of one year, the flow of environmental activities is as
follows:

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(1) Fiscal year planning


(2) Environmental implementation planning
This plan determines the achievement targets and action plan for the fiscal year, based on the
Environmental Plan
(3)

First-Half

Managers'

Conference

(Companywide

Environmental

Managers'

Conference)
At this conference, environmental managers from all Group companies confirm and
familiarize themselves with information and policies on particularly vital themes.
(4) Confirmation of half-year progress and achievements
The Corporate Environmental Sustainability Group collects data on topics such as
environmental performance, and reports to the Executive Officer in Charge of environment.
The Executive Officer conducts reviews and revisions of plans as required, such as in the
case of major changes in the work environment of the Group overall.
(5) Second-Half Managers' Conference (Companywide Environmental Managers'
Conference)
At this conference, environmental managers from all Group companies make progress reports
and recommend directions to consider in planning for the next fiscal year.
(6) Annual environmental results report
The Corporate Environme ntal Sustainability Group collects data on environmental
performance for the fiscal year and reports to the Executive Officer in Charge of
Environment.
(7) Management review
The Executive Officer in Charge of Environment reviews activity results, revising the
Environmental Plan and Environmental Implementation Plan for the next fiscal year as
necessary.
Repeating the cycle of planning (or revision in the second half), implementation, inspection
of results, and revision every half year, we improve the level of our activities. In addition, we
conduct on-the-spot audits and inspections to verify that appropriate actions are being
performed.

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INFORMATION SHARING IN CONFERENCES


Sharing information in conferences to improve overall management level
In addition to issue -specific technical committees and EMS Organization Managers'
Conferences, the Mitsubishi Electric Group holds conferences in Japan and overseas,
bringing together environmental managers from all divisions. These sessions help to regularly
and continuously share useful information, including best practices and cautionary items
taken from division activities, while confirming key points that require coordination. The
conferences play a vital role in improving the overall level of management.

In Japan
Once per fiscal half, relevant managers from all company sites and affiliates in Japan gather
at the Companywide Environmental Managers' Conference, where managers share
information, the Executive Officer in Charge of Environment provides updates on policies,
and all divisions report on the progress of initiatives.

Outside Japan
Overseas Regional Environmental Conferences are held once per year in the U.S., Europe,
China, and Asia. Convened by the Corporate Environmental Sustainability Group, the
conferences gather the environment managers from overseas affiliates along with participants
from the business groups and mother factories in Japan. The meetings strengthen the
coordination of overseas affiliates with each other and with the head office, raising
environmental management levels at each site.

COMPLYING WITH ENVIRONMENTAL REGULATIONS


As local entities enact strict compliance with the various laws and regulations of their
respective country or region, the head office employs corrective measures based on selfaudits and inspections to ensure legal compliance with international regulations that need to
be addressed by the Group as a whole, such as ROHS or REACH.

TRAINING KEY ENVIRONMENTAL PERSONNEL AND ASSIGNING THEM TO FACTORIES


Strict compliance with environmental regulations requires staff that is able to accurately
execute the necessary management tasks. The Mitsubishi Electric Group trains and assigns
key environmental personnel to undertake this work.
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In Japan
They assign key environmental personnel to each factory, conducting training to raise their
level of education.

Outside Japan
In fiscal 2011 we are assigning key environmental personnel within China, with plans to
expand the program to Asia, Europe, and America.

FOSTERING ENVIRONMENTAL AWARENESS


Promoting Environmental Awareness at Home and Overseas
The Mitsubishi Electric Group positions the fostering of environmental awareness as a key
aspect of preserving biodiversity, and conducts local activities in Japan and overseas under
this directive.

In Japan
We are continuing our environmental conservation activities centered around the Mitsubishi
Electric Outdoor Classroom and "Satoyama" woodland preservation.

Outside Japan
Activities are centered around reforestation efforts, but from fiscal 2011 our overseas
programs have also begun to include Mitsubishi Electric Outdoor Classrooms.

REFERENCES
http://www.mitsubishicorp.com/jp/en/about/philosophy/pdf/conduct100624e.pdf
http://dspace.mit.edu/bitstream/handle/1721.1/33557/63277381.pdf?sequence=1
http://www.mitsubishicorp.com/jp/en/csr/work/
http://en.wikipedia.org/wiki/Mitsubishi
http://www.mitsubishi-motors.com/en/spirit/environment/vision/index.html
http://articles.economictimes.indiatimes.com/keyword/mitsubishi
http://dspace.mit.edu/bitstream/handle/1721.1/33557/63277381.pdf?sequence=1
http://findarticles.com/p/articles/mi_m0EIN/is_20090714/ai_n32161373/
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INTEL CORPORATION

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INTRODUCTION
Intel Corporation is the largest semiconductor manufacturer in the world, with major facilities
in the United States, Europe, and Asia. Intel has changed the world dramatically since it was
founded in 1968; the company invented the microprocessor, the 'computer on a chip' that
made possible the first handheld calculators and personal computers (PCs). By the early 21st
century, Intel's microprocessors were found in more than 80 percent of PCs worldwide. The
company's product line also includes chipsets and motherboards; flash memory used in
wireless communications and other applications; hubs, switches, routers, and other products
for Ethernet networks; and embedded control chips used in networking products, laser
printers, imaging devices, storage media, and other applications. Intel remained competitive
through a combination of clever marketing, well-supported research and development,
superior manufacturing proficiency, a vital corporate culture, legal proficiency, and an
ongoing alliance with software giant Microsoft Corporation often referred to as 'Wintel.
During the 1990s, Intel invested heavily in new microprocessor designs fostering the rapid
growth of the computer industry. During this period Intel became the dominant supplier of
microprocessors for PCs, and was known for aggressive and sometimes controversial tactics
in defense of its market position, particularly against AMD, as well as a struggle with
Mic rosoft for control over the direction of the PC industry. The 2010 rankings of the world's
100 most powerful brands published by Millward Brown Optimor showed the company's
brand value at number 48.

HISTORY
Intel began in 1968. It was founded by Gordon E. Moore who is also a physicist and chemist.
He was accompanied by Robert Noyce, also a fellow physicist and co-creator of integrated
circuitry, after they both had left Fairchild Semiconductor. During the 1980s Intel was run
by a chemical engineer by the name of Andy Grove, who was the third member of the
original Intel family. Many other Fairchild employees participated in other Silicon Valley
companies. Andy Grove today is considered to be one of the companys essential business
and strategic leaders. As the 1990s concluded, Intel had become one of the largest and by far
the most successful businesses in the entire world. Intel has gone through many faces and
phases. In the beginning Intel was set apart by its ability primarily to create memory chips.

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When the firm was founded, Gordon Moore and Robert Noyce had the idea to name their
company Moore Noyce. However when the name is spoken it is heard as More Noise This
idea was quickly abandoned and the pursuit of a more suitable name one which was not
associated with a bad interface. The name NM Electronics was shortly thereafter chosen and
used for nearly a year, when the company experienced a name change to Integrated
Electronics, or INTEL for short. The right s to the name however had to be purchased as it
was already in use by a fairly well known hotel chain:
Though Intel had mastered the first microprocessor called the Intel 4004 in 1971 and also one
of the worlds very first microcomputers in 1972, in the ear ly 80s the focus was primarily on
Random Access Memory chips. A new client in the early 70s from Japan wanted to enlist
the services of Intel to design twelve chips for their calculators. Knowing that they did not
have the manpower or the resources to complete this job effectively, Ted Hoff agreed to the
job just the same. His idea was: What if we can design one computer chip which could
function the same as twelve microchips?. Hoofs idea was completely embraced by Moore
and Noyce. If this project were successful the chip would have the ability to receive
command functions. This is where the 4004 model came from. After a painstaking 9 months.
It measured 1/8th inch by 1/6th inch long and contained 2,300 transistors. History was made
and changed that day.
The Pentium Pro processor had 5.5 million transistors, making the chip so affordable that it
could be imbedded in common household appliances. After this success Intel decided to
completely embrace this and to pursue its production

ORGANIZATION CULTURE:
At Intel, we know that agility can provide competitive advantage and help us meet the needs
of our customers around the world. Recently, we made a significant change by reorganizing
Intel as a platform company, focusing the entire organization on the custome r and the market.
It is a move that changes the way we do business, a move that will keep us at the forefront of
our industry.
We believe it is our obligation to provide our employees with challenging work that
encourages them to create and innovate. Creation might take the form of a product that
improves people's lives, a process that produces an even cleaner environment in our

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manufacturing plants or a project that brings one of our employees into a local classroom to
inspire a child to become an engineer.
Providing what employees need in order to thrive. Intel can also apply platform thinking to
our employee base. Intel now has approximately 85,000 employees, spread more widely
around the world than ever before. Creating a workplace that provides employee s with what
they need in order to thrive is a complex challenge. In the same way that our new
organization will seek to define what the customer wants and needs before we create it, we
will continue to take our employees' pulse regularly to learn what they need and want, like
and don't like, in the workplace. (See, for example, the discussion of our corporate-wide
Organization Health survey process in this section.) Once we've seen the data, we can
proceed with sound, meaningful improvements in what we make available to employees.
In return for the excellent work that our employees do for Intel customers and stockholders,
we offer highly competitive compensation and cutting-edge benefits. For example, Intel was
one of the first companies to offer a consumer-driven health plan, allowing employees to
manage their own healthcare expenses. Our employees have given high marks to this
program.
Building a responsible culture one employee at a time Programs such as the consumer-driven
health plan work because employees take responsibility for their own destiny. The theme of
responsibility is strong at Intel. We encourage employee responsibility for self: employees
"own their own employability." We also encourage employees to take responsibility in their
local communit ies: they volunteer in large numbers in local schools and for local nonprofit
organizations. And we encourage responsibility for the human community at large: Intel
employees gave in record numbers to help the victims of the Asian tsunami.
Responsibility is also required of the company's leaders. It is our job to identify and promote
new leaders to ensure Intel's continued success. Over the past couple of years, I am proud to
say that we have graduated more than 1,000 managers from Intel's own leadership training
programs.
In the following pages, you'll learn about our employees in greater detail. You will see the
kind of workplace we try to nurture, one that encourages smart people to focus on creating
products that bring value to the world and to the communities in which they live and work.

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You'll also read about Intel's role in helping students and teachers learn and grow through our
external education programs.
I hope you'll see in these pages a reflection of Intel's unique, hard-driving cultureand
understand the dedication and enthusiasm of our employees as they play their part in helping
to advance the digital revolution.

SWOT ANALYSIS:
SWOT is the tool to see that where organization stands, which areas required improvement,
which areas required serious consideration, which would be the source of growth, which
things need avoidance and so on. The SWOT of Intel will help to understand the position of
Intel in the market.

STRENGTHS:
1. Intel is globally recognized brand name and has strong brand loyalty.
2.

Intel was the dominant and pioneer supplier of microprocessors of PCs. It is still
dominant by numerous memory devices.

3. Intel is a global technology corporation and the worlds biggest semiconductor chip
producer, based on revenue.
4. Intel is the originator of the x86 series of microprocessors; the processors set up in most
personal computers.
Intel is the largest microprocessor manufacturer company in the world. Most of the computer
manufacturer and users asked for Intel microprocessor. It has the largest marke t share of
about 80% around the world.
Intel has been successfully recognized as brand, whenever you think about PCs the first name
came in mind regarding computer architecture is Intel. People rely on Intel products as it is
most reliable name.
Intel produces specialized products as it has captured only one area. Its employees are skilled
in that area so it manufactures best products because of specialization in products.

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It keeps on improving its products like Intel introduced many versions of core 2 processor
and every version are improved than the previous one. These improvement in products not
only helps in stronger the customer base but also satisfying the customers.
Strong finances are also the important thing for a company to make innovations and
improvement and also taking risks regarding new products. Intel is also backed up by strong
finances which help it to lead the market.
In Intel there is a skilled and experienced employees with great knowledge about the area
they are working in. this is another reason for its success.

WEAKNESSES:
1. Intel sometime used divisive strategies in defense of its market position against its
competitors.
2. After 2000,Intels leading position in its core business was greatly reduced.
3. By the end of 2006, Intel proclaimed a reform that resulted in the dismissal of
10,500.employees or near 10% of its labor force by July 2006.
In Intel there is lack of formal strategic plans, employees make their own strategies to work
which sometimes got success and sometimes the face a big loss.
Sometimes technical problems have found in the products which needs consideration because
it can weakens the customers base.
There is lot of work load on the employees so they could not balance work life with social
life. Also the management pre fers those who do a lot of work rather than those who are
creative and competent.

OPPORTUNITIES

Demographics young and middle aged population.

New markets for products Atom processor, Developing countries.

Financial or legal trouble for competitors.

New technologies the company could adopt.

Positive growth for netbook market.

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Collaboration on WiMAX technology.

Unique and magical S3D (stereoscopic 3D) cinema experiences.

Advanced Security Features of Intel Technology.


Growing virtualization
As the time passing the demand for computer products increasing rapidly which is opening
the doors for the success of Intel. The increasing demand is great opportunity for Intel.
As New technologies are emerging, creating the ways to innovate products and for the new
products as well. Through product differentiation Intel can capture more market.

THREATS:
1. Internal obstacles the company is facing.
2. The relative position of the company's largest competitors. Technological advances in the
industry (if the company isn't keeping pace).
3. New technologies that threaten to displace the company's products Downturn in
semiconductor industry
4. Rising energy costs and global environmental concerns Changes in regulatory / tax
burdens
5. Recession
6. Competitors like AMD are trying to improve its products which can give the tough time
to Intels microprocessors.
Product specialization of Intel can become a big threat. If any competitor hit the market by
manufacturing fabulous microprocessor then the demand for Intels processor would be low
and there is no back up products through which company can survive.

INTERNATIONAL SUCCESS:
Studies show that employees working in a diverse environment tend to feel more fulfilled,
creative, and productive on the job. They also tend to experience higher le vels of positive
morale and job satisfaction. At Intel, these factors contribute directly toward making our
company a great place to work, create, and innovate.

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Our most valuable asset


Our employees bring a unique and valued perspective to Intel. Their creativity, productivity
and experience make it possible for us to remain innovative and competitive. Intel's
continued success as a company depends on our ability to meet the needs of our global,
diverse workforce. We are dedicated to making the Intel environment a place where our
employees thrive creatively and intellectually.
Our employees' faces reflect those of our customers, vendors, and colleagues in the global
market. This worldwide perspective makes it possible for us to anticipate and provide for
growing needs of a changing market place

A wireless revolution
Throughout Intel history, our employees have challenged the status quo by contributing to the
success of our landmark products. To create Intel Centrino processor technology, a first -ever
platform combining outstanding mobile performance, great battery life and integrated
wireless LAN capability, Intel tapped directly into the ingenuity of its diverse workforce. Our
talented mobile engineering teams based in Israel and the U.S. collaborated on platform
development. Our mobile marketing and business development teams combined their
expertise to drive strategies enabling the deployment of WLAN infrastructures and public
wireless hotspots around the globe. By connecting employees from different geographies,
backgrounds and experience, we were able to utilize their unique talents to create a product
that has revolutionized the way that people live and work. This combination of unique ideas
and fearless risk-taking ultimately transformed our company

Diversity as strategy
Calculated risk-taking is an important element of Intel's culture. Fab Materials Operations
Silicon, a department located within the Technology and Manufacturing Group (TMG),
brought this value to life when its leaders decided to consciously build workforce diversity
into their strategy for maximizing team effectiveness.
Through thoughtful implementation, the team was able to deliberately use tactics such as job
swapping and controlled employee role changes to increase the efficiency of their teams.
Their intentional blending of talent from a variety of backgrounds, geographies, previous
work experience, and areas of expertise resulted in the achievement of rock-solid business

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continuity, an unparalleled reduction in excursions, and an almost zero percent undesired


turnover rate since 2001.

ENVIRONMENT
We believe technology will be key to addressing the world's environmental challenges. As
one of the world's leading technology companies, we are passionate about the intelligent use
of technology. We design and build eco-friendly products that consume less energy per
transistor, take less water to build, and use fewer materials, like lead and halogens, than ever
before. And, we know our responsibility goes far beyond delivering eco-friendly products.

Eco -Smart Computing Inside


By designing our products with the environment in mind, we are able to make our processors
as energy efficient as possible, while maintaining high levels of performance.

Eco -Responsible Operations


By managing our operations responsibly, we have reduced our energy use, cut our carbon
emissions, saved billions of gallons of water, and developed innovative new ways to operate
our business efficiently.

Technology for Environment


Our biggest contribution to the environment comes from our technology. People,
organizations, and industries around the world are using it to create a sustainable future.

Sustainability Initiatives and Policies


In collaboration with governments, local communities, environmental groups, and businesses,
we lead sustainability initiatives. We also drive standards and policies that improve specific
environmental aspects of our products such as advanced power management schemes.

REFERENCING
http://www.eda.org/VIUF_proc/Fall92/IMMANENI92A.PDF
http://mba-lectures.com/marketing/swot-analysis -marketing/1116/swot-analysis-of-intelcorporation.html
http://www.intel.com/?en_US_01
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http://communities.intel.com/docs/DOC-4825

388

DELL INC

389

INTRODUCTION
Dell Inc. is an American multinational information technology corporation based in Round
Rock, Texas, United States, that develops, sells and supports computers and related products
and services. Bearing the name of its founder, Michael Dell, the company is one of the largest
technological corporations in the world, employing more than 103,300 people worldwide.
Dell is listed at #38 on the Fortune 500 (2011).
Dell has grown by both organic and inorganic means since its inceptionnotable mergers
and acquisitions including Alienware (2006) and Perot Systems (2009). As of 2009, the
company sold personal computers , servers, data storage devices , network switches, software,
and computer peripherals. Dell also sells HDTVs, cameras, printers, MP3 players and other
electronics built by other manufacturers. The company is well known for its innovations in
supply chain management and electronic commerce.
On May 3, 2010, Fortune Magazine listed Dell as the 38th largest company in the United
States and the 5th largest company in Texas by total revenue. It is the 2nd largest non-oil
company in Texas (behind AT&T) and the largest company in the Austin area.

HISTORY
Dell traces its origins to 1984, when Michael Dell created PCs Limited while a student at the
University of Texas at Austin. The dorm -room headquartered company sold IBM PCcompatible computers built from stock components. Michael Dell started trading in the belief
that by selling personal computer systems directly to customers, PCs Limited could better
understand customers' needs and provide the most effective computing solutions to meet
those needs
In 1985, the company produced the first computer of its own designthe "Turbo PC", sold
for US$795. PCs Limited advertised its systems in national computer magazines for sale
directly to consumers and custom assembled each ordered unit according to a selection of
options. The company grossed more than $73 million in its first year of trading.
The company changed its name to "Dell Computer Corporation" in 1988 and began
expanding globally. In 1996, Dell began selling computers via its web site, and in 2002, Dell
expanded its product line to include televisions, handhelds, digital audio players, and printers.
Dell's first acquisition occurred in 1999 with the purchase of ConvergeNet Technologies. In

390

2003, the company was rebranded as simply "Dell Inc." to recognize the company's
expansion beyond computers. From 2004 to 2007, Michael Dell stepped aside as CEO, while
long-time Dell employee Kevin Rollins took the helm. During that time, Dell acquired
Alienware, which introduced several new items to Dell products, including AMD
microprocessors. To prevent cross-market products, Dell continues to run Alienware as a
separate entity but still a wholly owned subsidiary.
On August 16, 2010, Dell announced its intent to acquire the data storage company 3PAR.
On September 2, 2010 Hewlett-Packard offered $33 a share, which Dell declined to match.

Dells Organizational Culture


Dell believes in being direct in everything they do. Their ultimate success is based on
maintaining direct relationships built on trust. The relationships with diverse partners help
them reach multicultural consumer groups across the world and recruit the best and brightest
ta lent to achieve success in the marketplace.
Dell's Winning Culture and comprehensive diversity initiatives create a corporate
environment based on meritocracy, personal achievement and equal access to all available
opportunities. They focus their internal efforts on cultivating and promoting best practices
among their global workforce in the areas of policy development, training, recruitment,
mentoring, development, advancement and culture change. Furthermore, the Work/Life
Effectiveness and career manageme nt programs enhance Dells ability to retain and develop
valuable team members and demonstrate its commitment to the Dell Team.

Networking Groups
Dell sponsors a community of networking groups formed by employees with common
interests in areas such as ethnicity, gender, nationality, lifestyle, and sexual orientation. These
groups offer Dell employees the opportunity to network with other employees from around
the company, while providing encouragement and an enhanced sense of belonging through
informal mentoring, professional and community events and access to personal and
professional development and growth. Additionally, networking groups help foster a more
inclusive work environment, improve communication among employees and enhance
understanding of all employees about the value of diversity.
Networking Groups currently chartered:

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BRIDGE - Building Relationships in Diverse Group Environments (AfricanAmerican Networking Group)

W.I.S.E. - Women In Search of Excellence

aDellante - Hispanic Networking Group

PRIDE - Partnering for Respect of Individuality in the Dell Environment (A Gay,


Lesbian, Bisexual, Transgender & Straight Alliance)

A.I.M. - Asians in Motion

Work/Life Effectiveness
At Dell, their people are the most valuable asset and who are committed to fostering a culture
that exhibits this value. Dells goal is to enable employees to maximize their contribution to
the company while also maintaining effectiveness between their work and personal lives.
Dell advocate flexibility in the workplace to empower employees, teams and managers to
hold discussions about both the needs of the business and each employee's individual
Work/Life Effectiveness goals, and then to construct a plan for fulfilling both priorities. As
individual circumstances vary, solutions that enable flexibility can be different, including
informal and formal flexible work arrangements such as variable daily work times, workfrom-home, and part-time work arrangements.
Additionally, Dell offers corporate employee resources that enable employees to better
manage their Work/Life situations, such as:

Employee Assistance Program

Dependent Care Referral Resources

Mothers Rooms

Staying Well at Dell Initiatives like "Weight Watchers at Work"

Career Management Program


Dell is committed to developing its workforce and helping employees achieve their personal
and professional best. Through an intensive, six-month Career Management Program, Dell
strives to develop, fully engage, and retain high-performing talent. Specifically, participants
in the program spend 6-8 hours per month developing and strengthening network and

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mentoring relationships; engaging in new activities; and exploring new assignments or


positions at Dell. Managers participate in a kickoff session and a mid-program discussion
with the coach and participant, in addition to holding monthly career-related discussions with
participants.

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ENVIRONMENTAL ANALYSIS
INTERNAL ENVIRONMENT
Dell thrives on being the best in whatever it does, from offering the best customer experience
to recruiting the best and brightest talent. In fact, its employees view Dell's diversity
initiatives as a competitive advantage that fosters a winning culture and leverages the vast
skills, similarities and differences of the Dell team so that they can be the best in the global
marketplace.

Dell's Women's Initiative


At Dell, the management is committed to understanding and responding to the challenges
women face around the world in balancing their professional and personal needs. It
understands the importance of providing meaningful opportunities and resources to support
women's success in Dells business. The managements focus on building a global Women's
Strategy across all Dell locations provides them the tools they need to fully access and
leverage female talent globally.

Inclusion and Cross-Cultural Training


Dell's Diversity strategy is focused on driving an environment of inclusion, where employees
are embraced and accepted as an integral part of the team wherever they work. The
management at Dell is committed to cross-cultural training and eliminating barriers that
hinder their multicultural team from achieving their personal and professional best.
Additionally, working successfully with people from different cultures and countries is a skill
that greatly impacts Dell's ability to compete in the global markets its employees serve.

Supplier Mentoring Programs


Companies that diversify workforce and supply bases are more successful in gaining access
to multicultural markets. Dell is committed to supplier diversity and challenges executives
and procurement managers to continuously seek creative ways to drive supplier diversity into
all of their procurement plans. This commitment helps Dell achieve long-term relationships
with quality minority-owned, women-owned and small businesses. Dells Supplier Diversity
program provides mentoring opportunities for potential and new suppliers, supplier

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orientation days, and an annual Supplier Summit for approximately 100 diverse suppliers
across the United States.

Diversity Recruiting
Dell recognizes that a diverse workforce is critical to the exploration of new ideas and the
creation of innovation. It is committed to ensuring its managers identify the best and brightest
diverse candidates in the marketplace to join the Dell team. Their relationships with diverse
partners are what help them reach multicultural consumer groups across the world and recruit
the best and brightest talent.
Dell actively recruits women and minorities by sponsoring professional conf erences, career
fairs and community events with minority organizations. It partners with a number of
organizations to identify new talent, including:

National Society of Hispanic MBAs

Black MBA Association

Society of Women Engineers

National Society for Black Engineers

Society of Hispanic Professional Engineers

United Negro College Fund

Congressional Hispanic Caucus

National Urban League

National Council of LaRaza

Catalyst

Out and Equal

African American, Asian and Hispanic Chambers of Commerce

Workforce Diversity
Dell's workforce is made up of approximately 83,000 employees who live and work in 6
continents and deliver products and services to more than 190 countries.
At Dell, women and people of color represent:
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More than half (52 percent) of our U.S. wor kforce, including GLBT.

More than one -third of our U.S. managers (41 percent).

32 percent of our U.S.-based vice president.

33 percent of our global workforce is women.

EXTERNAL ENVIRONMENT
Dell's major competitors include Hewlett -Packard (HP), Acer, Toshiba, Gateway, Sony,
Asus, Lenovo, IBM, Samsung, Apple and Sun Microsystems. HP and IBM pose the biggest
threat in competition. In terms of Entry Barriers, Dells direct to consumers sales approach has
increased their sales each year and they will soon be among their top competitors. Because
of this approach, Dell has entered into this highly competitive market in a unique way. The
biggest entry barrier that Dell has to face when entering into the technology industry is
having customers gain the trust of company over the more popular veteran computer
companies. Nevertheless many of competing companies use a range of different suppliers.
Competitor Sun Microsystems annual sales are lower than Dell.
They offer an online service where customers can order servers, and personal computers.
They differ from the rest of the organizations is that they do not use the Microsoft operating
system which is a weakness compared to the rest. Sun does not see Dell as a major
competitor, in obvious place of Dell; they see Micr osoft as a major competitor along with
Hewlett-Packard and IBM
This being said, Dell is performing in the right direction and sales are increasing dramatically
overtime as mentioned above, and the competition exist between the companies and that what
makes Dell unique. Operating Environment Consumers view Dell as a quality brand at a
good price. Some consumers find that Dell's competitors may be a little more expensive but
still offer a quality brand.
Dell and its subsidiary, Alienware, compete in the enthusiast market against AVADirect,
Falcon Northwest, VoodooPC (a subsidiary of HP), and other manufacturers. In the second
quarter of 2006, Dell had between 18% and 19% share of the worldwide personal computer
market, compared to HP with roughly 15%.
In late 2006, Dell lost its lead in the PC-business to Hewlett-Packard. Both Gartner and IDC
estimated that in the third quarter of 2006, HP shipped more units worldwide than did Dell.
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Dell's 3.6% growth paled in comparison to HP's 15% growth during the same period. The
problem got worse in the fourth quarter, when Gartner estimated that Dell PC shipments
declined 8.9% (versus HP's 23.9% growth). As a result, at the end of 2006 Dell's overall PC
market-share stood at 13.9% (versus HP's 17.4%).
IDC reported that Dell lost more server market share than any of the top four competitors in
that arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%, down
from 9.5% in the previous year. This represents an 8.8% loss year-over-year, primarily to
competitors EMC and IBM.

SWOT ANALYSIS OF DELL INC.


STRENGTHS
1. Dell is one of the biggest technological corporations in the world.
2. Dell is scheduled at 38 Number on the fortune 500 (2010). Fortune also lists it as the
Number 5 most admired corporation in its industry.
3. Dell has huge acquisitions and mergers. For example acquisition of Perot Systems (2009)
and Alienware (2006).
4. The company has experienced management and leadership. For example Michael Dell, at
the present is the computer industrys longest-tenured (CEO) chief executive officer.
5. Dell is highly innovative company in the industry and has very strong E-commerce and
supply-chain management.
6. Dell is the largest firm in Austin and 2nd biggest non-oil corporation in Texas and 5th
largest in Texas by revenue.
7. Direct selling to the customers by understanding customers needs and preferences is
important strength of the company.
8. Dell manufactures products near to its customers and use just -in-time (JIT) producing
approach to minimize cost.
9. Dell has strong customer base. Approximately two-third of Dells sales is generated from
government agencies, large corporations and educational institutions.

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10. The company is renowned for its distinctive Direct Model., industry-leading growth,
award winning customer ser vice, and consistent strong financial performance.
11. Dell has differentiated itself from competitors by providing potent systems to the clients
or customers at competitive prices.
12. Dell has the industry most efficient procurement, manufacturing, and distribution system.

WEAKNESSES
1. Dell is highly dependent upon its suppliers which may cause great troubles in quantity
manufacturing and services.
2. Dells centre of sales is the government institutions and corporate customers which has
affected its ability to from relations with customers.
3. The company does not have proprietary technology. It changes its technology at very fast
rate.
4. Management and Leadership rotate around just one person.
5. There is no diversification and the company is only focusing the PCs business.

OPPORTUNITIES
1. Advancements in technology will allow Dell to come up with new products and create
new market segment.
2. Improvement in technology will also help company to introduce efficient -manufacturing
systems which will decrease the overall cost of production.
3. Dell is the Rapid changing industry; innovation is the only way to remain in the industry
and be competitive.
4. Customer Preferences changes very frequently. They always look for new and updated
products. Being a customer-oriented is the sign of success in this industry.
5. Diversification in related and unrelated business such as; Security devices, softwares,
broadband and PC software are a few of the fastest growing segments.
6. Backward and forward integration may result in lower cost and increase in quality and
service.
7. Sustaining low-cost leadership is also an important opportunity for the company.
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THREATS
1. Advancement in technology obsoletes the manufacturing facilities as well as products of
the company.
2. Dell is facing strong competition to sustain its market share.
3. Industry is witnessing strong price war between PC producers.
4. Dell has strong competitors in the industry such as IBM, Intel, etc.
5. Dell has the strong presence in the developing countries; currency changeability in those
countries create problem for its business.
6. The company is facing various problems in developing countries such as: political
instability, government regulations, tariffs, etc.

Dell Exploitation of its Strengths


Dell Computer is maintained and increased their competitive advantage. They want to
maintain a low cost position to maximize the value passed on to customers, while driving
costs lower and lower. They also want to drive aggressive pricing and profitability gain share.
Dell wants to always put customers first and remain aggressive about driving improved
customer value across all Dell business. Employee support of Product Leadership, Customer
Experience, and Globalization is also important to the company. They want to have the best
product in the marketplace and gain as much share in the market as possible. One way of
achieving this would be to drive more than two-thirds of their sales and service transactions
online.
Dell Computer's strategies are built around several key elements: build-to-order
manufacturing, mass customization, partnerships with suppliers, just-in-time inventories,
direct sales, market segmentation, customer service, and extensive information sharing with
both supply partners and customers. With build-to-order manufacturing, Dell built its
computers, workstations, and servers to order based on the needs of their customers. The
orders were directed to the nearest factory. They reorganized plants and shifted to "cell
manufacturing" whereby a team of workers assemble one PC rather than typical assembly
line production. The result of this change was that there was no-in-house stock of finished
goods inventories and they did not have to wait for resellers to clear inventories before new
models could be pushed into the marketplace.
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Supply chain Process


When any customer or client purchases a computer online from Dell Corporation, the Dells
supply chain consists of the customer, assembly plant, website, suppliers and their respective
suppliers. The website presents the complete information concerning the product lines/range
its accessibility and pricing. After making a product choice customer or client enter the order
information and pay price through credit card or another source. The customer again may
visit the website to check the position of the purchase or order. Process further involves the
fulfillment of the order by the information received from customer about the purchase.
Supply chain further needs product, an additional flow of information, and funds among
different stages of the supply chain.

Dells global citizenship


Dell's global citizenship principles guide the company as it globalizes its operations, enters
new markets, and expands its global employment base. Dell's goal is to be a good neighbor in
the communities where we live and work.
Our global citizenship principles are based on our corporate values and policies regarding
social and environmental stewardship and draw from the Universal Declaration of Human
Rights and fundamental conventions of the International Labor Organization, the
International Organization for Standardization, as well as the experience of other corporations
around the globe.

THE DELL EFFECT


Dell is committed to using its unique direct business model to make technology more
affordable and accessible to people and institut ions around the world so that they can take
advantage of the tremendous economic and social benefits of more pervasive technology. To
do this, Dell is:

Using its customer direct model to bring affordable technology to both new and
emerging markets, as well as established ones;

Growing its global employment to tap diverse ideas and skills, increase its
understanding of global customer needs and to bring desirable technology jobs to
developing economies;

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Developing a global network of suppliers to improve the performance and lower the
cost of its systems.

Dell's direct way of working delivers industry-leading value to customers. It is also based on
distinct company values, The Soul of Dell, that acknowledge the company's responsibilities
to its:

Employees: Dell treats all employees with dignity and respect and provides
opportunities for all employees to succeed;

Communities: Dell strives to be a good neighbor and a responsible community and


environmental steward

Global suppliers and their employees: Dell acts ethically and encourages
responsible employment environmental practices from its suppliers.

GLOBAL PRINCIPLES
To participate responsibly in the global marketplace, Dell commits to:
Promoting A Healthy Business Climate Globally And Growing Their Business In All
Markets.

Growth:
Dell will expand its global reach in order to bring more affordable technology, and its
economic and social benefits, to more people around the world. We will grow our global
operations and manage our expansion responsibly by:

Conserving and protecting the natural environment and resources of our host
countries and communities;

Providing quality jobs with good benefits and employee training in new communities;

Communicating our responsibility requirements to our suppliers and working


collaboratively with them to promote high standards of work and behavior;

Respecting the laws, values and cultures of our host countries, and;

Contributing positively in every community that we call home, both individually and
organizationally.

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Employment:
Dell will grow its business by developing the capabilities of our teams around the world and
tapping global talent for diverse ideas. Dell will respect the rights of all employees treating
them with dignity and respect. Dell will be a competitive employer by providing:

Meaningful work in a safe, secure and health conscious environment;

Quality jobs with competitive benefits;

Opportunities for training and professional development that are open to all, and;

Rewards based on performance, results and contribution.

In new locations, Dell will work with local governments to provide jobs and create
meaningful employment opportunities. Dell will:

Create new opportunities for qualified individuals who are unemployed or


underemployed;

Provide ongoing on-the-job training and other professional growth opportunities;

Create a meritocracy in every location, where the best performers do better;

Develop a pipeline of knowledgeable workers; and

Address the digital divide through community-based education for youth.

To minimize the disruption for Dell employees whose jobs may be changed, relocated or
eliminated as Dell builds a global presence, the company will:

Provide fair notification regarding employment changes;

Strive to retain and place employees with good pe rformance into new positions elsewhere
in the company;

Work to ease the transition from Dell to their next employment opportunity for
employees who want to or need to seek careers and employment outside of Dell.

Understanding and Respecting Every Nations Laws, Values and Cultures and
Contributing, both Individually and Organizationally, In Every Community We Call
Home.

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Human Rights:
Dells respect for individuals begins with respect for human rights. Dell values the diversity
of its workforce. The companys approach to diversity is defined by a recognition of both
similarities and differences, inclusiveness, respect and a company culture that allows each
individual to contribute to his or her fullest potential. In addition, Dells suppliers are
expected to embrace high standards of ethical behavior and treat their employees fairly and
with dignity and respect in accordance with Dells Code of Conduct and Supplier
Commitment Policy.
Dell adheres to laws regulating wages, hours and working conditions, and requires by
contract that all suppliers also comply with all applicable laws and regulations where they
conduct their business. Dells suppliers must demonstrate a commitment to the health and
safety of their employees. They must not use child labor, forced or indentured labor, or use
raw materials or finished goods produced by child, forced or indentured labor. Dell will not
work with suppliers who do not respect human rights.

Contributing in Every Community:


Dell believes that its unique, one -to-one relations hips help customers, employees and
communities worldwide learn about, give to and connect with each other. Dell and its
employees are committed to building the technology that builds communities, both personally
and organizationally.
Dell believes in contributing positively in every community that it calls home. Dell
employees help their neighbors through our One Dell, One Community volunteerism and
personal giving programs. The Dell Foundation is focused on equipping youth for the digital
economy. Dell also has strategic community partnerships that address mutual interests and
needs of the community and company.
Examples of global social development programs supported by Dell include the Carter
Centers China Village Elections Project which is helping Chinese villages compile election
data and train election workers. Dell is providing refurbished computer equipment to help
former President Jimmy Carter and Chinas Ministry of Civil Affairs establish and
standardize election procedures.

403

Protection of Critical Technologies:


Dell complies with all laws of the United States and those of other countries concerning the
import or export of goods, services, software and technology including regulations that
restrict the sale of advanced technologies to terrorists.

Protection of Customer Information:


Dell respects customer privacy around the world by restricting the collection, storage and use
of personal information to specific purposes such as processing purchases, providing service
and support, and sharing product, service and company news with customers.
Dell does not sell or trade in personal information. Dell will share information only with
customer consent, as required by law or with companies that help Dell fulfill its service
obligations and then only with those who share Dell's commitment to protecting consumer
privacy and data.

CONCLUSION
The computer industry has benefited from the explosion of home computer usage and has
become one of the most competitive industries in the world. With technology growing at
amazing paces, many of the computer companies have fallen behind and even out of the
industry since the development of the computer. Only the strongest companies have been able
to be profitable and efficient. Dell Inc. is one of the few corporations to be able to remain at
the top of the market.
Dell's vision is to work closely with development partners to provide 100% perceived
availability to the application environment. Dell's mission is to be the most successful
computer company in the world at delivering the best customer experience in markets they
serve. In doing so, Dell will meet customer expectations of: highest quality, leading
technology, competitive pricing, financial stability, and individual and company
accountability. The most important value to Dell is to satisfy their customers and the second
most important value is to be profitable.
Dell has three distinctive capabilities which consist of:
1. Selling products directly to consumers which eliminates the markups of resellers
2. Build products as they are order, which eliminates overstocked products and
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3. Having the ability to respond quickly to customers who experience problems with
their products.
In order for Dell to compete efficiently in the computer industry, it needs to take advantage of
all of its opportunities. Dell continues to grow, especially in their line of personal computers.
Through its cutting edge, highly dependable products Dell will continue to grow into one of
the leaders in this industry.

REFERENCES
Dell Company Profile. Retrieve d (2010-07-28)
"Form 10-K". Dell Inc. United States Securities and Exchange Commission (2008-03-31).
Retrieved (2008-07-01). "For the fiscal year ended: Jan 1, 2009"
"Fortune 500 2010: States: Texas Companies". CNN.
Ladendorf, Kirk. "Dell expanding in Central Texas." Austin American-Statesman. October 1,
1996. A1. Retrieved on May 4, 2010.
http://www.Dell.com/content/topics/global.aspx/corp/pressoffice/en/2007/2007_07_19_rr_00
1?c=us&l=en&s=corp
"Guide to Greener Electronics". Greenpeace International. Retrieved (2011-01-13).
Mahoney, Jerry. "Dell to expand its office complex." Austin American-Statesman. May 30,
1998. D1. Retrieved on May 4, 2010.
Koehn, Nancy Fowler (2001). Brand New: How Entrepreneurs Earned Consumers' Trust
from Wedgwood to Dell. Harvard Business Press. p. 287. Retrieved (2008-10-14).
http://www.achievement.org retrieved on May 02, 2009
"Dell, EMC Extend and Expand Strategic Alliance". Dell. (2008-12-09_. Retrieved (2010-0905).
Ladendorf, Kirk and Mike Todd. "Dell seeks space for expansion Firm makes proposal for
tax abatements." Austin American-Statesman. November 5, 1992. Retrieved on May 4, 2010

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HALLIBURTON

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HISTORY OF HALLIBURTON
Founded in 1919, Halliburton is one of the world's largest providers of products and services
to the oil and gas industry. It employs nearly 60,000 people in approximately 80 countries.
Halliburton's fascinating and proud history reveals a continuous focus on innovation and
expansion that began with the company's founder, Erle P. Halliburton. After borrowing a
wagon, a team of mules and a pump, he built a wooden mixing box and started an oil theyll
cementing business in Duncan, Okla homa. In the 1930s, Halliburton established its first
research laboratories where the company tested cement mixes, began offering acidizing
services to break down the resistance of limestone formations and increase the production of
oil and gas, and performed its first offshore cementing job using a barge-mounted cementing
unit at a rig in the Creole Field in the Gulf of Mexico. This was the beginning of what was to
become the world's most extensive offshore service. Halliburton took the initial steps toward
becoming a worldwide company in 1926. They sold five cementing units to an English
company in Burma, the start of our Eastern Hemisphere operations, and Erle P. Halliburton
sent his brothers to open our business in Alberta, Canada. They opened in Venezuela in 1940.
By 1946, the company using its innovative technology had expanded into Colombia,
Ecuador, Peru and the Middle East and began performing services for the Arabian-American
Oil Company, the forerunner of Saudi Aramco. In 1951, Halliburton made its first appearance
in Europe as Halliburton Italiana SpA., a wholly owned subsidiary in Italy. In the next seven
years, Halliburton launched Halliburton Company Germany GmbH, set up operations in
Argentina and established a subsidiary in England. In 1984, Halliburton provided all of the
theyll completion equipment for the first multitheyll platform offshore China. Two years
later, Halliburton became the first American company to perform an oilfield service job on
the China mainland The final decade of the 20th century brought more changes and growth to
Halliburton. The company opened a branch office in Moscow in 1991. The company
realigned its work into Eastern and Theystern Hemisphere operations in 2006, and in 2007,
divided its service offerings into two divisions: Completion and Production, and Drilling and
Evaluation. Today, Halliburton offers the world's broadest array of products, services and
integrated solutions for oil and gas exploration, development and production.

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SWOT ANALYSIS
Location of Factor

TYPES OF FACTOR
Favorable

Unfavorable

Strengths

Weaknesses

Internal

Strong market position

Litigation issues

Diversified revenue
stream

Subject to criminal
investigations

Strong financial
performance

Impairment of oil and


gas properties

Strong research and


development
capabilities
Strong manufacturing
capabilities
External

Opportunities

Threats

Acquisitions
Positive outlook for the
global oil and gas
sector
Increase in demand for
natural gas in North
America
Opening of second
corporate headquarters
in United Arab
Emirates(UAE)

Economic slowdown
in the US and the
European Union
Risk associated with
conducting business
outside the US
Environmental
regulation

ORGANIZATIONAL CULTURE
Halliburton management planning skills has helped the organization grow into the largest
provider of services in the construction and oil industry offer all over the world. Hotheyver,
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Halliburton faces several ethical dilemmas that may lead to the down fall of their massive
organization or it could just fuel their way to more potheyr. Let use examine the history of
Halliburton to the present as they take into account the choice made by the organization to
increase its revenue and grow as a company.
Halliburtons strategic vision is to continue to set the company apart from the
competitors. Driven by a passion for excellence, a commitment to finding the best solution
for the customer... the legacy of our founders (Halliburton, 2008). Halliburtons vision
statement is inspirational. According to Bateman and Snell the most effective vision
statements inspire organizational members (Bateman & Snell 2007). The start of a successful
organization is a theyll though out vision statement. Halliburton has set themse lves apart
from other organizations that are in the same industry just by their vision statement being so
touching and heartfelt.
Very good work environment. Co workers are very helpful. The benefits and compensation
are average compared to other oil service companies.
Within the oil and gas industry, and in particular Canada, driving to and from the lease site
poses the greatest risk to employees. Given the variety of driving terrains, changing their
conditions, remoteness of the theyllsite and driver com placency, the driving risk also
represents the greatest challenge for making improvements.
At Halliburton Group Canada, several approaches have been used in an attempt to reduce
both the severity and frequency of motor vehicle collisions. The approach taken involved
primarily behavior-based strategies, but also utilized traditional approaches to driver related
behavior management such as policies and driver education By examining the lagging
indicators related to our various product service lines, they have observed a continued
decrease year over year in the number of severe collisions. In 2000, Halliburton Group
Canada was driving approximately 400,000 miles bettheyen serious wrecks. Today, with the
systems in place, this number has significantly increased to over 2,500,000 miles.
With these statistics in mind and utilizing a more traditional or compliance-based approach to
driving-related issues, a decrease in the overall number of motor vehicle -related issues would
also have been expected. Hotheyver, with the positive behavioral approach taken, the
opposite has been observed. During the same time, a significant increase in the reporting of
the more minor fender benders and near misses was observed. In a completely compliance, or

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traditional approach, these types of incidents would have gone unreported and been dealt with
on a reactive basis.

INTERNAL & EXTERNAL ENVIRONMENT


Information Technology Professional
Information technology (IT) graduates are at the core of everything they do at Halliburton.
Not only have they been fundamental to our ability to deliver a wide variety of potheyrful
solutions to our customers, but they will also play a major role in our future, as they develop
and deliver more high-tech solutions to increase the return on investment for exploration
efforts, maximize long-term production for existing fields, and decrease the time it takes to
bring a new field to production.
Halliburton's IT organization is large and diverse. They span the globe, covering enterprise
resource planning and business systems development, theyllsite engineering, data acquisition
development and corporate infrastructure implementation. As such, Halliburton's IT team
offers numerous and varied career opportunities for new graduates. Following are some of the
responsibilities you might have in each IT group:
Application Services Provide application development, support, security and integration
across a wide range of systems from world-class enterprise resource planning systems to
specialized systems at remote.
Architecture and Strategy Create an overall vision for technologies in the embryonic,
developing and even mature stages with a focus on data and information, network access,
information security, software development and Theyb strategy.
Enterprise Infrastructure Implement the fundamental IT backbone, focusing on:

Enterprise data center operations

Back-office operations

Database administration and digital consulting services

Research and development support, enterprise management

Security services

Converged network operations.


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Global Services Align closely with business needs by focusing on business process
optimization and training, real-time operations and commercial IT (consulting services)
support.
Project Services and Project Management Focus on IT portfolio management and
communications with a consistent approach to change management, stakeholder
communications and project reporting.
Information

Technology

professionals

provide

the

business

architecture,

process

improvements and systems to support and build upon Halliburton's internal and external IT
environment.

Management Planning At Halliburton


Planning is one of the most critical functions of management an organization can use to
accomplish its mission. Halliburton was founded in 1919 and is one of the largest providers
of products and services to the energy industry, with a workforce of almost 50,000 people in
over 70 countries. Their home office is located in Houston, Texas and they have been leaders
in the energy services and engineering and construction (E&C) industries for almost a
century. This paper will evaluate the planning function of management, discuss the factors
that influence management planning, and analyze several factors that affect different types of
planning within Halliburton.
The number one priority of Halliburton is to provide competitive, safe and superior quality
products and services. They also understand that in order to sustain business in this world
they must make a small impact on the environment in their search for new sources energy.
This search is guided by the companys vision: "To be theylcomed as a good corporate
neighbor in our communities; to do no harm to the environment; to provide demonstrable
social and economic benefits through sustainable relationships, sustainable technology and
sustainable sourcing; and to validate our progress through transparency and reporting"
(Halliburton, 2008). This vision clearly states how the company stands in respect to the
environment and the communities in which it does business. With this in mind, the company
plans for the future by assessing the impact their actions will have on the environment,
contributing back to the local communities, helping to create jobs, and developing new
technologies.

The strategic goal of Halliburton is to continue to expand through internal

growth and acquisition in order to benefit the stockholders. This goal is governed by a board
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of directors who analyze the companys current situation and develop goals and plans for
long-term success

Finance
Halliburton's Finance group offers relevant, value-added financial guidance and insight to
ensure that our business goals are met in a financially responsible manner. Finance manages a
broad range of business and financial issues that enable our internal clients to make critical
business decisions. Major functions of the Finance group include:

Financial Reporting

Consolidations

Manufacturing Accounting

Corporate Accounting

Financial Planning and Analysis

Financial Controls

Audit Services

Treasury

Investor Relations

Division/Region Finance and Accounting

Tax Compliance, Reporting and Transactions

Tax Global Operations and Planning

The Finance group's Accounting Rotation Program enables select new hires to spend their
first eight theyeks rotating through four or five Accounting functions. This rotation enables
participants to gain a better understanding of the various departments and learn how each
functions within the Company, and to gain exposure to some of the numerous opportunities
available within Finance.

BUSINESS DEVELOPMENT AND MARKETING


Business Development works closely with our customers and with our product service lines
to offer the best Halliburton technologies and solutions for our customers' biggest challenges.
412

In addition to opportunities for experienced professionals, Business Development offers


select new graduates the opportunity to participate in the Field Associate Program. This
program provides a broad operational view of Halliburton's product service line offerings,
and has the specific goal of providing the trainee with a working knowledge of the processes,
basic job procedures, operational factors, personnel functions and customer responses at the
point of delivery. Once the 18-24 month rotational program is completed, trainees have the
opportunity to advance into positions within our Sales and Operations departments.
Our Central Marketing group plans, produces and delivers innovative, high-impact marketing
campaigns, print and online collateral, and events that align with the Company's strategic
objectives.

HUMAN RESOURCES
Human Resources recruits new employees and provides current employees opportunities such
as training, career development, benefits and other resources to help them work theyll and
live theyll as a member of the Halliburton team. Major departments in the Human Resources
group include:

Talent Acquisition

Training

Benefits

Compensation

Employee Relations

Human Resource Information Systems

International Human Resources

HEALTH, SAFETY, ENVIRONMENT AND OPERATIONAL EXCELLENCE


At Halliburton, our goal is to safely exceed the expectations of our customers. They-being of
our employees, contractors, customers and communities are our primary concern in
everything they do. Halliburton's Health, Safety, Environment (HSE) and Operational
Excellence group drives improvements in HSE and service quality through a sustainable
focus on efficiency. These improvements promote safer working environments for

413

employees, ensure service delivery excellence, and enhance Halliburton's reputation as an


industry leader.

CORPORATE AFFAIRS
Corporate Affairs helps to build relationships bettheyen Halliburton and various stakeholders,
including our employees, our customers and the communities in which they operate. The
group consists of three primary departments Community Relations, Employee
Communications and Public Relations:

Community Relations strives to improve the quality of life in communities where


Halliburton operates through financial contributions, employee giving and employee
volunteering.

Employee Communications creates and delivers professional print, online and multimedia
communications to Halliburton employees.

Public Relations interact with the media and help to preserve and manage Halliburton's
reputation and image with stakeholders.

WAYS IN WHICH STRENGT HS ARE EXPLOITED


OPTIMIZING OPERATIONS WITH MULTILATERAL SOLUTIONS
Challenge
In many heavy oil fields it is no longer enough to produce from a single horizontal they
Often, these fields have extremely thick pay zones with high viscosity/low mobility crude and
multiple locations must be exploited to realize return on investment. Many operators need to
find ways to increase the amount of reservoir exposure by simultaneously increasing
production capability and reducing overall field development.

Solution
Halliburtons multilateral systems help enable production of multiple reservoirs or multiple
areas within a reservoir. In heavy oil plays, proven multilateral technology connects a lateral
theyllbore (or multiple lateral theyllbores) to the main borehole at the multilateral junction.
The junction can be designed for a new theyll application or created in an existing theyllbore
for a re-entry application where, from the lateral bore, supplementary lateral branches are
414

added to access additional reservoir targets. The main and lateral bore designs accommodate
the entire range of vertical to horizontal applications, with the multilateral system selection
based on the individual requirements of the heavy oil or oil sand reservoir.

MANAGEMENT PRACTICES
1. Director Orientation and Continuing Education. An orientation program has been
developed for new Directors which includes comprehensive information about
Halliburtons business and operations; general information about the Board and its
Committees, including a summary of Director compensation and benefits; and a review of
Director duties and responsibilities. Halliburton provides continuing education courses
several times per year on business unit product and service line operations.
2. Board Interaction with Institutional Investors and Other Stakeholders. The Board believes
that it is executive managements responsibility to speak for Halliburton. Individual
Board members may, from time to time, meet or otherwise communicate with outside
constituencies that are involved with Halliburton. In those instances, hotheyver, it is
expected that Directors will do so only with the knowledge of executive management and,
absent unusual circumstances, only at the request of executive management.
3. Stockholder Communications with Directors. To foster better communication with
Halliburtons stockholders, Halliburton established a process for stockholders to
communicate with the Audit Committee and the Board of Directors. The process has been
approved by both the Audit Com mittee and the Board, and meets the requirements of the
NYSE, and the SEC. The methods of communication with the Board include mail (Board
of Directors c/o Director of Business Conduct, Halliburton Company, 1401 McKinney,
Suite 1400, Houston, Texas 77010, USA), a dedicated telephone number (888-312-2692
or

770-613-6348)

and

an

e-mail

address

(BoardofDirectors@halliburton.com).

Information regarding these methods of communication is also on Halliburtons theyb


site, www.halliburton.com, under "Corporate Governance". Halliburtons Director of
Business Conduct, a Company employee, reviews all stockholder communications
directed to the Audit Committee and the Board of Directors. The Chairman of the Audit
Committee is promptly notified of any significant communication involving accounting,
internal accounting controls, or auditing matters. The Lead Director is promptly notified
of any other significant stockholder communications and communications addressed to a
415

named Director is promptly sent to the Director. A report summarizing all


communications is sent to each Director quarterly and copies of communications are
available for review by any Director.
4. Periodic Review of These Guidelines. The operation of the Board of Directors is a
dynamic and evolving process. Accordingly, these Guidelines will be revietheyd
periodically by the Nominating and Corporate Governance Committee and any
recommended revisions will be submitted to the full Board for consideration.

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS


INFORMATION TECHNOLOGY
Halliburton's Information Technology (IT) presence spans all of Halliburton's product service
lines, support functions and regions. The IT group supports internal operations and provides a
number of services for Halliburton's customers. The IT organization consists of six major
functions:

Infrastructure Services

Application Services

Project Services

Global Services

Finance and Administration

Division/Supply Chain Customer Relationship Management

Collectively, these functions manage the direction, development, supply and global support
of IT services for the Company.

LAW
The Law Department provides legal support for Halliburton's worldwide business activities.
With lawyers based in offices around the world, the Law Department represents the
Company's legal interests in all jurisdictions and with regard to all issues. The Law
Department is made up of the following practice areas:

Code of Business Conduct

416

Commercial

Corporate Governance

Employment

Environmental/Real Estate

Intellectual Property

International Trade Compliance

Government Relations

Legal Business Services

Litigation

Public Law

Records and Information Management

SUPPLY CHAIN
Supply Chain Management is the largest support group within Halliburton. This team of
global professionals is responsible for procuring, handling, managing, manufacturing and
transporting materials and finished goods to both internal and external customers at our
locations around the world.
The Supply Chain organization is made up of four major groups: Manufacturing,
Procurement, Materials and Logistics. Each plays a critical role in implementing strategies to
ensure that the goods are at the right locations, at the right time, in the proper quantity and at
an acceptable cost.
Supply Chain offers select new graduates an opportunity to participate in the Supply Chain
Management Program (SCMP). In this innovative 2-year program, participants rotate
through five six -month assignments in different Supply Chain functional groups across the
globe. The SCMP candidates are given high-value, high-impact projects to give them broad
exposure to Halliburton's $4 billion Supply Chain organization. This program puts graduates
on the fast track to leadership roles within Halliburton and international assignment
opportunities.

417

TECHNOLOGY (RESEARCH & DEVELOPMENT)


Halliburton's Technology group is responsible for the research and development that helps us
remain at the forefront of innovation and makes us a leader in the upstream oil and gas
service industry.
Recognized worldwide for developing some of the industry's most cutting-edge technologies
and solutions, the group works on high-visibility, high-priority, high-value projects that
significantly impact the revenue and profitability of the Company. Halliburton holds more
than 4,000 patents worldwide and invests approximately $230 million each year developing
new technologies to meet tomorrow's energy needs.

REFRENCES
http://www.freeonlineresearchpapers.com/halliburton
http://www.msnbc.msn.com/id/39894210/ns/us_news-environment/
http://www.halliburton.com/AboutUs/default.aspx?pageid=2308&navid=971
http://www.hallibur ton.com/careers/default.aspx?navid=2010&pageid=4215
http://www.yousigma.com/comparativeanalysis/halliburtoncompany.html
http://www.yousigma.com/comparativeanalysis/halliburtoncompanyswot.pdf
http://www.oppapers.com/essays/Management-Planning-Halliburton/186498

418

RANGE ROVER

419

INTRODUCTION
Land Rover is a British car manufacturer with its headquarters at the Gaydon
site near Gaydon, United Kingdom which specializes in four -wheel drive vehicles. It is
owned by Indian company Tata Motors, forming part of its Jaguar Land Rover subsidiary. It
is the second-oldest four -wheel drive car brand in the world, after Jeep.
Land Rover originated as one specific vehicle, originally known just as the Land Rover,
launched by Rover Company in 1948.
The Land Rover was the product of cont inuous evolution and refinement throughout the
1950s and 1960s with improved stability and a tighter turning circle. It was a period in which
Land Rover took the lead in the emerging market for four-wheel drive vehicles. . From
organizations such as Born Free Foundation to The Royal Geographical Society and
Biosphere Expeditions - we enter the second decade of the 21st century with them still
relying on Land Rover.

HISTORY
The first Land Rover was designed in 1948 in the United Kingdom by Maurice Wilks, chief
designer at the British car company Rover on his farm in Newborough, Anglesey. It is said
that he was inspired by an American World War II Jeep that he used one summer at his
holiday home in Wales. The first Land Rover prototype, later nicknamed 'Centre Steer', was
built on a Jeep chassis. A distinctive feature is their bodies, constructed of a lightweight
rustproof proprietary alloy of aluminium and magnesium called Birmabright. This metal's
resistance to corrosion was one of the factors that allowed the vehicle to build up a reputation
for longevity in the toughest conditions. Land Rover once advertised that 75% of all vehicles
ever built are still in use. In fact, Land Rover drivers sometimes refer to other makes of 4x4
as "disposables". The early choice of colour was dictated by military surplus supplies of
aircraft cockpit paint, so early vehicles only came in various sha des of light green; all models
until recently feature sturdy box section ladder-frame chassis.
The British Army maintains the use of the mechanically simple 2.5 litre 4-cylinder 300TDi
engined versions rather than the electronically controlled 2.5 litre 5-cylinder TD5 to retain
some servicing simplicity.

420

During its ownership by Ford, Land Rover was associated with Jaguar. In many countries
they shared a common sales and distribution network (including shared dealerships), and
some models shared components and production facilities.

SALE TO TATA:
On 11 June 2007, Ford Motor Company announced its plan to sell Land Rover, along
with Jaguar. The buyer was initially expected to be announced by September 2007,

but the

sale was delayed and an announcement was not made until March 2008. A UK-based private
equity firm, Alchemy Partners, and the India -headquartered Tata Motors and Mahindra and
Mahindra expressed interest in purchasing Jaguar and Land Rover from the Ford Motor
Company.
On 2 June 2008, the sale to Tata Motors was completed by both parties. Included in the deal
were the rights to three other British brands: Jaguar's own Daimler, as well as two dormant
brands Lanchester and Rover. BMW and Ford had previously retained ownership of the
Rover brand to protect the integrity of the Land Rover brand, with which 'Rover' might be
confused in the US 4x4 market; the Rover brand was originally used under license by MG
Rover until it collapsed in 2005, at which point it was re-acquired by the then Ford Motor
Company owned Land Rover Limited.

TIMELINE:

1948: Land Rover is designed by the Wilks Brothers and is manufactured by the Rover
Car Company

1948: the Land Rover Series 1 was launched at the Amsterdam motor show

1958: Series II launched

1961: Series IIA began production

1967: Rover becomes part of Leyland Motors Ltd, later British Leyland (BL) as Rover
Triumph

1970: Introduction of the Range Rover

1971: Series III launched

421

1975: BL collapses and is nationalised, publication of the Ryder Report recommends that
Land Rover be split from Rover and be treated as a separate com pany within BL and
becomes part of the new commercial vehicle division called the Land Rover Leyland
Group

1976: One-millionth Land Rover leaves the production line

1978: Land Rover Limited formed as a separate subsidiary of British Leyland

1980: Rover car production ends at Solihull with the transfer of SD1 production to
Cowley, Oxford; Solihull is now exclusively for Land Rover manufacture. 5-door Range
Rover introduced.

1983: Land Rover 90 (Ninety)/110 (One-Ten)/127 (renamed Defender in 1990)


introduced

1986: BL plc becomes Rover Group plc; Project Llama started

1988: Rover Group is privatised and becomes part of British Aerospace, and is now
known simply as Rover

1986: Range Rover is introduced to the U.S market in April of 1986

1989: Introduction of the Discovery

1994: Rover Group is taken over by BMW. Introduction of second-generation Range


Rover. (The original Range Rover was continued under the name 'Range Rover Classic'
until 1995)

1997: Land Rover introduces the Special Edition Discovery XD with AA Yellow paint,
subdued wheels, SD type roof racks, and a few other off-road upgrades directly from the
factory. Produced only for the North American market, the Special Vehicles Division of
Land Rover created only 250 of these bright yellow SUV's. Official formation of the
Camel Trophy Owners Club by co-founders Neill Browne, Pantelis Giamarellos and Peter
Sweetser.

1997: Introduction of the Freelander

1998: Introduction of the second generation of Discovery

2000: BMW breaks up the Rover Group and sells Land Rover to Ford for 1.8 billion

422

2002: Introduction of third-generation Range Rover

2005: Land Rover 'founder' Rover, collapses under the ownership of MG Rover Group

2004: Introduction of the third-generation Discovery/LR3

2005: Introduction of Range Rover Sport

2005: Adoption of the Jaguar AJ-V8 engine to replace the BMW M62 V8 in the Range
Rover

2006: Announcement of a new 2.4 litre diesel engine, 6-speed gearbox, dash and forward
facing rear seats for Defender. Introduction of second generation of Freelander
(Freelander 2). Ford acquires the Rover trademark from BMW, who previously licensed
its use to MG Rover Group

8 May 2007: 4,000,000th Land Rover rolls off the production line, a Discovery 3 (LR3),
donated to The Born Free Foundation

12 June 2007: Announcement from the Ford Motor Company that it plans to sell Land
Rover and also Jaguar Cars

August 2007: India's Tata Motors and Mahindra and Mahindra as well as financial
sponsors Cerberus Capital Management , TPG Capital and Apollo Management expressed
their interest in purchasing Jaguar Cars and Land Rover from the Ford Motor Company.

26 March 2008: Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.

2 June 2008: Tata Motors finalised their purchase of Jaguar and Land Rover from Ford.

STRENGTHS AND WEAKNESSES:


STRENGTHS:

Over the years, the land rover has been regarded as an ideal frame for conversions of
every kind. From rail vehicles to safari cars and military transportation to emergency
vehicles, land rover has risen to every

Demand. Land rover produces a range of highly capable bicycles.

423

Land Rover has overcome many hurdles in its storied life, and has successfully battled
manufacturing gaffes to re-establish a good reputation for vehicle reliability. Continuing
improvements in this area have been widely discussed in the auto press in recent years.
The Land Rover brand is known today for building first-rate luxury SUVs with every
conceivable amenity that still boast the superb off-road talents of their legendary
forebears.

From the beginning, the gutsy land rover was harnessed for expeditions and exploration.
The original permanent four wheel drive vehicle and each new member of land rover
range have provided reliable and rugged support for scientific and adventurous
expeditions around the world. Land rover today offers essential skills for expeditions
courses.

Highly modified Land Rovers have competed in the Paris Dakar Rally and won
the Macmillan 4x4 UK Challenge almost every year, as well as having been the vehicle
used for the Camel Trophy and more recently in the Odyssey Driving Around the
World expedition series as part of a sponsorship deal. Now, Land Rover has its own G4
challenge.

Its cheaper rates attract more customers, thus increasing the market share.

WEAKNESSES:

Due to the Japanese discovery of the "4x4 Leisure market" competition grew fierce for
Land Rover and Third World Markets sales dropped. To regain the market share Land
Rover would need to develop a new vehicle that would focus on the two types of
custome rs in this market and regain the sales lost to its Japanese competitors.

All the advancements and concerns are associated with design ignoring the safety
standards.

Luxury cars though introduced by them for the first time locally but they dont have
command over its technological problems.

Old Land Rovers, in standard form, have really terrible fuel consumption.

424

INTERNAL ENVIRONMENT:
The Gaydon site , which is situated north-west of the village of Gaydon, Warwickshire, UK,
is one of the engineering centers of Jaguar Land Rover and the location of the headquarters of
Land Rover. The site houses a design, research and development centre and extensive test
track facilities and is used for the design and development of Jaguar and Land Rover
vehicles.

It provides a congenial atmosphere to work, learn and grow.

It conducts various programmes to train their staff in the latest and the best technology
and management practices. The Company through its in-house vocational training and
apprenticeship programmes trains the technicians.

It provides excellent facilities for employees at plant locations.

ORGANIZATIONAL CULTURE
This culture of innovation has developed ever since with both Land Rover and Range Rover
vehicles: new models, more refinement, more innovative technology, more efficiency and
fewer emissions. And it continues with initiatives suc h as e_Terrain Technologies (which
improves the environmental performance of vehicles by reducing CO2 emissions),
Sustainable Manufacturing and CO2 Offsetting. Land Rover will remain at the forefront of
advanced design the new small Range Rover is a testament to the vision that takes the
company forward and keeps it at the cutting edge of technology and engineering.
Land rover capitalizes on the inherent value of their brand to deliver unique products and
services that command a premium. The strength o the band and their heritage are the source
of that uniqueness, but it is only the people working within those brands that can bring this
uniqueness to life, turning potential into reality.

EXTERNAL ENVIRONMENT
As part of its 60th anniversary celebrations, La nd Rover is donating 60 vehicles to the British
Red Cross Society and its sister national societies around the world. The vehicles were
officially handed over to the President of the Red Cross, HRH the Prince of Wales, during a
425

garden party at Buckingham Palace. In an unprecedented move, the vehicles, a mixture of


Defender, Discovery and Freelander models, were arranged in the form of the Red Cross flag
in the quadrangle of the palace.
Land Rover today officially received two Queens Awards for Enterprise at its Gaydon
headquarters in Warwickshire. Land Rover received one award for International Trade for
increasing export sales by 52% to nearly 4 billion a year, an increase of 1.3 billion in three
years. It also won an award for Innovation for the patented Terrain Response System that sets
up the vehicles engine response and traction to maximize performance on all surfaces. It is
the electronic equivalent of having an expert instructor next to the driver.

WAYS IN WHICH STRENGTHS ARE EXPLOITED:

The Range R over is also becoming a prime target of protesters who see it as a symbol of
wealthy arrogance and a lack of regard for traffic safety, the environment and urban
congestion. Whether the Range Rover is a victim of unfair attacks by the irrational

Emotional or a legitimate target for responsible citizens, the concern for its maker Land
Rover - and its hapless parent Ford - is that controversy can quickly hit sales. This would be
bad news for Land Rover, which is just emerging from crisis by means of a substantial
restructuring of its Solihull operations.

Last month, total Land Rover sales reached 3,140, up from 2,526 a year ago. Range
Rover sales, which have been fairly stagnant of late, are expected to soar with the
introduction of a sporty version.

Land Rover is enjoying a forward momentum; protesters are keen to derail its efforts to
return to the black.

MANAGEMENT PRACTICES:
Corporate Events:
The Land Rover team building programmes provide tailor made experiences for your group
event, corporate retreat or team building initiative. Land Rover's heritage of expedition
driving, remote navigation and off-road technology will put groups to the test.

426

Corporate Entertainment:
Entertain your clients the Land Rover way. Many of the centres have conference and meeting
facilities, and can cater for large groups.

Team Building:
Build motivation, expertise and group confidence in a way that's as competitive or easy-going
as your requirements dictate. The challenges of the day and the adrenaline inducing driving
strengthen teams, so they walk away with morale raised, loyalties forged and plenty of
exhilarating experiences to share.

Group events:
A Land Rover Adventure is ideal for birthday parties, employee incentives, or any large
groups.

Training:
Land Rover Experience Centres offer a variety of training courses which can be tailored
exactly for your needs whether you're a hobby driver or a professional.

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS:


Land Rover has established a global network of centres designed to provide the ultimate
driving experience in the world's most capable all-terrain vehicles. Jaguar Land Rover North
America continues to experience sustained growth in the business. They celebrated a strong
sales performance with retail sales up 18 percent across both brands for 2010. Land Rover
has had more than a year of consecutive sales growth since launch of the 2010 MY and is up
21 percent. Jaguar, with the launch of the highly anticipated XJ, is up 12 percent for the year.
Jaguar Land Rover today reinforces its commitment to science in the UK with its
participation and lead sponsorship of the British Science Festival, taking place in
Birminghams Aston University.
Power, agility and an indomitable spirit - qualities that sum up both Land Rover and great
competitive rugby. Land Rover Premiership Rugby Cup, through Premiership Rugby and
right up to international rugby. In fact, they were proud partners of the British & Irish Lions
throughout their 2001, 2005 and 2009 tours. And, with our 'Go Beyond' attitude, it's little
wonder we're the Official Vehicle of England Rugby and Premiership Rugby.
427

The UK Government has confirmed a grant offer of up to 27 million is to be made available


to Land Rover for the production of an all-new car. The company is due to make a final
decision on the go-ahead of the project at its award-winning plant in Halewood, on
Merseyside, later this year.
Jaguar Land Rover celebrated a successful 2010 having received more than eighty
international awards for its vehicles during the year.

REFERENCES:
http://everythinglandrover.com/
http://en.wikipedia.org/wiki/Land_Rover
http://www.everythinglandrover.com/site/land-rover-a-storied-brand-of-legendary-strengths/
http://www.landrover.com/gl/en/lr/experience-land-rover/corporate-events/corporate -events/
http://www.landrover.com/gl/en/lr/experience-land-rover/training/courses/
http://www.authorstream.com/Presentation/aSGuest62377-482980-tata-motors-ltd/
http://news.bbc.co.uk/2/hi/business/4550751.stm
http://blog.interactivelandrover.com/blog.do?id=871&p=entry

428

MC-DONALDS

429

INTRODUCTION
McDonald's Corporation (NYSE: MCD) is the world's leading food service organization. It is
the world's largest chain of hamburger fast food restaurants, serving more than 58 million
customers daily.
The corporation started out as a small drive -through in 1948 by two brothers, Dick and Mac
McDonald. Raymond Albert Kroc, a salesman, saw a great opportunity in this market and
advised Dick and Mac to expand their operation and open new restaurants. In 1961 Kroc
bought out the McDonald brothers. By 1967 McDonalds expanded its operations to countries
outside the USA while maintaining its headquarters in Illinois. This unyielding expansion led
the Corporation to open 23,000 McDonald's restaurants in 110 countries in 1994, producing
$3.4 bn in annual revenues. In addition, McDonald's opens a new res taurant every three hours
and has around 400,000 employees (2008) working for it Worldwide. Also, McDonald's has
twice the market share of its closest U.S. competitor, Burger King, representing 7% of total
U.S. eating-out sales. Similarly, McDonald's serve s about 1% of the world's population on
any given day through its 23,000 restaurants internationally. Big Mac, the world's most sold
hamburger was developed by Jim Delligutti in 1967 to feed construction workers. 'Big Mac'
is the biggest attraction and backbone of the corporation. Moreover, McDonald's maintains
its competitive advantage by constantly creating new items to add onto its menu. This shows
us that McDonald's practices an analyzer type of strategy, introducing new items and
defending its existing ones. The company has modified its menu to include alternatives
considered healthier such as salads, wraps and fruit according to the new market need of low
calorie food.
McDonald's are structured along functional lines. Their Chief Executive oversees five major
areas of activities i.e. Operations (equipment and franchising), Development (property and
construction), Finance (supply chain and new product development), Marketing (sales
marketing) and Human Resources (customer services, personnel, hygiene and safety).

COMPARISON

OF

MCDONALDS

USA

WITH

MCDONALDS

PAKISTAN
There is proper division of labor in McDonalds and it also has a global core curriculum for its
restaurant management which is followed by all its franchises in the world.

430

There is a proper cha in of authority starting from Alan D. Feldman the President and CEO of
McDonalds Corporation and Quinlan as the Chairman all the way down to the franchise
managers and waiters. There are definite managers and supervisors for a certain group.
Pakistanis, as compared to Americans are, non-confrontational and they seldom say "no"
overtly, so the manager in Pakistan must watch his non-verbal cues. It often takes several
visits to accomplish simple tasks.
The Human Resources Department in USA monitors the effec tiveness of the discrimination
policies at regular intervals and takes corrective action as necessary to ensure that they being
complied with. Employees who feel that they have been treated unfairly are encouraged to
use the remedies outlined in the Company's handbooks. In Pakistan, there are less racial
differences but issues on religion or other sects often arise and the managers mostly deal with
them.
The direction or the main objective of the entire organization is basically designed in USA
for its the host country for McDonalds but small time policies are left upon the individual
franchises. Similarly, the main recipes for the burgers and other eatables are designed in USA
but variations are made according to different regions and countries e.g. In Pakistan there are
no Ham Burgers but only Halal food is available.
In USA McDonalds gives several management training classes but in some cases it doesnt
train people for the drama that actually goes on inside one of their stores. There are people
who are crazy who work there, managers who play air guitar onto of their cars, other
managers who go and hire anyone who can breathe regardless of prior work experience or
even their job history. It pays little as compared to other fast foods, and offers so few benefits
to the crew, most people do still expect perfection from their order. Most of the kids and
adults who work there only work there because they cannot find a better job. Mostly, the
people working in McDonalds are youngsters and students. They usually dont feel that they
can grow in this organization, so after they complete their education or as soon as they get a
better job offer, they leave. This results in a higher turnover rate of the employees. And since
McDonalds has to train new employees all over again, it increases its Recruitment and
training costs. Thus, in USA, McDonald's placed great emphasis on effective training. It
opened its Hamburger University in 1961 to train franchisees and corporate decision-makers.
But in Pakistan, McDonalds is considered a standard brand as compared to other fast foods
and since the cost of labor is very less in Pakistan as compared to USA, here the employees
431

are given better wages because of which their turnover ratio is less than that of USA.
McDonalds in USA has also developed a new strategy i.e. Teenagers who complete a period
of work experience at fast-food giant McDonald's will be able to gain a qualification
equivalent to a GCSE. This motivates more and more students to apply.
In Pakistan, managers have to maintain a degree of formality at all times. Older people and
those in senior positions should be deferred to and treated with dignity and respect. Status is
important and it is a good idea to seek situations where you can flatter your colleagues. In
USA, the people are more blunt and direct, and the company promotes their employees based
on their relevant skill, talents, and performance. In support of this McDonald's promotes and
sustains a working environment, which is free from unlawful discrimination, harassment and
bullying.
McDonald's is also an equal opportunity employer. As an equal opportunity employer
McDonalds ensures that employees and job applicants are selected, trained, and promoted
without discrimination to race, gender, sexual orientation, age or disability but in Pakistan, a
little favoritism and referential hiring are relatively common practices.

McDonalds

commitment to diversity is established on the foundational belief that diversity is not just a
moral and ethical issue, but also a business issue (McDonalds, 2005). Due to the global
expanse of McDonalds business, diversity has become an integral part of the internal
company culture. McDonalds has over 30,000 restaurants around the world, which means
franchise owner/operators, employees, and customers represent just about every culture,
religion or ethnicity on earth. However, McDonalds leadership encourages diversity through
their policies and programs. McDonalds proven success with leveraging the advantages of
diversity can be att ributed to their core value of ethics.
In Pakistan, as in other hierarchical societies, managers may take a somewhat paternalistic
attitude to their employees. They may demonstrate a concern for employees that goes beyond
the workplace and strictly professional concerns. They sometimes expect you to understand
the rules unsaid and obey them. Relationships take time to grow and must be nurtured,
therefore we can call it a high context society. Pakistanis often ask personal questions as a
way to get to know you as a person. But USA is a low context society and here everything is
in words and is formal. There are proper manuals for different procedures and everyone is
expected to go by the book.

432

In USA, they favor creativity and innovation and the management style is somewhat
decentralized, though the organizational decisions and strategies are determined at the higher
level but some freedom is also given to the franchises and employees are regarded as
members of a team where everyone's opinion is valued and respected but in Pakistan
managers tend to have a rather autocratic style. Decisions are made at the top of the company
and handed down to managers to implement. Although the decision maker may consult with
technical experts before reaching a decision, he is not seeking consensus, simply sufficient
information to make an intelligent decision.
Pakistanis are hospitable and enjoy hosting foreign guests. In Pakistan, honor and reputation
play an important role. The risk becomes amplified in a team or collaborative setting. When
meeting together and moderating ideas, intercultural sensitivity is necessary. It is important to
qualify ideas that are raised in a gentle manner, protecting the reputation of those bringing up
ideas, so no one is shamed. In USA, McDona lds success is built on the foundation of
personal and professional integrity. From the beginning, McDonalds has based its reputation
on trust and dependability, and their commitment to the community made them a household
name.
Pakistanis are basically traditionalists, they are opposed to drastic change thus the managers
must exercise patience in their business dealings. Things generally take longer than expected
since meetings may be interrupted and patience will be necessary because these people are
not used to the modern ways. While, in USA, the people are more efficient and want positive
change e.g. the development of the new just-in-time system, dubbed "Made for You," was in
development for a number of years and aimed to deliver to customers "fresher, hotter food";
enable patrons to receive special-order sandwiches and allow new menu items to be more
easily introduced thanks to the system's enhanced flexibility.
Pakistan is a fluid time culture, and as is the case with many fluid time cultures, it is also very
relationship -oriented. People in Pakistan will not want to upset others in order to force
adherence to a deadline, and while appointments and schedules need to be set well in advance
as a sign of respect for the individual, the manager needs to understand that those schedules
are seen as flexible, not necessarily needing to be adhered to. Successful cross cultural
management will depend on the individuals ability to meet deadlines. Global and
intercultural expansion means that some managers may have a greater appreciation of the
need to enforce timescales and as such, agreed deadlines are more likely to be met. To ensure
433

successful cross cultural management, management will need to bear in mind the importance
of people in the office maintaining the proper behavior relative to their position.
Pakistans intercultural competence and readiness for risk is low. Pakistan is a low risk and
low change -tolerant culture. New projects will be carefully analyzed to assure that whatever
risk they represent is thoroughly understood and addressed. In order for change to take hold,
the idea needs to be perceived as good for the group and be accepted by the group.
Intercultural sensitivity is important with Pakistans attitude toward risk dramatically
impacted by the negative ramifications of failure on both the individual and the group. But
USA favours the strategy of more risk and more return. e.g. their introduction of the
"Speedee Service System" in 1948 established the principles of the modern fast -food
restaurant. In 1963, the Filet-O-Fish sandwich, billed as "the fish that catches people," was
introduced in McDonald's restaurants. Another item that Kroc had backed a year previously,
a burger with a slice of pineapple and a slice of cheese, known as a "hula bur ger," had
flopped. Eventually, in 1968 the now legendary Big Mac made its debut, and in 1969
McDonald's sold its five billionth hamburger. McDonald's pioneered breakfast fast food with
the introduction of the Egg McMuffin in 1972 when market research indic ated that a quick
breakfast would be welcomed by consumers. Five years later the company added a full
breakfast line to the menu, and by 1987 one-fourth of all breakfasts eaten out in the United
States came from McDonald's restaurants. This all proves that McDonalds in USA takes
more risks and shows more creativity.
McDonalds caters its menu in other countries to the cultures of the regions i.e. it shows poly
centric predisposition
Like in Pakistan, it only offers Halal food. Knowing and understanding the local customs and
traditions of the communities where McDonalds has established businesses, integrating
people from these communities into the company, and adapting locally to the tastes and
cuisines of the community, has made McDonalds the leader in the ir industry.

CHARITY WORK MCDONALDS


Throughout the 1970s, McDonalds became involved with a lot of charity work. In 1974
established a charity called Ronald McDonald House. The purpose of this program was to
provide temporary housing for the families of seriously ill children receiving treatment at

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nearby hospitals. Since the 70s, more than 10 million families around the world benefited
from the comfort provided by Ronald McDonald Houses.
In addition to their community involvement, McDonald's has a long-standing commitment to
environmental protection. Restaurants around the world have innovative programs for
recycling, resource conservation, and waste reduction. McDonalds worked with the U.S.
Environmental Defense Fund to develop a comprehensive solid waste reduction program.
Wrapping burgers in paper rather than plastic led to a 90 percent reduction in the wrapping
material waste stream.
In April 2008, McDonald's announced that 11 of its Sheffield restaurants have been using a
biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, waste
from the restaurants were collected by Veolia Environmental Services and used to produce
energy at a power plant. McDonald's plans to expand this project, although the lack of
biomass power plants in the U.S. will prevent this plan from becoming a national standard
anytime soon. In addition, in Europe, McDonald's has been recycling vegetable grease by
converting it to fuel for their diesel trucks.
Furthermore, McDonald's has been using a corn-based bio plastic to produce containers for
some of their products. Although industries who use this product claim a carbon savings of
30% to 80%, a Guardian study shows otherwise. The results show that this type of plastic
does not break down in landfills as efficiently as other conve ntional plastics. The extra
energy it takes to recycle this plastic results in a higher output of greenhouse gases. Also, the
plastics can contaminate waste streams, causing other recycled plastics to become unsalable.
The U.S. Environmental Protection Agency has recognized McDonald's continuous effort to
reduce solid waste by designing more efficient packaging and by promoting the use of
recycled-content materials. McDonald's reports that they are committed towards
environmental leadership by effectively managing electric energy, by conserving natural
resources through recycling and reusing materials, and by addressing water management
issues within the restaurant.

CROSS CULTURAL MANAG EMENT PRACTICES MCDONALDS


It is sometimes amazing how different people in other cultures behave. We tend to have a
human instinct that 'deep inside' all people are the same - but they are not. Therefore, if we go
into another country and make decisions based on how we operate in our own home country 435

the chances are we'll make some very bad decisions. With rapid globalization the
organizations are going increasingly global and cross cultural management is the need of the
hour for the organizations to get adapted to global environment. Globalization has affected
almost every aspect of life in almost every nation. From economic to social to culture, this
widespread exchange of goods, services and ideas have influenced changes around the world.
Even though the cultural influence in globalization is of slight significance to policy makers,
its power has tremendous consequences to the nations involved and its people. Food is an
important element in defining culture. Any changes in the foods that we eat, in its
preparation, the way it is served and consumed diminishes the traditional beliefs of the
people. One of the most influential changes came with the introduction of fast food
restaurants like McDonalds into foreign countries. Transformations have taken place which
could be perceived as beneficial or corrupting to that culture. Before the introduction of
McDonalds overseas, Fast food was almost unknown. McDonalds was the first company to
try to export Americas love of fast food and changes in eating habits of other nations. In
most communities, in fact, the McDonalds has conformed to the local culture. The
McDonalds corporation notes that most of its overseas franchises are locally owned, and
thus make efforts to buy from local communities. McDonalds also alters its regional menus
to conform to local taste.

CONCLUSION
Thus, I have explored large corporations i.e. McDonald's and showed how their Task
Environment, Workforce Diversity and effective management can have a profound effect on
the organization. The organization has effective management styles and has expanded their
operations internationally. So in order to maintain their positions in the market, the
corporation must stay growth oriented and should constantly make contingency plans to
overcome turbulence and they should also constantly keep on making new products while
strengthening their old ones as well, if they want to retain their positions.
If I am given the opportunity to work for McDonalds, I would love to work for McDonalds
because it not only offers the job itself- but also a good learning experience, and in some
cases its experience is also considered reputable and is considered as a qualification. It has a
wider network of its franchises all over the world also has less management disputes in it.

436

REFERENCES:
http://www.bized.co.uk/compfact/mcdonalds/mc7.htm
http://www.kwintessential.co.uk/intercultural/management/pakistan.html
http://www.freeonlineresearchpapers.com/external- internal-factors-affecting-mcdonalds
http://www.associatedcontent.com/article/95058/the_true_mcdonalds_work_experience_pg2.
html?cat=9
http://news.bbc.co.uk/2/hi/uk_news/education/8560468.stm
http://en.wikipedia.org/wiki/History_of_McDonald%27s
http://www.term-papers.us/ts/bb/bmu268.shtml
http://www.oppapers.com/essays/Mcdonalds -Burger-King/93129

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GENERAL ELECTRIC

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HISTORY
Thomas Edison was credited with inventing the light bulb in a research laboratory he set up
in 1876 and this is his major credit to fame. What most people don't know is that he was one
of the main founders of the General Electric Company. Edison had by 1990 built up a number
of separate business ventures and pulled them all together to make one large company called
Edison General Electric. At the same time another businessman called Charles Coffin
through shrew d buying of patents had also brought together a number of smaller businesses
to form the Thomson - Houston Company. These two companies had different patents and
had difficulty producing products because of this and in 1982 these two companies merged
and the resultant company was called General Electric. Twelve companies were put on the
first Dow Jones industrial index in 1986 and General Electric was one of them and the only
one to remain on it today.
Research was a key factor in the companys success and from start the company employed
scientists and engineers to develop new technology and products and they convinced the then
head of the company Charles Coffin to open a research laboratory. At one of the meetings to
discuss setting up a lab one founding member stated "It does seem to me therefore that a
Company as large as the General Electric Company, should not fail to continue investing and
developing in new fields: there should, in fact, be a research laboratory for commercial
applications of new principles, and even for the discovery of those principles." The first
research laboratory was opened in 1910 and was in a converted barn in the back yard of
distinguished industrial scientist Charles Proteus Steinmetz.
1911 saw the company take over the National Electric Lamp Association and build the
world's first industrial park in Ohio called Nela Park. By 1915 they had made the first
household toaster and brought in the hot point appliance range. The research lab was making
advancements in plastics and electronics. By 1925 the company had grown now involved in
many projects including construction, aircraft engines, household goods and generating
stations. They produced the first supercharger which gave them the edge over competitors in
the aircraft industry and motor racing and provided planes with the most powerful engines
during the Second World War. The late 20s and 30s brought many developments for the
home with cookers, refrigerators, air conditioning and televisions all mass produced for
domestic use. A finance division was set up to allow people who were struggling to be able to
buy these appliances during the depression. The war years saw development focus on the
439

aircraft industry with radar, autopilots, and tur boprops being built and research on jet engines
carried out.
General Electric was so large and diverse that it branched out into many divisions to be able
to manage and research each area better. They are a household name with kitchen appliances
and electrical products for the home as well as being a worldwide industrial giant in
construction and engineering The Company is still growing and today uses the phrase "GE Is
Imagination at work".

STRENGTHS AND WEAKNESSES


STRENGTHS
The strengths of a business or organization are positive elements, something they do well and
is under their control. The strengths of a company or group and value to it, and can be what
gives it the edge in some areas over the competitors. The following section will outline main
strengths of General Electric

Having alliances with other strong and popular businesses is a major plus point
for General Electric as it helps bring in new customers and make business more effective.

Being a market leader, as General Electric is, is key to their success as it boosts
reputation, profit and market share.

The services/products offered by General Electric are original, meaning many people will
return to General Electric to obtain them.

Experienced employees are key to the success of General Electric helping to drive them
forward with expertise and knowledge.

High quality machinery, staff, offices and equipment ensure the job is done to the utmost
standard, and is strength of General Electric.

General Electric has an extensive customer base, which is a major strength regarding
sales and profit.

General Electrics reputation is strong and popular, meaning people view it with respect
and believe in it.

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Being financially strong helps General Electric deal with any problems, ride any dip in
profits and out perform their rivals.

A strong brand is an essential strength of General Electric as it is recognized and


respected.

General Electric has a high percentage of the market share, meaning it is ahead of
many competitors.

High quality products/services is a vital strength, helping to ensure customers return


to General Electric.

General Electrics international operations mean a wider customer base, a stronger brand
and a bigger chunk of the global market.

Development and innovation are high at General Electric w ith regard to their
products/services, which is a sure strength in its overall performance.

General Electrics position in the market is high and strong a major strength in this
industry as they are ahead of many rivals.

The

online

presence

of General E lectric is

strong,

meaning

it

is

ahead

of

many competitors.

Strong Research and development department

Acquired number of businesses

Employee base of 323,000 employees

High revenues and profits

Strong organizational structure and culture

WEAKNESSES
Weaknesses of a company or organization are things that need to be improved or perform
better, which are under their control. Weaknesses are also things that place you
behind competitors, or stop you being able to meet objectives. This section will present main
weaknesses of General Electric
Problems with stock are a weakness for General Electric as they need to keep up with
demand.
441

GE performance in Asian market is not up to the mark


Low stock prices due to the financial downturn

ORGANIZATIONAL BEHAVIOR AT GE
LEADERSHIP AT GE
GE views its leaders as an extension of HR with the capacity to communicate how each
employee fits within the overall business strategy. A leader must: create a culture of
compliance in which employees understand their responsibilities and feel comfortable raising
concerns without fear of retaliation; encourage ethical conduct and compliance with the law
by personally rewarding employees; and ensure that employees understand the business
results are never more important than ethical conduct and compliance with GE policies.

Communication
GE views communication as the most critical element. The most important thing that they see
with the HR function is that there always is a constant dialogue, as they dont like to hide
things in GE. GE offers several channels for raising concerns. Use the channel that is most
comfortable for its employees.

Measuring performance
Beyond the idealized growth traits, GE also upholds four basic actions to drive performance:
imagine, solve, build and lead. Stemming from those action oriented qualities are the
foundational values that represent GE and its common set of beliefs: passionate, curious,
resourceful, accountable, teamwork, committed, open and energizing. This specific set of
corporate values lies at the heart of GEs unique approach to leadership development.
Ongoing appraisal processes and evaluations help to measure performance and also to sustain
the values that GE leaders aim to embody.

Stress management
Factors such as increasing completion, corporate restructuring and downsizing have
compelled employees to work for longer hours to meet their deadlines. This stress could lead
to various health problems. At GE, they have professional agencies to organize regular stints

442

of aerobic exercises, meditation and dancing sessions for employees as part of stress
management. They also provide counseling to the employees how to manage work and stress.

ORGANIZATIONAL CULTURE
GE's culture is very, very American. GE is more American than most US-based companies.
Here are some of the key aspects:

individual effort is much more important than group or collective efforts

rebels are heroes (Jack Welch was an effective rebel against most of GE's official
management practices throughout his career before he became CEO)

going around the hierarchy is encouraged (this is the hidden purpose of work-out, not
team-based participation and improvement)

competition is king, internally and externally

loyalty is determined by performance

poor performers loose face publicly

communications are direct and confrontational

leadership comes from individuals, not groups or teams

A company considering adopting some of GE's management practices should first evaluate
itself against these aspects of the GE culture. To the extent its culture is very different from
GE's, it will probably have difficulty making GE's techniques work well for it unless it makes
major adaptations to the techniques.
At General Electric, they have all begun programs aimed at keeping women professionally
engaged. The results are starting to show, as more women who skipped out on companies that
did not offer them intellectually challenging work resurface at companies that do.
GE has womens networks, coaching and mentoring programs, and family-balance policies.
Susan P. Peters, vice president for executive development, says GEs insistence that
everyone has quantity and quality to their work may be most responsible for the fact that
15% of its officers are women, up from 9% in 1997.

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Womens network
The GE womens Network (GEWN) was formed to support the professional development of
women at GE, with the mission of fostering professional womens development to help grow,
attract and retain successful women throughout GE. Development is focused on leadership,
advancement and career -broadening opportunities in a variety of ways including information,
education and networking with other men and women to learn best practices.

Competitive pay and a great job


In addition to great career opportunities, GE offers very competitive compensation and
benefit packages. While plans may vary from business to business, they all are
comprehensive and include such things as:

Stock Purchase Plan

Tuition Reimbursement

Comprehensive Health

Dental Care

Medical Leave

Parental Leave

Life Insuranc e

Work Connections

Relocation Assistance

Pension Plan

Providing security for family


GEs life and accident insurance plans provide eligible employees and their families with
financial protection and if one needs more coverage than the company provides, the y have
the option to purchase additional coverage at excellent group rates.

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UNINTENDED CONSEQUENCES OF GE'S CULTURE


GE has one of the best reputations of any company in the world. It is high on most lists of the
world's most admired corporations. As a result of this, and its strong economic performance,
some aspects of GE are often ignored.
A company wanting to become more like GE should also be aware that:

Success breeds success: almost all of the management innovations GE has had great
success in implementing were installed during times of strong economic performance.
These techniques were not used to deal with a crisis situation or to assist in turning
around a poorly performing business. Companies that are not among the leaders in their
industries should carefully consider the appropriateness of GE's techniques to their unique
strategic needs.

GE has tended to do best in late growth and mature industries. It uses advanced
technologies, but they are not so much the drivers of its success as are its manager ial
abilities. Its management systems, though, do not seem to allow for the kind of
knowledge development and patience required for growth through breakthrough
technology and product innovation, or in fast growing consumer markets.

The GE model of diversif ication across related and unrelated industries has grown out of
favor with many companies who have found it better to stay focused in fewer and more
related businesses. GE's success is driven by its abilities to obtain management -synergies
across a broad of businesses. It is one of the most deliberately managed businesses in the
world. It success is directly dependent on its creation of a process that produces
generation after generation of extremely capable executive leaders. Companies without
such a process will have a greater risk in following GE's strategies.

GE has a well documented history of ethical misconduct of the kind that is being less and
less tolerated throughout the world. This has included, over several decades, a pattern of
illegal behaviors including: price -fixing scandals, illegal stock trading, illegal payments to
foreign officials, time-card violations in US government contracts, anti-trust and
environmental violations. More recently, reports of cost-cutting efforts resulting in
diminished product quality have surfaced. This is a situation that, while not well
publicized by people promoting the economic success of GE through it management

445

culture, may be an unintended result of some aspects of the same tough, performancedriven culture that produces strong business performance.

MANAGEMENT PRACTICES
Few companies can boast the performance of General Electric, one of the world's most
consistently profitable enterprises. One of the top reasons is talent. GE recruits the brightest
minds it can find and relentlessly cultivates its leaders, training the m at its legendary in-house
management school, known as Crotonville (for its location north of New York City). In
addition to world-class CEOs like Jeff Immelt and his predecessor, Jack Welch, the GE
system has produced numerous executives who have left to run other well-known companies.
Part of the reason that GE is so widely recognized and respected for its leadership talent
comes from the fact is that measuring and developing talent is always at the forefront of GE
business strategy discussions.
GEs operating system, referred to as its learning culture in action, entails year-round
learning sessions where leaders from GE and outside companies share intellectual capital and
focus on generating the best ideas and practices. Conversations about developing talent and
reaching business objectives are side-by-side so there is a continuous link.
We really have a tight organization around how we combine our leadership meetings and
how we approach our business, Elsinga notes. We have a constant cycle going on
throughout the year where we talk about business and people at the same time. How do we
develop talent in those businesses, how do we make sure that we have the right people to
open a particular plant or to do an acquisition, etc.? Those discussions always go hand in
hand. And its not a one -time kind of conversation; this is a constant, ongoing process.
GE is very critical on their intake of talent and participates in behavioral skills interviewing
in order to predict behaviors moving forward, specifically looking at how experiences people
have had can translate back into GE. On the inorganic side, Elsinga notes that it also makes
sure incoming talent from acquired companies is of the highest caliber. If you have
acquisitions, it becomes very important to make sure you retain the good talent. If you buy a
company because of its industry expertise or its market position, make sure that you retain the
people that make it work and that they feel really good about the most recent transaction.

446

Once an individual is identified as a GE caliber candidate and welcomed into the culture, a
number of development and leadership practices shape the employee to fit the GE mindset.
We run leadership programs that run for two years for HR, finance, commercial, marketing,
IT and manufacturing, that bond people as a team together to their function and they also
bond them to GE, Elsinga says. Not only does a leadership program build a strong network
but it gives us great leverage in terms of knowledge and building capability and talent for the
future.
And GE puts its money where its mouth is when it comes to supporting such programs,
investing US$1 billion in training and development annually to wean individuals into
possessing and nurturing the kind of skills and traits necessary to become a leader.
Advanced management training is offered at dedicated facilities in Europe, Asia, Latin
America and Ossining, New York, which is home to GEs Crotonville facility, Americas
first corporate university. GE also offers intensive management training outside of its
facilities through leadership programs that maintain a curriculum for GEs highest
performing employees. Beyond its sophisticated development system, its leaders are groomed
with depth and substance through simple and natural approaches such as consistent ongoing
dialogue and ingrained corporate values paired with various assignments for on-the -job
development.

THE DRIVERS OF GE'S SUCCESS


It is misleading to attribute GE's strong economic performance to any one or a group of its
management techniques or business models (including portfolio management, the growth
engine, work-out, stretch targets, boundrylessness, expansion into service businesses, 6-sigma
quality, etc.). Many other companies do these without achieving GE's results.
Instead it is more accurate to characterize GE's managerial core competences as:

The ability to select from among the best practices available the ones most relevant to its
immediate (2-6 year time horizon) needs,

The ability to flawlessly implement these practices,

And - most important - the ability to periodically change its formula of management
practices as new needs emerge - adopting new practices, ruthlessly discarding the old
formulas for success before they led to weakened performance.
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GE knows better than most every company in the world how to manage the life cycle of a
business idea: put it in place, exploit it, and then abandon it.
GE does this by maintaining a "leadership engine" approach to executive development that
hopes to create future Jack Welches.

REFERENCES
Can Jack Welch reinvent GE? Business Week, June 29, 1986, pp. 405.
Jeff Immelts 2002 Annual Report to Share Owners, Waukesha, Wisconsin, April 24, 2002,
pp. 45.
GE Annual Report, 1993, p. 5.
Noel Tichy and Ram Charan, Speed, simplicity, and self con?dence: an interview with Jack
Welch, Harvard Business Review, September/October 1989.
GE 1984, Harvard Business School Case No. 385-315.
Tichy and Charan, Welch interview, Harvard Business Review, 1989.
Jack Welch, address to 1989 shareholders meeting.
Chairmans letter, General Electric Annual Report, 2000.
Tichy and Charan, Welch interview, Harvard Business Review, 1989.
GE Annual Report, 1990.
Chairmans letter, General Electric Annual Report, 1997.
Chairmans letter, General Electric Annual Report, 2000.
The GE Operating System (www.ge.com).
Running the house that Jack built, Business Week, October 2, 2000.
The days of Welch and roses, Business Week, April 29, 2002.

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CLARKS

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BRIEF HISTORY
In the beginning
It began with a flash of inspiration. It was 1825 in the Somerset village of Street and James
Clark was busy working at the tannery owned by his brother, Cyrus. Among the sheepskin
rugs, the off-cuts and cast-offs were piling up when James had a brainwave: Slippers! And
the rest, as they say, is history. A few stitches and a few years later, the sheepskin slipper was
born. It was the very first Clarks shoe and the opening chapter in a remarkable story that
continues to unfold to this day. In the decades that have passed since the young

1825 - 1900
Britain was perhaps at its greatest in the 1800s. Queen Victoria was on the throne from 1837
to just beyond the end of the century and reigned over a time of phenomenal economic,
colonial and industrial growth. For Cyrus and James Clark business was booming. Their
sheepskin slipper, named the Brown Petersburg, was a huge success. Within years of its
unveiling, its unique design graced feet the length and breadth of the country and by 1842
sales were averaging 1000 pairs a month.

1900 - 1946
What the latter days of the 19th Century had started, the new millennium carried on with a
passion. With more and more product to promote, Clarks began advertising their first press
ad appeared in 1936. They opened their own chain of shops called Peter Lord, a name which
remained on the high street until the 1990s. They also introduced a choice of width fittings to
their childrens range, not forgetting the first ever Clarks foot gauge two innovations which
became a benchmark in the care of growing feet.

1946 - 1990
As the world emerged from the dark days of war, the next their decades saw change beyond
the wildest dreams of many. For C&J Clark the end of the 1940s ushered in a period of rapid
growth. The available workforce in Street was too small to meet demand so, under the
guidance of Chairman Bancroft Clark; the company opened 15 new factories in neighboring
towns and cities. New shops and stores were also opened, including, in 1957, Clarks first
flagship store on Londons Regent Street.

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1990 - Present
The dawn of the 1990s found Clarks facing some tough decisions. Major changes in world
trade meant the company could no longer stay competitive while manufacturing in the UK.
They began in a small way in Portugal, but it wasnt enough. They had little choice but to
close their UK factory doors and move the entire production process overseas. Overseas
modern factories, many of them purpose-built for Clarks, are audited either by independent
auditors or their own on-site teams in order to monitor conditions of working practices. The
decision to move overseas wasnt taken lightly. However, coupled with their continuing
commitment to quality, new marketing and ad campaigns were carried out.

Into the future


Theyre pleased to say that things are still going well. New technology, state-of the-art
facilities and their love of shoes means theyre not only the number one shoe brand in the
UK. With continuing growth in North America, western and Eastern Europe, India and
China, theyre also the worlds largest casual and smart shoe company and the fourth largest
footwear company on the planet. Theyve come a long way since Cyrus and James Clark and
the Brown Petersburg. But their vision and passion live on in their shoes.

INTRODUCTION TO MANAGEMENT
Roger Pedder, Chairman of Clarks, describes himself as a hybrid not really family, but as
an in-law, as close as one can get. He is currently the only family member at Board level
who is involved in the day-to-day running of the busin ess. He sees his position and task to
conduct the orchestra of the family shareholders and the Board, an interface that requires a
strong Chairman.
The leadership style is geared to Quaker values such as open communication and integrity
The CEO has a hands-off approach that secures continuity and is supportive rather than
imposing, acting on the notion that you have to stand up and be accountable, be strong and
honest.
Clarks does not have a mission statement. They say they have no need for a lot of fluff.
Quaker values determine how the business is run. The basic purpose is to sell shoes and make

451

a profit, treat staff and customers in the right way, be fair and reasonable, yet tough in
negotiations.

Birds Eye View


The familiness of the business manifests itself mostly through the staff conditions and the
support given to people. In the words of one employee, you feel it in the local community
and it is embedded in the fabric of the building itself. The heritage and past of the company
comes across through the family, even though their presence is less strong than it used to be.
Their individual, fun, different and quirky style is evident throughout the company. Family
ownership is strong, and the feeling that you work for known shareholders not faceless
institutions is very clear. In the top management team, when you work for a family, you do
it all, decision-making is easier and there is nothing short term. There are huge ups and
downs, a lot of patience is required, and you need to belie ve firmly in a great future.

STRENGTHS AND WEAKNESSES


Shoes are important components of an outfit. They reflect their personality, mood and taste.
If you want to look stylish, you can choose from a contemporary range of Clarks shoes.
These shoes are made of high-quality leather that ensures long lasting performance.

STRENGTHS

Clarks has a very strong brand image. Being shoe making for almost 2 centuries now they
have always maintained a high standard quality assurance.

Clarks is catering most of the st yles and sizes, in different types of ranges it gives them
competitive edge.

Being the market leader of slippers it enjoys a high reliance from its customer in that
category having more sales then other slipper makers.

The internal environment of Clarks is though diversified but is very friendly and
cooperative which helps lowering the pressure of being global. That is entirely due to the
efficient fair and authentic recruitment and selection process.

Clarks is also the pioneer of after sales services that is why it known for completely
satisfying the customers.

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Continuous growth of Research and development section helps Clarks in making the most
latest and stylish shoes completely based on customer choice with help of Surveys.

WEAKNESSES

The logistics section of Clarks in the countries other than UK is average and there are
many complaints from the clients about the Customer Services as theyll.

While maintaining the standard Clarks has to forgo the price factor which makes it very
expensive and hence they target a niche market in most of the countries except Europe
and U.S.

Although by moving the Manufacturing units overseas Clarks has been able to reduce
some of the cost and keep up with upcoming technologies but it was not very successful
as the transportation cost sharply rose for tariff and taxes.

INTERNAL ENVIRONMENT
People
The intrinsic value of learning is a central Quaker value. In this spirit partial or whole grants
are offered to all employees who want to learn a new skill, whether job-related or not. There
is also a graduate scheme, in -house training for employees and a fast track programme for
identifying talent in the company. C larks is supportive of its employees through such
measures as its final salary pension scheme, job share arrangements, flexible working hours
and compressed working days. In many other ways the company pays close attention to the
differing individual needs and concerns of its staff. Most of these are locally recruited, and
they are an extremely loyal and long tenure population. Employees also include non-local
professionals, such as high-end, specialised designers, attracting such people to a rural setting
and retaining them requires a confident attitude and best management practice

Diversity
As youd expect from a company which designs, manufactures, markets and sells an
astonishing array of mens, womens and childrens shoes, diversitys in their make-up. For
Clarks it means making sure that they continue to recognize, value and take into account
different backgrounds and experiences, skills and knowledge. Its celebrating their
differences and using those differences to create a productive, effective and happy workforce.

453

Its this diversity that adds to the way they work and the way they do business. You could say
that its what makes Clarks, the Clarks. They treat everyone fairly and with courtesy and
respect. They recruit and promote solely on the basis of merit, aptitude and ability.

ORGANIZATIONAL CULTURE
This is a modern business, with a secure hold on tradition. Ensconced deep in rural Somerset,
the glossy West End interior of the age -old shoe factory that is the C. & J. Clark headquarters
is surprising, if not startling.

Culture
From the moment Cyrus and James Clark established the company they know today as C&J
Clark, theyve built a reputation for treating their people with courtesy and respect. And from
the moment you join us, they believe in doing everything they can to help you enjoy their
work and really feel good about their career. The culture at Clarks has been in a state of flux
over the past decade due to the changes in leadership that it has undergone, and it has
emerged more modern, more informal yet truer to its origins that are why their people are
proud to work with us.
Theyre a company where heritage and innovation sit side by side; where work is a journey to
be enjoyed; and where every day brings new experiences and exciting new challenges. One
of the first things youll notice on joining Clarks is just how open, honest and down-to-earth
they all are. And thats before theyve even mentioned the innovative, inspirationa l working
environment.

EXTERNAL ENVIRONMENT
The external business environment is highly competitive, but the firm feels confident in the
face of it, though changes in taxation and tariffs could always pose fresh challenges for a
trading business of this size and complexity.
On a more international level, Clarks has a programmed in place for its sourcing operations in
various countries, where social auditors are consulted in order to ensure that ethical trade
guidelines are adhered to.

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WAYS IN WHICH STRENGTHS ARE EXPLOITED (X)


Clarks passion is to listen to their customers and deliver a product that allows the consumer
to feel the pride, respect and trust of everyone at the Clarks Companies N.A. For some of us
Clarks Mission Statement means creating the be st shoes they can. For others, it means
listening to their customers when they reach out to us, and ensuring their experience with
Clarks is fun, easy and enjoyable. But for all of us, it keeps us focused on what really matters:
people. They feel they have a responsibility to help in the communities in which they live and
work.
They call it "standing tall", and it's an important part of the way they do business. Everyone
who works here has the opportunity to join us as they make a difference doing things like
bringing food to needy families, joining together for corporate volunteer days, raising funds
for important causes, working in their own neighborhoods to improve adult literacy, or
joining with other organizations to support breast cancer research. The way they see it,
they've proven the importance of teamwork within their company, and they love seeing all
the good it can do in other places.

Clarks Technology
One doesn't have to compromise comfort for style. At Clarks, their continued commitment to
foot they are technology enables us to create designs that not only look good, but feel good
too. Their styles only feature the very best in foot they are innovations whether they be
technologies they have developed in-house, such as Active Air, or those developed by
market-leaders such as GORE-TEX. From superior underfoot cushioning to the ultimate in
light they right flexibility, they incorporate whatever you need to go about their life with
confidence.

MANAGEMENT PRACTICES
Beyond their Mission Statement, five Core Values also guide the way they do business:

Core Values
1. Start - Integrity is expected from everyone, without that they have nothing.
2. Communicate - Feel free to express their self, but always with respect and humility.

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3. Partner - They make it easy for people to do business with us.


4. Inspire - They succeed as a team but value the individual. Success enables us to improve
the lives of others.
5. Imagine - Innovation and creative thinking are more important than avoiding risks.

What it all means?


It's not the footwear or the building in which they work, the innovative designs or the
marketing plans, it's people united by a belief that by working hard and working together,
they can succeed in a most spectacular way. Their company is filled with creative,
innovative, responsible risk-takers who love to laugh, share and listen.

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS


Today, the Clarks brand is sold in some 150 countries, with their most significant markets
being Germany, Japan, China, the Benelux countries (Belgium, the Netherlands and
Luxemburg), Spain and Italy. They are all working very hard to make Clarks a truly global
brand.
Across the world Clarks shoes are offered to consumers through Clarks branded shops and
wholesale outlets, and in some cases the business is operated by third party organizations.
With their franchise partners across the world, they have opened over 100 Clarks stores and
the number is growing fast. As theyll as subsidiary offices in Holland, Germany, Poland,
Japan, Mala ysia and China, they have substantial business in many other markets and these
are operated by either agents or distributors who work with local partners in the markets on
behalf of the Clarks brand.
Clarks international shirking operation alone employs over 200 people, from 14 different
countries outside the UK from Brazil to Vietnam. Theyre involved with all aspects of shoe
production: product testing and assurance, quality control, material specifications you
name it. They work closely with designers to develop their products too, to make absolutely
sure their suppliers meet their high standards for style, fit, comfort and durability.
As youd expect, they continue to focus on developing new markets, India and China for
example, and making sure that they have the people, processes and systems in place to
support further international growth. This really is an exciting time for Clarks. And it can be
for you too. So take their talents global. After all, they already have.
456

REFERENCES
Clarks Shoes: History & heritage
http://www.clarks.co.uk/Historyandheritage_Inthebeginning
Clarks Shoes: Culture & diversity
http://www.clarks.co.uk/Careers/AboutUsHome/CultureandDiversity
Clarks Shoes: Clarks Archive
http://www.clarks.co.uk/careers/aboutushome/archive
Clarks Shoes: The Social responsibility
http://www.clarks.co.uk/Careers/AboutUsHome/SocialResponsibility
Clarks Shoes: International opportunities
http://www.clarks.co.uk/Careers/HeadOfficeHome/InternationalOpportunities
C&J Clark from Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/C%26J_Clark
Clarks Shoes: Contemporary Shoes for Men by Luke

Raper

[Article

Stheirce:

http://EzineArticles.com/5790440]
http://ezinearticles.com/?Clarks -Shoes:-Contemporary-Shoes-for-Men&id=5790440
Clarks Shoes: Customer Review
http://www.ciao.co.uk/Reviews/Clarks_Shoes_Shop__82200
Mission statement and core values
http://www.clarksusa.com/eng/aboutus/missionstatement.cfm
Clarks Technology
http://www.clarksusa.com/eng/aboutus/technologies.cfm
Clarks Report
http://www.jpmorgan.com/cm/BlobServer?blobtable=Document&blobcol=urlblob&blobkey
=name&blobhea der=application/pdf&blobwhere=fbh04_2003_caseStudyCJC.pdf
Clarks Shoes: Pictures taken from:
457

http://www.clarks.co.uk

458

SCHLUMBERGER

459

INTRODUCTION
HISTORY
Schlumberger was founded in 1926 by French brothers Conrad and Marcel Schlumberger as
the Socit de Prospection. The company recorded the first-ever electrical resistivity well
log in Merkwiller-Pechelbronn, France in 1927. Today Schlumberger supplies the petroleum
industry with services such as seismic acquisition and processing, formation evaluation, well
testing and directional drilling, well cementing and stimulation, artificial lift, well
completions and consulting, and software and information manage ment. The company is also
involved in the groundwater extraction and carbon capture and storage industries. The
brothers had experience conducting geophysical surveys in countries such as Romania,
Canada, Serbia, South Africa, the Democratic Republic of the Congo, and the United States.
The new company sold electrical-measurement mapping services, and recorded the firstever electrical

resistivity well

log in Merkwiller-Pechelbronn,

France

in

1927.

The Socit quickly expanded, logging its first well in the U.S. in 1929, in Kern
County, California. In 1934, the Schlumberger Well Surveying Corporation was founded
in Houston, later evolving into Schlumberger Well Services, and finally Schlumberger
Wireline & Testing. Schlumberger invested heavily in research, inaugurating the
Schlumberger-Doll Research Center in Ridgefield, Connecticut in 1948, contributing to the
development of a number of new logging tools. In 1956 Schlumberger Limited was
incorporated in Curaao a s a holding company for all Schlumberger businesses, which by
now included American testing and production company Johnston Testers.
Over the years, Schlumberger continued to expand its operations and acquisitions. In 1960,
Dowell Schlumberger (50% Schlumberger, 50% Dow Chemical), which specialized in
pumping services for the oil industry, was formed. In 1962, Schlumberger Limited became
listed on the New York Stock Exchange. Schlumberger purchased 50% of Forex in 1964 and
merged it with 50% of Languedocienne to create the Neptune Drilling Company. The first
computerized reservoir analysis, SARABAND, was introduced in 1970. The remaining 50%
of Forex was acquired the following year; Neptune was renamed Forex Neptune Drilling
Company. In 1979, Fairchild Camera and Instrument (including Fairchild Semiconductor),
became a subsidiary of Schlumberger Limited.

460

The Schlumberger Cambridge Research Centre, designed by Michael Hopkins and


Partners was opened in 1985.
Schlumberger established the first international data links with e-mail in 1981. In 1983,
Schlumberger opened their Cambridge Research Center in Cambridge, England.]
The SEDCO drilling rig company and half of Dowell of North America were acquired in
1984, resulting in the creation of the Anadrill drilling segment, a combination of Dowell and
The Analy sts drilling segments. Forex Neptune was merged with SEDCO to create
the Sedco Forex Drilling Company the following year, when Schlumberger purchased Merlin
and 50% of GECO
In the 1970s, its top executives in North America were relocated to New York City.
In 1987, Schlumberger completed their purchases of Neptune (North America), Bosco and
Cori (Italy), and Allmess (Germany). That same year, National Semiconductor acquired
Fairchild Semiconductor from Schlumberger for $122 million. In 1991, Schlumberger
acquired PRAKLA -SEISMOS, and pioneered the use of geosteering to plan the drill path in
horizontal wells.
Schlumberger acquired the software company GeoQuest Systems in 1992. With the purchase
came the conversion of SINet to TCP/IP and www capability. In the 1990s Schlumberger
bought out the petroleum division, AEG meter, and ECLIPSE reservoir study team Intera
Technologies Corp. A joint venture between Schlumberger and Cable & Wireless resulted
with the creation of Omnes, which then handled all of Schlumbergers internal IT business.
Oilphase and Camco International were also purchased.
In 1999, Schlumberger and Smith International created a joint venture, M-I L.L.C., the
worlds largest drilling fluids (or mud) company. The company consists of 60% Smith
International, and 40% Schlumberger. Since the joint venture was prohibited by a 1994
antitrust consent decree barring Smith from selling or combining their fluids business with
certain other companies, including Schlumberger, the U.S. District Court in Washin gton,
D.C. found Smith International Inc. and Schlumberger Ltd. guilty of criminal contempt and
fined each company $750,000 and placed each company on five year probation. Both
companies also agreed to pay a total of $13.1 million, representing a full disgorgement of all
of the joint ventures profits during the time the companies were in contempt.[10]

461

In 2000, the Geco-Prakla division was merged with Western Geophysical to create the
seismic contracting company WesternGeco, of which Schlumberger held a 70% stake, the
remaining 30% belonging to competitor Baker Hughes. Sedco Forex was spun off, and
merged with Transocean Drilling company in 2000.
In 2001, Schlumberger acquired the IT consultancy company Sema plc for $5.2 billion. The
company was an Athens 2004 Summer Olympics partner, but Schlumbergers venture into IT
consultancy did not pay off, and divestiture of Sema to Atos Origin was completed that year
for $1.5 billion. The Cards division was divested through an IPO to form Axalto, which later
merged with Gemplus to form Gemalto, and the Messaging Solutions unit was spun off and
merged with Taral Networks to form Airwide Solutions. In 2003, the Automated Test
Equipment group, part of the 1979 Fairchild Semiconductor acquisition, was spun off to
NPTest Holding, which later sold it to Credence.
In 2004, Schlumberger Business Consulting was launched. Based in Paris, it is the
companys management consultancy arm.
In 2005, Schlumberger purchased Waterloo Hydrogeologic, which was followed by several
other groundwater industry related companies, such as Westbay Instruments, and Van Essen
Instruments. In late 2005, Schlumberger relocated its U.S. corporate offices from New York
to Houston. In 2006, Schlumberger purchased the remaining 30% of WesternGeco
from Baker Hughes for US$2.4 billion. In 2006, the Schlumberger-Doll Research center was
relocated to a newly built new research facility in Cambridge, Massachusetts to replace
the Ridgefield, Connecticut research center. The move was completed at the end of 2006. The
new facility joins the other research centers operated by the company in Cambridge,
England; Moscow, Russia; Stavanger, Norway; and Dhahran, Saudi Arabia. In 2010, the
acquisition of Smith International in an all stock deal valued at $11.3 billion was announced.
The sale price is 45.84-a-share price was 37.5 percent higher than Smith closing price on 18
February 2010. The deal is the biggest acquisition in Schlumberger history. The merger was
completed on August 27, 2010. In 2010, Schlumberger also announced plans to acquire
Geoservices, a French-based company specializing in energy services, in a deal valued at
$1.1 billion, including debt. In 2006, as the current owner of a facility in Pickens, South
Carolina, Schlumberger agreed to pay $11.8 million to federal and state agencies for a
problem caused by the previous owner, Sangamo-Weston, a capacitor manufacturing plant.
The cause of the problem was from polychlorinated (PCB) released into the environment by
462

Sangamo-Weston from 1955 to 1987. According to the Justice Departments Environment


and Natural Resources Division, an additional agreement by Schlumberger to purchase and
remove dams will directly improve the Twelvemile Creek, South Carolina ecosystem and
provide significant environmental benefits for the affected communities.

DELLS ORGANIZATIONAL CULTURE


Knowledge, technical innovation and teamwork are at the center of who we are. For more
than 80 years, we have focused on leveraging these assets to deliver solutions that improve
customer performance.
Today, our real-time technology services and solutions enable customers to translate acquired
data into useful information, then transform this information into knowledge for im proved
decision making-anytime, anywhere. Harnessing information technology in this way offers
enormous opportunities to enhance efficiency and productivity. This is a quantum leap from
providing traditional just-in-case information to delivering just-in-time knowledge.
Reflecting our belief that diversity spurs creativity, collaboration, and understanding of
customers needs, we employ over 108,000 people of more than 140 nationalities working in
approximately 80 countries. Our employees are committed to working with our customers to
create the highest level of added value. Knowledge communities and special interest groups
with our organization enable teamwork and knowledge sharing unencumbered by geographic
boundaries.

ENVIRONMENTAL ANALYSIS
Dell thrives on being the best in whatever it does, from offering the best customer experience
to recruiting the best and brightest talent. In fact, its employees view Dells diversity
initiatives as a competitive advantage that fosters a winning culture and leverages the vast
skills, similarities and differences of the Dell team so that they can be the best in the global
marketplace.

CODE OF ETHICS
The Schlumberger Code of Ethics and Schlumberger policies apply to all Schlumberger
directors, officers, and employees of the company. They are designed to help each employee
handle business situations professionally and fairly.

463

The Code emphasizes Schlumberger values and encourages employees to incorporate those
values into their working lives. As a practical and clear guide to the behavior that the
company expects from every one of its people worldwide, it deliberately sets consistent and
high standards for all employees, no matter their position or where they work in the world.
It is a broad outline supporting a range of company policies, standards, guidelines, business
processes and procedures that set out Schlumbergers obligations and responsibilities to
behave ethically in every aspect of business life.

WORKFORCE DIVERSITY
One of our greatest strengths is the diversity of our workforce, with men and women of many
nationalities and backgrounds working together and sharing common objectives.
Schlumberger does not have a nationality which describes its culture, but operates in a truly
global fashion throughout the world. As a company, we encourage fair employment practices
worldwide and offer equal opportunities to all our employees. We also try to take family
considerations into account in any decisions about personnel matters or assignments.

Workplace Diversitydeveloping human resources for the future


Our customers, suppliers and shareholders are increasingly global and diverse. They expect
us to understand, respond and deliver services that meet their unique expectations. We must
attract and retain top performers worldwide from the full depth of the talent pool and address
the evolving needs of our workforce in terms of quality of life and dual career expectations.
By creating a variety of perspectivesgender and culturethat stimulate productive
creativity and innovationwe maintain our competitive edge. Three prerequisites upon
which we will proceed with our diversity efforts: We are a publicly traded corporation
concerned with profitability and shareholder return. Meritocracy drives our actions, decisions
and employee advancement. While it is a competitive advantage that our workforce
communicates in a multitude of languages, English is the common language of our internal
management communication.

Gender Diversitya commitment to act


Our gender diversity focus began in 1994 and we have made progress since that time.
Looking forward, our goal is to continually increase the percentage of women we recruit

464

worldwide, ensure proper career development for high-performing women, and increase our
organizational flexibility to accommodate a wider range of personal situations.

Nationality Diversityleveraging the human resources of all nations


Schlumberger has been successful in attracting and developing nonwestern nationalities or
nationalities from emerging countries, now integrated into all levels of the work force,
including senior management.

Family and Work Life-mobility initiatives that work


Our people, men and women worldwide, are our main asset. The change in the composition
of our workforce necessitates an adjustment in our attitude toward recruitment, retention and
mobility of our employees.

Commitment to Quality, Health, Safety and the Environment


Schlumberger operates in many varied and often challenging geographical environments. An
unwavering commitment has always been maintained to the highest standards of the quality,
health and safety of our employees, customers and contractors, as well as for the protection of
the environment in the communities in which we live and work. The long-term business
success of Schlumber ger depends on our ability to ensure that QHSE remains a top priority
for the management and each employee. The Schlumberger QHSE policy and diverse
standards are applied throughout the company. Each employee must maintain up-to-date
certifications in essential QHSE training courses through both traditional classroom and online interactive learning. Our driving safety-training program is one example of our QHSE
success. In 2003 it resulted in zero occupational auto fatalities despite employees logging a
monthly average of 12 million driving miles

Dual Careersmoving across functions, technologies and geographies


One of the most significant changes in our society in the last several decades has been the
entry and continued presence of women in the working population. Families in marriages in
which both spouses work are now the largest single group of families in the workplace.
According to the US Bureau of Labor Statistics, 60% of all marriages are dual-career
marriages; these couples make up 45% of the workf orce.

465

Because the proportion of people in dual career relationships is on the increase, this creates
new challenges for the organization.

SWOT ANALYSIS OF DELL INC.


STRENGTHS
13. Schlumberger Limited is the worlds leading oilfield services company
14. Strong market position.
15. Technical excellence and innovation.
16. Strong Revenue growth.
17. Deep domain knowledge of exploration and production operations gained through 75
years of experience
18. A global reach in more than 80 countries coupled to strong local experience and the
diversity in thought, background and knowledge that more than 140 nationalities bring
19. A commitment to excellence in service delivery anytime, anywhere

WEAKNESSES
1. Decline in revenues of the WesternGeco segment.
2. Diseconomies to scale.
3. Poor supply chain
4. Weak, damaged brand

OPPORTUNITIES
1. Have an easy access to the Financial markets (raise money through debt, etc)
2. Innovation
3. Growth through acquisitions
4. Other alliances and agreements can be made.

THREATS
1. Environmental regulations.
466

2. Political risk.
3. Dependence on the level of expenditures by the oil and gas industry.
4. Economic slowdown
5. Exchange rate fluctuation.

SCHLUMBERGERS GLOBAL CITIZENSHIP


As a business and a community of individuals, Schlumberger is connected to global
challenges that also impact our employees, contractors, suppliers, clients, shareholders,
families and communities. At Schlumberger, global citizenship reflects the diversity and
integrity of our workforce. Drawn from 140-plus nationalities working in approximately 80
countries, our employees embody the qualities of global citizens: maintaining high standards
of behavior wherever we operate.
Global Citizenship at Schlumberger reflects the diversity and integrity of our workforce.
Drawn from 140-plus nationalities working in approximately 80 countries, our employees
embody the qualities of global citizens maintaining high standards of behavior wherever we
operate.
As a business and a community of individuals, Schlumberger is connected to global
challenges that also impact our employees, contractors, suppliers, clients, shareholders,
families and communities.
To guide our behavior, we have developed a framework that addresses these challenges while
anchoring them in the bedrock that allows us to call ourselves global citizensethics and
governance, health and safety, diversity and people development.
The Schlumberger Global Citizenship framework focuses on six issues chosen because they
are the ones to which we can bring most leadership and best practice:

Community Outreach
As a science and technology based company, weve adopted education as a key theme of our
community outreach, which is composed of several initiatives: Schlumberger Excellence in
Educational

Development

(SEED),

the

Schlumberger

Foundation,

Initiatives undertaken by our GeoMarkets as well as employees on their own time.

467

and Local

Passion for learning


SEED

is a volunteer -based, non-profit education program focused on underserved

communities where Schlumberger people live and work. SEED empowers over 3,000
employee-volunteers and educatorsincluding teachers, parents and other mentorsto share
their passion for learning and science with students aged 10-18. The SEED learning-whiledoing (LWD) methodology draws on the technology and science expertise of our volunteers
to engage students in global issues, such as water, energy and climate change.

Foundation for success


A second set of outreach programs is enabled through the Schlumberger Foundation, a nonprofit entity that provides grants to external organizations, co-funds eligible GeoMarket
outreach programs, and operates its own programs, generally through partnerships. Among its
initiatives are: Faculty for the Futureto support women in pursuing academic careers in
science and technology; the Africa Science Program to create opportunities in advancing
research capacity in African institutions; the United World Colleges Scholarship Program to
provide scholarships to talented students in developing countries interested in the sciences;
and Lab in a Lorry which offers students hands -on experiments and interaction with
volunteers using mobile science laboratories.

Catalyzing local initiative


Our staff around the world often initiates local projects themselves. In Chad, for example,
funding from the GeoMarket and the Schlumberger Foundation is helping to improve the
infrastructure at a school started by a local Schlumberger employee.
Local initiative by managers and employees also helped to direct our response to the
December 2004 tsunami and October 2005 earthquake that hit Asia. A disaster reconstruction
fund was created to contribute to reconstruction and recovery. To date, 12 projects-each
driven by our employees-have been supported in partnership with organizations on the
ground. Additionally, financial support is given to employees who have relevant technical
skills to contribute through short-term volunteering assignments.

468

ENVIRONMENTAL FACTORS, INNOVATION AND SAFETY


CLIMATE CHANGE
Schlumberger believes there is sufficient evidence of the seriousness of the situation to start
preparing future solutions.
Global climate change is controversial, complex, and potentially catastrophic. Average land
and ocean temperatures have risen in the last 150 years, very likely due in part to the
greenhouse effect caused by atmospheric carbon dioxide accumulation from burning coal, oil,
and gas.
Despite the uncertainties surrounding global climate change, we believe there is sufficie nt
evidence of the potential seriousness of the issue to start preparing future solutions. Among
the many challenges is finding ways of using fossil fuels without hurting the environment
until alternative forms of energy become cost effective and can be deployed on the scale and
with the efficiency required.
Carbon capture and storage is a serious mitigation option. Intergovernmental Panel on
Climate Change
One promising solution is carbon capture and storage (CCS), where CO2 is captured from
concentrated sources such as power stations and stored in underground geological formations.
We can contribute through subsurface characterization, modeling, simulation and prediction,
well completion, and CO2 monitoring both during injection and long-term storage.
Were participating in almost all of the CCS initiatives around the world and have created a
business unit devoted to investigating and developing the capacity to design, build, and
operate CCS projects. If CCS is to have an impact on the CO2concentration in the
atmosphere, billions of tons of CO 2 will have to be stored and we are gearing up to apply our
technology to this global challenge.
We participate in R&D consortia and projects, commercial-size projects, and international
forums and trade association projects.

469

ENVIRONMENT
Our responsibility to protect the environment is significant, and performance improvements
have been made over the last few years through the application of our global Environmental
Standard, bringing improvements most notably in relation to waste and water management.
For example, during the past several years weve issued detailed wastewater management
guidelines and have been tracking discharge compliance with either local requirements or our
often more demanding internal standards.
Land management at our manufacturing and field operations remains a high priority and we
have identified key areas for improvement, in particular resource consumption and emissions.
And increasingly we will apply our technical abilities to the reduction of our environmental
footprint, particularly in the design and engineering of our products.

DRIVING SAFETY
LEADERSHIP
Driving is ranked by the World Health Organization as the 9th highest cause of death
worldwide. With increased motorization and assuming no changes in behavior, this figure is
expected to rise, ranking driving among the top 3 causes of mortality.
Driving is the main cause of death within our industry, and at Schlumberger we drive more
than 150 million miles each year on every terrain and in every condition imaginable. In 2000,
we implemented a comprehensive driving management system designed to consolidate,
leverage, and augment the best practices of our various segments to eliminate accidents
through training, communication, in-depth accide nt reviews, and the use of driving simulators
and in-vehicle monitors. Every one of our employees, field to office, is required to take
regular driving training. Weve also begun sharing our training and expertise with our
customers and community members. In 2005, the Oil and Gas Producers Association (OGP)
adopted our driving standard as the foundation for their recommended land transportation
practices for the industry.
Malaria Prevention
We work in many countries where malaria is a recurrent health risk. Between 1 and 3 million
people die from malaria every year. Our own fatalities have been among employees returning
470

from assignment in infected areas to a home country where the disease is not prevalent and
therefore may not be detected and treated in a timely manner. To safeguard these employees,
we developed a Malaria Prevention Program that trains and equips them with a curative
malaria kit and a 24/7 malaria hotline allowing them to self -diagnose and treat their
symptoms. The program was recognized at the 2005 World Petroleum Congress and many of
our clients have adopted the kit we developed.
Additionally, in malaria risk zones, we regularly distribute insecticide-impregnated mosquito
nets and support home fumigation for local employees and their families.

HIV/AIDS Awareness
UNAIDS and the World Health Organization estimate that there are around 33 million people
living with HIV worldwide. Every year, almost 2.6 million new infections occur and 1.8
million people die from AIDS-related deaths worldwide. Some of our employees and their
families are affected, and many more face the risk of exposure. So in 2003 we asked
ourselves what more we might do, within our scope of expertise, to help stem the spread of
the disease among our employees and their families.
We incorporated an HIV/AIDS Guideline into our Global Health Standard at the core of
which is the practice of non-discrimination in job screening and during employment. This
standard follows the ILO Guidelines on HIV/AIDS.
Education is fundamental to how we address all our health and safety risks and we invest
heavily in making training available to all employees. So, in addition to the guideline, we
started a campaign to raise awareness and encourage a preventive approach. In 2005, this
campaign was reinforced and all locations in high-risk areas were asked to use the
educational materials developed by our in-house medical advisor to ensure their employees
and their families are informed on how to prevent STDs, including HIV/AIDS.
While our employees and their families are our first priority, weve also started to take our
awareness campaign to high-risk communities where we have outreach relationships as part
of an effort to share our health and safety practices externally.

Education
As a science and technology based company, weve adopted education as a key theme of our
community outreach, which is composed of several initiatives: SEED (Schlumberger
471

Excellence in Educational Development), the Schlumberger Foundation, and Local


Initiatives undertaken by our GeoMarkets as well as employees on their own time.

Passion for learning


SEED is about sharing our passion for learning and science to create opportunities for youth.
Founded in 1998, SEED reaches out to young people in underserved schools and provides
resources for exploring the world of science. More than 1,500 Schlumberger employee and
family volunteers have contributed their time and skills to students and teachers in over 30
countries. Initiatives include educational programs, the Online Science Center, collaborative
projects, and the School Network Program.

Foundation for success


A second set of outreach programs is enabled through the Schlumberger Foundation, a nonprofit entity that provides grants to external organizations, co-funds eligible GeoMarket
outreach programs, and operates its own programs, generally through partnerships. Among its
initiatives are: Faculty for the Future to support women in pursuing academic careers in
science and technology; the Africa Science Program to create opportunities in advancing
research capacity in African institutions; the United World Colleges Scholarship Program to
provide scholarships to talented students in developing countries interested in the sciences;
and Lab in a Lorry which offers students hands-on experiments and interaction with
volunteers using mobile science laboratories.

Catalyzing local initiative


Our staff around the world often initiates local projects themselves. In Chad, for example,
funding from the GeoMarket and the Schlumberger Foundation is helping to improve the
infrastructure at a school started by a local Schlumberger employee. Local initiative by
managers and employees also helped to direct our response to the December 2004 tsunami
and October 2005 earthquake that hit Asia. A disaster reconstruction fund was created to
contribute to reconstruction and recovery. To date, 12 projectseach driven by our
employeeshave been supported in partnership with organizations on the ground.
Additionally, financial support is given to employees who have relevant technical skills to
contribute through short-term volunteering assignments. Strong ownership within the
GeoMarket is critical to the success of any local undertaking.

472

REFERENCES
Schlumberger Company Profile. Retrieved (2010-07-28)
Investor Contacts. Schlumberger. Retrieved on January 13, 2009.
^ Bloomberg Business Week . retrieved July 14, 2010..
^ History, Schlumbe rger. Slb.com. Retrieved 2010-01
http://www.glassdoor.com/Reviews/Employee-Review -Schlumberger-RVW14582.htm
^ Schlumberger Website
Schlumberger Research. Schlumberger. Retrieved on January 30, 2011.

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BARCLAYS PLC

474

BARCLAYS HISTORY:
Barclays PLC is a global financial services company headquartered in London, United
Kingdom. As of 2010, it is the world's 10th-largest banking and financial services group and
21st-largest company according to a composite measure by Forbes magazine. It has
operations

in

over

50

countries

and

territories

across Africa, Asia, Europe , North

America and South America and around 48 million customers. As of 30 June 2010 it had
total assets of 1.94 trillion, the third-largest of any bank worldwide (after BNP Paribas and
HSBC).
Barclays is a universal bank and is organized within two business 'clusters': Corporate &
Investment Banking and Wealth Management, and Global Retail Banking. [6] The Corporate
& Investment Banking and Wealth Management cluster comprises three business
units: Barclays Capital (investment banking), Barclays Corporate (commercial banking)
and Barclays Wealth (wealth management). The Global Retail Banking cluster comprises
four business units: Barclaycard (credit card and loan provision), Barclays Africa, UK Retail
Banking and Western Europe Retail Banking.
Its primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100
Index. It has a secondary listing on the New York Stock Exchange .

EARLY HISTORY:
Barclays takes it symbol, the spread eagle, from the Quaker goldsmithing and banking firm
founded by John Freame in 1728. In 1736, James Barclay, Freame's brother -in-law, became a
partner in the Black Spread Eagle. When two more of Barclay's relatives joined the firm -Silvanus Bevan in 1767 and John Henton Tritton in 1782--the banking firm took the name by
which it would be known for more than a century: Barclays, Bevan & Tritton. While
fledgling joint-stock banks outside London struggled to establish themselves in the late 18th
and early 19th centuries, Barclays, Bevan & Tritton was still occupied with the wellestablished and highly lucrative commercial life of London.
A series of legislative changes enacted in the late 19th century created a new banking climate
that threa tened the existence of private banks such as Barclays. First, the Bank Charter Act of
1826 allowed banks with more than six partners to be formed only outside London. In 1833,
the geographical restriction was removed. Stockholders of new joint-stock companies were

475

granted limited liability for the first time in 1854. Finally, in 1879, existing joint-stock
associations were allowed to convert to a limited-liability structure.
Principal Subsidiaries: Barclays Bank plc; Barclays Capital Inc.; Barclays Capital Investors
N.A.; Woolwich plc.
Principal Operating Units: Barclays Africa; Barclaycard; Barclays Capital; Barclays Global
Investors; Barclays Private Clients; UK Banking.

STRENGTHS:

Barclays has a widespread global presence, allowing it to spread risk and enjoy
economies of scale.

The Barclays brand is well-established historically and continually promoted, for


example through sponsorship of Premier League football.

Barclays is particularly associated with innovation. It brought out the first credit card in
1966, and has continued to develop cards, most recently the OnePulse card combing
Oyster, cashless and credit functions for London-based customers.

The opening of several new flagship branches along with a refurbishment programme can
be seen as an attempt to refocus on customer demands for a strong presence on the high
street (see threats).

WEAKNESSES:

Services provided in Zimbabwe to individuals connected with Zanu PF have generated


controversy and raised questions about Barclays ethical position: investors are
increasingly concerned about ethics.

Large bonuses for Directors have attracted unwanted attention from commentators, and it
has been speculated that the banks reluctance to take financing from the UK government
is because that would end its autonomy with regard to bonuses.

Plans to expand in Asia were limited when Barclays were outbid for ABN Amro in 2006,
and alternative expansion plans have had to be adopted.

The bank does not plan to pay dividends on its shares until the second half of 2009,
making them less attractive to investors.

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INTERNAL & EXTERNAL ENVIRONMENT:


Organizational processes:
Barclays organizational processes were well thought of and were designed in accordance
with the need of the environment. Each organizational process whether it relates to
production, marketing or sales has a specific goal that contributes to the success of the firm.
The processes of Barclay underwent a rigorous analysis. The management team made sure
that they choose well the processes that they will use.

COMPETENCIES:
Core Competencies:
The core competencies of Barclays include its personnel and corporate competency wherein
the focus is on the companys relationship with its internal and external environment. These
two competencies assist the company in its daily operations. It also provides the company the
capability to create new trends in the market. The two competencies are given extra attention
by the company since these two competencies can do various things for the company. In the
instance of one of the competencies experiences some problem the company has to create
solutions or it will experience more problems that may hamper the operations of the
company.

Distinct Competencies:
Barclays distinct competencies include its ability to provide services with a high value but
with minimal costs. The companys distinct competency is embedded on its efficiency of
service. The company makes sure that the clients are given the best service. The company
also makes sure that the best financial advice will be given to the clients.

ORGANIZATIONAL CULTURE:
Barclays culture evolves as the world in which they live and work changes. Sitting still is
simply not an option so they are always looking at ways to improve themselves and better
serve all our customers.
The result is a culture where everyone is encouraged to stretch themselves, take responsibility
for their actions and challenge the status quo by coming up with fresh ideas. They have a 300
477

year history of building success through innovation and this approach is still going strong
today. Inventing superior products and services takes fresh thinking, creative energy and team
work. This makes all of their businesses vibrant and engaging places to work. As a diverse
and global organization, they attract people wit h all kinds of skills and ambitions and are able
to offer many different career paths. Regardless of where they are located or which business
area their people are working in, there are key attributes that they look for in any individual
they recruit. These derive from their five guiding principles:

Winning together A willingness to do whats right for Barclays, their teams and their
colleagues in order to achieve collective and individual success.

Best people The ability to develop individually and to help those around you.

Customer and client focus The ability to understand and deliver what their customers
and clients want and need.

Pioneering The capacity to innovate and drive idea generation to improve their
operational excellence.

Trusted Acting with the highest level of integrity and being able to take responsibility
for decisions and actions.

These principles guide how they work together and how they serve their customers and the
communities in which they operate.

WAYS IN WHICH STRENGTHS ARE EXPLOITED:


RESOURCES:
The essential resources of Barclay include its own physical and human resources. These two
resources are acquired and continuously developed so that its capabilities can be fully
realized by the company. The unique resource of Barclay includes the companys intangible
resource. This kind of resource cannot be easily and directly acquired and it may take some
years before the full use of such resource can be realized.

Financial:
The company funds come from either the parent company or from other sources like
investors. The funds are used to pay for the different expenses of the firm. Barclays wants to

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focus on price based strategies wherein the main goal is to achieve more profits without
sacrificing other things. The company has a set of priorities where it focuses its budget on.
The company has been doing well financially but it still wants to maintain its financial
standing through providing an effective and efficient service with lesser cost and maintained
profits.

Human:
In providing excellent service to the clients, a company needs to have a dedicated staff that
performs well and knows that the service they give to the client can help the company have a
positive or negative image. The staff of the company is well trained to ensure that the best
service can be given to the clients. The company makes sure that it hires promising
individuals that can assist in the companys task of reaching their goals. These people are
trained well by the company so that each employee will have an important role to play in the
company. The company provides various financial and compensation packages to their
employees. This ensures that for every effective service the employees do they are greatly
rewarded. The company also recognizes and gives awards to employees who perform above
standards.

Skill:
The personnel of Barclays are well skilled in providing services to the clients. The company
makes sure that they hire individuals who are skilled in management, banking and finance.
The company also looks for various activities that will help the personnel improve their skill.

Capabilities:
Barclays capabilities include its use of sophisticated technologies to provide the best kind of
services. Barclay has a unique set of production regulations that ma kes sure that every stage
in the companys operations is well thought of and will minimize any waste on time and
effort of the company.

MANAGEMENT PRACTICES:
What they do:
Barclays Risk teams operate across the Group, with colleagues in every Business Unit
managing and minimizing risks to the companys assets.
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At Group Centre level, risk experts play a vital role in advising the Group Chief Executive,
Board of Directors and other business leaders, helping to facilitate informed, controlled and
measured decision-making. And at Barclays offices all over the world, risk management
experts are also carrying out invaluable work, analyzing and advising on practices and
building frameworks to minimize potential threats to the company.

TYPICAL ROLES:
Assessing risks and preventing damage to the business is essential to Barclays ongoing
success a role in Risk offers a chance to be part of this process.

Capital Manager: Their Capital Managers collate valuable business data to assist
decision-makers across the business with calculations, reporting and forecasting.

Anti Money Laundering Officer: Their Anti Money Laundering Officers enforce
Barclays measures against money laundering and terrorist financing, dealing with
transactions all over the world.
Operational Risk Manager: Their Operational Risk Managers utilize expert technical
knowledge to support, shape and implement an operational risk framework across the
Barclays Group.

SAS (Statement of Auditing Standards) Report Writer:


Their SAS Report Writers deliver external and internal mandatory reports and documents to
address Barclays performance and improve business processes.
Rather than preventing people from taking risks, its the role of the Barclays Risk
professionals to understand the threats and hazards the company can face and help
stakeholders throughout the business manage and make decisions accordingly.
Risk management is a vitally important function within Barclays globally. Risk experts are
represented in every location and business unit, with a common goal to ensure that good
risk management practices are central to the way Barclays does business.
A set of core competencies people skills, adaptability and ambition among them is key to
successful career progression within the Risk team, and a department-specific mentoring
programme offers senior -level support to every colleague who seeks it.

480

Barclays Risk teams operate across the Group, with colleagues in every Business Unit
managing and minimizing risks to the companys assets.

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS:


Barclays has been in business for over 300 years, and the common thread running through its
long history is relationships. Strong business relationships depend on talented people.
The development of their people and the nurturing of talent within Barclays is the key to
lifting performance and to creating differentiating capabilities. It's also the key to their two
overriding operational priorities: good execution on behalf of customers, and excellent
customer service.
They now have over 113,000 people within the Group, and nearly half of them are outside the
UK. Barclays is changing. They are increasingly a magnet for talent. Recruiting and retaining
the best people is a strategic imperative for them. They direct a lot of time and effort at
nurturing what we call franchise health': in other words, the standing of Barclays in the
minds of their people, their customers and the communities in which they live and work.
They measure their people's level of engagement regularly through their employee opinion
surveys, and the results of the 2010 survey continued the positive trend of recent years, with
good progress in employee engagement and pride in Barclays. They take pride in being
successful, because if they are successful as an organization, then they contribute
significantly to the societies in which they work. It is important for all their stakeholders be
they pensioners, employees, customers or governments that Barclays does well.

REFRENCES
Searching for literature on Barclays PLC
Available at:
http://en.wikipedia.org/wiki/Barclays#History Accessed on: [March 26, 2011]
http://www.businessteacher.org.uk/business -resources/swot-analysis-database/barclays -bankswot-analysis/ Accessed on: [March 26, 2011]
http://ivythesis.typepad.com/term_paper_topics/2010/12/internal-analysis-of-barclaysbank.html Accessed on: [March 26, 2011]

481

http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?task=articleFWabout&site=pfs&va
lue=13446&menu=5482 Accessed on: [March 28, 2011]
http://www.investor.barclays.co.uk/results/2005/annualreport/annualreview2005/enhancingex
cellence.htm Accessed on: [April 02, 2011]
http://www.fundinguniverse.com/company-histories/Barclays-plc-Company-History.html
Accessed on: [April 02, 2011]
http://group.barclays.com/Careers/Barclays-around-the-world/Group-Centre/Risk
on: [April 02, 2011]
http://uk.finance.yahoo.com/q/pr?s=BARC.L Accessed on: [April 02, 2011]

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Accessed

APPLE INC

483

HISTORY:
19761980: The early years
Apple was established on April 1, 1976 by Steve Jobs , Steve Wozniak, and Ronald Wayne, to
sell the Apple I personal computer kit. They were hand-built by Wozniak and first shown to
the public at the Homebrew Computer Club. The Apple I went on sale in July 1976 and was
market-priced at $666.66. Apple was incorporated Jan3, 1977 without Wayne Who sold his
share of the company back to Jobs and Wozniak for $800 Multi-millionaire Mike
Markkula provided essential business expertise and funding of $250,000 during the
incorporation of Apple. The Apple II was introduced on April 16, 1977 at the first West
Coast Computer faire. It differed from its major rivals, the TRS-80 and Commodore PET,
because it came with color graphics and an open architecture. While early models used
ordinary cassette tapes as storage devices, they were superseded by the introduction of a 5
inch floppy disk drive and interface, the Disk II. The Apple II was chosen to be the desktop
platform for the first "killer app" of the business worldthe VisiCalc spreadsheet program.
VisiCalc created a business market for the Apple II, and gave home users an additional
reason to buy an Apple IIcompatibility with the office. By the end of the 1970s, Apple had
a staff of computer designers and a production line. The company introduced the illfated Apple III in May 1980 in an attempt to compete with IBM and

Microsoft in the

business and corporate computing market. When Apple went public, it generated more capital
than any IPO since Ford Motor Company in 1956 and instantly created more millionaires
(about 300) than any company in history.

19811985: Lisa and Macintosh


Steve Jobs be gan working on the Apple Lisa in 1978 but in 1982 he was pushed from the
Lisa team due to Infighting, and took over Jef Raskin's

low -cost-computer project,

the Macintosh. A turf war broke out between Lisa's "corporate shirts" and Jobs' "pirates"
over which product would ship first and save Apple. Lisa won the race in 1983 and became
the first personal computer sold to the public with a GUI, but was a commercial failure due
to its high price tag and limited software titles. In 1984, Apple next launched the Macintosh.
Its debut was announced by the now famous $1.5 million television commercial "1984". It
was directed by Ridley Scott, aired during the third quarter of Super Bowl XVIII on January
22, 1984, and is now considered a watershed event for Apple's success and a "masterpiece".
484

19861993: Rise and fall


Having learned several painful lessons after introducing the bulky Macintosh Portable in
1989, Apple introduced the PowerBook in 1991,which established the modern form factor
and ergonomic layout of the laptop computer. The Macintosh Portable was designed to be
just as powerful as a desktop Macintosh, but weighed 17 pounds with a 12-hour battery life.
The same year, Apple introduced System 7, a major upgrade to the operating system, which
added color to the interface and introduced new networking capabilities. It remained the
architectural basis for Mac OS until 2001. The Apple II series is too expensive to produce,
while taking away sales from the low end Macintosh. In 1990, Apple released the Macintosh
LC with a single expansion slot for the Apple IIe Card to migrate Apple II users to the
Macintosh platform.

19941997: Attempts at reinvention


By the early 1990s, Apple was developing alternative platforms to the Macintosh, such the
A/UX.

Apple had also begun to experiment in providing a Mac-only online portal which

they called eWorld , developed in collaboration with America Online. The Macintosh would
need to be replaced by a new platform, or reworked to run on more powerful hardware.
In 1994, Apple allied with IBM and Motorola in the AIM alliance. The goal was to create a
new computing platform (the PowerPC Reference Platform), which would use IBM and
Motorola hardware coupled with Apple's software. At the 1997 Macworld Expo, Steve Jobs
announced that Apple would join Microsoft to release new versions of Microsoft Office for
the Macintosh. On November 10, 1997, Apple introduced the Apple Store, tied to a new
build-to-order manufacturing strategy.

19982005: Return to profitability


On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of
the Macintosh 128K : the iMac. The iMac featured modern technology and a unique design.
It sold close to 800,000 units in its first five months.
On May 19, 2001, Apple opened the first officialApple Retail Stores in Virginia and
California. Later on July 9 they bought Spruce Technologies, a DVD authoring company.
The same year, Apple introduced the iPod portable digital audio player. In 2003,
Apple's iTunes Store was introduced, offering online music downloads for $0.99 a song and

485

integration with the iPod. The servic e quickly became the market leader in online music
services, with over 5 billion downloads by June 19, 2008.

20052007: The Intel transition


At the On January 10, 2006, the new MacBook Pro and iMac became the first Apple
computers to use Intel's Core Duo CPU. By August 7, 2006 Apple had transitioned the entire
Mac product line to Intel chips On April 29, 2009; Apple also introduced Boot Camp to help
users install Windows XP or Windows Vista on their Intel Macs alongside Mac OSX.
Apple's success during this period was evident in its stock price. Between early 2003 and
2006, the price of Apple's stock increased more than tenfold, from around $6 per share to
over $80. In January 2006, Apple's market cap surpassed that of Dell.

2007present: Mobile consumer electronics era


Delivering his keynote at the Macworld Expo on January 9, 2007, Jobs announced that Apple
Computer, Inc. would from that point on be known as Apple Inc., because computers are no
longer the singular focus of the company. This change reflects the company's shift of
emphasis to mobile electronic devices from personal computers. The event also saw the
announcement of the iPhone and the Apple TV. After years of speculation and multiple
rumored "leaks" Apple announced a large screen, tablet-like media device known as the iPad
on January 27, 2010. Later that year on April 3, 2010, the iPad was launched in the US and
sold more than 300,000 units on that day and reaching 500,000 by the end of the first
week. In May of the same year, Apple's market cap exceeded that of competitor Microsoft for
the first time since 1989. Apple released the fourth generation iPhone , which
introduced video calling, multitasking, and a new uninsulated stainless steel design, which
acts as the phone's antenna. In October 2010, Apple shares hit an all-time high, eclipsing
$300. Additionally, on October 20, Apple updated their MacBook Air laptop, iLife suite of
applications, and unveiled Mac OS X Lion, the latest installment in their Mac OS X operating
system. On January 6, 2011, the company opened their Mac App Store, a digital software
distribution platform, similar to the existing iOS App Store. On January 17, 2011, an internal
Apple memo from Jobs announced that he will once again take a medical leave of absence,
for an indefinite period, to allow him to focus on his health. Chief operating officer Timothy
D. Cook will take up Jobs' day-to-day operations at Apple, although Jobs will still remain
"involved in major strategic decisions for the company."
486

STRENGTHS AND WEAKNESSES


STRENGTHS
CEO Steve Jobs. Visionary and charismatic.
Apple Computer are expert in Developing own software and hardware.
Product development. Doesn't invent the market, but its products set high standards for
the market.
Design and utility. Sleek, not clunky. For instance, the desktop computer is part of the
screen, not a separate box with wires; the iPhone has very few buttons and feels nice in
the hand. Products are easy to use, almost intuitive.
Marketing. Clever and takes advantages of people's frustrations with other hardware.
Brand name.

WEAKNESSES
The product life cycle of Apple products are very small for that reasons revenues are
more depend on launch of new products and services.
Apples market share is far behind from major competitor Microsoft.
In past the relationship between Steve jobs and employee were not good which result in
reputation loss.
Slow turn around on high demand products.
Weak relationship with Intel and Microsoft.

Weak presence in business arena.

CEO Steve Jobs. He has been described as a control freak and very demanding. When he
dies, the company will take a severe blow. When his health was in the news, his
secretiveness damaged the company's reputation.

ORGANIZATIONAL CULTURE
The culture of Apple was based on an ideal that self-motivated individuals will work harder if
they do not have a boss micromanaging every action. The unique structure of Apple had
487

allowed it to grow and react more quickly to changes than its competitors. The reason for the
quick responsiveness is simple; it is much easier to get a project started if there are only a few
people to obtain approval from. Apple initially grew fast, because decisions were made at the
lowest possible level. Corporate headquarters made policy and oversaw all activities, but the
local employees made the day-to-day decisions on the ground in countries all over the world.
This type of top-down philosophy allowed for quick responsiveness and resolutions to
situations without involving the corporate headquarters.

ORGANIZATIONAL STRUCTURE:
The organizational structure of Apple was almost non-existent and focused on placing
decision making in the hands of the people in the field. Apple was doing incredibly well and
had gotten the attention of many people because the company worked well and was very
responsive to change. However, things took a downward turn and Apple found themselves in
a financial nightmare. Apple suffered problems in regional areas, specifically in the
accountability of spending and in fiscal decision-making. The same "top-down" ideology that
helped Apple grow also opened the door for some serious financial losses. With employees at
different levels making decisions, it became difficult for the corporate office to keep track of
spending and purchasing.

MANAGEMENT PRACTICES
In the last five years, Apple was reaching for the sky moving performance. After his iPod
products soar and make officials Sony throe, Apple is now about to shake up its product
superiority with the stunning Nokia, iPhone. Investigations into business processes that acted
by Apple brings us to the three key elements that might explain the triumph of the company
from Cupertino, California. Elements of the first and perhaps most vital is the existence of the
CEO and founder Steve Jobs. Inevitably casual-looking guy who likes this is a key figure
behind Apple's toughness. Through his vision is sharp and strong flavor would-technology
products were aesthetics, Steve has manifest itself as an anchor who is very determine in
which direction Apple would ship destined. Steve was a person who is always chasing
perfection point - both on aspects of design or in the process of manufacturing a variety of
product lines. Once he is confident with its product design vision, then he would work
furiously with his engineers to ensure that design really can be produced with full perfection.
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The story of the creation of the iPod and the iPhone probably will never happen without a
perfectionist attitude and strong leadership as well as processes of Steve Jobs. The second
element that determines the success of Apple is a perfect synergy between the various teams both the design team and software hardware teams. Every task is done in parallel and
simultaneous collaboration. Product creation process at Apple is not done step by step, where
after the design is complete then handed over to the software, then forwarded again to the
hardware. Conversely, in the process all these aspects work together simultaneously.
Essentially it means that products do not pass from team to team. Products get worked on in
parallel by all departments at once - design, hardware, software. Elements of the latter may be
more rarely known. This element is the presence of the other genius named Jonathan Ive,
who served as Chief Design Apple. Jonathan Ive is a brilliant product designer who has a
very central role in the history of the birth of the legendary Apple products. Jonathan is the
brains behind the birth of the iMac product, the iPod and iPhone. In other words, this figure is
apt to translate vision into reality through the Steve Jobs product suite is elegant and full
shades of beauty.

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS


Key success factors are significant to future success of industry firms. These factors
encompass competencies, market achievement, resources, competitive capabilities and
product attributes etc. it is most important for the strategists to be familiar with the external
environment in order to distinguish the most important competitive success factor. The KSFs
of apple are given below.

Extensive Research &Development


Apple started the building of infinite loop campus and each activity on the campus was
constraint and R&D. In the campus every building was named as R&D 1 to R&D 6. Apple
increases its workforce by 12,600employees for the year 2010 as the technology oversize
strengthened its R&D activities.

Innovative activities
Apple is well recognized for its innovative product lines. Over the precedent decade, it has
launched 5 sensibly game-changing innovations
1. The iPod: the stylish MP3 player that started its decade of distraction.
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2. The iTunes: Exquisite software with an influential business model that demonstrated the
individuals would indeed forfeit for music if the value was fair and the interface was easy
enough.
3. The iPhone: Nicknamed the Jesus phone by followers, a Smartphone which three years
afterward still hasnt been harmonized by competitors.
4. The Apple Exchange: No one desires 98% of the apps that apple presents.
5. The Apple Store: The quietest fraction of apples revolution, nowadays near to $2 billion
value of products progress throughout apple revolutionary shops.

Advertising and Differentiation


Throughout the history apple has been recognize well for its advertisements, which are
planned to imitate a set up of marketing its brands to creative persons. Their most noticeable
and campaigns include the super bowl commercial 1984 , Think different 1990s
campaign, and the 2000s iPod people. Apples iPod, portable music player has been
showcased as a part of modern art in NYs Museum of Modern Art. Nowadays its advertising
efforts focus around special events, and keynotes at seminars such as the Apple expo and
Mac world expo.

Well Recognized and Cherished Brand Name


Apple is the king of brand names around the globe and is placed at number one in the US.
Apple and Google do a substitute for the international market with star bucks, IKEA and
Skype rounding out the top five. Tiger as well as did the iMac made apple top on the radar
catalog for individual. Apples brand name recognition is overturn on the high.

Retail and Distribution Network


Apple has opened its largest United States store; a buildin g in Boston which imitates apples
arrangement to increase its retail ventures at home and abroad. Apple distributes its products
through its retail stores; direct sales force, online stores, as well as throughout the third party
resellers, value added rese llers and wholesalers. The apple operated eighty four retail open
outlets in 2004. These outlets were selling peripheral products, hardware, software, as well as
a range of third party software and hardware products.

490

Breadth of Product Line


Apple inc. deals in the manufacture, marketing and designs of personal computers (PCs) and
related services, peripherals, software and networking solutions. It has also developed various
markets and is engaged in designing a wide range of portable digital music players besides
related services and accessories which includes the online distribution third party audio and
music books

INTERNAL ENIVRONMENT
Career Opportunities and Employability Security
Apple followed a positive policy of recruitment, including internship, on-the -job training, and
several career opportunities. It focused on the importance of having computer-based
knowledge in the job market.

Culture of Secrecy
As Apple was mainly into innovation, the company's policy was to keep things confidential.
Secrecy was built into the corporate culture and the company always maintained tight control
over information.

A Unique Culture
Many experts praised Apple's corporate culture. They felt that like many other top
companies, Apple focused on nurturing a culture that valued creative people in good times
and bad. They said that the culture at Apple was deeply associated with Jobs.

Or a Dysfunctional Culture?
However, not all were impressed by Apple's corporate culture. Some felt that there were
certain aspects of Apple's culture that were dysfunctional. Analysts felt that Apple had a
laidback work culture which was dysfunctional from a management standpoint.

Is There a Need for Change?


Experts felt that Apple was doing well in the economic downturn by investing, inventing, and
innovating. Quoting Technology Business Research, Inc. (TBR) , data and analysis, iTWire
reported that Apple's "culture of innovation" would lead to the company outperforming the
economy and its competitors.
491

REFERENCES:
http://en.wikipedia.org/wiki/Apple_Inc .
http://www.fool.com/investing/general/2010/06/07/apple -strengths-weaknessesopportunities-threats.aspx
http://hubpages.com/hub/The -elegance -of-Apples-management-style
http://www.mba-tutorials.com/marketing/273-apple -swot-analysis.html
http://mba-lectures.com/management/strategic -management/1203/key-success-factors-ofapple.html

492

HTC CORPORATION

493

HISTORY:
The history of HTC Corporation is described as follows:

INTRODUCTION:
HTC Corp produces powerful handsets that continually push the boundaries of innovation to
provide true mobile freedom.
It is founded in 1997 by Cher Wang, Chairwoman, HT Cho, Director of the Board &
Chairman of HTC Foundation, and Peter Chou, President and CEO, HTC made its name as
the company behind many of the most popular operator-branded devices on the market. It has
established unique partnerships with key mobile brands, including the leading five operators
in Europe, the top four in the US, and many fast -growing Asian operators. It has also brought
products to market with industry leading OEM partners and, since June 2006, under its own
HTC brand. HTC is one of the fastest-growing companies in the mobile sector and has
achieved remarkable recognition over the past couple of years. According to Business Week
ranked HTC as the second best performing Technology Company in Asia in 2007 as well as
giving the company the number 3 spot in its Global listing in 2006. According to HTC, 18
months ago the company has introduced dozens of HTC-branded products around the world.

Products and Innovation:


HTC is known for its innovation. It is constantly broadening the range of devices it offers
introducing devices to support specific applications and new form factors that meet the
increasingly diverse needs of its customers and partners.
HTC's product portfolio offers easy-to-use solutions that embrace the full range of mobile
multimedia resources, wireless anytime and Internet on the go.
It has a rich heritage of device 'firsts':

First color palm-size PC (1999)

First Microsoft Pocket PC (2000)

First Microsoft wireless Pocket PC (2002)

First Microsoft powered Smart phone (2002)

First Microsoft Smart Music Phone (2004)

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Large 2.8" TFT touch -screen LCD display

First Microsoft 3G Phone (2005)

First Microsoft Windows Mobile 5.0 Platform Phone (2005)

First tri-band UMTS 3G device on the Windows Mobile platform (2006)

First Microsoft Windows 5.0 Smart phone (2006)

First Tri-band UMTS PDA touch screen to allow finger tip navigation (June2007)

In early 2006, HTC launched a powerful new device with a groundbreaking form factor: the
HTC Advantage. The HTC Advantage is the worlds most powerful office, boasting a 5"
screen and full detachable QWERTY keyboard. This was followed in early 2007 with the
introduction of the HTC Shift. Equipped with Windows Vista this device includes a brilliant
7-inch widescreen touch display and a 40 gigabyte hard drive.
HTC launched the HTC Touch in June 2007 as the result of extensive R&D and the
conviction that fingertip control would enable more intuitive navigation. The groundbreaking
HTC Touch is equipped with TouchFLO so that consumers just sweep their finger
across the screen to get access to the most commonly used content, contacts and features in a
simple finger flick. HTC aims to continually develop smart new devices that empower users
on the go, providing more freedom in the way they live their lives.

SWOT ANALYSIS:
The SWOT analysis will help to understand the position of HTC in the market:

495

Strength

Weaknesses

Leading makers of PDAs smart


phones

other competitors e-g: Nokia, Apple,


Blackberry which has big market

Recognized brands name and good

share

quality products

Product has good image in market

The Research and Development in

The range of their cell phone is low as


compared to their competitor , Nokia ,
which has greater variety of smart

HTC has given more importance

HTC has not such a big share like

phones,

HTC has smart portfolio consisting of

from

cheapest

to

most

expensive one

42 phones

Their number of

customers are

increasing as the time passes

Opportunities

Threats

iPhone. It is a big hindrance in the

HTC is providing touch screen cell

demand of HTC cell phones.

phones, which are very much in

demand now days.

threat for the company. Thats because

and launched their cell phones with

HTC smart phones are expensive and


not affordable for all smart phone
users like Nokia and so people prefers

Google popularity plays huge role in


success of HTC

The financial crunch could also be

HTC has collaborated with Google

Android operating system.

The major threat to HTC is Apple

HTC cell phones are working on new


technology

like3D,

4G

and

5G

technologies

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Nokia over HTC.

INTERNAL ENVIRONMENT:
Mission statement:
HTC's mission is to become the leading innovative supplier of mobile information and
communication devices by providing value-added design, world -class manufacturing and
logistics and service capabilities.
HTC is committed to driving the growth and capabilities of smart phone technology. The
company has developed strong R&D capabilities, pioneered many new designs and product
innovations and launched state of the art PDA phones and smart phones for operators and
distributors in the global telecoms industry. It has invested in a strong R&D team accounting
for 25% of the total headcount and a world-class high-volume manufacturing facility, both
based in Taiwan.

POLICIES
HTC has its policies in written form in his public meetings and in stock markets. The main
points are as follow:

Procedures for Acquisition or Disposal of Assets

Rules for Endorsements and Guarantees

Procedures for Handling of Derivatives Trading

Operational Procedures for Fund Lending

These are the points which are approved by the share holders meeting 18 June 2010.For every
policy, detailed list of articles of company law is under governance of corporate environment.
These company policies are approved by the concerning departments of a government
department. This shows the internal environme nt of organization that governance is pure and
meeting their missions and goals. It also shows that it also give courage to employs and
concentrate towards it personal and organizational goals.

Procedures for Acquisition or Disposal of Assets:


For purposes of enhancing the Corporation's asset management and effecting public
disclosure of information, these Procedures for the Acquisition or Disposal of Assets are
adopted in accordance with Article 36-1 of the Securities and Exchange Act and the

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Regulations Governing the Acquisition or Disposal of Assets by Public Companies issued by


the Securities and Futures Bureau of the Financial Supervisory Commission, Executive Yuan.

Rules for Endorsements and Guarantees:


These Rules are adopted pursuant to the Regulations Governing Lending of Funds and
Making of Endorsements and Guarantees by Public Companies issued by the Securities and
Futures Bureau under the Financial Supervisory Commission, Executive Yuan, to protect the
rights and interests of the Corporation's shareholders, ensure sound financial management,
and minimize operational risk.

Procedures for Handling of Derivatives Trading:


These Procedures are adopted in accordance with the provisions of Taiwan-FinanceSecurities-I-0910006105 of the Securities and Futures Commission, Ministry of Finance, to
protect investment, effect public disclosure of information, and strengthen the risk
management system for derivatives transactions established by the public company.

Operational Procedures for Fund Lending:


These Operational Procedures are adopted pursuant to the Regulations Governing Lending of
Funds and Making of Endorsements and Guarantees by Public Companies issued by the
Securities and Futures Bureau under the Financial Supervisory Commission, Executive Yuan,
to ensure the Corporation's sound management of funds and to minimize operational risks.

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FORMAL STRUCTURE:

ORGANIZATION DIVISION:
Division

Management Team
Name

499

Title

Marketing

John Wang

Chief

Marketing

Officer

Global Sales

Peter Chou

CEO & President

Innovation Center

Horace Luke

Chief

Innovation

Officer

Global Product

Kouji Kodera

Chief

Product

Officer

Strategy

Ronald Louks

Chief

Strategy

Officer

R & D Center

David Chen

Chief Engineering
Officer

Global Operation Center

Fred Liu

Corporate

Senior

Executive

Vice

President

Procurement & Supply Chain MGT

Kenny Tseng

Special Assistant
to President of
Engineering and
Operation

500

Information Technology

Eric Chou

Chief
Information
Officer

Manufacturing Operation Center

CS Wang

Vice President

Customer Service &

Fred Liu

Corporate
Senior Executive

Quality Assurance

Vice President
Internal Audit

Vincent Tseng

Director

Finance & Accounting

Hui-Ming Cheng

Chief

Financial

Officer

&

Spokesman
Legal

Grace Lei

General Counsel

ORGANIZATION CULTURE:
HTCs culture is a guideline to provide high ethical standards for all employees in conducting
HTC business activities. All employees of HTC Corporation., including branches and
subsidiary companies, must follow these ethical standards regardless of the employees
position, grade level, and location. This Code includes three major sections:

General Moral Imperative

Venders/Suppliers and Customers Relationship

Conflict of Interests

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The General Moral Imperative section requires that HTC commits to providing a safe and
healthy work environment and equal opportunities, and that it establishes a behavioral code
for the treatment of knowledge about the companys assets/properties/ information.
The Venders/Suppliers and Customers Relationship section requires that HTC commits to
maintaining a fair, legal, and long-term relationship with its venders/suppliers and customers
to the benefit of all parties. The Conflict of Interest section describes the behavioral rules for
employees in situations of divided interest. This is superior to any other local regulations
except certain mandatory laws/acts issued by the local government. Any violation of HTC
Code of Conduct and applicable policies may cause disciplinary action up to and including
the termination of employment. The employees are responsible for understanding and
complying with the HTC Code of Conduct. The manager must ensure that each employee
endorses the contents of the Code of Conduct and should review this document with each
employee per iodically (at least once per year). Both parties should then sign in the
appropriate space on the last page.

EXTERNAL ENVIRONMENT:
The external environment is comprised of various factors which are directly interactive or indirectly interactive.
The directly interactive forces are as:

Owners: The stock holders keep eye over their interests and provide a return on
investment.

Customers: The main factor is demand satisfaction. If customers are satisfied with
product then the company is in profit.

Competitors: The competitors for HTC are increasing day by day. The biggest
competitors are Samsung, Motorola, Sony Erickson which are dealing in android and
share the market place.

The indirectly interactive forces to HTC are as follow:


Socio-cultural
o Demographic
o Values

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The political and legal dimensions

The technology dimensions

The economic dimensions

The Global influences

These are the factors which externally affect the HTC Corporation. The socio-culture is
especially important in HTC, it includes demographic and values of a particular customer
base. The political and legal environment effects too the HTC externally. Political parties
create or influence laws, and business owners must abide by these laws. Tax policies, trade
regulations, and minimum wage legislation are the external factors which affect the HTC.
The technological dimensions of the external environment impacts the scientific process
using in input to output. The economic and globally do effect highly affect HTC. The amount
of earthquake is high in Taiwan region so its a natural factor which externally affects the
HTC.

Ways in which Strength are Exploited:


HTC is effectively exploiting its strength to maximize the market share and profit margins.
They first analyze their strengths and then using the ir think-tank they have exploited them.

Using their PDA (Personal Digital Assistant), first company to make palmtops. They have
used this technology and making their Smart Phones even smarter. Every day they are
using new technologies in their smart phones to make them unique and exciting.
Releasing first time phone with 3D technology without glasses to make it more exciting.
The phone named HTC EVO 3D, using EVO technology to run 3D without glasses. HTC
is releasing its Tablets with remarkable technology HTC Sense and HTC scribble, named
HTC Flyer.

HTC is highly recognized now days, firstly it was using windows operating system then
after collaboration with Google they are permanently moved to android operating system.
With this factor their customer track is increasing day by day. First Android phone was
released by HTC in 2007 named, Google G1. Up till now they have make remarkable
changes in their operating system and HTC is following them and updating their smart
phones. This factor of innovation has caused the high market share and recognition
among people.
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HTC has very strong and talented research and development department which is using
effective techniques to research and develop new technologies which is appreciated by
their customers. In 2009 they release the set HTC HERO which was powered by HTC
SENSE which is generally called SENSE UI. The main characteristics of sense user
interface is; sense update of weather widget, no GPRS and WiFi connection needed,
sitting in a room your phone is ringing flip your phone and it turns silent without pressing
anything. There are many uses of HTC SENSE which make it distinguish and unique
from others which has developed by its research and development to tackle the market
share.

MANAGEMENT PRACTICES:
The management practices are the key role of any company. It helps in making your strategy
to compete with other company to make secure and make your brand at top. HTC has focus
on following points to practice management and make strategy:

BRAND STRATEGY:
Following are their management practices belonging to their Brand:

Focus on smart phone market; they are the leaders of MS OS and Android platform.
There are many other operating systems like Symbian OS which is widely used by Nokia
but it is out dated thats why HTC dont use that OS.

Build up brand value through innovative products and friendly user interface. If interface
of your phone is user friendly and simple then it is widely accepted by customer. The
good interface becomes value for a customer. By this strategy they are building brand
value.

Fast response to the market changes and delivers product diversification to the market.
The distribution Channel is quick that their product reaches in time at market.

COMPETITIVE STRATEGY:
The competitive strategies to compete with other mobiles company are as:

Work closely with the industry leaders to facilitate change of trends.

Cooperative teamwork, good execution, implements of global operation and cost control.
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Strategic partnerships with the world's industrial leaders in telecommunications help


comprehension of customer's needs.

Continual market expansion, particularly in the 3G platform market which is beneficial to


the demand of data transmission.

RISK MANAGEMENT:

Exercise tighter credit risk and channel inventory control.

Intellectual property rights risk management and accelerates patents application.

Operating expense control.

Provide various provisions in operational risks to ensure its appropriateness and


sufficiency.

Some are the achievements of HTC from 2003-2008:

Best newly listed company in Taiwan for 2002 (Asia money, January 2003)

Strong R&D has made HTC a pioneer in the wireless industry (Far Eastern Economic
Review, September 2004)

HTC Smart phone named as the best choice for 2005 (T3, September 2004)

A leading maker of PDAs, PDA phones, and Smart phones (Wall Street Journal, March
2005)

HTC Chairperson Cher Wang selected as an Innovator in the 2005 Stars of Asia: 25
Leaders on the Forefront of Change (Business Week, July 2005)

Ranked No. 4 in the annual ranking of Asia's best-performing companies. (Business


Week, September 2006)

Ranked No. 2 in the annual ranking of Asia's best-performing companies. (Business


Week, September 2007)

Ranked No. 10 among global IT companies in the 2008 Info Tech 100 (Business Week,
May 2008)

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FACTORS CONTRIBUTING TO INTERNATIONAL SUCCESS:


Following are the key success factors involved in international success;

The main key factor to international success is collaboration with Google and starts
new product line using Android OS, this increases their market share and people came
to know about HTC especially in Asia. Using new innovative ideas and competing
with up to date technology contributes to international success. HTC tends to try new
technologies in their smart phones to keep their name in market. They are also
releasing their phones with Windows 7 OS. Collaborating with well established
companies contribute to international success.

The innovation factor of HTC is a big factor to international success. Using


innovative technologies to satisfy their customer in a unique way. It results in a
worldwide success. HTC is currently working on 5G technology, they are currently
releasing phone in 4G. They have transformed many technologies in their smart
phones like EVO technology and 3D technology. The remarkable innovative
technology is HTC Sense which has change the concept of smart phone. These
technologies distinguish it with its competitors and contribute in international success

The collaboration of HTC with big telecommunication companies lead to key success
internationally in Europe and America. Collaboration of HTC with Verizon, Sprint,
T-Mobile, Orange, Vodafone are key success factor because they are high selling
telecom companies which contribute in international success.

The important factor is their strategy; expanding their market then earning the profit.
This strategy helps in brand awareness to people in world. This strategy helps in the
key success to international success. In 2009 the Gross Profit and market share of
HTC was as: North America 48.8% NT$ 70.7 Billion, Europe 30.4% NT$ 44 Billion,
Asian & other countries 20.8% NT$ 30.2 Billion

REFERENCES:
http://www.htc.com/us/about
http://www.freeswotanalysis.com/telecommunication-companies-swot-analysis/57-htccorporation-swot-analysis.html

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http://www.corpasia.net/taiwan/2498/irwebsite/index.php?mod=profile
http://www.htc.com/www/press/htc-story.html
http://www.corpasia.net/taiwan/2498/irwebsite/index.php?mod=pages&id=2
http://www.corpasia.net/taiwan/2498/engovernancepage/2/EN/20100618HTC%20Procedures%20for%20the%20Acquisition%20or%20Disposal%20of%20Assets_E.
pdf
http://www.corpasia.net/taiwan/2498/engovernancepage/2/EN/20100618HTC%20Rules%20for%20Endorsements%20and%20Guarantees_E.pdf
http://www.corpasia.net/taiwan/2498/engovernancepage/2/EN/20090619HTC%20Procedures%20for%20the%20Handling%20of%20Derivatives%20Trading_E.pdf
http://www.corpasia.net/taiwan/2498/engovernancepage/2/EN/20100618HTC%20Operational%20Procedures%20for%20Lending%20Funds%20to%20Others_E.pdf
http://www.corpasia.net/taiwan/2498/irwebsite/index.php?mod=pages&id=1
http://www.cliffsnotes.com/study_guide/The -Internal-Environment.topicArticleId8944,articleId-8860.html
http://www.cliffsnotes.com/study_guide/The -External-Environment.topicArticleId8944,articleId-8859.html
http://www.htc.com/uk/press.aspx?id=126904&lang=1033
http://www.corpasia.net/taiwan/2498/irwebsite/index.php?mod=strategy
http://www.corpasia.net/canreport/main.php?ticker=2498&id=25&regionid=1
http://www.htc.com/www/about-htc/achievements.html

507

NESTLE

508

Nestl S.A. is one of the largest food and nutrition companies in the world, founded and
headquartered in Vevey, Switzerland. Nestl originated in a 1905 merger of the Anglo-Swiss
Milk Company, which was established in 1866 by brothers George Page and Charles Page,
and the Farine Lacte Henri Nestl Company, which was founded in 1866 by Henri Nestl.
The company grew significantly during the First World War and following the Second World
War, eventually expanding its offerings beyond its early condensed milk and infant formula
products. Today, the company operates in 86 countries around the world and employs nearly
283,000 people.

NESTLE LOGO:
The Nestl logo was launched by Henri Nestl in 1868 on the basis of the meaning of his
name in German, i.e. little nest, and of his family emblem. Henri obtained a 15-year French
patent for his logo in 1868. After he retired, it was registered in Vevey in 1875 by the new
owners of his company.
In 1938, the traditional nest design was combined with the "Nestl" name to form what is
called the combined mark.
In 1966 the design was simplified. In 1988, the worm in the mother bird's beak was removed
and the fledglings became two instead of three. It is said that it was meant to better illustrate
the activities of the company, no longer active only in nutrition, and to reflect the
average modern family of two children.
The logo we know now has just been simplified. The tree is supposed to represent an oak and
the birds thrushes. You see that this logo has its own life and story, it was changed many
times to stay modern and have up-to-date look. Sometimes it is very good idea to update old
logo of your company. That is why many old companies do a million-dollar rebranding.

HISTORY:
Nestl originated in a 1905 merger of the Anglo-Swiss Milk Company, which was
established in 1866 by brothers George Page and Charles Page, and the Farine Lacte Henri
Nestl Company, which was founded in 1866 by Henri Nestl. The company dates to 1867,
when two separate Swiss enterprises were founded that would later form the core of Nestl.
In the succeeding decades the two competing enterprises aggressively expanded their
businesses throughout Europe and the United States.

509

In August 1867 Charles A and George Page, two brothers from Lee County, Illinois, USA
established the Anglo -Swiss Condensed Milk Company in Cham. Their first British operation
was opened at Chippenham , Wiltshire in 1873.
In September 1867, in Vevey, Henri Nestl developed a milk-based baby food and soon
began marketing it. The following year, 1868, saw Daniel begin seven years of work
perfecting his invention, the milk chocolate manufacturing process; M. Nestl's was the
crucial cooperation M. Peter needed to solve the problem of removing all the water from the
milk added to his chocolate and thus preventing the product from developing mildew. Henri
Nestl retired in 1875, but the company, under new ownership, retained his name as Farine
Lacte Henri Nestl.
In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following year
the Nestl Company added condensed milk, so that the firms became direct and fierce rivals.
In 1905 the companies merged to become the Nestl and Anglo-Swiss Condensed Milk
Company, retaining that name until 1947, when the name Nestl Alimentana SA was taken as
a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding
company, Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of
soup mixes and related foodstuffs. The companys current name was adopted in 1977. By the
early 1900s, the company was operating factories in the United States, United Kingdom,
Germany and Spain. World War I created new demand for dairy products in the form of
government contracts; by the end of the war, Nestl's production had more than doubled.
After the war, government contracts dried up and consumers switched back to fresh milk.
However, Nestl's management responded quickly, streamlining operations and reducing
debt. The 1920s saw Nestl's first expansion into new products, with chocolate the company's
second most important activity.
Nestl felt the effects of Wor ld War II immediately. Profits dropped from US$20 million in
1938 to US$6 million in 1939. Factories were established in developing countries,
particularly Latin America. Ironically, the war helped with the introduction of the company's
newest product, Nescaf ("Nestl's Coffee"), which was a staple drink of the US military.
Nestl's production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestl. Growth
accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings
510

and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971)
and Stouffer's (1973). Diversification came with a shareholding in L'Oral in 1974. In 1977,
Nestl made its second venture outside the food industry by acquiring Alcon Laboratories
Inc.
In 1984, Nestl's improved bottom line allowed the company to launch a new round of
acquisitions, notably American food giant Carnation and the British confectionery
company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to Nestl.
The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia), in
February of 2007.
The first half of the 1990s proved to be favorable for Nestl: trade barriers crumbled and
world markets developed into more or less integrated trading areas. Since 1996 there have
been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and Ralston
Purina (2002). There were two major acquisitions in North America , both in 2002: in June,
Nestl merged its U.S. ice cream business into Dreyer's , and in August a US$2.6 billion
acquisition was announced of Chef America, the creator of Hot Pockets. In the same time
frame, Nestl came close to purchasing the iconic American company Hershey' s, one of its
fiercest confectionery competitors, though the deal fell through. Another recent purchase
included the Jenny Craig weight loss program for US$600 million.
In December of 2005, Nestl bought the Greek company Delta Ice Cream for 240 million.
In January of 2006, it took full ownership of Dreyer's, thus becoming the world's biggest ice
cream maker with a 17.5% market share.
In November of 2006, Nestl purchased the Medical Nutrition division of Novartis
Pharmaceutical for $2.5B, also acquiring in 2007 the milk flavoring product known
as Ovaltine. In April of 2007, returning to its roots, Nestl bought baby-food
manufacturer Gerber for $5.5 billion.
In December of 2007, Nestl entered in a strategic partnership with a Belgian chocolate
maker Pierre Marcolini. Nestl agreed to sell its controlling stake in Alcon to Novartis on 4
January, 2010. The sale was to form part of a broader US $39.3 billion offer, by Novartis, for
full acquisition of the worlds largest eye-care company.

511

STRENGTHS:
Nestle is the world's largest food and beverage company in terms of sales. Due to strong
brand name their product will gain a wide consumer acceptance from all over the Pakistan.
The biggest strength would be the strong brand name the risk in investing would be
reasonable very low and the pledge of ge tting a viable business, one that has been worked
many times before. They will set a complete transparent manufacturing system for customer
satisfaction in terms of hygiene. They will strengthen our product by broad distribution
network by increasing the capacity for innovation which will lead to an improvement in sale
growth. Nestle will be organizing a team which will inspect and observe the accumulation
(stock) on daily bases to prevent any damages occurring and also in order to keep the
inventory fres h.
Following are the strength of nestle

Skilled labor.

Educated staff.

Large number of offerings.

Pre purchase virtual display.

Arrangement of events.

Good background of the company.

Easy to approach outlets.

Physical evidence

WEAKNESSES:
The main weakness of nestle is the lack of an established good standing. Their competitors
have been around for decades and therefore have a loyal base. The second biggest weakness
would be the lack of capital, establishing such an enormous and gigantic plant there will be a
need of acquiring financial support in terms of loans from the bank. Spending millions in a
strong brand is no guarantee to wealth. It may the safest way to get into the business, but it is
not necessarily the cheapest.
Further weakness would be.

512

Small target market.

Lack of awareness among the target market.

Dependency on others (govt. & sponsors) for the arrangement of events.

INTERNAL ENVIRONMENT:
In nestle internal environment ensures

Employees are on side with the goals of an organization

They have direct impact on product quality, dependability and overall productivity

They are internal market, which impact every department within an organization; a
satisfied internal market will be better able to satisfy external market.

ORGANIZATIONAL CULTURE:
Our Culture:
At Nestl Waters North America, were a competitive business who also understands the
importance of how business is conducted. Our people, who are dedicated to producing high
quality products and maintaining top service levels, share our Aspirations and Beliefs, a set of
principles that everyone in our organization follows. We strive to act responsibly in our
business and workforce practices, to be good stewards of the environment and to be a good
neighbor in the communities where we live and work.

Our Values:
Our values are best expressed through our Aspirations and Beliefs, a doctrine that everyone at
the company shares and practices every day.

Aspirations:

Building Customer Loyalty

Inspiring Employee Passion and Commitment

Consistently Achieving our Key Business Objectives

Acting with an Entrepreneurial Company Spirit

Constantly Improving Our Company and Ourselves


513

Beliefs:
Our beliefs provide a framework for decision-making. They guide individual actions on a
daily basis. They are at the heart of what we do and who we are. We believe in:

Respect for People, Community and the Environment

Honesty and Integrity

Teamwork

The Aspirations describe what we are striving for our company to become and how we
chart our progress. The Beliefs provide a framework for decision-making. They guide
individual actions on a daily basis. They are at the heart of what we do and who we are.

EXTERNAL ENVIRONMENT:

Nestle is operating in a society which is very large in nature thus placing the organization
in an external environment where there is a huge number of forces which can potentially
influence the functioning of nestle in many ways.

The external elements with which the Nestle has to deal are the elements that are directly
related to it in conducting daily operations and the forces that may create certainties that
cannot be predicted. These elements have differentiated impact on Nestle in different
countries of the world.

Following are the components of Nestls Mega environment:

Political

Economic

Social t he components of Nestl's Mega

SOCIAL ENVIRONMENT:
In analyzing the social factors that can influence Nestls course of business activities in
Pakistan, we come across the demographical statistic of Pakistan which includes, gender
specification, age specification and religious specification, how a social and cultural values of
a certain geographical area can influence the important shifts in the demand of the product,
which may result in nestle changing some of its strategies accordingly in order to mainta in its
sales in Pakistan. Nestle lays a great emphasis in penetrating into the market by keeping
514

the cultural and traditional values of the geographic area in which it is conducting its
operation. Before nestle begins its operations in any country its main emphasis is on
studying the cultural values of that country, in order to get its products warmly welcomed and
make it highly preferred among other companys operating at the same level.

ECONOMIC ENVIRONMENT:
The second mega external environmental factor that influences the organization is the
economical factor, which controls the mechanism (contraction and expansion) of production,
consumption and distribution. Nestl makes a significant contribution to the economic sector
of Pakistan. Through generation of tax revenue, import substitution of milk powder, export
and infusion of over 2.3 billion rupees in the rural economy through milk purchases, the
company plays an active role in promoting economic growth. The capitalist economic
system consists of firms owned privately by individuals or by corporations. In such an
economy there is a great scope for the company to take favorable decisions and move
towards a better organizational environment. Social economic structure, then the rights of
owner ship and decision making (policy making) will be transferred to the state (government)

WAYS IN WHICH STRENGTHS ARE EXPOITED


Following are the notable strengths of Nestle:

Skilled labor.

Educated staff.

Large number of offerings.

Pre purchase virtual display.

Arrangement of events.

Good background of the company.

Easy to approach outlets.

Physical evidence

Nestls strengths that are exploited as;

They emphasize on internal growth that is to achieve higher volumes by renovating the
existing products and innovating new products. According to them renovation is that to
515

just keep pace in the industry, you need to change at least as fast as consumer
expectations and innovation for them is to maintain a leadership position, you also need
to leapfrog, to move faster and go beyond what consumers will tell you.

Nestle is a strong brand name so for them experimenting with new products or new line is
easy ,even if it doesnt work; their brand name is so strong that it somehow covers the
cost. This edge of strong brand name gives them the edge of experimenting more and
coming with new products and lines. Their strong brand name has earned them a not only
a massive consumer base but also strong customer-company trust relation. For investors
such a company flaunts a minimal risk investment with a guaranteed and handsome
turnover.

Furthermore, their transparent production cycle has also solidified their client base and
made them globally reliable for consumer based product manufacture. They will
strengthen their product through their broad distribution network and by increasing the
capacity for innovation in advertisement campaigns, eventually, leading to an imposing
sale growth.

Nestle always keeps an observant eye on its stock densities throughout its subdistributions to prevent any accumulation or deficiencies of their product. This strategy
makes people loyal to their products, obviously when a product of some company is
always out of stock them people tend t switch to other substitutes.

Another exploited strength that Nestle has is that they are low cost operators. This allows
them to not only beat the competition by producing low cost products, but by also edging
ahead with low operating costs.

MANGEMENT PRACTICES:
As they say;
Quality is the foundation of our Food, Nutrition, Health and Wellness Company
At Nestl Pakistan, we consider ourselves the standard bearers of our founder Henri Nestl's
care for safety and quality. Thus, Nestl Pakistan has an absolutely non-negotiable
commitment to product quality and food safety their take our motto of Good Food, Good Life
very seriously. At every step, from collecting raw materials from rural farmers to distributing

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finished goods in city supermarkets, our employees are trained and retrained to understand
their role in ensuring that consumers enjoy food and beverage items of the highest quality.
The Nestl name on a product is a promise to consumers that:

It Is Safe To Consume:
It complies with all relevant laws and regulations and meets high standards of quality. In
addition, they constantly try to improve and tighten existing regulations. We wish to ensure
the highest possible benefits and protection for our consumers. For this reason, they actively
participate in the revision of food standards with the government.

Quality Is To Win Consumer Trust And Preference:


They are committed to offering products and services to our customers that meet their needs
and/or preference and provide sound nutrition.

Quality Is Everybodys Commitment:


Our management takes the lead, sets the objectives and demonstrates its commitment towards
quality. All Nestl functions across our Value Chain are fully responsible to follow
mandatory norms and instructions for maintaining agreed quality standards. We follow the
stringent international standards of the World Health Organisation's Codex Alimentarius on
food production. All factory laboratories operate according to Good Laboratory Practices
guidelines. Our Sheikhupura and Kabirwala laboratories have long enjoyed an 'Excellent'
rating in the worldwide proficiency tests conducted by Nestl SA (Switzerland), and attest to
the world -class quality of our factories.

Quality Is To Strive For Zero Defect And No Waste:


We focus on facts and results and we strive for zero defect and excellence in everything we
do. They adopt a no waste attitude and constantly look for competitiveness and
opportunities for Continuous Improvement of the quality standards delivered to our
consumers.

Quality Is To Guarantee Food Safety And Full Compliance:


A solid quality management system must rely on a strong and fully empowered quality
function. We enforce full compliance with the mandatory standards and principles of our
Quality Management System, which include Food Safety, Regulatory and Quality
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requirements in every step of our Value Chain. The Nestl Quality Management System
builds on the existing Nestl Quality System and adds a strong management component to it.
The new dimension is the management of quality in all the rele vant business processes from
Consumer Requirement to Consumer Satisfaction.

NESTLES FACTORS CONTRIBUTING TO


INTERNATIONAL SUCESSS:
Nestle factors contributing to international success are:

Quality and Safety Science:


Quality and Safety Science at the Nestl Research Center is a cornerstone in Nestls global
success in guaranteeing safe and high quality products. With outstanding scientific expertise,
we know how to analyze our raw materials and finished products to assure safe and
compliant products that consumers expect from all Nestl brands. Our science driven food
safety evaluations allow issue anticipation and fact-based risk management.
Our passion is protecting our consumers and safeguarding their trust in Nestls brands and
products.

R & D Centers:
Nestle employs approximate 5000 people in 24 R&D centers and over 250 application
groups. It extends its reach by tapping into the technologies and expertise of more than 1
million researchers around the world.
For excellence today, a bottom-up approach appears to be more effective in both formulating
and implementing customer-satisfaction strategies. At Nestl, for example, it is local country
managers and their subordinate product and segment managers who regularly make such
today-for-today dec isions, not corporate headquarters management.

Entering New Markets:


Creates entry-level goods for emerging markets and then quickly and cheaply repackage them
for sale in rich nations, where customers are increasingly hungry for bargains. The term for
this new approach is trickle-up innovation. Source Innovation trickles in a new direction.

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Localization amidst globalization:


Nestle is successfully achieving localization in the increasingly globalized food industry.
Product planning, production, marketing and services form a strategy of successful
localization of a global company. Nestle has 2 organizations that focused on leveraging its
global reach to achieve operational efficiencies: GLOBE and GNBS provide the process,
organization and technology infrastructure to allow Nestl to leverage its global size. GNBS
will enable Nestl to leverage its scale to increase the efficiency and effectiveness of its "back
office" whilst enabling the markets and businesses to focus on demand generation and
profitable growth. Nestls Swiss sales are only 2% of their total global sales.

Global Brand Strategy:


Nestle has products that resonate all over the world under a unified brand. These brands are
unified under the Nestle banner, which delivered a value and reputation of a global food
company while the products

delivered its own specific attributes. The global corporate

brand was the brand platform for delivering localized products and brands. Nestle has built
global brands such as Nescafe, Nesquik, Nestea, Tasters Choice, Haagen-Dazs.

Successful Mergers and Acquisitions:


Nestle has grown thru organic growth but really thru successful M&A. Nestle has acquired to
enter both emerging and developed markets, and new product categories. Clear strategic
focus: Food & Beverages, Nutrition, Health & Wellness, adjacencies to existing core
businesses
Within these strategic focuses, 12 of their brands represent 70% of sales, most are #1 or #2 in
Market Share (4 of these brands are billion dollar brands). Clear criteria for transactions:
Enhancing key metrics, strong market positions, brands, capabilities, ease of integration
(culture). Global scope but focus on bolt-ons: both emerging and developed markets. M&A
drives profitable growth thru competitive advantages, growth drive rs, and operational pillars.

Commitment to Health and Safety:


Nestles commitment to occupational safety, health and environmental sustainability is
integrated into Nestl Continuous Excellence (NCE), the core of our strategy to drive
operational efficiency across the entire value chain. The overriding goal of NCE is to engage

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employees hearts and minds in a consumer-driven war on waste. It helps in winning hearts
globally and making them trust on its products. Its three main principles are:
Excelling in compliance: this includes complying with legal and strict Nestl internal
requirements at all times;
Delighting our consumers: Creating Shared Value and sustainability are increasingly
becoming a driver for product development, and sharing our aims and achievements with
consumers through brand and product communications;
Driving competitive advantage: for example, making progress towards our ambitions for zero
waste and zero accidents, and improving water efficiency and energy efficiency.

CONCLUSION:
Nestl is more people, product and brand oriented than systems oriented. While systems are
necessary, they should never be an end in themselves. Nestl favors long-term successful
business development and endeavors to be a preferred Company for long-term oriented
shareholders. However, Nestl does not lose sight of the necessity to improve short -term
results and remains conscious of the need to generate a sound profit each year. Nestl seeks
to earn consumers confidence and preference and to follow and anticipate consumer trends,
creating and responding to demand for its products. Therefore Nestl is driven by an acute
sense of performance, adhering to and favoring the rules of free competition within a clear
legal framework. Nestl is conscious of its social responsibility, which is inherent in its longterm orientation. Nestl is as decentralized as possible, within the framework imposed by
fundamental policy and strategy decisions requiring increasing flexibility. Operational
efficiencies, as well as the group-wide need for alignment and people development, may also
set limits to de -centralization. Nestl is committed to the concept of continuous improvement
of its activities, thus avoiding more dramatic one -time changes as much as possible.

REFERENCES:
http://www.scribd.com/doc/46343820/Nestle-Document-Final
http://www.nestle.com/Common/NestleDocuments/Documents/Library/Documents/People/M
anagement-Leadership-Principles-EN.pdf
http://www.nestle.com/AboutUs/Pages/AboutUs.aspx
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http://hubpages.com/hub/Potential-strategic-financial-objectives -of-an-organization
http://www.nestle.pk/community/corporate-social-responsibility.aspx

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PIZZA HUT

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INTRODUCTION
Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of
Wichita, Kansas. When a friend suggested opening a pizza parlor, they agreed that the idea
could prove successful, and they borrowed $600 from their mother to start a business with
partner John Bender Renting a small building at 503 South Bluff in downtown Wichita and
purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first
"Pizza Hut" restaurant; on opening night, they gave pizza away to encourage community
interest. They chose the name "Pizza Hut" since the sign they purchased only had enough
space for nine characters and spaces. Additional restaurants were opened, with the first
franchise unit opening in 1959 in Topeka, Kansas. The original Pizza Hut building was later
relocated to the Wichita State University campus.
Dan and Frank Carney soon decided that they needed to have a good standard image. The
Carney brothers contacted Wichita architect Richard D. Burke, who designed the distinctive
mansard roof shape and standardized layout, hoping to counter competition from Shakey's
Pizza, a chain that was expanding on the west coast. The franchise network continued to
grow through friends and business associates, and by 1964 a unique standardized building
appearance and layout was established for franchised and company-owned stores, creating a
universal look that customers easily recognized.
By 1972, with 314 stores nationwide, Pizza Hut went public on the New York Stock
Exchange under the stock ticker symbol NYSE: PIZ . In 1978, Pizza Hut was acquired by
PepsiCo, who later also bought KFC and Taco Bell. In 1997, the three restaurant chains were
spun off into Tricon, and in 2001 joined with Long John Silver's and A&W Restaurants to
become Yum! Brands .
The Pasta Bravo concept was acquired in 2003 from Pasta Bravo, Inc. of Aliso Viejo, Calif
for $5 million to pair with Pizza Hut

PRODUCTS:
Pizza Hut sells "Stuffed Crust" pizza, with the outermost edge wrapped around a coil of
mozzarella cheese; "Hand-Tossed," more like traditional pizzeria crusts; "Thin 'N Crispy", a
thin, crispy dough which was Pizza Hut's original style; "Dippin' Strips pizza", a pizza cut
into small strips that can be dipped into a number of sauces; and "The Edge pizza,"

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Depending on the individual restaurant size, Pizza Huts also may offer pasta dinners such as
spaghetti and Cavatini a mixture of Cavatelli (shells), Rotini (spirals), and Rotelle
(wheels) Pizza Hut introduced the Big Eat Tiny Price Menu. It features new Pizza Rolls, the
P'Zone Pizza, new Personal Panormous Pizza, and the Pizza Mia.
Pizza Hut introduced stuffed pan pizza Unlike regular stuffed crust cheese is not inside the
crust, just pressed into the pan crust. Pizza Hut introduced the Big Italy, a pizza that is almost
two fe et long . It has new, Italian themed dishes such as penne pasta, chicken commodore and
toasted sandwiches. Other than that they also have ice-cream, fruit shakes, brownies, chicken
wings, Garlic bread, fries , salads ,pasta and soups etc.

ORGANIZATIONAL CULTURE:
Organizational culture is basically a Pervasive, deep, largely subconscious, and tacit code that
gives the 'feel' of an organization and determines what is considered right or wrong,
important or unimportant, workable or unworkable in it, and how it responds to the
unexpected crises, jolts, and sudden change. In Pizza hut all new employees t assimilate this
code to know the correct way to behave and what to expect from other employees. It is based
on shared attitudes, beliefs, customs, express or implied contracts, and written and unwritten
The organizational culture of Pizza hut is conducive and friendly. In Pizza hut employees are
given the leverage to give their inputs in order to prove their service. The customers
satisfaction is of prime importance in pizza hut and they take severe measures to make them
happy and fulfill their desires. The organogram, mission statement and policies of Pizza hut
describes it organizational Structure.

ORGANO GRAM:
A simplified version of organogram is shown below.

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PIZZA HUT'S MISSION STATEMENT


Pizza hut take pride in making a perfect pizza and providing courteous and helpful Service on
time all the time. Every customer says, "I'll be back!" Is the employer of choice offering
team members opportunities For Growth, Advancement, And Rewarding Careers in a Fun,
Safe Working Environment.

P.E.A.R.L.S
v PASSION for excellence in doing everything.
v EXEUTE with positive energy and urgency.
v ACCOUNTABLE for growth in customer satisfaction and profitability.
v RECOGNIZE the achievement of others and have fun doing it.
v LISTEN and more importantly, respond to the voice of the customer.

HUMAN RESOURCE POLICY:


Pizza Hut is a company which genuinely recognizes that having great people is vital for long
term business success; in fact 'People Capability First' is one of the foundations on which
everything else is built. The HR department has an enviable reputation and is a fully
integrated part of the organization, playing a key role in most business decisions. Proof of
their ability to add value are the results they achieve in being involved in and leading
commercial business initiatives right across the business.
As well as their strategic input to the business, HR supports the restaurants and the RSC
where it is really needed. By sourcing exceptional new employees and supporting individual
growth and career progression through our many world class training programs they are able
to ensure that 70% of all vacant positions are filled internally. But it doesn't stop there; they
drive a culture which constantly finds reasons to celebrate the achievements of others and has
fun doing it. Working hand in hand with Operations we help our people achieve their
potential and deliver great results.

ETHICAL STANDARDS:
Pizzahut is also an equal opportunity employer. As an equal opportunity employer Pizzahut
ensures that employees and job applicants are selected, trained, and promoted without
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discrimination to race, gender, sexual orientation, age or disability. The company promotes
their employees based on their relevant skill, tale nts, and performance. In support of this
Pizzahut promotes and sustains a working environment, which is free from unlawful
discrimination, harassment and bullying. Employees are regarded as members of a team
where everyone's opinion is valued and respected. The Human Resources department
monitors the effectiveness of the discrimination policies at regular intervals and takes
corrective action as necessary to ensure that they being complied with (www.mcdonalds).
Employees who feel that they have been treated unfairly are encouraged to use the remedies
outlined in the Company's handbooks. Pizzahut ethical standards, as well as their strategies
for globalization and diversity are instrumental to the overall success of the company.

CONCEPT AND FORMAT:


Pizza Hut is split into several different restaurant formats; the original family-style dine-in
locations; store front delivery and carry-out locations; and hybrid locations that offer carryout, delivery, and dine -in options. Many full-size Pizza Hut locations offer lunch buffet, with
"all-you-can-eat" pizza, salad, bread sticks, and a special pasta. Additionally, Pizza Hut also
has a number of other business concepts that are different from the store type; Pizza Hut
"Bistro" locations are "Red Roof"s which offers an expanded menu and slightly more upscale
options. Traditionally , Pizza Hut has been known for its ambiance as much as pizza. Vintage
"Red Roof" locations can be found throughout the United States, and quite a few exist in the
UK and Australia. Even so, many such locations offer delivery/carryout service. This
building style was common in the 1960s and 1970s. The name "Red Roof" is somewhat
anachronistic now, since many locations have brown roofs. Dozens of "Red Roofs" have
closed or been relocated rebuilt. Many "Red Roof" branches have music from a jukebox, and
sometimes an arcade. Later on, the company moved into other successful formats including
delivery carryout and the fast food "Express" model.

STRENTHS AND WEAKNESSES


STRENGTH:
Name recognition is an obvious strength for Pizza Hut. Pizza Hut has been around for a
long time, and consumers know the name well. Another big strength and even a
competitive advantage is the fact that they have a full service restaurant as well as
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delivery services. Most of Pizza Hut's competitors do not have restaurants. Because of
the restaurant, Pizza Hut can market to many different segments that other pizza chains
cannot. For example, Pizza Hut can market to families much easier than Domino's or
Little Caesar's. Pizza Hut offers a sit-down, conversational type restaurant where
families can take their children for birthday parties for example. Pizza Hut's broad
selection of products also makes it easier for them to market to different market
segments.
Pizza Hut is the market leader in providing different products of pizzas as there are no big
competitors in this sector.
There good image makes the organization more strong. Pizza Hut is providing good taste,
quality products with qualified staff, good atmosphere and hygienic environment. They are
specialized in pizzas. Motivation level of staff is very high which make the organization more
prosperous. They are ISO (International Standard Organization) certified. They have enough
resources for operating different activities of the organization. They are providing free home
delivery service. They have created monopoly in this sector. Another big Strength and even a
Competitive Advantages the fact that they have a full service restaurant as well as delivery
services. Most of Pizza Hut's competitors do not have restaurants. Because of the restaurant,
Pizza Hut can market too many different segments that other pizza chains cannot. For
example, Pizza Hut can market to families much easier than Domino's or Little Caesar's.

WEAKNESS:
However, the fact that Pizza Hut does have a restaurant to run is also a weakness. Pizza Hut
has higher overhead costs, due to the restaurant that other competitors don't have to deal with.
Another result of higher overhead costs is higher prices Pizza Hut must charge. Obviously,
Pizza Hut is not the low cost producer. They rely on their quality pizza and good service to
account for their higher prices
An indirect weakness that Pizza Hut has is that they have lost a lot of their customers and
market share due to such intense competition with competitors. Pizza Hut's opportunities are
almost endless. They can increase revenue with their new innovative pizzas, and increase
brand loyalty with good customer service.
A problem facing all of the pizza chains is that each of their individual competitive
advantages are pretty much everyone's competitive advantages. Most if not all the top pizza
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chains offer free delivery, and always have some sort of promotional deal offering large !
Pizzas at reduced prices. Other competitors to take into consideration are frozen pizzas and
make-it-yourself pizzas that are purchased in grocery stores. Some examples of these are
Tombstone Pizzas, Boboli, Menu food And Di'Gornio pizzas.

STRATEGIES TO EXPLOIT STRENGTH:


A business's strategy is the pattern of decisions and actions that are taken by the business to
achieve its goals. A business has a variety of goals and objectives. All businesses need to
organize their business activities in order to achieve their business objectives. Running a
business involves planning the current as well as future activities. Hence, in order to achieve
the business objectives, all business organizations adopt different strategies. Similarly, Pizza
Hut has adopted many strategies which help achieve the targets set by the main office to the
local store. Changes are the external as well as internal environment has led Pizza Hut rethink
their past strategies and has therefore designed new strategies after noticing the changes in
the environment. After considering all the factors Pizza Hut has decided upon the strategies
and their current strategies are divided into five main categories and further have sub-parts.
These strategies are:
FUNCTIONAL STRATEGIES
These are strategies designed to improve the efficiency of a business's operations. They often
focus on an area, such as marketing, human resource etc . All business organizations adopt
strategies at functional level as once the functional objectives are achieved, corporate
objectives become easy. In order to make the functional strategy efficient, Pizza Hut has
made all the functional departments co-operate with each other.

BUSINESS LEVEL STRATEGY


Business level strategies are plans made to gain a competitive advantage over its rivals in a
market. Hence, all the businesses need to adopt business level strategies in order to compete
in a competitive environment. If we take a look at the market, there are few large competitors
of Pizza Hut but unlimited small competitors exist in the market. Therefore, present strategies
adopted by Pizza Hut are keeping in consideration the present competition. Whereas, in
future this competition will increase and Pizza Hut will have to change all its business level
strategies in order to compete with its rivals. It has rivals like Papa Jones, Dominos etc.

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PRICING STRATEGY
The level of competition a business faces determines its pricing strategy. Sometimes a
business has the scope to set its price and sometimes a business cannot. When a business has
the scope to set its price there is a number of pricing strategies or policies it might choose. As
there are no such competitors of Pizza Hut which could compete with the quality of pizza
produced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is 'market
skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share
of the market by maximum profit. They satisfy the target market as the food quality is worth
the price paid.

FACTORS CONTRIBUTING INTERNATIONAL SUCCESS:


In the past, Pizza Hut has always had the first mover advantage. Their marketing strategy in
the past has always been to be first. One of their main strategies that they still follow today is
the diversification of the products they offer. Pizza Hut is always adding something new to
their menu, trying to reach new markets.

VALUED CUSTOMERS:
Lastly, Pizza Hut has always valued customer service and satisfaction. In 1995, Pizza
Hut began two customer satisfaction programs: a 1-800 number customer hotline, and a
customer call-back program. These were implemented to make sure their customers
were happy, and always wanted to return. They take quick actions if there is a
customers complaint and they take drastic measures to satisfy their customers.

VARIEGATION
Another strategy they used in the past and are still using is the diversification of their
pizzas. Pizza Hut is alway s trying to come up with some innovative way to make a pizza
into something slightly different - different enough that customers will think its a whole
new product. For example, let's look at some of the pizzas Pizza Hut has marketed in the
past. In 1983, Pizza Hut introduced their Pan Pizza, which had a guarantee of being
ready to eat in 5 minutes when dining at Pizza Hut restaurants. They introduced the
"BigFoot," which was two square feet of pizza cut into 21 slices. They introduced
"Stuffed Crust Pizza," where the crust would be filled with cheese. They marketed "The
Edge," which had cheese and toppings all the way to the edge of the pizza. They keep on
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experimenting with their products so that customers will not get bored of the same
offers.

DIVERSITY
Pizzahut realizes that having diversity as an asset greatly enhances the profitability of the
company. Diversity is a direct reflection of a companys interpersonal relationships. These
relationships, if positive, result in a rewarding venture. Conversely, if the relationships are
negative, the companys morale declines and if not addressed, leads to the deterioration of the
company. This deterioration directly impacts the companys income and the communitys
acceptance of the business. However, Pizzahut leadership encourages diversity through their
policies and programs. Pizzahut proven success with leveraging the advantages of diversity
can be attributed to their core value of ethics. Pizzahut success is built on the foundation of
personal and professional integrity .From the beginning, Pizzahut has based its reputation on
trust and dependability, and their commitment to the community made them a household
name.

COMMUNITY INVOLVEMENT
Pizzahut success is built on the foundation of personal and professional integrity (From the
beginning, Pizzahut has based its reputation on trust and dependability, and their commitment
to the community made them a household name. Founder believed in giving something back
to the community in order to make the world a better pla ce.

MANAGEMENT PRACTICES:
Good managers do not appear overnight, and sometimes restaurant managers need instruction
and practice in order to effectively run the business, supervise employees and satisfy
customers. In P izza H ut they are blessed with good managers who practice the efficient and
effective way to manage their employees. This enabled them to enhance the motivation and
productivity of the workers. The following are the practices followed in Pizzahut.

TOTAL QUALITY MANAGEMENT (TQM)


This is the most important for a food chain like Pizza Hut. All the employees back- of-thehouse i.e. the kitchen assistants are trained accordingly. They are given extra classes in order
to meet the quality standards set by Pizza Hut around the world. This strategy is important in
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order to satisfy the CHAMPS. This strategy is strictly implemented in Pizza Hut in order to
fulfill the quality standards. Different quality management staff is also there at Pizza Hut. The
shift managers have the task to observe whether the quality standards are met or not, whereas
there are a total quality management department at the main office in Karachi. This
department has the task to implement quality standards and know whether they are achieved
or not.

MANAGE COSTS EFFECTIVELY


In order to run a successful business, the managing costs is critical. These costs include labor,
food and waste costs. In pizza hut the financial s and inventory managers keeps an accurate
record of all costs and losses which help managers budget funds for the future and protect
profits.

SUCCESSFULLY MARKET THE CONCEPT


Managers are responsible for promoting the brand in order to bring in more business. Learn
the best ways to market to your area and implement marketing strategies whenever possible.
The marketing managers of pizza hut never leave an opportunity to market their ideas to their
customers. They use many interactive ways of marketing as well. Pizza Hut is also advertised
in anime, movies, talk shows etc.

MANAGE PRODUCT QUALITY


Simply by opening their doors, restaurants are promoting the quality of their food and
service. The managers make sure to follow through and offer the best quality products
possible. They enforce food preparation procedures, food storage standards and presentation
quality at all times. They have specific department of Quality management and they take
feedback from their customers to keep on improving their service.

DELIVER SUPERIOR SERVICE


Guest service is one of the most important parts of Pizza huts objectives. any staff members
who have contact with guests, they make sure to train and model superior customer service at
all times, from their arrival to their departure. They have 24 hours delivery service and has a
toll free number.

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POSITIVE WORK ENVIRONMENT


Managers have specific prescribed guidelines to create a positive environment where people
feel they can trust one another and work together. Hire quality people, get to know them and
treat them fairly. Balance fun with hard work to create a positive environment. They provide
Equal Opportunity to their employees.

MOTIVATE THE TEAM


The managers make it sure to learn about what motivates your employees. They use contests,
games, food, prizes and other incentives to get the team excited about running a strong shift.
Motivation keeps people upbeat and productive.

REWARD APPROPRIATELY
The management makes sure to identify when employees deserve rewards due to high
achievement or consistently great work. For that they Praise employees in front of their peers
when appropriate, and be sure to consistently recognize those who perform above standards.
They have a concept of employees of the month as well which helps to motivate employees
to work better.

EXTERNAL ENVIRONMENT
We have used the data from the PEST (Political, Economic, Social and Technological)
Analysis, in order to find out about its external environment.

POLITICAL ISSUES:
Political issues include regulatory frame work operating in judicial system which may affect
the business in different ways. There are not many political factors in countries like Pakistan,
India and Siri Lanka etc, Factors such as laws on business employment, pollution and
taxation apply on the organization which it has to follow regarding the rules.

ECONOMIC FACTORS:
If the countys economy is better so the GDP of the country will be good, this is a green
signal for the business as the per capita income of the people will be increased and they will
spend more money. When the inflation rate increases the cost of raw material also increases

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and this leads towards high prices of the products and vice versa. But due to recession of the
economy they have to set their prices low, their personal deal is cheaper than McDonalds and
Nandos.

SOCIAL FACTORS:
Pizza hut is a multinational and it is basically originated from America so the organization is
overwhelmed by western culture. There are social forms of society which consist of Upper
class, middle class, middle upper class, lower class and lower class. Every country has
cultural norms, values, beliefs and religion which can affect the organization, and Pizza hut
has rightly adopted to different societies and cultures. In Pakistan they have introduces pizzas
like Hurra Bhurra and chicken Tikka which are according to the taste and likes of the
people residing here.

COMPETITORS
Papa Jones and Dominos are the main competitors of pizza hut. Other competitors are
frozen pizza suppliers like Tombstone Pizzas, Boboli, Menu food And Di'Gornio pizzas.
They have to keep a check on its competitors and accordingly launch new schemes and
offers. Pricing is also done by keeping in view the competitors.

TECHNOLOGICAL FACTOR:
Now a days technology is improving so as baking and heating ovens will be of new and
efficient technology and will provide efficient service. Due to new technology there are new
ways of marketing like internet; telemarketing and the organization can advertise their
products with much more faster pace. Computer based customer data that is MIS (managing
information system) helps in collecting customer data, daily transactions, future forecasting
and decision making. New vehicles will make their service more e fficient.

GLOBALIZATION
In todays society, corporations and enterprises are expanding their businesses in the global
markets. Globalization is necessary for success and survival in the worldwide market;
however, global competition is not easy). By the end of the twentieth century, the list of
Fortune 500 companies was no longer only United States corporations due to an increase in
international companies joining the list. As a leading food service retailer, Pizzahut joins

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those corporations with restaurants in 119 countries important strategic decisions are a key
factor to their success with consideration for both internal and external factors. When
considering the foreign market, companies need to consider there are risks. There must be
local marketing to appeal to the local consumers and also to build relationships and trust.
Therefore, the strategic planning for marketing has to be effective. Pizzahut caters its menu in
other countries to the cultures of the regions. For example, in India, the non-vegetarian menu
includes chicken and fish items only Beef is not on the menu in India because are considered
sacred. Global marketing decisions are no different than those made domestically but the
decisions are unique to each country. Furthermore, operating on a global scale allows a
companys employees to experience working in different cultural environments. This is a
good marketing strategy for recruiting employee

INTERNAL ENVIRONMENT
Following are the elements which affect the internal environment of Pizzahut

HUMAN RESOURCE
Pizza Hut is a company which genuinely recognizes that having great people is vital for long
term business success, in fact 'People Capability First' is one of the foundations on which
everything else is built. The HR department has an enviable reputation and is a fully
integrated part of the organization, playing a key role in most business decisions. Proof of
their ability to add value are the results they achieve in being involved in and leading
commercial business initiatives right across the business.
As well as their strategic input to the business, HR supports the restaurants and the RSC
where it is really needed. By sourcing exceptional new employees and supporting individual
growth and career progression through their many world class training programmes they are
able to ensure that 70% of all vacant positions are filled internally. But it doesn't stop there;
they drive a culture which constantly finds reasons to celebrate the achievements of others
and has fun doing it. Working hand in hand with Operations we help our people achieve their
potential and deliver great results.

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MARKETING
The Marketing function is split into two sub teams: one focused on promoting current
products and controlling the overall brand, the other on developing the Pizza Hut products of
the future. Wherever some on joins it , hell benefit from working closely with people from a
range of different specialism, including Pizza Hut International HQ in Dallas, and there will
be plenty of training and development on hand to help you progress. This includes an
extensive programme of internal training courses, and the opportunity to become CIM
qualified.

RETAIL MARKETING
All their advertising and in-store activities - from high-profile TV campaigns to menus, door
drops, point of sale support, local and national press and radio ads - start from this small, fastpaced team of just eight. So there are plenty of opportunities to really get stuck in and
experience a broad range of the marketing mix. As well as new product launches, activities
revolve around store openings and promoting new offers, and it's up to each Brand Manager
to find out their customers' needs and liaise with Operations to develop marketing plans that
meet them. They also work closely with their creative and media agencies to ensure each
campaign reaches its target audience and continues to grow our business.

FINANCE DEPARTMENTS
Finance departments, Control and Planning, work together to report and analyse business
results and help set the path for future business growth. In both departments, one'll have
exposure to lots of different areas of the organisation, as well as the opportunity to study for
qualifications such as CIMA, ACCA and PPM for Payroll.

CONTROL
Control is focused on approving, processing and recording all the company's financial
transactions and reporting the figures back to investor, Yum!, as well as statutory bodies, the
Board of Directors and the rest of the organisation. But it's much more than that. They also
carry out fraud prevention and protect business assets. Additionally, due to their global
nature, they work hard to ensure compliance with both UK and US statutory requirements.

535

COMMITMENT TO DIVERSITY:
Pizzahut commitment to diversity is established on the foundational belief that diversity is
not just a moral and ethical issue, but also a business issue .Due to the global expanse of
Pizzahut business, diversity has become an integral part of the internal company culture.
Pizzahut has over 30,000 restaurants around the world, which means franchise
owner/operators, employees, and customers represent just about every culture, religion or
ethnicity on earth. In addition, Pizzahut promotes the use of local suppliers and based on their
policies of diversity, expects and retains suppliers that have a similar diversity culture.
Knowing and understanding the local customs and traditions of the communities where
Pizzahut has established businesses, integrating people from these communities into the
company, and adapting locally to the tastes and cuisines of the community, has made
Pizzahut the leader in their industry.
In the United States alone, Pizzahut has won numerous awards and received national
recognition for diversity. These awards and recognitions are not the result of a surface
attempt to appease the critics. They are the result of Pizzahut embracing and integrating
diversity into their company ethos as an asset and an ally.

ANALYSIS
One of the first International food franchises is Pizzahut which open its doors in Karachi.
When the first Pizza Hut restaurant opened in Karachi the quick service industry was at a
nascent stage and the pizza category was dominated by a sole regional player who had a
marginal presence. Pizza Hut went on to play a significant role in pioneering and developing
this category in Pakistan.
Worldwide and in Pakistan, Pizza Hut has come to become synonymous with the 'best pizzas
under one roof'. This is because at Pizza Hut the belief is that every pizza has its own magic,
thus making it a destination pr oduct which is sought by everyone. It is this belief that has
ignited the passion to create, innovate and serve the finest product the industry has to offer,
while setting standards for others to strive to replicate. Pizza Hut is committed to providing
uncompromising product quality, offering customers the highest value for money and giving
service that is warm, friendly and personal.

536

A significant and critical factor in Pizza Hut's success has been its unique dining experience.
Crew members at Pizza Hut strive each day to provide 'CUSTOMER MANIA' the kind of
service that ensures that every visit of the customer is a memorable one.
Pizza Hut's constant endeavor to provide extra value, whether it is pizzas which are available
to suit every price range, new promotions or the introduction of innovative product ranges
,that puts a 'Yum' on every customer's face this has allowed it to increase its presence in
Pakistan to the current 38 restaurants across 9 cities.
Pizza hut targeted market defines them as a family product. This is because they dont really
directly market their customers. They are target everyone whereas their competitors target a
certain gender or age. But pizza hut targets a wide range of customers. This is because they
want to make the most money and who blames them.
They have many competitors and they are bound to try everything to cope up tops. Their
competitors are everywhere. There are just a few that are main competitors and pizza hut will
always try to be the best and get the most money by making their products better quality but
also cheaper.
They try to offer something different with their product as well. They offer a range of stuffed
crusts to try and attract customers. They also do vegetarian options with meet free pizzas and
a salad and pasta bar. Not a lot of restaurants offer a salad and a pasta bar. This is another
competitive idea to attract or customers.
They have diversified their market and they keep on experimenting with their products and
introduce up to date offers to attract their customers, which provides them a competitive
edge.
The pricing scheme of pizza hut is not expensive either. Their pricing is cheaper than most of
the competitors and this is the sole reason that most of the families prefer to go to Pizza hut
every now and then.

CONCLUSION
Pizza Hut has a successful history of introducing new products to increase sales and reach
new customers. This introduction of new products to the market on a regular basis is what
makes Pizza Hut the leader in their industry. Pizza Hut has many targets which it has achieve
in a given period of time. The time-period is mostly a year. Therefore, in order to fulfill the
537

targets different strategies are adopted by Pizza Hut. Pizza Hut experiments with new
products frequently, with less successful ones being discontinued. It can be concluded that
these strategies have been successful and there is flexibility in the strategies, as they can be
changed with the changes in the market conditions as well as the targets this is one of the
main reason behind the tremendous success of pizza hut not only in west but also in eastern
side of the globe. One can learn a lot from the business practices of Pizza hut and can make
use of the tools and methods used by Pizza hut in order to conduct his business both
effectively and efficiently.

REFERENCES:
Pizza Hut official Website
http://www.pizzahut.com.sg/
Better Strategies Better Pizza Hut, Waters, Jenifer, Feb,15 2000
http://www.highbeam.com/doc/1G1-60051449.html
Saur Daugh, Pizzahut Vs Papa Jones
http://findarticles.com/p/articles/mi_m0BDW/is_21_42/ai_75028177/
Pizza Hut , Article, Geek.com
http://www.geek.com/articles/tagged/pizza-hut/
Funding Universe,
http://www.fundinguniverse.com/company-histories/Pizza -Hut-Inc
Scribed, Report on Pizza Hut
http://www.scribd.com/doc/20410335/Report-on-Pizza-Hut
Pizza Hut India, Yum Brands
http://www.ibef.org/download/PizzaHut.pdf
Happy World, Pizza Hut Always Gives Back To The Community.
http://www.happyworld.com/responsibility/

538

MOTOROLA INC

539

HISTORY
Motorola started in Chicago, Illinois as Galvin Manufacturing Corporation (at 847 West
Harrison Street) in 1928, with its first product being a battery eliminator . Paul Galvin
purchased the patents to the automotive radio and acquired the rights to the trade name
Motorola ("motor" and "Victrola ") from William Lear. The name Motorola was adopted
in 1930, and the word has been used as a trademark since the 1930s.
Many of Motorola's products have been radio-related, starting with a battery eliminator for
radios,

through

the

first walkie-talkie in

the

world

in

1940,

defense electronics, cellular infrastructure equipment, and mobile phone manufacturing. In


the same year, the company built its research and development program with Dan Noble , a
pioneer in FM radio and semiconductor technologies joined the company as director of
research.
v In 1943, Motorola went public and in 1947, the name changed to its present name. At this
time, Motorola's main business was producing and selling televisions and radios.
Motorola produced the hand-held AM SCR-536 radio during World War II which was
vital to allied communication.
v In 1952, Motorola opened its first international subsidiary in Toronto, Canada to produce
radios and televisions. In 1953, Motorola established the Motorola Foundation to support
leading universities in the United States.
v In 1955, years after Motorola started its research and development laboratory
in Phoenix , Arizona to research new solid-state technology, Motorola introduced the
world's first commercial high-power germanium-based transistor . The present "batwing"
logo was also introduced in 1955 (having been designed by Zeke Ziner in late 1954).
v Beginning in 1958 with Explorer

1, Motorola provided radio equipment for

most NASA space -flights for decades including during the 1969 moon landing. A year
later, it established a subsidiary to conduct licensing and manufacturing for international
markets.
v In 1960, Motorola introduced the world's first "large -screen" (19-inch), transistor ized,
cordless portable television.

540

v In 1963, Motorola, which had very successfully begun making televisions in 1947
introduced the world's first truly rectangular color TV picture tube which quickly became
the industry standard.
v In 1969, Neil Armstrong spoke the famous words "one small step for a man, one giant
leap for mankind" from the Moon on a Motorola Radio.
v In 1973, Motorola Demonstrates Portable Telephone to be Available for Public Use by
1976.
v In 1974, Motorola sold its television business to the Japan-based parent company
of Panasonic .
v In 1976, Motorola moved to its present headquarters in Schaumburg, Illinois.
v In September 1983, the firm made history when the U.S. Federal Communications
Commission (FCC) approved the DynaTAC

8000X telephone,

the

world's

first

commercial cellular device. By 1998, cell phones accounted for two thirds of Motorola's
gross

revenue. The

company

was

also

strong

in semiconductor technology,

including integrated circuits used in computers. In particular, it is well known for


the 6800 family and 68000 family of microprocessors used in Atari ST, Commodore
Amiga, Color Computer, and Apple Macintosh personal computers. The PowerPC family
was developed with IBM and in a partnership with Apple (known as the AIM alliance).
Motorola

also

has

diverse

line

of

communication

products,

including satellite systems, digital cable boxes and modems.


v In 1986, Motorola invented the Six Sigma quality improvement process. This became a
global standard. In 1990, General Instrument Corporation, which was later acquired by
Motorola, proposed the first all-digital HDTV standard. In the same year, the company
introduced the Bravo numeric pager which became the world's best-selling pager.
v In 1991, Mot orola demonstrated the world's first working-prototype digital cellular
system and phones using GSM standard in Hanover, Germany. In 1994, Motorola
introduced the world's first commercial digital radio system that combined paging, data
and cellular communications and voice dispatch in a single radio network and handset. In
1995 Motorola introduced the world's first two-way pager which allowed users to receive
text messages and e-mail and reply with a standard response. In 1998, Motorola was
overtaken by Nokia as the world's biggest seller of mobile phone handsets.
541

v On September 15, 1999, Motorola announced it would buy General Instrument in an $11
billion stock swap. General Instrument had long been the No. 1 cable TV equipment
provider, supplying cable operators with end-to-end hybrid fiber coax cable solutions.
This meant that GI offers all cable TV transmission network components from the headend to the fiber optic transmission nodes to the cable set-top boxes, now at the availability
of Motorola.
v In June 2000, Motorola and Cisco supplied the world's first commercial GPRS cellular
network to BT Cellnet in the United Kingdom. The world's first GPRS cell phone was
also developed by Motorola. In 2002, Motorola introduced the world's first wireless cable
modem gateway which combined a high-speed cable modem router with an ethernet
switch and wireless home gateway. In 2003, Motorola introduced the world's first handset
to combine a Linux operating system and Java technology with "full PDA functionality".
In June 2006, Motorola acquired the world -class software platform (AJAR) developed by
the British company TTP Communications plc.
v In 2006, the firm announced a music subscription service named iRadio . The technology
came after a break in a partnership with Apple Computer (which in 2005 had produced
an iTunes compatible cell phone ROKR E1, and most recently, mid 2007, its
own iPhone). iRadio has many similarities with existing satellite radio services (such
as Sirius and XM Radio) by offering live streams of commercial- free music content.
Unlike satellite services, however, iRadio content will be downloaded via a broadband
internet connection. As of 2008, iRadio has not been commercially released and no
further information is available.
v In 2007, Motorola acquired Symbol Technologies, Inc. to provide products and systems
for enterprise mobility solutions, including rugged mobile computing, advanced data
capture and radio frequency identification (RFID).
v Motorola creates numerous products for use by the government, public safety officials,
business installments, and the general public. These products include cell phones, laptops,
computer processors, and radio communication devices. The Motorola RAZR line has
sold over 120 million units bringing the company to the number two mobile phone slot in
2005.

542

v Since the 1950s, used Motorola radio equipment has been popular with amateur
radio ("ham") operators. Known as "Ma Batwings," Motorola has provided little to no
support to hobbyists, who keep using these, radios for years or even decades after they
were taken out of production.

DIVISIONAL PRODUCTS

Enterprise Mobility Solutions: Headquarters located in Schaumburg, Illinois;


comprises communications offered to government and public safety sectors and
enterprise mobility business. Motorola develops analog and digital two-way radio,
voice and data communications products and systems, mobile computing, advanced
data capture, wireless infrastructure and RFID solutions to customers worldwide.

Home & Networks Mobility: Headquarters located in Arlington Heights,


Illinois; produces end-to-end systems that facilitate uninterrupted access to digital
entertainment, information and communications services via wired and wireless
mediums. Motorola develops digital video system solutions, interactive set-top
devices, voice and data modems for digital subscriber line and cable networks,
broadband access systems for cable and satellite television operators, and also wire
line carriers and wireless service providers.

Mobile Devices: Headquarters located in Libertyville, Illinois ; currently the least


prosperous arm of the firm; designs wireless handsets, but also licenses much of its
intellectual properties. This includes cellular and wireless systems and as well as
integrated applications and Bluetooth accessories.

STRENGTH AND WEAKNESS


When customers choose us, they benefit from several Motorola strengths and advantages. We
help them move to the promise of the wireless Internet faster. We help the m create smoother,
more efficient deployment. And we help them reap the full benefits of 3G.
Our total communic ations solutions provide operators with four primary benefits: rapid
delivery of services; superior end-user experiences; orderly migration for existing operators;

543

and reduced costs of ownership. These value propositions are in direct response to operators
and service providers need for a competitive advantage in the worldwide market. The
strength behind these value propositions lies in the unique advantages that only Motorola
brings.

WHAT MAKES MOTOROLA STRONG


GPRS Successes and CDMA Experience
Motorola was first to deliver a complete commercial, functioning GPRS system. Not
Ericsson. Not Nokia. Weve delivered GPRS in a complicated, multi-vendor environment,
integrating wireless and data networks across multiple technologies, demonstrating our
speed-to-market capabilities. Weve also established ourselves as a world leader in CDMA
technology. Weve applying the expertise and experience weve accumulated to all of our 3G
technology.

Synchronized Timelines For Product Availability


Were fine-tuning our 3G timelines, roadmaps and supplier contracts to ensure all components
of our end-to-end solution are readily available when our customers need them. With our
"One Motorola" focus, well be ready with everything our customers require, from a robust
system platform to base stations to end-user devices. In addition, our solutions benefit new
operators by enabling them to migrate directly to an all-IP network.
APPLICATIONS AND SERVICES TO SUPPORT NEW BUSINESS MODELS
The true promise of 3G for operators and service providers means moving beyond simply
providing basic voice to data services, and exploring the revenue opportunities these data
services bring. Motorola Aspira total communications solutions offer endless possibilities
that can enable operators to move up the value chain. This allows them to become whatever
they want to be to their own customers, resulting in a superior experience for the end-user.
Our growing list of allied information and entertainment providers make operator entry into
content-based services faster and easier.

544

Integration and IOT Experience


With decades of network deployment and interoperability testing experience to our credit,
and as the prime contractor on some of the world most complex telecommunication projects,
we have proven our ability to implement complex multi-vendor deployments. We will put
this same experience to work in leading 3G implementation. We are a solutions partner with
the proven integration experience to deliver a fully operational, commercial end-to-end
system.

Non-MSC Legacy
Weve never been dependent upon switch revenues and we can therefore focus more closely
on delivering the benefits of an all-IP network. Our close working relationship with Cisco
Systems has propelled us ahead in creating the world first-to-IP wireless network. This
alliance brings together the best of IP and the best of mobility, setting the industry standard.

AND WHAT GIVES MOTOROLA THE ADVANTAGE


First to IP
Working in a strategic alliance with Cisco Systems, we are setting the industry standard by
creating the world first -to-IP wireless network. Because this architecture is totally open and
access-technology independent, it the better breed of network in the long run, that can reduce
operator total cost of ownership. And for our operators, it a more direct path forward to new
revenue-generating opportunities.

The "One Motorola" Approach


Providing a complete 3G solution requires not only a breadth of expertise, but also reliability
in ensuring all the components of a next-generation network are available and accessible
when our operators need them.

545

Alliances with Technology Leaders


Teaming with best-of-breed companies such as Cisco, Portal, GoAhead and others enable us
to deliver our world-class end-to-end solutions effectively: for IP expert ise, IP billing
solutions, and operational support solutions for a 3G world. We continue to form agreements
with other recognised leaders to ensure we bring the most innovative solutions to our
customers.

World Class Utran


Motorola UTRAN (UMTS Radio Access Network) provides numerous advantages for our
customers using UMTS, including fourth-generation design, common platform, wideband
data modem (WDM) capacity and trunked low -power amplifiers. This means that operators
can enjoy the quick transfer speeds, reliability and flexibility they need to maximise
technology promise.

Full "Turnkey" Services


Our total programme management package covers all aspects of our customers deployment,
from site selection to systems engineering to installation and testing. This frees operators to
concentrate on the pressing tasks of building markets, attracting customers and building their
businesses, Motorola turnkey solutions provide the services and support needed for quick,
seamless deployment.

WEAKNESSES
Most of the Motorolas products are not user friendly which keep many consumers away to
purchase Motorola products.
Its supply chain management is not very impressive. It is less penetrated it has not introduced
a breakthrough product yet.

546

In some of the Motorola products found faults, which made people unhappy from Motorolas
products and affects its image as well. Motorolas cellular products are going toward
declining in sales and it is suffering as well.
In Motorola company there is a low employee training and low education about its business.
Brand awareness of Motorola is very low which also a reason of its low sales.

INTERNAL BUSINESS ENVIROMENT


In addition to issues related to Supply Management, Manufacturing and Motorola Product,
we are also addressing our internal business environment. This includes business
applications, the desktop environment, end-user computing, networks, data centers, electronic
commerce, business processes, and facilities. We have formed teams of business unit
executive sponsors and representatives from all these business disciplines to proactively
pursue solutions to assure no disruptions to our internal operating environment. Further, the
influence of the Year 2000 Enterprise Council is extended by councils in the global regions
of Europe, the Middle East and Africa (EMEA), Japan, North Asia and South Asia.
Our goal is to ensure that critical business systems continue to function normally through the
turn of the century; to continue providing Motorola customers the level of service they
expect. We have secured the services of several world -class consulting organizations with the
experience and knowledge to assist us in resolving Year 2000 issues with these systems.
These partners, working with our internal Year 2000 teams, will address all issues,
professionally, cost effectively, and to our customers complete satisfaction. It is our intent to
have most internal systems Year 2000 issues resolved by 31 December 1998.
Motorola has engaged all business units around the world, across all product segments, in all
affected disciplines, to identify and address global Year 2000 issues. We are partnering with
you, our customer, to take action well before the turn of the century to assure we are both
positioned to make a successful

547

EXTERNAL BUSINESS ENVIRONMENT


Since it first entered the competitive electronic firm market, Motorola has continued to
remain successfully as a world leader in mobile communication technology, ranking as the
leading maker of cellular telephones, paging devices, automotive semi-conductors, and
microchips that are used to operate devices other than computers. Although it has lost a few
battles, Motorola has taken on the Japanese head to head, through these times of Japanese
competition. In the 1980s

Motorola controlled the emerging U.S, Market for cellular phones and pagers but they
werent aggressively focused on competing with the Japanese, even though Japanese firms
began to flood the U.S. market with low-priced, high-quality telephones and pagers, leaving
Motorola pushed into the background. This is when Motorola heard the call to battle.
Managers at first were not sure how they should respond, so they originally decided to
abandon some business areas and even considered merging their own semiconductor
operations with those of Toshiba.
After a lot of searching they decided to fight back and regain the firms lost market position.
This fight involved two main strategies: First learn from the Japanese, and then compete with
them. To carry out these strategies, Motorola executives decided to set a number of broad
based goals that essentially committed the firm to lowering costs, improving quality, and
regaining lost market share. Managers were then sent out on missions, mainly focused on
Japan, to learn how to compete better. Some manager even observed Motorolas own
Japanese operations to learn and understand how it fully functioned; while others focused
more on how other successful Japanese firms operated. At the same time, the firm also
drastically boosted its budget, R&D, and employee training worldwide.
One important thing that executives learned from their trip to Japan after viewing a flag
flying outside one of its plants was that they had altogether forgotten their old ways of doing
business and this is the exact point where they decided to reinvent their firm from top to
bottom. Old plants were closed as new ones were built. Workers received new training with a
wide range of quality-enhancement techniques. They decided to place their new commitment

548

to quality at the forefront of everything it did. They even decided to announced their goal of
achieving a perfection rate of 99.9997% (Six Sigma), and when they actually achieved this
level of quality they received the Malcolm Baldrige National Quality Award. Motorola has
been continuously successful especially abroad in Japan.
The firm has 20 offices and has more than 3,000 employees there. It is currently number three
in market share there both in pagers and cellular telephones but is steadily approaching
number two. Worldwide, Motorola controls 45% of the total market for these products, have
regained its number two position in semiconductor sales, and are furiously launching as many
new productions that seem to baffle its competitors. Today Motorola generates more than
56% of its revenues abroad. Major new initiatives are underway in Asia, Latin America, and
Eastern Europe and the firm has currently made headway in Western Europe against rivals
Philips and Thomsom. Motorola has set new and staggering goals for itself. It wishes to take
quality to the point where defects will be measured related to billions rather millions. It wants
to cut its cycle time tenfold every ten years. And by this year, Motorola wanted over 75% of
its revenues to come from foreign markets. Even though Motorola has established and proven
itself as a successful company, they have their strengths and weaknesses like every other
company.
What threatens Motorola the most is how Japanese Competitors have flooded the market with
low- prices high quality products. Motorola also has trade problems that include the fact that
it is hard to penetrate Japanese markets; Japan has also been allowed to enter U.S. markets
with few barriers. The U.S. government has also done very little to try and stop Japanese
competitors and help the U.S. companies. Japan also has high standards for quality,
efficiency, cost and customer relations. Motorola has also been faced with the fact the market
share for pagers and cellular phones has declined. U.S. businesses including Motorola ha ve
also been under siege by foreign competitors. Just as Motorola has its strengths and
weaknesses it also has its share of problems that include the threats that I mentioned above.
They are faced with competition in the Vietnam Market from L G information
Communications along with Information & Technology agreed to jointly develop equipment
for wireless phone services using code division multiple access technology and fiber optic
cables.

549

ORGANIZATIONAL CULTURE TO MOTOROLA


An organizations culture is comprised of the set of values, beliefs, assumptions, principles,
myths, legends and norms that define how people actually think, decide and perform. It is a
basic set of assumptions that defines for us what we pay attention to, what things mean, and
how to react emotionally to what is going on, and what actions to take in various kinds of
situations (1992).
Motorola is focusing on customer satisfaction by attempting to reduce mistakes in its
products at the same time do its work faster. To achieve this, Motorola established a standard
measure of quality by the number of defects found per unit. Each quarter, it reviews each
divisions level of quality in relation to its quality goals. If the division does not meet the
goals, the reviews are done monthly; if the goals have still not been met, the reviews are done
weekly (1992).
In the early 1990s, Motorola was recognized as a true high performance organization with its
innovations and socially responsible corporate attitude. Indeed, its organizational culture was
identified as a source of competitive advantage for the firm. Working in quality teams,
members sought to provide the highest level of customer satisfaction, measuring defects in
incidents per billion. Motorola earmarked more than $100 million a year for training, with
everyone in the organization, however humble, spending at least a week a year back in the
classroom at Motorola University, courtesy of the company. 3
Motorola listed its fundamental objective as total customer satisfaction: "To serve every
customer better than our competitors do with products and services of excellent value and
quality, and thereby earn continued enthusiastic trust and support."4 It wishes to accomplish
this objective with respect for the individual, a statement it makes cle ar in its shared beliefs.

PEOPLE
To treat each employee with dignity, as an individual; to maintain an open atmosphere where
direct communication with employees affords the opportunity to contribute to the maximum
of their potential and fosters unity of purpose with Motorola; to provide personal
opportunities for training and development to ensure the most capable and most effective

550

work force; to respect senior service; to compensate fairly by salary, benefits and, where
possible, incentives; to promote on the basis of capability; and to practice the commonly
accepted policies of equal opportunity and affirmative action.

INTEGRITY AND ETHICS


To maintain the highest standards of honesty, integrity and ethics in all aspects of our
business with customers, suppliers, employees, governments and society at large and to
comply with the laws of each country and community in which we operate."From a
proponent of leadership training to a leader in quality control processes, Motorola has created
an internal climate that fosters high standards and a high performance culture. The firm
depends on Total Customer Satisfaction Teams (TCS) to ensure the firm's commitment to
quality. These teams are now made up of almost 30 percent of Motorola's 150,000
employees, and a goal of 10 times reduction of defects every two years puts pressure on them
to constantly devise new ways to develop and deliver their products and service s.
Motorola views itself as family and encourages employees to balance their work and family
responsibilities. They support onsite child care centers and fund a wellness program for all
employees.
Authors John Kotter and James Hesket's study on corporate culture shows that:
1. Corporate culture can have a significant impact on a firm's long-term economic
performance.
2. Corporate culture will probably be an even more important factor in determining the
success or failure of firms in the next decade.
3. Corporate cultures that inhibit strong long-term financial performance are not rare;
they develop easily, even in firms that are full of reasonable and intelligent people.
4. Although tough to change, corporate cultures can be made more performance
enhancing. 6
Organizational culture can be a two-edged sword, however. Strong cultures may contribute to
high performance for extended periods of time but may actually result in an inability to adjust
when conditions change. It's important to foster a balance between stability and flexibility for

551

change, an objective that is difficult to maintain. For many firms, success in the short term
causes problems with inflexibility to changing situations in the long term.

MANAGEMENT SYSTEM
The implementation of the strategic plan will be done by starting at the highest level of
management to the lower-level. The management must explain to the employees all the
situations, policies and rules that are needed to change and what is the reason behind it. All
the information regarding the change must be stated clearly in report or memo. The reaction
of the employees regarding to change must also look at because most of the time, employees
are resisting to change due to wrong perceptions. The management must also conduct
seminars and trainings tha t will be helpful to familiarize the employees to the new policies
and rules.

SIX SIGMA AT MOTOROLA


Motorola learned about quality the hard way: by being consistently beaten in the competitive
marketplace. When a Japanese firm took over a Motorola factory that manufactured
television sets in the United States, they promptly set about making drastic changes in the
way the factory operated. Under Japanese management, the factory was soon producing TV
sets with 1/20th the number of defects they had produced under Motorola management. In the
late 1970s and early 1980s the company responded to the competitive pressure by engaging
in a publicity campaign decrying "unfair" competition and calling for political protection
solutions. Finally, even Motorola's own exe cutives had to admit "our quality stinks," (Main,
1994) and Motorola decided to take quality seriously. Motorola's CEO at the time, Bob
Galvin, started the company on the quality path and became a business icon largely as a result
of what he accomplished in quality at Motorola.
Today, Motorola is known worldwide as a quality leader. To accomplish its quality and total
customer satisfaction goals, Motorola concentrates on several key operational initiatives. At
the top of the list is "Six Sigma Quality," a statistical measure of variation from a desired
result. In concrete terms, Six Sigma translates into a target of no more than 3.4 defects per
million products, customer services included. At the manufacturing end, this requires "robust
designs" that accommodate reasonable variation in component parts while providing
consistently uniform final products. Motorola employees record the defects found in every
552

function of the business, and statistical technologies are made a part of each and every
employee's job.
Reducing the "total cycle time"-the time from when a Motorola customer places an order
until it is delivered-is another vital part of the company's quality initiatives. In fact, in the
case of new products, Motorola's cycle-time reduction is even more ambitious; the clock
starts ticking the moment the product is conceived. This calls for an examination of the total
system, including design, manufacturing, marketing, and administration.
Motorola management demonstrates its quality leadership in a variety of ways, including toplevel meetings to review quality programs with results passed on through the organization.
But all levels of the company are involved. Non-executive employees contribute directly
through Motorola's Participative Management Program (PMP). Composed of employees who
work in the same area or are assigned to achieve a specific aim, PMP teams meet often to
assess progress toward meeting quality goals, to identify new initiatives, and to work on
problems. To reward high-quality work, savings that stem from team recommendations are
shared.
To ensure that employees have the skills necessary to achieve company objectives, Motorola
spent in excess of $170 million on worker education between 1983 and 1987. About 40
percent of the worker training provided by the company is devoted to quality matters, ranging
from general principles of quality improvement to designing for manufacturability.
Motorola knows what levels of quality its products must achieve to top its competitors. Each
of the firm's six major groups and sectors has benchmarking programs that analyze all aspects
of a competitor's products to assess their manufacturability, reliability, manufacturing cost,
and performance. Motorola has measured the products of some 125 companies against its
own standards, verifying that many Motorola products rank as best in their class.
Motorola acknowledges that they made many mistakes. One of the most serious was to start
the training for quality at the bottom of the company. Many workers were unable to
understand statistical process controls and other techniques without remedial education, and
they couldn't turn to their untrained bosses for help. Even those who understood the concepts
completely were not able to apply them in the unreceptive workplace. Motorola's director of
training and education estimates that Motorola wasted $7 million trying to train from the
bottom up. Recognizing their mistake, the company established "Motorola University" and
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put thousands of Motorola executives through executive training. Bob Galvin himself spent
time in the classroom. By 1992 the company was spending $110 million per year on
instruction. As a result of these efforts, Motorola can now perform such feats as building
pagers and cell phones in lots ranging from one unit to 100,000. Through mass customization
the factory can fill a precise order within minutes of receiving it. Thanks in large part to its
six sigma activities, the company dominates such key high-tech industries as pagers, cell
phones, and mobile communications, and is a significant force in many others.

FACTORS CONTRIBUTING TO MOTOROLAS INTERNATIONAL SUCCESS


Motorola's experiences are that the changes to process require talent to be implemented, take
time to become institutionalised, and investment of time and money and commitment that
many organisations may be uncomfortable with. Management commitment is needed from all
levels top management is not enough unless individual project leaders and managers are
also determined to success. Linking process changes to metric analysis data is critical for
improving the effectiveness of SPI and to this end the organisation needs tool integration to
aid in the collection and interpretation of quantitative data.
In making the improvements themselves, the learning was that copying processes from other
organisations does not work. If the process is to be a successful one, it must match the
culture, structure, product types, etc, of the organisation. Furthermore the improvements at
low maturity levels should be targeted to new projects, as it is more difficult for existing
projects to adopt new processes. However, the single hardest obstacle was found to be the
resistance to change. (Diaz & Sligo 1997, 79.)
According to the authors, there are three main reasons why low -maturity organisations find it
difficult to implement SPI. These are the difficulty of establishing metrics, the fact that there
is a lot of groundwork to be done such as defining the core processes before the actual
improvements can start, and the sheer effort required for SPI, especially at the start. In
addition the staff may be very skeptic when the SPI is at its infancy and needs to be
convinced that the initiative is not just a passing management fad. The critical success factors
at Motorola were considered to be the leadership from the engineering department manager,
and the senior management sponsorship, in form of interest to SPI progress, funding and time
allocation, and rewarding those who contributed to the SPI

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In addition there were several strategies that yielded optimal results. Firstly, improving new
projects and emphasising business rather than process results. Secondly adopting a top-down
focus to SW-CMM, finding out the intents and principles and mapping them to the
environment before starting to implement it. Thirdly, using practitioners, rather than outside
experts, for defining the processes. Fourthly convincing the management of the fact that
while SPI is not free, it pays for itself on the long run. And finally keeping customer
informed about the process, especially when changes took place.

WAYS IN WHICH STRENGTHS ARE EXPLOITED


Analyzing Your Competition
Almost everyone in business understands the principle of trying to offer something better
than what their competitors are offering. Gaining an advantage is the key to success and even
survival. But many of the so-called advantages that businesses rely on are not sustainable.
They can be easily copied, stolen or negated. Real competitive advantages things like
brand name recognition, patented manufacturing processes or exclusive rights to a scarce
resource cannot be easily copied.
Every company has a unique set of strengths, and it's critical that you determine yours, as
well as your competitors'. Hold a brainstorming session with your staff and advisors to
perform a formal SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. This
analysis helps you to see how your strengths stack up against your competitors' weaknesses
and suggests ways to take advantage of marketplace opportunities. After you have performed
the analysis, there are four basic competitive strategies to consider.
1. Become the low -cost supplier. By under-pricing the competition, you can achieve
greater volume, which can drive your costs down even further by realizing economies
of scale. Of course, it's important to still maintain a healthy profit margin so the key
here is to lower costs, not just prices.
2. Achieve product or service quality differentiation. Think about the hundreds of
companies that have achieved such differentiation for themselves. Take L'Oreal, for
example. Why have they used the slogan "I'm worth it" for so many years? And are
there really any other crackers on grocery store shelves that have the image of Ritz?
What's the real difference between Coke and Pepsi, or between Skippy and Jif peanut
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butter? Why do you keep returning to the same dealership to have your car serviced?
Why do many of us follow our favorite hair stylist or radio personality if they move to
another location or station? The answers lie in the perception of a difference in
people's minds.
3. Achieve supply or distribution leverage. When Microsoft wrote the DOS operating
system, it instantly gained an advantage in the computer industry that has remained
virtually impossible to copy. Airlines with landing rights at airport gates, or
companies like Kellogg's with lots of shelf clout, have sustainable advantages that
provide serious barriers to competitors. A patent, copyright or exclusive contract
provides legal protection.
4. Pursue a market niche, especially one that has been neglected by the dominant firm in
your industry. As companies grow, decisions often have to be made to discontinue
servicing a particular segment. But that doesn't mean that the segment no longer has
needs; it just means that the larger company can no longer provide for them efficiently
or profitably. That spells immediate opportunity for a smaller, leaner organization.

CONCLUSION
To best evaluate Motorola, one would have to say that it is one of the most successful
companies in the world. It possesses the highest quality as recognized by their receiving of
the Malcolm Baldrige National Quality Award for reaching Six Sigma Quality. It
successfully controls 45% of the world market for both cellular phones and pagers and
generates over 56% of their revenues abroad. They have not only proved to be a successful
company here in the United States but all over the world. What we would recommend
Motorola to do, which is extremely important is to become more customer service oriented. A
good and highly successful idea we feel would be if Motorola made it available for its cell
phone customers to track the number of free minutes that are left in their account, how many
minutes they have used in all, and all other account information, which can apply to its pager
customers also. Another recommendation is to allow their customers to pay their bills on line
either by credit card and even setting up a monthly debit of their checking account, of the
bills amount. Another thing that is extremely important is that the collaboration with America
Online to make available, access to customers emails. All of the recommendations that were
made could, would, and will be more convenient to customers. The more Motorola pleases it
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customers, the more happy they are, the more they become loyal to the Motorola brand.
These all create a preference to the Motorola name, which leads to a better reputation,
increased sales, increased profits, increased revenue, and increased market share; all of which
are a vital part of a company like Motorolas present and future business.

REFERNCES
http://en.wikipedia.org/wiki/Motorola
http://www.millscreative.com/moto/motostrength.html
http://www.freeessays.cc/db/11/bmu201.shtml
http://www.slideshare.net/adamkasi/motorola-swot-analysis
http://www.motorola.com/General/year2000/overview/page11.html
http://www.wiley.com/c ollege/schermerhorn/047120367X/cases/ch13.html
http://ivythesis.typepad.com/term_paper_topics/2009/08/corporate -strategy-motorola-inc.html
http://www.qualityamerica.com/knowledgecente/articles/sixsig_pg1-3.html
http://www.va -interactive.com/inbusiness/editorial/bizdev/ibt/analyze_comp.html

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ADIDAS

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HISTORY
Adidas is a German sports apparel manufacturer and parent company of the Adidas Group,
which consists of the Reebok sportswear company, golf company (including Ashworth), and
Rockport. Besides sports footwear, the company also produces other products such as bags,
shirts, watches, eyewear and other sports and clothing-related goods. The company is the
largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in
the world, after its American rival Nike.
Adidas was founded in 1948 by Adolf "Adi" Dassler, following the split of Gebrder Dassler
Schuhfabrik between him and his older brother, Rudolf. Rudolf later established Puma , which
was the early rival of Adidas. Registered in 1949, Adidas is currently based in
Herzogenaurach, Germany, along with Puma.
The company's clothing and shoe designs typically feature three parallel bars , and the same
motif is incorporated into Adidas's current official logo. The "Three Stripes" were bought
from the Finnish sport company Karhu Sports in the 1951.The company revenue for 2009
was listed at 10.38 billion and the 2008 figure at 10.80 billion.

GEBRDER DASSLER SCHUHFABRIK


Adolf "Adi" Dassler started to produce his own sports shoes in his mother's wash kitchen in
Herzogenaurach, Bavaria , after his return from World War I. In 1924, his brother Rudolf
"Rudi" Dassler joined the business which became Gebrder Dassler Schuhfabrik (Dassler
Brothers Shoe Factory) and prospered. The pair started the venture in their mother's laundry,
but at the time, electricity supplies in the town were unreliable, and the brothers sometimes
had to use pedal power from a stationary bicycle to run their equipment.
By the 1936 Summer Olympics, Adi Dassler drove from Bavaria on one of the world's first
motorways to the Olympic village with a suitcase full of spikes and persuaded U.S. sprinter
Jesse Owens to use them, the first sponsorship for an African American. Following Owens's
haul of four gold medals, his success cemented the good reputation of Dassler shoes among
the world's most famous sportsmen. Letters from around the world landed on the brothers'
desks, and the trainers of other national teams were all interested in their shoes. Business
boomed and the Dasslers were selling 200,000 pairs of shoes each year before World War II.

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Late in World War II, the shoe factory shifted to production of the Panzerschreck anti-tank
weapon.

COMPANY SPLIT
Both brothers joined the Nazi Party, but Rudolf was slightly closer to the party. During the
war, a growing rift between the pair reached a breaking point after an Allied bomb attack in
1943 when Adi and his wife climbed into a bomb shelter that Rudolf and his family were
already in: "The dirty bastards are back again," Adi said, apparently referring to the Allied
war planes, but Rudolf was convinced his brother meant him and his family. After Rudolf
was later picked up by American soldiers and accused of being a member of the Waffen SS,
he was convinced that his brother had turned him in.
The brothers split up in 1947, with

Rudi forming a new firm that he called Ruda from Rudolf Dassler, later rebranded
Puma,

Adi forming a company formally registered as Addidas AG (with lower case lettering)
on 18 August 1949. The acronym All Day I Dream About Sport, although sometimes
considered the origin of the Addidas name, was applied retroactively, which makes it
a backronym. The name is actually a portmanteau formed from "Adi" (a nickname for
Adolf) and "Das" (from "Dassler").

THE TAPIE AFFAIR


Bernard Tapie , a former French businessman who once owned Adidas but has since
relinquished his control over the company due to debt
After a period of trouble following the death of Adolf Dassler's son Horst Dassler in 1987,
the company was bought in 1989 by French industrialist Bernard Tapie , for ?1.6 billion (now
243.918 million), which Tapie borrowed. Tapie was at the time a famous specialist of
rescuing bankrupt companies, an expertise on which he built his fortune.
Tapie decided to move production offshore to Asia. He also hired Madonna for promotion.
He sent, from Christchurch, New Zealand, a shoe sales representative to Germany and met

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Adolf Dassler's descendants (Amelia Randall Dassler and Bella Beck Dassler) and was sent
back with a few items to promote the company there.
In 1992, unable to pay the loan interest, Tapie mandated the Crdit Lyonnais bank to sell
Adidas, and the bank subsequently converted the outstanding debt owed into equity of the
enterprise, which was unusual as per the prevalent French banking practice. Apparently, the
state -owned bank had tried to get Tapie out of dire financial straits as a personal favour to
Tapie, reportedly because Tapie was Minister of Urban Affairs (ministre de la Ville) in the
French government at the time.
In February 1993, Crdit Lyonnais sold Adidas to Robert Louis-Dreyfus, a friend of Bernard
Tapie for a much higher amount of money than what Tapie owed, 4.485 billion (683.514
million) francs rather than 2.85 billion (434.479 million). Tapie later sued the bank, because
he felt "spoiled" by the indirect sale.
Robert Louis-Dreyfus became the new CEO of the company. He was also the president of
Olympique de Marseille , a team Tapie had owned until 1993.
Tapie filed for personal bankruptcy in 1994. He was the object of several lawsuits, notably
related to match fixing at the football club. During 1997, he served 6 months of an 18-month
prison sentence in La Sant prison in Paris. In 2005, French courts awarded Tapie a 135
million compensation (about 886 million francs).

POST TAPIE ERA


An Adidas casual shoe, with the company's distinctive three parallel bars
In 1994, combined with FIFA Youth Group, SOS Children's Villages became the main
beneficiary.
In 1997, Adidas AG acquired the Salomon Group who specialized in ski wear, and its official
corporate name was changed to Adidas-Salomon AG because with this acquisition Adidas
also acquired the Taylormade Golf company and Maxfli which allowed them to compete with
Nike Golf.

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In 1998, Adidas sued the NCAA over their rules limiting the size and number of commercial
logos on team uniforms and apparel. Adidas withdrew the suit, and the two groups
established guidelines as to what three-stripe designs would be considered uses of the Adidas
trademark.
In 2003, Adidas filed a lawsuit in a British court challenging Fitness World Trading's use of a
two-stripe motif similar to Adidas's three stripes. The court ruled that despite the simplicity of
the mark, Fitness World 's use was infringing because the public could establish a link
between that use and Adidas's mark.
In September 2004, top English fashion designer Stella McCartney launched a joint-venture
line with Adidas, establishing a long-term partnership with the corporation. This line is a
sports performance collection for women called "Adidas by Stella McCartney", and it has
been critically acclaimed.
Also in 2005, on 3 May, Adidas told the public that they sold their partner company Salomon
Group for 485m to Amer Sports of Finland.
In August 2005, Adidas declared its intention to buy British rival Reebok for $3.8 billion
(US). This takeover was completed with partnership in January 2006[1] and meant that the
company will have business sales closer to those of Nike in North America. The acquisition
of Reebok will also allow Adidas to compete with Nike worldwide as the number two athletic
shoemaker in the world.
Adidas has global corporate headquarters in Germany, and many other business locations
around the world such as Portland OR, Hong Kong, Toronto, Taiwan, England, Japan,
Australia and Spain. Mainly sold in the U.S., Adidas makes lots of assets from these
countries and is expanding to more oversea countries.
In 2005, Adidas introduced the Adidas 1, the first ever production shoe to utilize a
microprocessor. Dubbed by the company "The World's First Intelligent Shoe", it features a
microprocessor capable of performing 5 million calculations per second that automatically
adjusts the shoe's level of cushioning to suit its environment. The shoe requires a small, userreplaceable battery that lasts for approximately 100 hours of running. On 25 November 2005,

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Adidas released a new version of the Adidas 1 with an increased range of cushioning,
allowing the shoe to become softer or firmer , and a new motor with 153 percent more torque.
On 11 April 2006, Adidas announced an 11-year deal to become the official NBA apparel
provider. They will make NBA, NBDL, and WNBA jerseys and products as well as teamcoloured versions of the "Superstar" basketball shoe. This deal (worth over $400 million)
takes the place of the previous 10-year Reebok deal that was put in place in 2001.

STRENGTHS AND WEAKNESS


STRENGTHS

Worldwide presence in 200 countries

Strong management team

Brand recognition and reputation

Strong control over its own distribution channel

Large market share in Europe

Strong success in Europe

Diversity and variety in products offered on the web (footwear, apparel, sporting
equipment, etc.)

Focus on performance development and technology development

Recent selling of subsidiary dog Salomon

Sponsorship to various sports and events like Olympics, street ball, soccer tennis etc

Brand reputation in achieving sports performance products.

In many invents is the biggest sponsor

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WEAKNESSES

Limited exposure to U.S market

Limited budget allocation for advertisement

Few influential athletes in brand ambassador portfolio

Poor ad agency

Poor customer service

High prices in some products

The direct sale to consumers is creating conflicts with its own resellers

American athletes endorsed by Addidas are not as popular as Nikes

Nike gaining ground on European soccer market

Public dissent over use of sweatshops

INDUSTRY ANALYSIS
OPPORTUNITIES

The athletic footwear and apparel industries will benefit from the currently strong
economic backdrop in the United States. Spending is high and is expected to result in
sales growth industry-wide.

Athletic shoes and apparel have become a staple in wardrobes worldwide. This is due
to both the increasing numbers of people exercising and the trend towards casual
apparel.

Competition is fierce at all levels in within the industry, especially among the leaders.
This creates a sense of security for the companies that have been able to create a
niche.

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Cost cutting due to restructuring of operations will give many companies the chance
to price products more competitively.

One area in the industry that is ever changing is research and development. The strong
depa rtments will surely capitalize on the trends of tomorrow if their efforts are
successful.

Increasing financial recovery in overseas markets proves to be an area of expansion


for the athletic footwear and apparel industry.

E-tailing, or customer-designed internet merchandise, is threatening the traditional


distribution channels, thus eliminating the "middle-man" distributors and allowing for
increasing profitability.

THREATS

The industry has reached a level of maturity. While style and technology in athletic
apparel and footwear has reached a leveling-off point, the important aspect now is for
companies to differentiate their lines.

Inflation is looming over the U.S. economy, which may spark a cutback in consumer
spending.

Consumers are becoming savvier and may lean towards discounted items.

In terms of market saturation, many of the key manufacturers in this industry have
been around for many years. Consumers may be scanning the market for new and
different footwear and apparel products.

ENVIRONMENTAL ANALYSIS:
TOP COMPETITOR ANALYSIS
Distinctive Competency - Marketing (Consumer Loyalty)
Despite the tough times Reebok has recently come upon, reasons for optimism remain.
Reebok has managed to hold the loyalty of a large portion of the industrys female consumers
market. While Reeboks spending on advertising has fluctuated, individual product designs

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have come and gone, female consumers have, as a group, remained loyal to Reebok and their
products.

Can Reebok use this distinctive competency to inflict damage on Addidas?


Yes, Reebok can use their distinctive competency to wound Addidas. If Reebok can expand
their appeal to incorporate female consumers who are not currently Reebok customers,
Reebok could expand their market share and take customers away from Addidas products.

Can Addidas protect itself against this threat?


Yes, Addidas can protect its market share among female consumers within the industry by
targeting some of our promotions to female consumers.

Competitors Key Weakness Marketing (Advertising/Promotion)


The leading cause of Reeboks recent tumbles stemmed from problems relating to poor
marketing. Reeboks shortcoming in the area of marketing is their key weakness. While other
athletic shoe companies bombard the airwaves with commercials pushing their product lines,
Reebok remains out of sight and out of mind.

Can Reeboks key weakness damage their competitive position?


Yes, Reeboks chances of growing their market share are slim as long as their advertising
endeavors remain to be so unsuccessful. For Reebok to rebound from their current economic
woes, they will have to improve the quality of their overall marketing operations.

Can Addidas take advantage of their competitors key weakness?


Yes, Addidas can take advantage of Reeboks marketing woes by doing extensive and
aggressive marketing. Continuing its successful marketing programs should allow Addidas to
court the customers Reebok fails to draw in with their weak marketing initiatives.

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OTHER EXTERNAL FORCES


DEMOGRAPHICS
Opportunity
Adidas once loyal market is currently aging. This means that its customers are not as athletic
as they may have been in the past. However, this poses as an opportunity for Addidas because
they have the ability to influence the next generation of Addidas customers. The older
generation of Addidas brand purchasers have the power to influe nce their children - part of
the next generation of Addidas loyalists. In addition, by marketing different types of shoes to
this market, these existing customers will continue to be loyal to Addidas.

THREAT
The phenomenon of the aging of our most loyal market segment questions whether there is a
threat that the new generation will not be exclusively loyal to Addidas. In the current market
there are a number of other competitors that are not mainly athletically oriented. Examples
include such manufacturer-retailers as The Gap and Old Navy. Their clothing and shoes are
competing with Addidas. In addition, Nike is not keeping up with the latest trends and styles
like some of its competitors have been. For that reason, the newer generation is attracted by
Nike and Tommy Hilfiger.

PRESSURE GROUPS
Opportunity
An opportunity produced by pressure groups is the ability to react in a positive manner to
concerns of the public as well as customers. Consumer watch groups are paying especially
close attention to Addidas use of sweatshops and child labor to produce our products. Adidas
opportunity lies in being able to show the consumer force that they are indeed taking steps to
reduce and eventually eliminate sweatshops and child labor through new policies and strict
implementation procedures. Also, by responding to such consumer activism, they are
portraying a positive image in that we are promoting ethics even while we are trying to be
efficient and economical.
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Threat
In the same manner, not responding to these consumer activist groups poses a threat to
Addidas. The negative publicity the potential to ruin a company permanently. By
disregarding the voice of concerned citizens, means disregarding their customers, one of our
most important stakeholders.

KEY OPPORTUNITY
The key opportunity for Addidas currently is the booming economy of the United States.
Currently the company has the ability and the resources to exploit this opportunity. Adidas
has capitalized on the recent economic boom with higher sales and income. However, they
are not using their resources to the fullest degree. There are currently many areas in which
Addidas is not paying attention. They have not catered to a large portion of the new
generation that demand the latest trends and styles. Also, Addidas must take into account the
changing demographics in this country. There is a much higher proportion of Hispanics,
Asians, and African Americans than there was before. These groups have somewhat different
tastes that Addidas should be able to satisfy.
To exploit this opportunity, Addidas needs to focus on who the next generation of loyal
customers will be and cater to their needs. In addition, the world economy is recovering
currently, which allows Addidas to make an impression in foreign markets as well. Addidas
is strong in many foreign countries, but we need to focus on the younger market of
consumers. Adidas has been doing a great deal of research and development, but if they want
to increase their market share, they must look at trends while maintaining their high standards
of quality.

KEY THREAT
The key threat for Addidas. is market saturation. The problem is that the athletic shoe market
is already full of different brands and companies. Now, there is very little room for new
companies. There is also very little room for new product innovation and growth of market
share for companies like Addidas. Since Addidas is currently holding the second position in

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the market as far as market share, there is little room for them to expand. Adidas. is now
competing with other athletic companies as well as companies that just sell clothing or other
types of shoes. If all of these other companies merely gain a small percentage of the market,
Addidas will be one of the main companies to start losing market share.
In response to this threat, they have to focus on keeping and increasing their market share and
making sure that competitors like Nike, Rebook and Old Nay do not steal away the market
share. They could do this by focusing their efforts on a broader market. This would include
the younger generation that is interested in sports as well as extreme sports.

PEST ANALYSIS
POLITICAL
Adidas policy is to control and monitor hazardous substance to protect human health and
environment one of those is to eliminate PVC making progress in finding substitutes like
polyurethane, ethyl vinyl, silicones thermoplastic rubber. Adidas also provide training
sessions on employment standards and HR systems, health and safety is impor tant for the
company. Establishing teams to manage and monitor SARS in Asia factory, washing stations,
disinfectant units. Finally Adidas protects and supports the rights of its employees by
following all the current employment laws.

ECONOMICAL
As a multinational company Addidas helps countries to decrease unemployment by
increasing every year the number of employees. The Industrial Production Growth Rate in
Germany was 1% in 2001-3, 2004 become 1.7%. Adidas is a reason of this increase Because
of the big sponsorship in 2004 Olympic Games. As exporting to Europe is not too expensive
as it was before, Europe since 2002 has own money (euro) and the borders are not so tight.
Labor salary is high in Germany and France but not so expensive in China (Suzhou). This is
the reason that most of factories located in Asia.

SOCIAL

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Adidas products declare in any raise, age, religion, and lifestyle, always in fashion with
special design in any of product. Focus in people who like sports and athletes, almost
everybody can purchase Addidas products.

TECHNOLOGY
Adidas join into technology by make up the worlds first smart shoe, adding a microchip
inside the shoe and wireless mp3 player. Also using hot melt system of the production that is
environmentally safe, using heat-activated adhesives. The packaging that company use, are
suitable for transportation over long distances, humid conditions and extreme temperature
changes and use recycled paper and other environmentally-friendly packaging materials.

ORGANIZATIONAL CULTURE OF ADIDAS


Before 1993, that is when Louis-Dreyfus joined as the CEO of Adidas, Adidas was a very
formal and centralized company. All the top management was German and as Louis-Dreyfus
recalls, it was a very self centered German company which was absolutely sure that it was
right. There was a lot of bureaucracy in the company which had built up over several
generations. Louis -Dreyfus realized this fact on the very first day when he joined as the
President of Adidas, when he was asked to approve a salesman expense account for $ 300. He
soon realized that this was the companys biggest enemy.
Adidas more or less tried to follow the lines of its rival Nike. Nike has a strong sportsoriented culture and is promoted through company practices such as paying employees extra
for biking to work instead of driving. Nike is recognized worldwide as an athletes company
which, hire former college, professional and Olympic athletes to design and market its shoes
and clothing for sports enthusiasts. The company chooses to call its headquarters a "campus"
instead of an office. Employees are called "players," supervisors are "coaches" and meetings
are "huddles."
Nike has been striving towards an inner culture that reflects this mantra. Employees are given
an hour and a half for lunch to play sports or simply workout. The new Nike is not just about
shoes and slam-dunks, but about promoting a lifestyle. All new employees view a video of
sports highlights accompanied by a soundtrack that discusses the soul of the athlete and the
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competitive spirit. In addition, management sends weekly emails to update employees on the
recent successes of Nike-sponsored athletes, and often hosts spokespeople to motivate and
thank its staff for contributions to the sports world.
Adopting a new culture is not an easy job. The primary steps taken by Louis-Dreyfus were,
that as soon as he joined Adidas as its CEO, he replaced nearly all of the senior managers and
brought in young managers. He slashed the company's bureaucracy, adopted American
accounting rules and brought in international management talent. In a matter of weeks, the
entire German senior management had been fired. The company's chief financial officer was
Australian and the international marketing manager was a Swede. English became the of ficial
language of the head office and no Germans remained on the managing board of the company
other than himself and some other trusted aides.
In another break with the traditional German workplace, corporate life was made almost
gratingly informal. Unlike other German managers, the managers of Adidas show up for
work wearing sweatshirts and sneakers. A lot of freedom is now given to the employees
working there. None of the decisions are interfered with and no complaints are made about
any decision.
The culture of Adidas does not only care for the internal environment but also the external
environment. Its culture now emphasizes on socially responsible, safe and environmentally
sustainable practices in the company and its supply chain to enhance the value of its brands.
Adidas emphasizes on the fact that athletes need a healthy planet, just as they need the best
products, as it is hard to run when the air is poisoned.
v Globally, Adidas has made, or is in the process of making the following commitments
towards reducing its impact on the environment:
v Preparation of a Germany-based global technology centre dedicated to developing
environmental friendly footwear manufacturing technologies.
v ISO 14000 (a set of international standards which help make the world a better place
to live) Certification.
v Cutting wastes and conserving resources.
v Promoting a culture of responsible outdoor athleticism and an athletic, healthy
lifestyle
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v Teaming up with other organizations and companies to help Adidas develop


sustainable soc ially responsible business practices.
The brand values of the company are authenticity, inspiration, honesty and commitment that
are derived from sports. They form the basis of its Standards of Engagement, the companys
code of conduct that aims to ensure that its suppliers factories are safe, fair places in which
to work.
Adidas vows to adhere to social and environmental laws, directives and guidelines while
continually improving upon its own contribution to a sustainable society.
Adidas aims to communicate with all stakeholders in an atmosphere of mutual trust and
respect. It provides them with appropriate information related to the social and environmental
performance of the group on a regular basis.

WAYS IN WHICH STRENGTHS ARE EXPLOITED


As mentioned on their website Addidas has been a leader in Europe for years and have been
able to become comfortable there. Another strength is that Addidas-Salomon produces highperformance shoes. They have been able to attract hardcore athletes as customers due to
efficiently made shoes (adidas.com). Addidas recently announced that it will be selling its
Salomon brand to Amer Sports Corporation for $624 million. Salomon was originally
acquired by the Addidas Group in 1997 when it paid $1.4 billion for Salomon and its
subsidiaries, including golf brand TaylorMade and cycling brand Mavic. The sale will
include the brands and subsidiaries Salomon, Mavic, Bonfire, ArcTeryk, and Clich. Herbert
Hainer, Addidas-Salomon Chairman and CEO, stated that Salomon has been a great member
of our group. However, we have decided that now is the time to focus even more on our core
strength in the athletic footwear and apparel market as well as the growing golf category
(Bloomberg). This move will allow Addidas to rid itself of the recently slumping Salomon
brand, which posted a 1 percent drop in revenue along with a 74 percent drop in operating
profit in 2004. The sharp decrease in operating profit is due to recent restructuring that
reduced French production of Salomon products from 55 to 35 percent with new production
taking place in Romania and China. News of the sale spiked Addidas shares up 9.2 percent,
reaching its highest point in six years, while Amer Sports shares gained 7.6 percent.

572

CONCLUSION
MISSION STATEMENT
Our mission is to become the best sports brand in the world. To that end, we will never
equate quantity with quality. Our founder Adi Dassler was passionate about sports. For Adi,
the athlete came first. He gave those on the field, the court and the track the unexpected and
the little differences that made them more comfortable and improved performance. This is
our legacy. This is what the brand stands for. This will never change.
VISION
Passion for sport. This is Addidas. We consistently bring our passion to every single sport,
wherever and whenever it is played. Whether it's football in the park or the 100 meters at the
Olympics - we have been there, we are there now, and we will always be there. Our dream is
to bring our passion for sport, the athlete and the product, to anyone who comes into contact
with Addidas.
OBJECT
We are innovation and design leaders who seek to help athletes of all skill levels achieve
peak performance with every product we bring to the market. We are a global organization
that is socially and environmentally responsible, creative and financially rewarding for our
employees and shareholders. We are committed to continuously strengthening our brands and
products to improve our competitive position and financial performance. In the medium term,
we will extend our leading market position in Europe, expand our share of the US footwear
market and be the fastest growing major sporting goods supplier in Asia and Latin America.
The resulting top-line growth, together with strict cost control and working capital
improvements, will drive over-proportionate earnings growth.

REFRENCES
Adidas. Retrieved 31 March 2011.
"Adidas Group History"."Annual Report 2010".
16 January 2008. Retrieved 2008-01-26.
"Adidas, Deutsche Telekom, Infineon: German Equity Preview". Bloomberg L.P..
573

In.rediff.com. 2005-11-08. Retrieved 2010-09-26.


"How Adidas and PUMA were born"
Addidas-Salomon. 2005. Our Values. [online] [cited 12 September 2005]. Available from
World Wide Web: (http://www.adidas-salomon.com/en/overview/values/default.asp)
EBSCOhost. 2005. Addidas-Salomon SWOT Analysis: Threats [online]. Business Source
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10

September

2005].

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Wide

Web:

GUCCI

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HISTORY
1900s
Gucci, or the House of Gucci, is an Italian haute couture establishment. Guccio Gucci in
Florence founded it, in 1921. In 1906, Guccio Gucci started a small saddler shop in Florence,
Italy. Born into a family with a history of leather making, Guccio was a talented leather
artisan with an eye for European design flair. His extensive travels to Paris and London,
where he gained an appreciation for cosmopolitan culture, sophistication, and aesthetics made
him one of the best of his time. Guccio started out designing leather horseman bags during
the days of horse-drawn carriages. As the modes of transportation evolved, he eventually
expanded his offerings to include premium leather luggage. In 1932 Guccio Gucci create d the
loafer shoe with a gilded snaffle which are the only shoes to have found a place in New
York's Museum of Modern Art.

1950s
Guccio and his wife Aida Calvelli had a large family of six children. Only his sons, Vasco,
Aldo, Ugo, and Rodolfo played a role in leading the company After Guccio's son Aldo took
the company to a position of international prominence after his death in 1953. The company's
first boutiques were opened in London, Paris and New York.

1960s
The company finally developed its famous GG logo (Guccio Gucci's initials), the Flora silk
scarf, and the Jakie O shoulder bag, made famous by Jackie Kennedy, the wife of U.S.
President John F. Kennedy.

1980s - 1990s
Though Gucci remained one of the premier luxury goods establishments in the world until the
late 1970s, the 1980s were marked by internal family disputes that brought Gucci to the brink
of bankruptcy. Rodolfos son Maurizio took over the companys direction after his fathers
death in 1983, and dismissed his uncle Aldo, who eventually served a prison term for tax
evasion. Maurizio was known for his mismanagement of the company, which caused him to
introduce dclass products which further cheapened the then-weakening Gucci brand name.
The company suffered heavy losses in October 1993. The business was set up for liquidation

576

and Maurizio was forced to sell his shares in the company to Investcorp, a Bahrain based
company, in August 1993. This was the start of Guccis turnaround and emancipation with
Investcorps bold move of hiring Domenico de Sole as Guccis CEO and Tom Ford as
Creative Director. Finally in 1999, Pinault-Printempts-Redoute (PPR) made a strategic
investment worth $2.9 billion when Domenico de Sole feared a hostile takeover by LVMH,
and thus bought the House Of Gucci.

2000 - 2010
In 2009, after suffering from heavy debts The House Of Gucci appointed Patrizio di Marco as
the CEO and Frida Giannini as a sole Creative Director in 2006. Exploring Guccis rich
heritage and its incomparable craftsmanship capabilities, Giannini ha s created a unique vision
for Gucci that fuses past and present; history and modernity. As for Di Marco, he himself is a
newcomer to the Gucci story but hopes are high as he comes with a cache of pragmatism and
astuteness gained from two decades in the luxury business, having earned his stripes at
companies like Prada, Louis Vuitton and Bottega Veneta.
Therefore even today Gucci is one of the leading luxury brands in the world with several
luxury brands under its portfolio like Balenciaga, Yves Saint Laurent and Alexander
McQueen etc.

FORTE OF GUCCI
The undeniable strength and best asset of Gucci was its famous brand image and global
presence. The company put permanent emphasis on using the highest quality materials and
paying special attention to details. It did not take long until an exclusive and loyal clientele
developed and stores were opened in Florence, Milan and Manhattan; the hub of the fashion
industry. People around the globe have invested their trust into this brand which compels
millions to buy its products without a single thought to its quality. The name merely speaks
volumes.
Gucci has also developed a strong defensive strategy, which is to take control of its
distribution channels by increasing the number of their directly operated stores (DOS). This
meant that Guccis defensive strategy in the chain value was to capture the value added,
instead of giving it to the intermediaries such as suppliers and retailers. In 2003 DOS
accounted for 61.3% of revenues compared to a much lower 32.5% in 1999.

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Another of Guccis strength was its aggressive strategy accomplished through diversification.
Gucci changed its strategy of carrying a single brand to branching out to a multi brand group.
It now carries Alexander McQueen, Balenciaga, BEDAT & Co and Bottega Veneta etc.
unlike the other leading brands Versace.

WEAKNESSES OF GUCCI
Though, Gucci is one of the top luxury brands available out there it still has it Achilles
heel. Over the years Guccis major weakness were that initially, its management was
continuously changing, as Vasco, Aldo, Ugo, and Rodolfo fought wars over its ownership.
The instability of its management affected its corporate strategy and vision. Furthermore,
even though Aldo was the better leader, in the late 80s Rodolfo, who apparently did not know
a lick about fashion and nearly sent the firm into bankruptcy, ruled Gucci.
Then, it also suffered from a weak financial base over the years at the hands of Rodolfo who
eventually had to sell it out for the very same reason. Yet, even after Domenico de Sole was
the appointed the CEO, the financial base of the company was very weak and alarming in the
late 90s, with a long-term debt increasing from $17 million in 1998 to $143 million in 1999.
These years were known as the Years Of Tragedy. Some brands carried by Gucci are still
not as profitable as Prada and Louis Vuitton. Although with the new CEO Di Marco in tow,
the overall profitability of Gucci has increased as sales went from 1.5 billion in 2004 to 2.27
billion in 2009.

BUSINESS STRATEGY
Guccis strong heritage is built on key critical foundations of uncompromising quality,
superior craftsmanship and made in Italy products.
Gucci's strategy is centered around a commitment to the production of limited lines of highquality, luxury goods distributed primarily through a network of company-owned stores. By
holding down the number of different product lines and distribution channels, the company
was better able to present its image consistently and serve its customers with the best. This is
why over the years the company acquired control over its subsidiaries in Taiwan, Korea and
Asia regardless of the slum in the Asian economies. They called these acquisitions a key step
in the company's "strategy to exercise a high degree of control over our distribution network."
According to the then CEO Domenico De Sole, this would enable the company to closely
578

oversee every aspect of manufacturing, advertising and distribution in order to present a


uniform quality image worldwide. These acquisitions were a means of further developing its
presence in the worldwide market.
Gucci also refurbished and expanded many Gucci boutiques, paying particular attention to its
growing markets in Japan and Western Europe so to present a consistent brand image
throughout the world.
Moreover, Guccis growth strategy was also reestablished after Years Of Tragedy and thus
it emphasized three main areas of action

Capitalizing on its state-of-the-art positioning in fashion

Innovation and product quality maintaining the strong momentum in leather


goods and shoes

Exploiting new opportunities in jewelry, ready-to-wear and watches.

The new creative leadership of Giannini has strengthened the focus on iconic brand symbols
(Horse bit, Bamboo, GG logo, Green/Red/Green web, Flora) by reinventing them in a
modern and luxurious way. This has increased the GG fame and recognition in the
international markets even more.
In this recession period, Patrizio di Marco (CEO), disclosed his business strategy, which is
rather than introducing lower priced goods Gucci will focus on the labels rich fashion history
and refreshing goods made with the 88-year-old brands interlocking-G logo by adding
crocodile and leather trim to higher priced bags. Gucci will also be reintroducing classic
styles such as the Jackie bag and using classic motifs dating back to the Forties so that people
are once again reminded why Gucci is the crme in luxury goods.
Furthermore, by exploiting childrens segment recently Gucci increased its market share
throughout the world. Patrizio di Marco launched the childrens line in June 2010. The line
was initially unveiled in Italy and to 40 stores around the world. The idea was to try to
convince customers that a handbag isn't just an accessory but an investment.
Thus, these new leaders have driven Gucci to excellent results with their understanding and
appreciation for the brands heritage, together with the extraordinary talent in providing a
fresh and modern interpretation of the brand. That is why Gucci now operates in more than
55 countries, and due to its strong global brand recognition, it is successfully developing its
579

presence even in the emerging markets. Its major outlets and revenues arise from the
following geographical areas: Europe, Japan, Asia and USA.

INTERNAL DRIVING FORCES


ORGANIZATIONAL CULTURE
Mission
To become a group leader in the luxury market at world-wide level through: putting into
effect and maintaining
The companys objective was to enhance its rapid development and growth plans, as well as
to bring about great flexibility to its production and business processes.

Vision
To become the global multi-brand, well-diversified luxury goods company leader
Organizational culture that is encouraged in all outlets of Gucci is acting responsibly and with
integrity no matter what. Management of Gucci understands that the success and long-term
growth of its company in the worldwide market depends on the confidence of its customers,
employees, shareholders, business partners and local communities since it operates in
virtually all continents of the world, in countries with different cultures and at different stages
of economic development.

HUMAN RESOURCE POLICY


The leaders of Gucci understand the importance of human resources policy and thus Gucci
HR policy aims to contribute to the professionalism, motivation and satisfaction of each of
the employees. It provides opportunities for training, mobility and internal career promotion
as each employee is considered an ambassador for this brand.
It is ensured that working conditions conform to Human Rights standards and labour
legislation, as well as to the regulations governing environmental protection and health and
safety matters. Discrimination, intimidation, harassment, child labour or forced labour is not
tolerated anywhere in the world. Freedom of speech of employees and freedom of association
and trade union rights of employees within the legal framework of the different countries in
which it operates is respected.
580

EXTERNAL DRVING FORCES


COMPETITORS
The competitiveness in the luxury goods industry is quite high. Gucci currently faces the
toughest competition from Louis Vuitton, Versace and Polo. Although given the high
margins and the customers' perception about the price of the products of each of these luxury
brands, the competition is not on price, but rather on quality and image perception, as well as
on the ability to attract the right designers.
The barriers to entry though are very high, which are the intangible image and the perception
built around the brand. As for the barriers to stay, they are also very high since there is a
continuous need to "feed" the image and maintain the perception while still responding to
customers' needs and changing expectations. On the other hand, there are hardly any barriers
to exit since the dynamics of the industry are few big players and only the best. Others
either cannot get in, or are easily out.

CUSTOMERS
Gucci exclusively caters to two types of customers The super-rich. These are the customers
that are not subject to the world economic cycles. Economic crisis rarely reaches them. Since
they have been growing in number Gucci seems awfully fixated on their needs.
Gucci also caters to The middle market customers, who selectively trade -up to higher levels
of quality, taste and aspiration. The middle-market customers are those that are willing to buy
luxury goods, but they want the hottest, trendiest design, which increasingly have to be
marketed in creative and expensive ways. They usually potentially expand the market quite
dramatically, as they are part of the upper -middle class. They are considered to be both a
great opportunity but they are also a threat as they usually are more selective in their choices
and show less brand loyalty.
These two different types of customers have created a difficult equilibrium for Gucci as both
are not compatible. Therefore, in its early years Gucci only focused on the wealth and crme
of society but due to great advancement in technology they are now able to cater to both these
different groups regardless of their incompatibility.

581

ECONOMIC CONDITIONS
Regardless of the recession that the world underwent especially in the west after 9/11 Gucci
kept up its frivolous presence in the market. It did suffer due to economic recession in the
early 2000s but eventually it found a steady foothold in the later years.
Despite the slump in the Asian economies during the late 1990s, Gucci believed the Asian
market still held significant growth potential and regarded the acquisitions of its own supply
chains as a means of further developing its presence in this market. In 1997, although
economic conditions in Asia (which accounts for nearly half the company's revenues)
seriously curtailed the company's overall growth, Gucci's retail business in Japan grew at a
double -digit rate, with the three men's boutiques opened during 1997 performing well above
expectations. The Asian slowdown did not affect Gucci's expansion plans either. The
company opened six new Gucci stores and another men's boutique in Japan, as well as a
flagship location in Tokyo and two stores in the new Hong Kong airport. Therefore, Gucci
eventually acquired 100 percent of the Gucci business of Sung Joo International Limited.
Meanwhile, Gucci has downplayed its traditional GG bags as a means of surviving the
recession period that it is encountering in numerous countries. As sales of Gucci fell 2.7%,
Guccis recession strate gy was to focus on the labels rich fashion history by reintroducing
their timeless, but also more expensive products like Jackie sports bag at a price tag of $2,200
which is about twice what the usual GG bags cost.

SOCIAL CONDITIONS
Bags and luggage have formed a completely new segment that can be exploited by luxury
brands in the recent years. Now even luggage and baggage needs to be of top brands and thus
Gucci is giving top billing to a new purse called the New Jackie, based on a style carried by
Jacque line Kennedy Onassis. It was priced at $2,200 and more.
Since the top brands now also associate themselves with world-renowned and famous
personnels in all fields to promote their products, Gucci also announced that Claire Danes (a
top actor) would be the face of their fine jewelry line. Then due to James Franco (actor) fame
due to his role in 127 Hours, he has now become the new face of the latest Gucci fragrance as
well.

582

TECHNOLOGICAL CONDITIONS
Although Gucci brand managers have leeway on strategy, a financial discipline was recently
imposed. Ad budgets were slashed and boutique openings put on hold, which resulted in
Gucci stepping up their Internet presence. Heavy focus was on technology by senior
management which was visible as part of Guccis revamping efforts. These included online
sales, aggressive use of their websites, EDI network connecting Gucci-suppliers-partners, and
data mining on customer preference and market demand management.

LESSONS TO BE LEARNED
Even though numerous cheaper substitutes Gucci products exist in the market today, Gucci
had still managed to retain its huge market share. Although, Guccis journey to the top of the
pyramid was not an easy one.
Throughout the years, it suffered dropping sales and changing management with the constant
family wars, as it was a family business. One of its major pitfalls happened to be the very fact
that for many years it just kept on have new leaders who had a completely different outlook
on fashion altogether. As a business student and future entrepreneur, it is important to note
that even though change is good, constant change is always disastrous for the company and
its inhabitants. A common mission and vision has to be realized that everyone in the company
needs to be clear about it so they may willingly follow. That is the only way a company will
find a strong hold to stand on and show its customers what it is actually offering. During
Rodolfos rein, Gucci lost most of its customers due to the very fact that he introduced
designs that the customers could not relate anymore to Guccis early trademark designs.
Yet, regardless of all the financial pitfalls it suffered at the hands of its leaders, Gucci has still
been able to maintain itself in the world even against the toughest of competitions from Prada
and Louis Vuitton. When in the late 2000s, Gucci had even further gotten down in a ditch, it
ultimately pulled itself up exposing to the world its roots and heritage, which proved to be
their smartest move. Sometimes what companies do not realize is that all that is really
requires is that they show the world once again why it actually started out as a luxury brand
and how its different and more special from the rest of the brands available in the market.
This is what Gucci did under Patrizio and received immense acclaim for, as they reintroduced
the Jakie O handbag which was initially introduced in the 60s. Staying true to the tastes of

583

his intended market, Gucci up kept its integrity by not losing its touch by producing low
quality goods. Even though the economy is in recession, it still sells high quality goods,
although it could have made do by diluting its product offerings with mass -market
merchandise.
Thus, one has to acknowledge Gucci immense struggle and effort to maintain its position on
the top of the pyramid for top luxury brands regardless of its years of tragedy. It is not every
day that a brand manages to uphold its position by sticking to its core values in such a
competitive world.

CONCLUSION
Gucci has been the epitome of luxury since its inception and has the goods to back it up.
Although, Gucci had a tumultuous past with family feuds and dramatic dips in sales it still
turned out to be a fashion powerhouse that stood the test of time. Whats more is that it
regained its pos ition aside the crme de la crme of the fashion world. The fact that Gucci
stayed true to its word and never diluted its product offerings with mass-market merchandise
or any low quality goods is the major cause why the company regardless of its difficult ies
managed to retain its success. Even today with numerous other luxury brands topping the list
people worldwide still want to revisit the vision, the heritage and the iconic accessories that
have shaped the label into one of the most recognizable brands there are. Thus, the Gucci
name remains a symbol of prestige and its accessories are virtually de rigueur among the
affluent even today.

REFRENCES
Anon, 2009. Patrizio di Marco New Strategy. Fashion Blog. 3rd June.[online] Available at:
http://www.infashionlife.com/2009/06/03/patrizio-di-marco%E2%80%99-new-strategy/
Articlespride, 2011. The House Of Gucci A Look At The Company Behind Gucci Bags.
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company-behind-gucci-bags.html
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Carroll, A.M, 2010. Global CEO: Gucci looks toward the future, says Patrizio di Marc.
[online] Economic Times. Available at: http://articles.economictimes.indiatimes.com/201012-10/news/27626025_1_gucci-group-bottega -veneta-ppr
CPP -Luxury, 2010. GUCCI makes yet another confusing step in its business strategy.
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Cuizon, G., 2009. The Marketing Strategies of Gucci, SWOT Analysis for House of Gucci.
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Eloquence Magazine, 2011. Celebrating 90 Years Of Gucci. [online] Available at:
http://www.eloquence.co.kr/wordpress/?p=1191
Ezinemark, 2010. House of Gucci. [online] Available at: http://ezinemark.com/a/house-ofgucci/
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Gucci.

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WAL-MART

587

BRIEF HISTORY
In the late 1940s, when Sam Walton was franchising a Ben Franklin's variety store in
Newport, Arkansas, he had a simple but momentous idea. Like any retailer, Walton was
always looking for deals from suppliers. Typically, though, a retailer who managed to get a
bargain from a wholesaler would leave his store prices unchanged and pocket the extra
money. Walton, by contrast, realized he could do better by passing on the savings to his
customers and earning his profits through volume. This insight is what formed the basis for
Wal-Marts launch in 1962. As of present, Wal-Mart Stores, Inc. is not only the largest
retailer in the world; it now also ranks as the largest corporation in the world. The company
was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded
on the Exchange in 1972. The Group's principal activity is the operation of retail stores in
various formats. The Wal-Mart Stores segment operates three different retail formats:
Discount Stores, Supercenters and Neighbourhood Markets. The International segment
consists of several different formats of retail stores and restaurants including discount stores,
Supercenters and SAM'S CLUB'S that operate outside the United States. The SAM'S CLUB
segment consists of membership warehouse clubs. The Group operates in the United States
under its own name, the United Kingdom as Asda, Argentina, Brazil, Canada, China,
Germany, South Korea, Mexico and Puerto Rico. Wal-Mart has more than 1.2 million
workers, making it the nation's largest nongovernmental employer.

STRENGTHS AND WEAKNESSES:


STRENGTHS:
Wal-Mart is a powerful retail brand. It has a reputation for value for money,
convenience and a wide range of products all in one store.
Wal-Mart is a global, rapidly growing company; it expands by both acquisitions of
other companies and opening new stores. Wal-Mart has opened over 1,000 discount
stores in the United Sta tes; acquired English retail giant ASDA, and opened many
stores in different countries such as Germany, Brazil, Mexico, China, Canada, United
Kingdom, Argentina, and others.

588

Wal-Mart itself is a very powerful brand, known to people in nearly all developed and
developing countries. The companys slogan is very attractive to the public. In
addition, Wal-Mart discount stores offer a very low price, which attracts the public
even more. In addition to discount stores, Wal-Mart has several other successful types
of stores.
The company has a core competence involving its use of information technology to
support its international logistics system. For example, it can see how individual
products are performing country-wide, store-by-store at a glance. IT also suppor ts
Wal-Mart's efficient procurement.
Wal-Mart has its own satellite-supported global communication system, which allows
people in America to trace sales of a particular item in any store in the world. Its
powerful privately owned global intranet is one of the largest in the world, and it was
one of the 10 Best Intranets of 2002.

WEAKNESSES:
They seem not ready to employ 1.3 million individuals as its pays its employees
roughly $13,861 annually, which is below the federal poverty line of $14,630. This
weakness is the major cause of lawsuit problems that the company will be facing in
the near future.
Wal-Mart is the biggest company in the world (after Exxon), and regardless of their
great communication systems, such an empire is very difficult to control. With their
corporate culture, which gives managers power to make decisions, this giant becomes
even more uncontrollable. The span of control is tremendous. Each separate store is a
unique little corporation, despite the fact that it is connected to the entire Wal-Mart
intranet
Since Wal-Mart sell products across many sectors (such as clothing, food, or
stationary), it may not have the flexibility of some of its more focused competitors.
The company is global, but has a presence in relatively few countries Wor ldwide.
Public relations of the company are deteriorating; whether with the help of
competitors or justly, it still is a fact. Wal-Mart has experienced intense criticism from
its customers and competitors. Some of the mast widely spread topics of concern are

589

discrimination at workplace, and mistreating their employees. Although Wal-Mart


does pay much attention to its public relations, still there are several occurrences of
job discrimination, which had cost Wal-Mart millions of dollars

INTERNAL ENVIRONMENT:
CORPORATE STRUCTURE:
Wal-Mart is a public corporation, however the majority of the stock is still held by Walton
family members. Therefore, there is lots of family involvement at the top level. The
headquarters are in Bentonville, Arkansas, along with the control and decision making ability
of the organization. There is a very hierarchical structure in place which only fuels the "good
old boys club" for the top management. The other unique element in Wal-Mart's corporate
structure is a strong culture that is fuelled by the Wal-Mart way of doing things, which as far
as they are concerned is the only way.

MANAGEMENT:
The top management and most support functions are centralized at the headquarters in
Arkansas. Most of the top management started by working their way up for a store manager
and making a name for themselves. It is assumed that in order to be an effective executive the
individual needs to have the experience from the store in order to know what they are talking
about. The control also lies in Bentonville, each day the store managers in each and every
store must submit reports and update the inventory, where the results are sent to headquarters
and reviewed.

MARKETING:
Wal-Mart works hard at marketing itself as "the" low -cost or discount retailer. It has also
recently begun airing more and more advertising focusing on employees and how much they
love working at Wal-Mart. Wal-Mart wants to be able to market itself as a full-service
organization and is aligning its marketing strategies with this goal. They are looking to
expand into areas such as banking, used car dealers, and real estate. While there seems to be
several organizations and individuals that are out to make life horrible for Wal-Mart, there
has been a great deal of damage control done by Wal- Mart. Wal-Mart portrays itself as the
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"American" store, starting from nothing by a guy from Small town, U.S.A. and even helped
to begin a "Buy American" campaign to encourage the consumption of American made
goods.

R&D
Wal-Mart is facing the challenge of continuing to grow when margins are continuously
shrinking. In order to help their bottom line, Wal-Mart needs to introduce more products on
its private label brand, where the margins are higher. In addition to the private label, an
apparel and house ware is an area with high margins that Wal-Mart will focus on increasing
sales. In the past Wal-Mart was one of the first retailers to embrace the idea of "green"
products, and not only introduced them to their customers, but also educated them on the idea
of what a "green" product is. A lso, Wal-Mart is looking to expand into many areas as
mentioned in the marketing segment, in addition to opening a different type of store,
Neighbourhood Stores, and the fringe market. Neighbourhood stores are Wal-Marts answer
for the urban area, these are smaller stores, or "marts", that sell fruits and vegetables, photo
lab, pharmacy, and a few other staples. These stores will be more like Walgreen's or Rite-Aid
but with a little different product offering.

OPERATIONS:
In the world of retailing, Wal-Mart has what is considered to be the most sophisticated
distribution system called Retail Link. This system connects each store with headquarters and
over 2,000 suppliers so that they will never run out of or have too much inventory. Wal-Mart
turns over their inventory more than any other retail store. The current challenge exists with
supplying their overseas stores, especially while this is the area that they are concentrating on
growing. In order to become more efficient ove rseas, Wal- Mart has started is on Customs
Brokering division to take care of its global procurement, which saves them brokering and
freight forwarding fees, and also gives them more control. They have also started to "request"
strongly that their suppliers also be physically located in the countries where Wal-Mart is to
better supply them.

HUMAN RESOURCES:
Wal-Mart is the largest non-government employer in the world. They realize that turnover is
high in retail, but that their associates are one of their most important assets. Their written

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policy regarding associates is as follows: "they are encouraged to maintain the highest
standards of honesty, morality, and business ethics". In order to become a Wal-Mart
associate, candidates must take a multiple -choice test and select what are considered the
appropriate "Wal-Mart" responses in order to be hired. Due to the fact that Wal-Mart strives
to keep their costs low, they do not offer high wages. They exist on many part-time and
temporary workers, do not offer these employees benefits, and do not pay their employees
enough to live on. Wal-Mart has a 20-30% cost advantage over competition, as their labour is
not unionized. Besides facing current litigation for not paying employees for overtime there
are and have been several cases regarding discrimination on the basis of gender (female) that
females are often not hired or promoted to be managers.

INFORMATION SERVICES:
Wal-Marts inventory system, Retail Link, is a web-based technology that ties ALL Wal-Mart
stores to thousands of suppliers to allow for suppliers to be aware of what is needed by stores.
Wal-Mart was the first chain to have computers in all of its stores and to have them
connected to each other. This system connects to headquarters, which sends reports on what
the store is selling, what's just sitting on the shelves, and what stores are selling the most
items.

INNOVATIVE RESOURCES
Wal-Mart is always full of ideas. They innovate as well as educate. It evaluated market
potential based on economic and political risk, growth, potential and availability of real-estate
for development; thus, they always know how to tackle every investment and every
innovation that they have in mind.

ORGANISATIONAL CULTURE:
Culture at Wal-Mart conjures up store cheers, and the early morning meetings where all of
particular stores employees get together and pump each other up for another day of serving
their customers. Sam Walton believed that a strong culture would help them to be a retail
giant. He was once quoted as saying: "The reason for our success is our people and the
way that they're treated and the way they feel about their company." Wal-Mart has
worked to keep a small-town feel for its stores while becoming a retail powerhouse. WalMart's primary concerns are low cost, low cost, and low cost. Their entire success and being

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is built around this philosophy and therefore their culture also. They are continuously looking
for ways that they can save money and cut prices. This low cost strategy has led to several
investigations and lawsuits concerning child labour and sweatshops overseas and current
litigation involving Wal-Mart alleges that they have not been payin g overtime; thirty six
states currently are taking action regarding the refusal of over-time payments. Wal-Mart
really sells itself as being a great place to work, that its employees have a lot of fun at work,
and are ready to help its customers out. However, there are several accounts of former
employees that do not present employment at Wal-Mart positively.

EXTERNAL ENVIRONMENT:
ECONOMIC
Despite the general weakness in the world economy and the uncertain environment that
prevailed, Wal-Mart had reported sales growth of 11%, amounting to $6.4 billion. The
company's associates were indeed doing the Wal-Mart cheer in faraway places like Germany,
South Korea, China and United Kingdom. In three decades, it had grown from its rural
Arkansas roots to become the world's largest company, and quite possibly the most powerful
retailer.

SOCIO-CULTURAL:
Wal-Mart stores are said geared toward the low -income customer segment; headquarters are
reflective of the company's tendency to be tight-fisted as they are housed in warehouse style
buildings with minimalist decor. Frugality is a central tenet at the company, and every
associate is expected to fully adopt this value in all its manifestations. It is also said that the
company is homogenizing the marketplace by letting smaller towns dictate popular culture.

GLOBAL:
Wal-Mart worked globally under the philosophy: Different store for different folks. As it
grows around the world, it is important to its success that it exchanges best practices among
all the countries where it operates. Wal-Mart launched its globalization efforts with an initial
foray into Mexico, then to Brazil, as well as Argentina. It then penetrated Europe with its
stores in Germany and in the United Kingdom. Its Asian strategy composed of China, Korea
and Japan and India.

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TECHNOLOGICAL:
Wal-Mart is a leader in the use of technology to maximize operational efficiency. Very early
on, the company realized the value of proactive investments in technology and deployed a
private satellite network. Wal-Mart also manages much of its own logistics through a central
hub-and-spoke system of warehouses and distribution centers. It is estimated that the
corporate logistics handled over million loads each year.

POLITICAL AND LEGAL:


It is said that politicking also made a way within Wal-Mart as women were discriminated by
not allowing them to sit in supervisory and managerial levels. There are said to be pending
lawsuits waiting for Ma l-marts notions as the company has allegedly gone against the labour
laws.

MANAGEMENT PRACTICES
Wal-mart around the world is known to be as the company that provides its customer buy low
cost and high quality products so that its customers can live better. Well known for its
corporate culture Wal-mart is built around strong moral and values that permeates into the
everyday practices of our managers making Wal-mart the worlds' most admired companies.
At the core of every one of the rules and customs is the basic value of respect for the
customer, associates, and suppliers. Building relationships is of prime importance, which not
only helps them serve the communities will but also help build their business committed to
excellence. Wal-marts management believes in open communication and that it is critical to
understanding and meeting the associates and their customers needs. They often do their
best to answer requests by the close of business on the day receive them. The 10-foot Rule is
one of their secrets to customer service. During his many store visits, Sam Walton
encouraged associates (employees) to take this pledge with him: "I promise that whenever I
come within 10 feet of a customer, I will look him in the eye, greet him, and ask if I can help
him."Sam Walton believed that effective leaders do not lead from behind their desks. "It's
more important than ever that we develop leaders who are servants, who listen to their
partners their associates in a way that creates wonderful morale to help the whole team
accomplish an overall goal, Sam said. Sam Walton, the founder, believed in the power of

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teamwork and it has only become important over the years. Factors contributing to its
international success

PRODUCTIVITY:
Productivity is the principal driver of economic progress. It is the only force that can make
everyone better off: workers, consumers, and owners of capital and it is what has driven
Wal-mart to its success and its international presence. Wal-Mart has indisputably made a
tremendous contribution to productivity.

SOPHISTICATED INVENTORY SYSTEMS:


Wal-marts sophisticated state of the art inventory system has enabled them to keep a control
on their widespread services that are geographically dispersed over regions.

PRICING INNOVATIONS:
Wal-marts pricing innovations, into the way they have been providing low cost products to
its customers has been attributed as the prime reason for its success.

REFERENCES:
Wal-Mart: An Analysis
http://www.associatedcontent.com/article/916627/walmart_an_analysis_pg10.html?cat=3
SWOT:
http://marketingteacher.com/lesson-store/lesson-swot.html
Environmental scanning
http://www.angelfire.com/ultra/mg695/CapStoneWebPageEnvironmentalScanning.htm

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UNILEVER

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HISTORY
Unilever was created in 1930 by the amalgamation of the operations of British soap maker
Lever Brothers and Dutch margarine producer Margarine Unie , a merger as palm oil was a
major raw material for both margarines and soaps and could be imported more efficiently in
larger quantit ies. In the 1930s the Unilever business grew and new ventures were launched in
Latin America. In 1972 Unilever purchased A&W Restaurants' Canadian division but sold its
shares through a management buyout to former A&W Food Services of Canada CEO
Jefferson J. Mooney in July 1996.
In 1996 Unilever purchased Helene Curtis Industries, giving the company "a powerful new
presence in the United States shampoo and deodorant market" The purchase brought Unilever
the Suave and Finesse hair-care product brands and Degree deodorant brand. In 2000 the
company absorbed the American business Best Foods, strengthening its presence in North
America and extending its portfolio of foods brands. In April 2000 it bought both Ben &
Jerry's and Slim Fast.
In 2008 Unilever was honored at the 59th Annual Technology & Engineering Emmy Awards
for "Outstanding Achievement in Advanced Media Technology for Creation and Distribution
of Interactive Commercial Advertising Delivered through Digital Set Top Boxes" for its
program Axe: Boost Your Esp. On September 28, 2010, Unilever and EVGA announced that
they have signed an agreement under which Unilever will acquire EVGAs ice cream brands
(amongst others, Scandal, Variete and Karabola) and distribution network in Greece, for an
undisclosed amount.
On March 23 2011: Unilever announced that it has entered a binding agreement to sell the
global Sanex business to Colgate-Palmolive for 672m.

UNILEVER TODAY
No matter who you are, or where in the world you are, the chances are that their products are
a familiar part of our daily routine. Every day, around the world, people reach for Unilever
products. Unilever brands are trusted everywhere and, by listening to the people who buy
them, they have grown into one of the world's most successful consumer goods companies. In
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fact, 150 million times a day, someone somewhere chooses a Unilever product. In our fridge
or on the bathroom shelf and we are bound to see one of Unilever well-known brands. They
create market and distribute the products that people choose to feed their families and keep
themselves and their homes clean and fresh.
People's lives are changing fast. As the way they all live and work evolves, our needs and
tastes change too. Unilever aim is to help people in their daily lives. So they keep developing
new products, improving tried and tested brands and promoting better, more efficient ways of
working.
Focusing on performance and productivity, they encourage their people to develop new ideas
and put fresh approaches into practice. Hand in hand with this is a strong sense of
responsibility to the communities they serve. They do not only measure success in financial
terms; how they achieve results is important too. They work hard to conduct their business
with integrity - respecting their employees, their consumers and the environment around
them.

UNILEVER MISSION
Their mission is to add Vitality to life. They meet everyday needs for nutrition; hygiene and
personal care with brands that help people look good, feel good and get more out of life.

ENTHUSED WITH VITALITY


Vitality is at the heart of everything they do. It's in their brands, their people and their values.
Vitality means different things to different people. Some see it as energy; others view it more
broadly as a healthy state of body and mind of feeling alive.
Ever since the 19th Century when William Hesketh Lever stated that the company's mission
was "to make cleanliness commonplace; to lessen work for women; to foster health and
contribute to personal attractiveness, that life may be more enjoyable and rewarding for the
people who use their products," Vitality has been at the heart of their business.
Vitality defines what they stand for: their values, what makes them different, and how they
contribute to society. It's the common thread that links their brands and its central to the
unique way they operate around the world.

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HEALTH & NUTRITION


Their Vitality mission commits them to growing their business by addressing health and
nutrition issues. They focus on priorities including children and family nutrition,
cardiovascular health and weight management.

INSIDE & OUT


Their culture also embodies Vitality. Adding Vitality of life requires the highest standards of
behavior towards everyone they work with, the communities they touch and the environments
on which they have an impact.

UNILEVER VISION
Unilever products touch the lives of over 2 billion people every day whether that's through
feeling great because they have got shiny hair and a brilliant smile, keeping their homes fresh
and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A CLEAR DIRECTION
The four pillars of their vision set out the long term direction for the company where they
want to go and how they are going to get there:

They work to create a better future every day

They help people feel good, look good and get more out of life with brands and
services that are good for them and good for others.

They will inspire people to take small everyday actions that can add up to a big
difference f or the world.

They will develop new ways of doing business with the aim of doubling the size of
their company while reducing their environmental impact.

PURPOSE AND PRINCIPLES


Their corporate purpose states that to succeed requires "the highest standards of corporate
behavior towards everyone they work with, the communities they touch, and the environment
on which they have an impact."

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ALWAYS WORKING WITH INTEGRITY


Conducting their operations with integrity and with respect for the many people,
organizations and environments their business touches has always been at the heart of their
corporate responsibility.

Positive impact
Their aim is to make a positive impact in many ways: through their brands, their commercial
operations and relationships, through voluntary contributions, and through the various other
ways in which they engage with society.

Continuous commitment
They are also committed to continuously improving the way we manage their environmental
impacts and are working towards their longer-term goal of developing a sustainable business.

Working with others


They want to work with suppliers who have values similar to their own and work to the same
standards they do. Their Business partner code, aligned to their own Code of business
principles, comprises ten principles covering business integrity and responsibilities relating to
employees, consumers and the environment

SUSTAINABILITY STRATEGY
They have a clear mission and a long-standing set of values and principles that guide their
behavior and underpin their approach to sustainability.

SUSTAINABLE LIVING PLAN


In November 2010 they launched their Sustainable Living Plan. The Plan complements their
Compass strategy and will drive delivery of their environmental impact reduction and
enhanced social impact. Their Plan commits them to three significant outcomes by 2020: To
help more than one billion people take action to improve their health and well-being; to halve
the environmental footprint of the making and use of their products; and, to source 100% of
their agricultural raw materials sustainably.

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Compass strategy
They will deliver their ambitious mission through what they call their Compass strategy. The
Compass focuses them on delivering growth winning market share and growing volume
profita bly across their categories and countries. They will do this by winning: with brands
and innovation; in the marketplace; through continuous improvement; and with people.

A long-standing commitment
Their commitment to responsible business practice goes back over 100 years. Their founders
William Hesketh Lever and Samuel van den Bergh did not just create some of the worlds
first consumer brands; they also built a business with strong values and a mission to act as
agents of social change. Today, they continue on this journey keeping their values and
principles at the heart of everything they do.

SUCCESS AND CHALLENGES


As lifestyles continually change and markets become increasingly competitive, each day
brings a new challenge. Discover how sometimes the simplest solution can make the biggest
impact. Their major challenge is to innovate and brand products successfully that means
supporting and building up their existing brands as well as bringing new brands to the
marketplace. They endeavor to underpin the brands with a world -class supply chain that
meets the highest level of customer service and raise the efficiency in the supporting
processes within the business. They will make investments in IT applications, such as those
that are provided by SAP, against very clear, well-defined business objectives.

Need European Dietary Guidelines to set nutrition profiles.

Need to approve science behind the new health and medical claims.

Believe if science can be substantiated then claim should be allowed to be made


especially weight reduction and psychological claims.

Believe that claims should be allowed to make reference to doctors or other health
professional bodies or their charities.

Limited consideration of portion sizes in nutrition claims e.g. salt, fat.

Need to ma intain trademark with nutrition claims in their brand name e.g. Slim. Fast.

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KEY TO SUCCESS
The common thread running through all their R&D activities is a direct connection between
science, technology and consumer needs.

PRODUCTS THAT PEOPLE WANT


Their researchers are looking at potential uses of emerging areas of science, or their chefs and
product developers are exploring how to make a packet of soup taste better, they are always
asking themselves what the benefit is for the consumer. Their R&D experts are constantly
developing innovations in nutrition, hygiene and personal care.

Striking a balance
As competition increases, the importance of rapid innovation becomes ever greater. But
scientific breakthroughs cannot always be converted overnight into innovations preferred by
consumers. R&D is all about finding the balance between long-term fundamental research
and medium to short-term technological applications of the research results to deliver marketready products.

Consumers & citizens


Consumers in the twenty-first century are also citizens, with social and environmental
concerns increasingly at the top of their minds. But they do not want to trade product efficacy
for social and environmental benefits. They expect us to provide solutions that meet both
these needs.
This requires in-depth scientific and technological expertise. We are working on an
environmental metrics programme to quantitatively monitor and improve emissions of
greenhouse gases (e.g. CO2), waste, water use in water stressed countrie s and sustainable
sourcing of materials for all our innovations around the world.

Raising the bar


Innovation never stops. In today's globalised world the challenges and opportunities arise
ever faster. Where R&D was once a local activity, we now have a closely linked global
network of R&D centers, to build and use our expertise in the most effective and efficient
way.

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Our R&D expertise is applied across Foods and Home and Personal Care categories, again,
maximizing the return on the investment in R&D. Besides our internal R&D capabilities, we
build expertise with external partners as well to deliver more breakthroughs, better solutions
for consumers and faster growth for Unilever

INNOVATIONS IN UNILEVER
Innovation is the engine of Unilevers growth; the lifeblood of their business. Their future
depends on their ability to bring bigger & better innovations to market more quickly than
their competitors.

AREAS OF INNOVATION
Unilever is recognized as a world leader in R&D, both in terms of innovation (new products
and mixes) and renovation (refreshing existing products).

A STRONG R&D REPUTATION


They typically file between 250 and 350 new patent applications a year and their portfolio
contains more than 20 000 patents and patent applications. By focusing their efforts in global
and regional centers, with small implementation teams in the countries and factories, they
make the best use of resources and bring bigger innovations to market more swiftly than ever
before.

FOOD & NUTRITION


By providing foods that taste great and are good for you, their aim is to become the worlds
leading food and nutrition business. To achieve that, they are continuously improving the
nutritional profile of their product range and giving consumers a wider choice of tastier,
healthier, more natural options as well as functional foods with additional health benefits.
For example:

Hellmanns Extra Light uses citrus fiber to create a very low fat mayonnaise that still
tastes great.

Knorr Stockpot revolutionizes bouillon with a new jelly format that provides a more
authentic, a closer-to-fresh bouillon that smells delicious, melts naturally into the
food, develops a great aroma and tastes genuine and delicious.

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Breakthrough technology that uses Ice Structuring Proteins (ISP) in ice cream enables
us to deliver healthier options and better quality.

Catechin-rich tea helps people improve their body shape.

HYGIENE, HEALTH & BEAUTY


The desire to be clean and healthy and to look good is universal. Our home and personal care
brands have promoted hygiene, health and beauty since the late 19th century and continue to
play a vital role in millions of homes around the world today.
For example

The Vaseline Skin Fund gives one million people better access to information about
managing skin complaints.

Our Oral Care teams run promotional and education programmes in partnership with
the FDI World Dental Federation.

Sunlight hand dishwashing liquid uses an ultra-concentrated formula that requires less
water in production and less packaging.

All Rexona, Axe and Dove brands incorporate a lightweight packaging design.

STRENGTHS
They have a portfolio of brands that are popular across the globe - as well as regional
products and local varieties of famous -name goods. This diversity comes from two of their
key strengths:

Strong roots in local markets and first-hand knowledge of the local culture.

World-class

business

expertise

applied

internationally

to

serve

consumers

everywhere.

Recognized as a global company.

Strong brand portfolio.

Strong relationships with retailers.

Economies of scale.

Experience and established distribution network and efficient and effective logistics
infrastructure that will keep competitors squeezed out from store shelves, and mind
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share of local users and better consumer research then rivals that will enable it to
customize products to fit local environments.

Develop effective health promotion strategies for employees in the workplace.

Promote healthy diets and physical activity in conjunction with other recognized
stakeholders.

Enhance the nutrition composition, where possible, of all our food and beverages by
further

Reducing levels of Trans fat, saturated fat, sugar and sodium.

Introduce new products with nutrition and health benefits.

Offer greater choice.

WEAKNESS

Not connecting with customers

Inefficient management of brands

Reduced spending for R&D to maximize acquisition

Dual leadership

High prices of products

Substitutes products

Policy of spending for the social responsibility

Lack of control in the market

Decrease in revenue

Increase in the production and labor cost

Low pricing powers at a time when input cost are rising

Lack of Earnings visibility

Unilever suffers from a structurally weak portfolio in food

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About 80% of raw material is imported for the

manufacturing of the cons umer

goods. Raw material constitutes about 85% of manufacturing cost, leaving Levers
margin exposed to rupee devaluation.

Rampant smuggling of tea and detergents has

seriously affected levers sale and

earning.

Unless the govt. takes serious steps to curb smuggling growth in sales and earnings
will continued to be significantly restrained.

One of the weaknesses of Unilever and its

products especially when selling in a

developing country like Pakistan is its product prices which are a little if not more
higher than what a regular rural person could afford.

Another weakness for Unilever is what should

be its major strength as well. The

size of corporation is so huge that its difficult to manage all the units and their
specific departments. So sometimes some products get more attention and some stay
hidden from sight.

REWARDS AND CHALLENGES OF BEING MANAGER


REWARDS

The

foremost reward of being a manager, especially being a manager at an

organization of Unilevers stature is to have a good salary.

Another reward of being a manager at Unilever is to have recognition as manager in


a leading corporation.

Being a manager also gives you chance to create an environment for your employees
and utilize your skills.

A major reward of being a manager at Unilever is to be able to work with people of


different background and from different cultures.

CHALLENGES

Major challenge at Unilever is to make plans and strategies for achieving them to
compete with other large corporations.

Another challenge is to get the maximum out of the employees to increase their
efficiency.

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Another challenge of being a marketing manager at Unilever is to that he has to deal


with different personalities.

Also finding to some unusual problems is a challenge for the manager.

ORGANIZATIONAL STRUCTURE OF UNILEVER


In Unilever the organizational structure is share structure in nature. As it is multinational
corporation and almost all such type of organizations have decentralized structure. Unilever
also has decentralized structure in most departments but in most of its departments the
structure is combination of centralized and decentralized structure.

CULTURE
Unilever is home to some of the most innovative people in the industry. Their culture is about
what they believe in & how they act collectively. Unilever is consistently ranked among the
world's most admired employers.
Unilever, the culture is consumer-oriented and they consider more their customers and also
tried to give their best services. Unilevers culture varies from country to country. The most
important are their high standards of corporate behavior which are enshrined in their code of
business principle. Here at Unilever we value colleagues as individuals, they friendly towards
each other and they are informal in terms of corporate behavior and, to a large extent, dress
code.
Finally, they believe in every ones ability to develop and grow. Whatever their functions,
role or level, they all have an equal right to take advantages of learning opportunities and
progress how they want to in their chosen career.
.Unilever people have a passion for achievement, strive for outstanding results and are
determined to get things done. To make sure that happens each and every day, they have
created a working environment in which they can be you. After all, as a business they need to
be as diverse as their millions of consumers around the world.

EXTERNAL ENVIRONMENT
The external factors affect Unilever a great deal. Since Unilever is a consumer good company
the factors such as changing trends among its customers and other factors including suppliers,

607

competitors and public pressure groups have great impact on planning and strategy making of
company and overall operations.
Being a marketing manager he has to be extremely sensitive towards factors such as
consumer and competitors. Consumer behavior in todays dynamic world is also changing
rapidly. And people demand better and healthier products each day. Also awareness of
consumers towards environmental issues is also playing an important role in forming product
related plans and strategies.
Competitors also play an important role in organizations external environment. Unilevers
competitors include big name such as Kraft Foods, Nestle and Procter & Gamble, so it has to
keep its marketing strategies and operations up to date as well to keep competing with these
giants.
1. Economical factors
2. Technological factors
3. Socio-cultural factors
4. Demographic factors
5. Political factors
All these factors have an equal impact on Unilever and its operations as does the specific
environment of Unilever. The political factor had a huge impact on Unilevers operations in
Pakistan because of instability of this factor in Pakistan. Other than that other general factors
of external environment including technological factor, global factor, socio-cultural factor,
demographic factor and economical factors also have huge impact on the organization.

UNILEVER IN GLOBAL ENVIRONMENT


Currently a Unilever brand can be found in one out of every two households in the world.
Unilever is a multinational corporation with 400 brands spanning 14 categories of home,
personal care and foods products. No other company touches so many people's lives in so
many different ways. Their brand portfolio has made them leaders in every field in which
they have worked. It ranges from much-loved world favorites including Lipton, Knorr, Dove

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and Omo, to trusted local brands such as Blue Band and Suave. The brands produced by
Unilever have become global phenomenon.
Unilever developed its strength worldwide in acquisition of other firms, and their subsequent
Unileverization. Unilever has been trying to become a transnational organization, and to
some extent it has succeeded in doing so. Unilever employs about 174 000 people in 100
countries worldwide, and supports the jobs of many thousands of distributors, contractors and
suppliers.

MANAGEMENT PRACTICES
Unilever recognizes the importance of good corporate governance and behavior, and is
committed to achieving the highest standards within its policies. Unilever basically works on
growth strategy as growth is the key to sustainable long term value creation, and because
growth is where Unilever has been deficient in the past. Through the 80s and 90s Unilever
volume growth averaged around 2.5%. In 1990 they launched a 5 year Path to growth
strategy. Their goal is to bring about a sustained step-changed in Unilevers growth rate.
Path to growth strategy was basically to bring about a sustained step-changed in Unilevers
growth rate. Sinc e introduction of this strategy Unilever has reduced its brands from 1600 to
400 leading brands and 250 tail brands. This strategy enabled them to concentrate on
resources on portfolio of their leading brands with strong growth potential that best meet the
needs and aspirations of people around the world. Path to growth has achieved many
important things. It delivered brand focus, it improved global buying, drove up margins and
improved capital efficiency but it failed to transform their growth performance
Unilever constantly keeps its corporate governance arrangements under review. NV and PLC
are subject to different corporate governance requirements and best practice codes, the most
relevant being those in the Netherlands, the United Kingdom and the United States. It
is Unilever's practice to comply, where practicable, with the highest level of these codes, and
respond to developments appropriately.
NV and PLC, together with their group companies operate effectively as a single economic
entity. This is achieved by a series of agreements between NV and PLC (the foundation
agreements, see below), together with special provisions in the articles of association of
both NV and PLC. NV and PLC have the same directors, adopt the same accounting
principles, and their shareholders receive dividends on an equalized basis.
609

A comprehensive description of Unilever's corporate governance arrangements including


further details on the structure of the Unilever Group are set out in the document 'The
Governance of Unilever'.
Their policies cover operational or functional matters, and in turn govern how they run their
business. As set out within 'The Governance of Unilever', included within the business of the
board is the endorsement or amendment of certain corporate policies w hich includes
Unilever's code of business principles, code of ethics for senior financial officers, and
Unilever's share dealing code.
The code of business principles sets out the standards of behavior we require from all of our
employees. Furthermore, our code of ethics, which applies to the senior executive, financial
and accounting officers, comprises the standards prescribed by the US Securities and
Exchange Commission (SEC). The code of ethics provides an extract of the relevant
provisions of Unilever's code of business principles and the more detailed rules of conduct
that implement it.
The share dealing code applies to persons who are executive directors and members of the
executive team of NV and PLC and will apply whilst any such person holds the relevant
office or is employed by the Unilever Group and for six months thereafter. It also applies to
non-executive directors and persons who are notified from time to time that their name is on
the Unilever general standing insider list.

NEW STRATEGY
Unilever attaches great value to its relationship with shareholders. One of the Investor
Relations departments primary tasks is to maintain an open and constructive dialogue with
current and potential shareholders of Unilever and with sell side analysts.
The new strategy opted and being used by Unilever is to reorganize its organizational
structure to focus on needs and wants of consumers and brand management. This strategy is
based on product and brand extensions and using advertisement to connect with consumer
needs and increase consumer focus on health and nutrition products.

RECOMMENDATIONS

Reorganize and streamline Unilevers organizational structure.


610

Implement Unilever Believer product and brand extensions.

A simpler management structure will increase accountability and speed the decision
making process

Provides a greater clarity of leadership, responsibility, and accountability

Allows Unilever to focus on the needs of their customers and consumers thus
reigniting growth and increasing sales potential

Provides the ability to leverage scale of operations

Create a strategic platform for brand management

Delivers innovative products that capitalizes on changing consumer preferences

Provides a strong competitive platform against major competitors and private label
brands

CONCLUSION
Unilever is a very strong multinational corporation with a lot of strengths, including its strong
management, to run its operations to the heights of success. It also has a few weaknesses but
those are very minor ones that are present with every organization and it also has got the
resources and managerial muscle to cope with those weaknesses and threats. It also has major
opportunities to flourish its business to African continent and to rural areas in developing
countries like Pakistan and India. In the near future with globalization of world continuing
Unilever will be even bigger and stronger. Unilever has a role to play in engaging with
society at all levels to improve diet and public health.
Health is everyones business

REFERENCES
http://www.guardian.co.uk/sustainable-business/profile-unilever
http://en.wikipedia.org/wiki/Unilever
http://www.fhf.org.uk/meetings/2005-03-22_presentation_heughan.pdf
http://myvalueidea.blogspot.com/2007/12/unilever-value-idea.html
http://www.scribd.com/doc/2074712/Unilever-Strategy
http://www.unilever.com/innovation/innovationinunilever/?WT.GNAV=Innovation_in_Unile
ver
611

http://www.unilever.com/investorrelations/corp_governance/

612

IBM

613

HISTORY
It was founded in 1896 as the Tabulating Machine Company.IBM is a multinational computer
technology and its consulting corporation headquartered is in Armonk, New York, United
States. The company is one of the few information technology companies with a continuous
history dating back to the 19th century. International Business Machines, abbreviated IBM
and nicknamed "Big Blue" (for its official corporate color), is a multinational computer
technology and IT consulting corporation headquartered in Armonk, New York, United
States. The company is one of the few information technology companies with a continuous
history dating back to the 19th century. IBM manufactures and sells computer hardware and
software and offers infrastructure services, hosting services, and consulting services in areas
ranging from mainframe computers to nano-technology. Samuel J Palmisano is the chairman
and CEO of IBM.
IBM has been well known through most of its recent history as one of the world's largest
computer companies and systems integrators. With over 388,000 employees worldwide, IBM
is one of the largest and most profitable information technology employers in the world. IBM
holds more patents than any other U.S. based Technology Company and has eight research
laboratories worldwide. The company has scientists, engineers, consultants, and sales
professionals in over 170 countries. IBM employees have earned Five Nobel Prizes, four
Turing Awards, five National Medals of Technology, and five National Medals of Science.

ORGANIZATIONAL CULTURE
IBM is an international corporation with operations in more than one hundred and sixty
countries in such faraway places as Brazil, Thailand, Israel, Singapore and Hungry. Clearly,
no one single type of universal IBM organizational culture exists as national, regional,
cultural, and linguistic variables abound. However, by concentrating on the IBM
organizational culture of the United States, the birthplace and headquarters of IBM. Perhaps,
we will gain a solid foundation of the organization behavior of IBM worldwide. In examining
this shared meaning of organizational values, three key characteristics of organizational
culture will be identified.
First, in the high tech world of today, IBM recognizes and encourages innovation and risk
taking. Innovation, specifically high tech innovation is perhaps the prime reason for IBMs

614

dominant position in the marketplace. Such high tech innovation is risky in terms of the
tremendous cost research and development. However, this innovation and risk taking has
certainly benefited IBM. Last year alone IBM was granted more patents than any other
company or individual.
Last year the United States Patent and Trademark Office granted IBM two thousand eight
hundred and eighty six patents. Moreover, IBM has held the number one position for patent
awards for the last eight years. This innovation and risk taking generated more than $1 billion
licensing royalties and one third of the patents granted in 2000 are in the marketplace.
Certainly, mistakes are highly probable in this type of environment. Original mistakes are
treated as a learning experience and it is expected to admit to the mistake early and not repeat
it.
Number two of the three key characteristics is attention to detail. Clearly, management
demands that employees display expert precision, analysis, and detail. However, this also
directly conflicts with management's desire for minimal costs, development time, and other
financially related matters. So far this has not been overcome in my organization and is often
a source of heated discussion. The attention to detail has been dominating so far but various
policies have been implemented to reduce costs. One of these is a web accessible database to
track, quantify, qualify, correlate, and otherwise analyze all production changes, production
experiments, and failure analysis.
Outcome orientation scores relatively high and is third which is last on the list. The outcome,
vision, or big picture is regularly stressed in monthly department meetings. The big picture
within my organization is delivering a quality product at cost, on time, and responsiveness to
the customers needs. Often times, it is the details that dominate most of the meetings and
work time, yet the outcome does rate high. For example, a task force is already in place
developing the second and third generation of the product. This task force has before it
clearly defined goals that must be reached. These goals are the desired outcome and must be
fulfilled in order to have a successful outcome.

MANAGEMENT PRACTICES
The managers at IBM follow the focus on giving flexibility to the employees so that the team
can together evolve as one unit. By involving the team members in taking decisions, the

615

managers give the employee a sense of ownership and so that every employee feels as one
family. In this style, team building skills, social harmony and cooperation are aimed to
achieve a target.
Guiding
Collaboration & Coaching
Diversity & Flexibility
Openness & Sharing
Involvement of others
In IBM use of management style finds that employees are more receptive to change than in
situations in which they have no voice. Changes are implemented more effectively when
employees have input and make contributions to decisions. Participation keeps employees
informed of upcoming events so they will be aware of potential changes. IBMS manager can
then place itself in a proactive mode instead of a reactive one, as IBM managers are able to
quickly identify areas of concern and turn to employees for solutions.
Coordination and interaction helps employees gain a wider view of the organization. Through
training, development opportunities, and information sharing, employees can acquire the
conceptual skills needed to become effective managers or top executives. IBM managers
increase the commitment of employees to the organization. Creativity and innovation are two
important benefits of participative management in the IBM. By allowing a diverse group of
employees to have input into decisions, IBM benefits from the synergy that comes from a
wider choice of options. When all employees, instead of just managers or executives, are
given the opportunity to participate, the chances is increased that a valid and unique idea will
be suggested.

INTERNAL ENVIRONMENT
Internal factor s include following factors in it.

COMPANY
IBM is a multinational computer technology and its consulting corporation headquartered is
in Armonk, New York, United States. The company is one of the few information technology
companies with a continuous history dating back to the 19th century. International Business
616

Machines , abbreviated IBM and nicknamed "Big Blue" (for its official corporate color) , is a
multinational computer technology and IT consulting corporation headquartered in Armonk,
New York, United States

CUSTOMERS
IBM has its customers in every region of the world so it has to keep in mind the unique
demands of every customer. For home users, IBMs direct method and customization
approach posed problems. For one customers cannot go to retailers because IBM does not use
distribution channels. Customers just cant buy IBM as simply as other brands because each
product is custom-built according to their specifications and this might take days to finish.

COMPETITORS
IBM has three main competitors
1. Dell
2. HP
3. Compaq

EMPLOYEES
In IBM the companies consider employees an important asset and really value them and try
to give them good compensation and motivate them.

EXTERNAL ENVIRONMENT
External environment forces cant be controlled by the organization it includes.

LEGAL DIMENSION
The first and most important thing for any organization like IBM is to know different laws in
their global business operations. In this case, the global community of IBM played a vital
role in differentiating between the legal codes from one region to another.

POLITICAL DIMENSION
The domestic and international political environment has a major impact on every national
and international company. As government policies of US are stable and constant, MNCs
must adjust their strategies and practices to accommodate the new perspectives and actual
617

requirements. Same is the case with IBM which maintains good relations with government so
they can avoid any problems or can minimize their negative effect by manipulating the
policies in their interest.

ECONOMIC DIMENSION
The economy has a significant impact on the viability of a corporate strategy. Both the
companys and the countrys economic environment matters a lot for any organization to
succeed. As it has its main office in USA, so it has a strong impact of the economy of USA
and IBMs has also very strong economic environment.

TECHNOLOGICAL DIMENSION
Technology factors are the scientific advances in which influence the competitive position of
the corporation. Maintaining awareness of new technologies decreases the probability of
becoming promotes innovation. Advancements in technology can impact the transformation
plan in many ways. IBM keeps in mind the new needs of its customers and spends a lot on
new technologies.

618

STRENGTHS AND WEAKNESS


STRENGTHS

WEAKNESS

1. Worlds largest PC maker

1. Least market size exodus of talent

2. One of the best known brands


3. Specialized software
4. Customers own specification

2.

Computer

maker

not

computer

manufacturer making IBM unable to switch


supply

5. High end Operating system


6. Keep track of your delivery

3. The company has such a huge range of


products

7. Diversification strategy by introducing


many new products to its range.
8.

Making and selling low -cost, unbranded

and

components

from

many

suppliers from a plethora of countries, that


there is the occasional product recall that can
cause IBM some embarrassment. In 2004

low-price computers to PC retailers in the

IBM had to recall 4.4 million laptop adapters

global markets.

because of a fear that they could overheat,


causing electric shocks or fires.

WAYS IN WHICH STRENGTHS ARE EXPLOITED


IBM Researchers push the boundaries of science, technology and business to make the world
work better. Our global network of scientists work on a range of applied and exploratory
research projects to help clients, governments and universities apply scientific breakthroughs
to solve real-world business and societal challenges.
The IBM First-of-a-Kind (FOAK) program brings together IBM researchers and clients to
test new technologies on real business problems and growth opportunities. Since 1995, we
have partnered with clients on more than 150 projects to help drive innovation into the
marketplace, including finding ways of providing information for healthcare without
compromising patient privacy, translating a real-time warning to troops in Iraq and driving
down the cost of electricity by adding intelligence to power grids.
First-of-a-Kind (FOAK) program, which pairs IBM researchers with clients to bring
incredible discoveries and possibilities into view. This first episode brings you the wonderful

619

tale about how IBM researchers and clients came together to create an innovative solution for
a hospital based on clever stream computing software.

High Performance Stream Processing Platform for Financial Services


Sectors
Many financial institutions have built automated trading systems that consume high volume
market data feeds. Their business success depends on high stream processor database, so
IBM is providing effectively scale to handle the anticipated load. They need to improve endto-end latencies for competitive advantage.

Benefits

High competitive Edge.


o

Ultra high speed & ultra low latency processing

Scales easily to addresses future workloads

Lower infrastructure TCO

Removes hardware dependency

Enables greater flexibility


o

Real-time monitoring

Global optimization

Conforms to existing data center power and space limits

21x performance improvement on the volume of data consumed by financial trading


sys tems

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS


IBM: WORLDWIDE HOSTING LEADER
IBM is a worldwide hosting leader chosen by thousands of companies of all sizes to host their
business applications and Web sites. By using the IBM hosting infrastructure, including
networking security, operating system management, storage, backup and implementation
methodology independent software vendors like Success Factors deliver comprehensive
solutions to their customers business requirements.

620

The IBM hardened facilities protect against security breaches and natural disasters.
Redundancy is built into the architecture, and IBM facilities provide a safe, controlled
environment for proprietary information and physical assets. IBM Business Partners and their
clients realize reduced costs; have access to technical expertise and can run full speed 24/7.

SUCCESSFACTORS SOLUTION DRIVES EMPLOYEE PERFORMANCE


As a result, SuccessFactors software promotes visibility, accountability and results. The suite
includes solutions for career and development planning, recruiting management, employee
surveys, succession planning and employee profiles. It also speeds employee performance
reviews and compensation planning.
As an IBM Business Partner, Bauer noted that SuccessFactors collaborates in joint marketing
programs with IBM and makes joint presentations to potential clients. The two companies
work together on producing direct mail campaigns. SuccessFactors is one of more than 1,330
IBM Business Partners to use co-marketing and sales initiatives. To date, such activities have
generated more than 30,000 customer inquiries for the partners.

REFERENCES
http://en.wikipedia.org/wiki/History_of_IBM
http://www.research.ibm.com/FOAK/index.shtml
http://www.ibm.com/ibm/environment/ems/

621

MERCEDES BENZ

622

HISTORY
Mainly Mercedes Benz is very famous in the world for its variety of car models. In the year
1886 it produced the worlds first true internal combustion engine powered three wheeler
automobile vehicles. In the year 1894, Mercedes Benz produced worlds first single cylinder
four stroke engine powered four wheeler vehicle Benz Velo. In the year 1899, an
automobile enthusiast dealer of Germany Mr. Emil Jellinek successfully raced the Daimler
Motoren Gesellschaft (DMG) vehicles by painting his daughters name Mercedes on all these
test vehicles for good luck and later this very name became the brand name of all the DMG
vehicles. The first DMG make four wheeler vehicles bearing the brand name Mercedes rolled
out of the factory in the year 1902.
The Mercedes 35 hp four wheeler vehicles which were produced in 1902 became an
important mile stone in the advancement in the automobile design. While focusing on the
land surfing vehicles Mercedes Benz also produced both civil and military boat and aircraft
engines and even Zeppelins. Since 1920, Mercedes Benz regularly started producing
limousine vehicle models. During that period Mercedes Benz also started producing sports
car models. Explicitly for the American market Mercedes Benz started producing vehicles
during the period of 1950s. Iconic 300SL sports car model was showcased in the New York
automobile show in 1954, which was produced particularly for the American market.
Mercedes Benz made rear engine cars produced that time had been rather unsuccessful
attempt but later on it successfully produced similar category less expensive and higher
volume cars. Recently Mercedes Benz made small 139 hp car has not been very successful in
the market. Since 1994 Mercedes Benz has been successfully producing compact city cars
along with in-expensive A-class range cars.
Mercedes Benz motor sport history began in 1894 by participation in the worlds very first
automobile race Paris to Rouen. Since then the automobile motor sport cars manufacturing
had been a unique feature of Mercedes Benz till late 1930. In 1955 the Mercedes Benz race
car 300 SLR collided with anothe r racing car and killed around 8 people. Since then up to the
year 1980 Mercedes Benz had not participated in the motor sport racing, but in 1980
Mercedes Benz returned in the frontline motor racing contests with its Sauber racing car.
Mercedes Benz car model production significantly started from the SSK racing car model
produced in 1928.Since then Mercedes Benz has been successfully producing a variety of

623

luxury car models till the latest car models like GL320 Bluetec, R320 Bluetec, E320 and
ML320 Bluetec, produced in 2007.

MERCEDES CROSS CULTURE


Success was evidenced for Mercedes-Benz at their plant in Tuscaloosa, Alabama. The
Americans found that their styles for addressing issues differed from Germans and vice versa.
Debra Nelson, administrator of external affairs at Mercedes-Benz U.S. International says,
"We knew we would be engaging Alabamians, Germans, and people throughout North
America as well as the 'Big Three.'" She adds, "It has taken a lot of work, including crosscultural understanding and aware ness, to help us be productive. The work has paid off. We
learned communication was the key. Through communication we discovered our
commonalities."
Developing cultural competence takes work and education, but is well worth the investment.
Sondra Theiederman, author of Bridging Cultural Barriers for Corporate Success writes that
learning about cross-cultural management is important because it will "allow you to
maximize the chances that your multicultural workplace will be productive, efficient, and
harmonious. It will also enable you to attract and retain high-quality workers of diverse
ethnic or cultural backgrounds." Specifically, she notes, it will allow:

"Better communication despite accent and language barriers.

More effective motivation of workers through the accurate interpretation of behaviors


and the design of culturally aware motivation strategies.

The accurate evaluation of culturally diverse applicants and employees through a


better understanding of presentation styles, behaviors, and language facility.

Harmony and comfort in the workplace through an understanding of the motivations


and perspectives of others.

Moreover, cross-cultural management minimizes:

Worker alienation that can result from misunderstandings of etiquette, values, and
behaviors.

Costly discrimination suits that arise from poor communication and worker alienation.

624

Unnecessary terminations that result from communication breakdown and


misinterpretation of employee behavior.

Your managers' reluctance to hire and work with culturally diverse workers.

Racism and discrimination that can result from misinterpretations of the behaviors of
others."

Sometimes culture-specific training is necessary, but there is also culture-general training


which can be valuable and particularly useful for developing cross -cultural competence.

STRENGTHS AND WEAKNESS


Mercedes -Benz Commercial Valencia uses a unique management system based on vehicle
tracking and license plate recognition to increase productivity and improve customer
satisfaction.
"We are the first car dealership in the world to have implemented this type of management
solution. Telefnica has been instrumental in the success of such a complex project."
Vicente
Mesado
IT Director at Mercedes -Benz Commercial Valencia.

KEEPING

CUSTOMERS

SATISFIED

WITH

CUTTING-EDGE

INNOVATION
Mercedes -Benz Commercial Valencia, a Mercedes -Benz car dealership in Valencia, Spain,
was established in 1955 by Manuel Catal. The business is one of the largest and oldest
Mercedes -Benz dealerships in Spain. With a strong focus on technological innovation, it sells
new and used cars, as well as small and large industrial vehicles. They also provide car
maintenance services, a spare parts store, and end-to-end customer service.

THE CHALLENGE: SERVICE MORE CARS, MORE QUICKLY AND


IMPROVE PRODUCTIVITY
Integrating a logistics management system from the reception of the vehicle until its return or
delivery, including tracking and service status while the vehicle is in the garage. The

625

management of IT and Communications had to optimise the response time, priority based
workflow and general productivity.
The dealership carries out a large number of daily activities: up to 125 annual service and
repair jobs. In addition to its commercial and administrative offices, it also has specialized
garages and a 28,000 square meter car park.
The strategic objectives of the dealership are to optimize productivity and cost savings, as
well as improve the brand reputation by providing excellent customer service. This is why its
IT department looked to Telefnica for a solution to manage all aspects of its core business
(from the reception of the vehicle to invoicing and dispatching), enhancing and prioritizing
customer service tasks. The dealership's objective was to eradicate long waiting times,
monitor real time and operational activity, increase customer satisfaction, and create a
scalable database that could be integrated with other company systems in order to support a
continuous improvement process.

THE SOLUTION: A MANAGEMENT SYSTEM BASED ON VEHICLE


TRACKING AND LICENSE PLATE RECOGNITION
Telefnica has developed a system to enable the identification of vehicles and license plates
(based on Tag RFID), using the Telephony over Internet Protocol (ToIP) existing network.
The solution enables the location of each vehicle in the garage and car park to be viewed at
any time, alerting the Service Director via email when the garages reach full capacity, thus
avoiding bottlenecks. It also manages the exit of vehicles allowing them to leave the site only
after the invoice has been paid and the tag has been returned.
Telefnica has developed together with the IT organization of Mercedes-Benz Commercial
Valencia a custom-designed solution for the dealership's requirements. It is based on the
identifica tion of the vehicle's license plate using four video cameras placed at the facility's
entrance and exit. Once the identification has taken place, the system assigns an RFID tag
which is placed on the vehicle's interior mirror so that the MobileView system can pick up its
signal and track the vehicle's location anywhere in the garage or the car park. In order to
guarantee accuracy at all distances, the system uses two search engines operating
simultaneously: Cisco's Received Signal Strength Indicator (RSSI) that operates on the
existing Wi-FI network, and AeroScouts TDOA algorithm.

626

The system tracks the vehicle and shows its precise location whether in the car parks or in
any associated garage across the facility (body shop, electrical, mechanical, or indust rial).
This allows the assignment and management of all operations in order to optimize the
minimum and maximum workload per area. The Service Director receives an email when the
capacity levels exceed defined thresholds. This enables the Service Director to reassign
priorities in order to ensure transit flow, and to avoid bottlenecks. The computer shows the
workflow for each vehicle, including check-in and check-out times, as well as all the
operations performed on it and anything pending.
When the customer returns to pick up their vehicle, the systems locate it and it is delivered in
minutes. Security is a priority: therefore the vehicle tracking and billing systems are
connected to make sure that no vehicle leaves before the invoice has been paid and the tag
returned. The system has the intelligence built in to allow exceptions, such as company
vehicles, test drives, and new vehicles being delivered.

THE RESULTS: CUTTING-EDGE CUSTOMER SERVICE


The solution created and implemented by Telefnica has enabled Mercedes-Benz
Commercial Valencia to increase productivity and speed of decision making across their
facilities, whilst simultaneously improving the quality of service provided to customers,
positively impacting their brand reputation.

BLUEEFFICIENCY
Mercedes-Benz supports green fleet management with BlueEFFICIENCY, the label which
identifies models able to help put your fleet on a more eco-friendly and cost -effective footing.
BlueEFFICIENCY models are an ideal way of securing efficient mobility. They are part of
Mercedes -Benzs integrated BlueEFFICIENCY strategy which focuses on sustainability, low
emissions and a high level of customer benefit.
Our first approach involves the optimisation of vehicles equipped with the latest combustion
engine technology. B lueEFFICIENCY

measures

(improvements

in

the

fields

of

aerodynamics, lightweight design and energy management) increase the efficiency of current
models by up to 12 percent.
Further scope for savings is offered by bespoke hybridisation, as already implemented
extremely successfully in the S 400 HYBRID.

627

Mercedes -Benz vehicles with fuel cell and battery electric drives take the concept one step
further: these vehicles, which can already be driven with no local emissions, are paving the
way to the future.

QUALITY RANKINGS
Since its inception, Mercedes-Benz had maintained a reputation for its quality and durability.
Objective measures looking at passenger vehicles such as J. D. Power surveys,
demonstrated a downturn in reputation in this criteria in the late 1990s and early 2000s. By
mid-2005, Mercedes temporarily returned to the industry average for initial quality, a
measure of problems after the first 90 days of ownership, according to J.D. Power. In J.D.
Power's Initial Quality Study for the first quarter of 2007, Mercedes showed dramatic
improvement by climbing from 25th to 5th place, surpassing quality leader Toyota, and
earning several awards for its models. For 2008, Mercedes -Benz's initial quality rating
improved by yet another mark, now in fourth place. On top of this accolade, it also received
the Platinum Plant Quality Award for its Mercedes Sindelfingen, Germany assembly plant.
As of 2009, Consumer Reports of the United States has changed their reliability ratings for
several Mercedes-Benz vehicles to "average", and are recommending the E-Class and the SClass.

KNOWLEDGE - UP TO DATE
The need for training is constantly growing in response to the product campaigns,
permanently changing buyer behavior and the necessity of having the brand visible and
noticeable at all times and in all places. Our new building is a response to this need. The
guiding idea behind the new Global Training Center in Stuttgart-Vaihingen is: "from us, for
our customers". Seldom has architectural planning been so totally geared to its users'
requirements. In an urban setting, the open glass structure is deservedly called the
"transparent campus". In an area of nearly 20,000 m2 are concentrated the qualification
measures for the Mercedes-Benz, Maybach, smart brands as well as Mercedes-Benz
commercial vehicles. The new training center offers more workshop capacity: in all, we have
20 workshops for passenger cars and commercial vehicles. To avoid long walking distances
for participants, the theory classrooms are located directly next to the practical rooms. All
training vehicles are parked in covered areas or in the garage. Open to the outside, the
building is distinguished by the short distances participants and trainers need to travel. The

628

open spatial organization of the building, with all departments interconnected, facilitates
communication and creates an atmosphere governed by collegiality and the willingness to
learn. The facilities of the training rooms themselves can be flexibly arranged. State -of-theart equipment facilitates the implementation of innovative training concepts. In line with the
new of fice concept of the "advanced workplace," employees are afforded over 50 desksharing workstations for use by multiple workers, in addition to conventional workplaces.
Besides the many innovative constructive details, such as the elaborate climate control
concept, the equipment in the office and training areas merits special mention. State -of-theart technology promotes new forms of learning and optimizes the training processes.

COMMUNICATION EVERY SECOND COUNTS


Keeping your knowledge up to date is more important today than ever before. Those who
want to be able to act and reason professionally have to constantly adapt and expand their
spectrum of knowledge.
Mercedes -Benz Global Training guarantees professional knowledge management and
provides the competenc e to solve problems. As a global training provider, we ensure and
improve the competence of the worldwide Mercedes-Benz sales organization. Global
Training thus makes a decisive contribution to quickly transferring knowledge and
successfully marketing products and services. Up to date, fast, widespread, and simultaneous
- this is how know-how is passed on to our sales employees.
To achieve all this, the training course concepts are developed in close cooperation with
research, development, business units, and our markets. A wide range of courses in
management training, sales and brand training, technical product training, and training in
processes and systems provides tailored qualifications for all target groups at the various
sales levels.
In a unique network with 90 local training centers in 70 countries, 800 trainers work
worldwide to help over 185,000 participants yearly to get the qualifications they need. Up to
450 employees will be trained daily in the latest in sales, management, and after sales, just in
Stuttgart-Vaihingen, Germany.

629

OVERCOME DISTANCE WITH NEW LEARNING TECHNOLOGIES.


Learning in the information age uses new media and methods. Global Training is one of the
pace-setters in these developments. Our unique technical infrastructure is the cornerstone of
our attractive training offerings.
Besides conventional presence training, Global Training focuses on new learning
technologies:

CBT- Computer-Based Training can be used to learn the basics of any automotive
topics and systems in After-Sale s and supports participants in preparing for their training.

AKUBIS - Automobile customer-oriented broadcast information system


The worldwide TV training with the AKUBIS format family:

AKUBIS classic: interactive live broadcasts

AKUBIS direct: weekly news magazine

AKUBIS direct special: broadcasts focusing on current after-sales topics

AKUBIS direct sales: broadcast focusing of current sales topics

E-learning presents theoretical training content on specific Mercedes-Benz topics.

DIVERSITY IS OUR COMPETITIVE EDGE


Effective diversity management is one of Daimlers most important future tasks. It is our
people who give Daimler the power to drive innovation and shape the future of our company.
Our different experiences, skills and perspectives reflect the diversity of our customers,
suppliers, investors and our overall environment.

OPPOSITES ATTRACT
At Daimler we value a broad understanding of diversity. Since the inception our diversity
management drives no less than 42 dimensions are part of our definition.

EFFECTIVE AND TARGET-ORIENTED DIVERSITY MANAGEMENT IS OUR RESPONSIBILITY


To us, diversity management means analyzing facts and figures, committing to strategies and
defining customized measures. On the basis of our analysis, one focal point of our daily

630

diversity management work is improving gender diversity at Daimler. Since 2005 we have
focuses on improving the mix of women and men in leadership. Since 2008, two additional
diversity dimensions also moved in to focus: generations und internationality.

SUSTAINABILITY IS MORE THAN ICING ON THE CAKE


We believe in a broad approach to establish diversity management sustainably within our
companys processes and culture. Therefore, our program impacts four pillars of HR work:
leadership and change, HR development, labor policies, as well as work and family life.
Additionally, Daimler has set measurable goals. In gender diversity we measure the
continuous increase of female executives by way of inspirational guidelines and target
agreements: So far we have been able to achieve an increase of approximately one percent
per year always keeping outstanding performance at the core of recruiting and advancement
decisions. Until 2020, we want to have 20 percent of leadership positions, thus approaching a
more promising mix of diverse leadership.

DIVERSITY MANAGEMENT MATTERS TO EVERYONE


And can be learned. Therefore, we facilitate the cultural change with a sophisticated learning
and development program. In addition, we provide consulting to executives and HR with
regard to implementing diversity management in daily business. Best practice sharing and
active networking are important to us in this regard. We are eager to continually improve our
diverse culture in a joint effort by learning from one another. This is how we aspire to
continually optimize our own programs and consequently shape our companys future.

ENVIRONMENTAL FACTORS, INNOVATION AND SAFETY


Environmental protection in the product lifecycle
To safeguard our companys future, our key aim is to shape sustainable mobility. With
climate researchers warning that the temperature of the earths atmosphere will continue to
rise, many countries, especially in Europe, are calling for a reduction of carbon dioxide
emissions. As a globally operating automobile manufacturer, we have a special responsibility
in this regard, which is why we aim to steadily improve the environmental compatibility of
our products and activities. To this end, we focus on the environmental impact of our
products over their entire lifecycle, from development and production to service, use, and
recycling (more about climate protection and cutting CO2 emissions).
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The following chapters review the individual stages of the product lifecycle and describe the
measures we employ at each stage to conserve resources and minimize pollutant emissions.

REFERENCES
Diamler Company Profile. Retrieved (2010-07-28)
"Mercedes-Benz History". Edmunds.com. Retrieved 26 September 2010."Fortune 500 2010:
States: Texas Companies". CNN.
"DaimlerChrysler". DaimlerChrysler. Retrieved 26 September 2010.
"Business Week, November 2006". Business Week . Retrieved 26 September 2010.Mahoney,
Jerry.
"Automobile Magazine". Automobile.automotive.com. Retrieved 2011-03-12.
"MBUSI

Products/Models".

Mbusi.com.

Retrieved

26

September

2010http://www.daimler.com/retrieved on March 25, 2011


"Mercedes-Benz Ireland New cars AMG". Mercedes-benz.ie. Retrieved 26 September
2010.

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PEPSICO

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HISTORY
Origins
The recipe for Pepsi, the soft drink, was first developed in the 1890s by a New Bern, North
Carolina pharmacist and industrialist, Caleb Bradham, who named it "Pepsi-Cola" in 1898.
As the cola developed in popularity, he created the Pepsi-Cola Company in 1902 and
registered a patent for his recipe in 1903. The Pepsi-Cola Company was first incorporated in
the state of Delaware in 1919. Ownership of this company traded hands several times
throughout the 1920s and 1930s, and in the early 1960s its product line expanded with the
creation of Diet Pepsi and Mountain Dew.
Separately, the Frito Company and H.W. Lay & Company - two American potato and corn
chip snack manufacturers - began working together in 1945 with a licensing agreement
allowing H.W. Lay to distribute Fritos in the Southeastern United States. The companies
merged to become Frito-Lay, Inc. in 1961.
In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the
company it is known as at present. At the time of its foundation, PepsiCo was incorporated in
the state of Delaware and headquartered in Manhattan, New York. The company's
headquarters were relocated to its still-current location of Purchase, New York in 1970, and
in 1986 PepsiCo was reincorporated in the state of North Carolina.

TIMELINE HISTORY
v 1898 Caleb Bradham, a New Bern, North Carolina, pharmacist, renames "Brad's Drink,"
a carbonated soft drink he created to serve his drugstore's fountain customers. The new
name, Pepsi-Cola, is derived from two of the principal ingredients, pepsin and kola nuts.
It is first used on August 28.
v 1902 Bradham applies to the U.S. Patent Office for a trademark for the Pepsi-Cola name.
v 1903 In keeping with its origin as a pharmacist's concoction, Bradham's advertising
praises his drink as "Exhilarating, invigorating, aids digestion."
v 1905 A new logo appears, the first change from the original created in 1898.
v 1906 The logo is redesigned and a new slogan added: "The original pure food drink." The
trademark is registered in Canada.

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v 1907 The Pepsi trademark is registered in Mexico.


v 1909 Automobile racing pioneer Barney Oldfield becomes Pepsi's first celebrity endorser
when he appears in newspaper ads describing Pepsi-Cola as "A bully drink...refreshing,
invigorating, a fine bracer before a race." The theme "Delicious and Healthful" appears,
and will be used intermittently over the next two decades.
v 1920 Pepsi appeals to consumers with, "Drink Pepsi-Cola. It will satisfy you."
v 1932 The trademark is registered in Argentina.
v 1934 Pepsi begins selling a 12-ounce bottle for five cents, the same price charged by its
competitors for six ounces.
v 1938 The trademark is registered in the Soviet Union.
v 1939 A newspaper cartoon strip, "Pepsi & Pete," introduces the theme "Twice as Much
for a Nickel" to increase consumer awareness of Pepsi's value advantage.
v 1940 Pepsi makes advertising history with the first advertising jingle ever broadcast
nationwide. "Nickel, Nickel" will eventually become a hit record and will be translated
into 55 languages. A new, more modern logo is adopted.
v 1941 In support of America's war effort, Pepsi changes the color of its bottle crowns to
red, white and blue. A Pepsi canteen in Times Square, New York, operates throughout the
war, enabling more than a million families to record messages for armed services
personnel overseas.
v 1943 The "Twice as Much" advertising strategy expands to include the theme, "Bigger
Drink, Better Taste."
v 1949 "Why take less when Pepsi's best?" is added to "Twice as Much" advertising.
v 1950 "More Bounce to the Ounce" becomes Pepsi's new theme as changing soft drink
economics force Pepsi to raise prices to competitive levels. The logo is again updated.
v 1953 Americans become more weight conscious, and a new strategy based on Pepsi's
lower caloric content is implemented with "The Light Refreshment" campaign.
v 1954 "The Light Refreshment" evolves to incorporate "Refreshing Without Filling."
v 1958 Pepsi struggles to enhance its brand image. Sometimes referred to as "the kitchen
cola," as a consequence of its long-time positioning as a barga in brand, Pepsi now
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identifies itself with young, fashionable consumers with the "Be Sociable, Have a Pepsi"
theme. A distinctive "swirl" bottle replaces Pepsi's earlier straight-sided bottle.
v 1959 Soviet Premier Nikita Khrushchev and U.S. Vice -President R ichard Nixon meet in
the soon-to-be-famous "kitchen debate" at an international trade fair. The meeting, over
Pepsi, is photo-captioned in the U.S. as "Khrushchev Gets Sociable."
v 1961 Pepsi further refines its target audience, recognizing the increasing im portance of
the younger, post-war generation. "Now it's Pepsi, for Those who think Young" defines
youth as a state of mind as much as a chronological age, maintaining the brand's appeal to
all market segments.
v 1963 In one of the most significant demographic events in commercial history, the postwar baby boom emerges as a social and marketplace phenomenon. Pepsi recognizes the
change, and positions Pepsi as the brand belonging to the new generation-The Pepsi
Generation. "Come alive! You're in the Pepsi Generation" makes advertising history. It is
the first time a product is identified, not so much by its attributes, as by its consumers'
lifestyles and attitudes.
v 1964 A new product, Diet Pepsi, is introduced into Pepsi-Cola advertising.
v 1966 Diet Pepsi's first independent campaign, "Girlwatchers," focuses on the cosmetic
benefits of the low -calorie cola. The "Girlwatchers" musical theme becomes a Top 40 hit.
Advertising for another new product, Mountain Dew, a regional brand acquired in 1964,
airs for the first time, built around the instantly recognizable tag line, "Ya-Hoo, Mountain
Dew!"
v 1967 When research indicates that consumers place a premium on Pepsi's superior taste
when chilled, "Taste that beats the others cold. Pepsi pours it on" emphasizes Pepsi's
product superiority. The campaign, while product-oriented, adheres closely to the
energetic, youthful, lifestyle imagery established in the initial Pepsi Generation campaign.
v 1969 "You've got a lot to live. Pepsi's got a lot to give" marks a shift in Pepsi Generation
advertising strategy. Youth and lifestyle are still the campaign's driving forces, but with
"Live/Give," a new awareness and a reflection of contemporary events and mood become
integral parts of the advertising's texture.

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v 1973 Pepsi Generation advertising continues to evolve. "Join the Pepsi People, Feelin'
Free" captures the mood of a nation involved in massive social and political change. It
pictures us the way we are-one people, but many personalities.
v 1975 The Pepsi Cha llenge, a landmark marketing strategy, convinces millions of
consumers that Pepsi's taste is superior.
v 1976 "Have a Pepsi Day" is the Pepsi Generation's upbeat reflection of an improving
national mood. "Puppies," a 30-second snapshot of an encounter between a very small
boy and some even smaller dogs, becomes an instant commercial classic.
v 1979 With the end of the '70s comes the end of a national malaise. Patriotism has been
restored by an exuberant celebration of the U.S. bicentennial, and Americans are looking
to the future with renewed optimism. "Catch that Pepsi Spirit!" catches the mood and the
Pepsi Generation carries it forward into the '80s.
v 1982 With all the evidence showing that Pepsi's taste is superior, the only question
remaining is how to add that message to Pepsi Generation advertising. The answer?
"Pepsi's got your Taste for Life!," a triumphant celebration of great times and great taste.
v 1983 The soft drink market grows more competitive, but for Pepsi drinkers, the battle is
won. The time is right and so is their soft drink. It's got to be "Pepsi Now!"
v 1984 A new generation has emerged-in the United States, around the world and in Pepsi
advertising, too. "Pepsi. The Choice of a New Generation" announces the change, and the
most popular enterta iner of the time, Michael Jackson, stars in the first two commercials
of the new campaign. The two spots quickly become "the most eagerly awaited
advertising of all time."
v 1985 Lionel Richie leads a star -studded parade into "New Generation" advertising
followed by pop music icons Tina Turner and Gloria Estefan. Sports heroes Joe Montana
and Dan Marino are part of it, as are film and television stars Teri Garr and Billy Crystal.
Geraldine Ferraro, the first woman nominated to be vice president of the U.S., stars in a
Diet Pepsi spot. And the irrepressible Michael J. Fox brings a special talent, style and
spirit to a series of Pepsi and Diet Pepsi commercials, including a classic, "Apartment
10G."

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v 1987 After an absence of 27 years, Pepsi returns to Times Squa re, New York, with a
spectacular 850-square foot electronic display billboard declaring Pepsi to be "America's
Choice."
v 1988 Michael Jackson returns to "New Generation" advertising to star in a four -part
"episodic" commercial named "Chase." "Chase" airs during the Grammy Awards
program and is immediately hailed by the media as "the most -watched commercial in
advertising history."
v 1989 "The Choice of a New Generation" theme expands to categorize Pepsi users as "A
Generation Ahead!"
v 1990 Teen stars Fred Savage and Kirk Cameron join the "New Generation" campaign,
and football legend Joe Montana returns in a spot challenging other celebrities to taste test
their colas against Pepsi. Music legend Ray Charles stars in a new Diet Pepsi campaign,
"You got the right one baby."
v 1991 "You got the Right one Baby" is modified to "You got the Right one Baby, UhHuh!" The "Uh-Huh Girls" join Ray Charles as back-up singers and a campaign soon to
become the most popular advertising in America is on its way. Supermodel Cindy
Crawford stars in an award-winning commercial made to introduce Pepsi's updated logo
and package graphics.
v 1992 Celebrities join consumers, declaring that they "Gotta Have It." The interim
campaign supplants "Choice of a New Generation" as work proceeds on new Pepsi
advertising for the '90s. Mountain Dew growth continues, supported by the antics of an
outrageous new Dew Crew whose claim to fame is that, except for the unique great taste
of Dew, they've "Been there, Done that, Tried that."
v 1993 "Be Young, Have fun, Drink Pepsi" advertising starring basketball superstar
Shaquille O'Neal is rated as best in U.S.
v 1994 New advertising introducing Diet Pepsi's freshness dating initiative features Pepsi
CEO Craig Weatherup explaining the relationship between freshness and superior taste to
consumers.
v 1995 In a new campaign, the company declares "Nothing else is a Pepsi" and takes top
honors in the year's national advertising championship.

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ACQUISITIONS AND DIVESTMENTS


Between the late -1970s and the mid -1990s, PepsiC o expanded via acquisition of businesses
outside of its core focus of packaged food and beverage brands; however it exited these noncore business lines largely in 1997, selling some, and spinning off others into a new company
named Tricon Global Restaurants, which later became known as Yum! Brands, Inc.. PepsiCo
also previously owned several other brands that it later sold, in order to allow it to return
focus to its primary snack food and beverage lines, according to investment analysts reporting
on the divestments in 1997. Brands formerly (no longer) owned by PepsiCo include: Pizza
Hut, Taco Bell, KFC, Hot 'n Now, East Side Mario's, D'Angelo Sandwich Shops, Chevys
Fresh Mex, California Pizza Kitchen, Stolichnaya (via licensed agreement), Wilson Sporting
Goods and North American Van Lines.
The divestments concluding in 2007 were followed by multiple large -scale acquisitions, as
PepsiCo began to extend its operations beyond soft drinks and snack foods into other lines of
foods and beverages. PepsiCo purchased the orange juice company Tropicana Products in
1998, and merged with Quaker Oats Company in 2001, adding with it the Gatorade sports
drink line and other Quaker Oats brands such as Chewy Granola Bars and Aunt Jemima,
among others.
In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its
products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this
acquisition was completed, resulting in the formation of a new wholly owned subsidiary of
PepsiCo, Pepsi Beverages Company. Also in late 2010, the company made its largest
international acquisition when it purchased a majority stake in Wimm-Bill-Dann Foods - a
Russian food company which produces milk, yogurt, fruit juices and dairy products.

COMPETITION
The Coca -Cola Company has historically been considered PepsiCos primary competitor in
the beverage market, and in December 2005, PepsiCo surpassed The Coca-Cola Company in
market value for the first time in 112 years since both companies began to compete. In 2009,
the Coca-Cola Company held a higher market share in carbonated soft drink sales within the
U.S. In the same year, PepsiCo maintained a higher share of the U.S. refreshment beverage
market, however, reflecting the differences in product lines between the two companies. As a

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result of mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s,
its business has shifted to include a broader product base, including foods, snacks and
beverages. The majority of PepsiCo's revenues no longer come from the production and sale
of carbonated soft drinks. Beverages accounted for less than 50 percent of its total revenue in
2009. In the same year, slightly more than 60 percent of PepsiCo's beverage sales came from
its primary non-carbonated brands, namely Gatorade and Tropicana.
PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack food
market, accounting for approximately 39 percent of U.S. snack food sales in 2009. One of
PepsiCo's primary competitors in the snack food market overall is Kraft Foods, which in the
same year held 11 percent of the U.S. snack market share.

SWOT ANALYSIS
PepsiCo is an American multinational corporation. The company is headquartered in
purchase, York. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and FritoLay. Popular brands of PepsiCo are: Mountain Dew, Diet Pepsi, Lays, Doritos, Tropicana,
Gatorade, and Quaker. Pepsis products are available in some 200 countries. In 2010 the
company acquired its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. SWOT
analysis of the company is given below:

STRENGTHS
1. Pepsi is highly diversified company by having non-carbonated and carbonated beverages
in addition to sweet, salty and cereal based snacks.
2. Pepsi Corporation has strong image all over the globe and possesses 5 diverse billiondollar brands.
3. PepsiCo has shaped partnerships with numerous brands in order to market and distribute
them with its own brands.
4. PepsiCo brands stand quality and are appreciated household names.
5. Pepsi has more diversified portfolio in food and beverage related products as compared to
the coca cola.
6. PepsiCo mainly fights on differentiation, advertising and high market share.
7. PepsiCo has strong brand equity and greater number of loyal customers around the world.
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8. It has huge production and distribution facilities of alcoholic, non-alcoholic beverages


and food products.
9. PepsiCo has delivered solid operating and financial performance in current (2007-2009)
challenging environment and generated significant operating cash flow such as:
a. Net sales grew 5% on a stable currency basis.
b. Main division operating profit rose 6% on a stable currency basis.
c. Operating cash flow, without few items, arrive at $5.6 billion, an increase of 16%.

WEAKNESSES
1. In 1993, PepsiCo has vast lines of discontinued products throughout the history which
badly damage the companys reputation.
2. PepsiCo directed to stave off a runaway fraud pertaining to supposed product tampering
such as:
3. Needles were declared to have been found in bottles and cans of diet Pepsi.
4. Consumers accounted finding pins, screws and a bullet in their diet Pepsi
5. Overdependence on the markets of united states and Wal-Mart. For example the company
generates 52% of its sales from the U.S. and nearly 12% is generated by Wal-Mart.
6. PepsiCo is too away Coca-cola in the international market place and demand for its
products is extremely elastic.

OPPORTUNITIES
1. India is a promising market and one of the top five market places in provisions of growth
of soft drinks market.
2. The level of consumption in India is seen to increase with increasing household incomes.
3. Expand divisions with mergers and acquisitions for strong presence all over the world.
4. Invest in R&D to expand offerings of more reasonable, nutritionally related products for
lower -income and underserved communities.
5. The improving economic conditions globally after economic slowdown 2007-10.

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6. Growing demand of juices products and health-conscious consumers and changing


lifestyles.
7. Bottled water drinking is increased by 11%.
8. PepsiCo should offer the hygienic products due to increasing figure of health conscious
consumers.

THREATS
1. PepsiCo and Coke have been main targets in India because they are familiar foreign
firms. This draws abundance of attention and strong criticism by different groups.
2. Improve or sustain brand equity brand equity figure for PepsiCos $19 billion brands in
top 10 marketplaces.
3. In this industry Pepsi is fighting against increasing taxes on soft drinks.
4. Carbonated drink consumption have been decreasing due to involvement of lofty fructose
and sugar to obesity result to heart disease.
5. Many smaller players are furious competitors which are also creating competition harsh.
6. Economic slowdown resulted in volatile commodity costs, fluctuating currencies, frozen
credit markets and negative GDP rates.
7. PepsiCo is facing strong regulations in different countries around the world.
8. Coca-Cola is the strong competitor which competes with strong advertising and
differentiation.
9. Numerous substitutes such a water, juices, coffee and beer etc are available to the end
consumers.

INTERNAL ENVIRONMENT
CORPORATE GOVERNANCE
Headquartered in Purchase, New York, with research and development headquarters in
Valhalla, New York, PepsiCos Chairman and CEO is Indra Nooyi. The board of directors is
composed of eleven outside directors as of 2010, including Ray Lee Hunt, Shona L. Brown,
Victor Dzau, Arthur C. Martinez, Sharon Percy Rockefeller, Daniel Vasella, Dina Dublon,

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Ian M. Cook, Alberto Ibargen, James J. Schiro and Lloyd G. Trotter. Former top executives
at PepsiCo include Steven Reinemund, Roger Enrico, D. Wayne Calloway, John Sculley,
Michael H. Jordan, Donald M. Kendall, Christopher A. Sinclair and Alfred Steele.
On October 1, 2006, former Chief Financial Officer and President Indra Nooyi replaced
Steve Reinemund as Chief Executive Officer. Nooyi remained as the corporation's president,
and became Chairman of the Board in May 2007, later (in 2010) being named #1 on Fortune's
list of the "50 Most Powerful Women" and #6 on Forbes' list of the "World's 100 Most
Powerful Women". PepsiCo received a 100 percent rating on the Corporate Equality
Indexreleased by the LGBT-advocate group Human Rights Campaign starting in 2004, the
third year of the report.

CORPORATE CULTURE/ORGANIZATION CULTURE


"PepsiCo offers excellent opportunity for early responsibility and a culture that encourages
initiative, risk taking and access to decision makers," says one insider. The company has a
"professional but fun" corporate culture in which employees are "free to pursue their goals"
without "the burden of excessive structure." The "casual" and "collegial" environment is
headed by senior management "eager to hear the questions and ideas" of their more junior
colleagues. Pepsi "is also a company of candor and reality."
PepsiCo is into "diversity - they welcome and actively recruit people of color and give them
early opportunity for advancement." Fortune magazine named PepsiCo as one of the "Best
Companies for Women and Minorities" to work for, and in 1998 alone PepsiCo spent 5
percent ($285 million) of its procurement budget with minority and women-owned
businesses. However, say insiders, "PepsiCo really wants one type of person, regardless of
ancestry, someone who will put their job before their family or personal life." As Pepsi's
"diversity is centered around birth rather than style or culture," the result for some is that
PepsiCo culture is "fairly uniform: extremely competitive and very focused." However "the
business units have a fair degree of autonomy" so even things such as dress code vary from
office to office.
Employees praise the company's benefits program, which includes a "bountiful retirement
package, a tuition reimbursement program, and even a legal assistance program." The
downside of this is that "t he culture is deliberately geared to churn people - the workload is
extreme, your job is everything, and personal needs (family, vacation, etc.) are frowned
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upon." The effect of this attitude is that "Pepsi will burn many people out very quickly." But
many see Pepsi as the "?ultimate corporate workplace - if you make it here you can make it
anywhere." PepsiCo has instituted a number of work family programs to ease the strain of
corporate life including flex-time and work at home arrangements. Though insiders have
mixed reactions to PepsiCo compensation packages, company representatives report that they
strive to offer salaries in the top quartile. Monetary issues aside, the "challenging"
assignments and "accessible promotion path" aid job retention. When people do leave, they
do so in a position of strength, as one employee notes, "PepsiCo experience is well thought
of, and this seems to be backed up by the jobs that people hold after they leave."
The bottom line, an insider concludes, is that "Pepsi is a great place to make a name for
yourself with a wide open career track, but only if youre prepared to make personal
sacrifices."

CHARITABLE ACTIVITIES
Headquarters of Pepsi-Cola Venezuela (ES)PepsiCo has maintained a philanthropic program
since 1962 called the PepsiCo Foundation, in which it primarily funds nutrition and activity,
safe water and water usage efficiencies, and education, according to the foundations
website. In 2009, $27.9 million was contributed through this foundation, including grants to
the United Way and YMCA, among others.
In 2009, PepsiCo launched an initiative which the company calls the Pepsi Refresh Project, in
which individuals submit and vote on charitable and nonprofit collaborations. The main
recipients of grants as part of the refresh project are community organizations with a local
focus and nonprofit organizations, such as a high school in Michigan which - as a result of
being selected - received $250,000 in 2010 towards construction of a fitness room for high
school students. Following the Gulf of Mexico oil spill which occurred in the spring of 2010,
PepsiCo donated $1.3 million to grant winners in determined by popular vote. As of October,
2010, the company had provided a cumulative total of $11.7 million in funding, spread across
287 ideas of participant projects from 203 cities in North America. In late 2010, the refresh
project was reported to be expanding to include countries outside of North America in 2011.

SUSTAINABILITY PRACTICES
According to its 2009 annual report, PepsiCo states that it is committed to delivering
sustainable growth by investing in a healthier future for people and our planet, which it has
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defined in its mission statement since 2006 as Performance with Purpose. According to
news and magazine coverage on the subject in 2010, the objective of this initiative is to
increase the number and variety of healthier food and beverage products made available to its
customers, employ a reduction in the companys environmental impact, and to facilitate
diversity and healthy lifestyles within its employee base. Its activities in regards to the pursuit
of its goals - namely environmental impacts of production and the nutritional composition of
its products - have been the subject of recognition from health and environmental advocates
and organizations, and at times have raised concerns among its critics. As the result of a more
recent focus on such efforts, critics consider (PepsiCo) to be perhaps the most proactive and
progressive of the food companies", according to former New York Times food industry
writer Melanie Warner in 2010.

PEPSICO VALUES & PHILOSOPHY


Our Values & Philosophy are a reflection of the socially and environmentally responsible
company we aspire to be. They are the foundation for every busine ss decision we make.

OUR COMMITMENT
We are committed to delivering sustained growth through empowered people acting
responsibly and building trust.

WHAT IT MEANS
Sustained Growth is fundamental to motivating and measuring our success. Our quest for
susta ined growth stimulates innovation, places a value on results, and helps us understand
whether today's actions will contribute to our future. It is about the growth of people and
company performance. It prioritizes both making a difference and getting things done.
Empowered People means we have the freedom to act and think in ways that we feel will get
the job done, while adhering to processes that ensure proper governance and being mindful of
company needs beyond our own.
Responsibility and Trust form the foundation for healthy growth. We hold ourselves both
personally and corporately accountable for everything we do. We must earn the confidence
others place in us as individuals and as a company. By acting as good stewards of the
resources entrusted to us, we strengthen that trust by walking the talk and following through
on our commitment to succeeding together.
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EXTERNAL ENVIRONMENT
PEST ANALYSIS
Political

Economical

PepsiCo product are subject to

New opportunities in other countries

various federal laws

Land acquisition for new factories

Govt. focusing on stricter water

Fuel price

Availability of labor

Have a global economic perspective

Raw material prices A great worry.

Social

Technological

Replenishing water

Operates in almost all the countries

Partnership with farmers

Introduction of cans and plastic


bottles

Solid waste management program

Impact on youngsters

Newer and attractive designs

State-of-the Art plants

GUIDING PRINCIPLES/MANAGEMENT PRACTICES


We uphold our commitment with six guiding principles.
We must always strive to:

1. CARE FOR OUR CUSTOMERS, OUR CONSUMERS AND THE WORLD WE LIVE IN
We are driven by the intense, competitive spirit of the marketplace, but we direct this spirit
toward solutions that benefit both our company and our constituents. Our success depends on
a thorough understanding of our customers, consumers and communities. To foster this spirit
of generosity, we go the extra mile to show we care.

646

2. SELL ONLY PRODUCTS WE CAN BE PROUD OF


The true test of our standards is our own ability to consume and personally endorse the
products we sell. Without reservation. Our confidence helps ensure the quality of our
products, from the moment we purchase ingredients to the moment it reaches the consumer's
hand.

3. SPEAK WITH TRUTH AND CANDOR


We tell the whole story, not just what's convenient to our individual goals. In addition to
being clear, honest and accurate, we are responsible for ensuring our communications are
understood.

4. BALANCE SHORT TERM AND LONG TERM


In every decision, we weigh both short-term and long-term risks and benefits. Maintaining
this balance helps sustain our growth and ensures our ideas and solutions are relevant both
now and in the future.

5. WIN WITH DIVERSITY AND INCLUSION


We embrace people with diverse backgrounds, traits and ways of thinking. Our diversity
brings new perspectives into the workplace and encourage s innovation, as well as the ability
to identify new market opportunities.

6. RESPECT OTHERS AND SUCCEED TOGETHER


Our mutual success depends on mutual respect, inside and outside the company. It requires
people who are capable of working together as part of a team or informal collaboration.
While our company is built on individual excellence, we also recognize the importance and
value of teamwork in turning our goals into accomplishments.

PEPSI AND INTERNATIONAL SUCCESS


PERFORMANCE WITH PURPOSE
At PepsiCo, Performance with Purpose means delivering sustainable growth by investing
in a healthier future for people and our planet.

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As a global food and beverage company with brands that stand for quality and are respected
household names Quaker Oats, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola, to name a
few we will continue to build a portfolio of enjoyable and wholesome foods and
beverages; find innovative ways to reduce the use of energy, water and packaging; and
provide a great workplace for our associates. Additionally, we will respect, support and invest
in the local communities where we operate by hiring local people, creating products designed
for local tastes and partnering with local farmers, governments and community groups.
Because a healthier future for all people and our planet means a more successful future for
PepsiCo. This is our promise.

PEPSICOS PERFORMANCE WITH PURPOSE


PERFORMANCE
To all of our investors, its a promise to strive to deliver superior, sustainable financial
performance.

HUMAN SUSTAINABILITY
To the people of the world, its a promise to encourage people to live healthier by offering a
portfolio of both enjoyable and wholesome foods and beverages.

ENVIRONMENTAL SUSTAINABILITY
To the planet we all share, its a promise to be a good citizen of the world, protecting the
Earths natural resources through innovation and more efficient use of land, energy, water
and packaging in our operations.

TALENT SUSTAINABILITY
To the associates of PepsiCo, its a promise to invest in our associates to help them succeed
and develop the skills needed to drive the companys growth, while creating employment
opportunities in the communities we serve.

DIVERSITY & INCLUSION


At PepsiCo, we approach diversity and inclusion as fundamental business priorities.

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Our companys growth requires leaders and associates who can understand the worlds
evolving nutrition needs, the global environmental challenges and the economic and social
needs of developed and developing countries.
We intend to continuously evolve our culture so our leaders and associates are recognized for
their contributions and valued for the unique differences they bring to the workplace.
In 2009, we were recognized for our diversity and inclusion initiatives around the world
including Forbes (Turkey): Where Women Can Get Promoted the Fastest; The Times (U.K.,
Ireland): Top 50 Places Where Women Want to Work; Working Mother (U.S.): 20 Best
Companies for Multicultural Women; and DiversityInc (U.S.): Top 50 Companies.

PERSONAL COMMENTS/ANALYSIS:
Pepsi has a long-standing commitment to protecting the consumers whose trust and
confidence in its products is the bedrock of its success. In order to ensure that consumers stay
informed about the global quality of all Pepsi products sold in world, Pepsi commitment is to
deliver sustained growth, through empowered people, acting with responsibility and building
trust.
PepsiCo offers product choices to meet a broad variety of needs and preference from fun for
you items to product choices that contribute to healthier lifestyles. A companys promotional
efforts are the only controllable means to create awareness among publics about itself, the
products and services it offers, their feature and influence their attitudes favorably.
Pepsi is the brand who catches the heart of consumers and the attention of the youngsters.

REFERENCES
http://mba-lectures.com/marketing/swot-analysis -marketing/1143/swot-analysis-ofpepsico.html
http://www.docstoc.com/docs/10545397/Pepsi-Marketing-Report
http://www.scribd.com/doc/36586576/Swot-and-Pest-pepsi
http://hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinks
www.pepsico.com

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CHEVRON

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BRIEF HISTORY
Chevron traditionally traces its roots to an oil discovery in Pico Canyon (now the Pico
Canyon Oilfield) north of Los Angeles. The discovery led to the formation, in 1879, of the
Pacific Coast Oil Company, the oldest predecessor of Chevron Corporation. In 1895; the
company initiated its enduring marine history when it launched California's first steel tanker,
the George Loomis, which could ship 6,500 barrels of crude between Ventura and San
Francisco.
Chevron Corporation was originally known as Standard Oil of California, or SoCal, and was
formed amid the antitrust breakup of John D. Rockefeller's Standard Oil Company in 1911. It
was one of the "Seven Sisters" that dominated the world oil industry in the early 20th
century. In 1933, Saudi Arabia granted SoCal a concession to find oil, and oil was found in
1938. In the early 1950s, SoCal discovered the world's largest oil field (Ghawar) in Saudi
Arabia. SoCal's subsidiary, California-Arabian Standard Oil Company, developed over years,
to become the Arabian American Oil Company (ARAMCO) in 1944. In 1973, the Saudi
government began buying into ARAMCO. By 1980, the company was entirely owned by the
Saudis, and in 1988, the name was changed to Saudi Arabian Oil Company (Saudi Aramco).
Standard Oil of California and Gulf Oil merged in 1984, the largest merger in history at that
time. Under the antitrust regulation, SoCal divested many of Gulf's operating subsidiaries,
and sold some Gulf stations and a refinery in the eastern United States. SoCal changed the
name to Chevron Corporation.
In June 1992, Dynegy, Inc. (NYSE: DYN) was created from the merger of Chevron's former
natural gas and natural gas liquids business with Dynegy's predecessor, NGC Corp. (formerly
NYSE: NGL). NGC had been an integrated natural gas services company since around
1994.In a merger completed February 1, 2000, Illinova Corp. (formerly NYSE: ILN) became
a wholly owned subsidiary of Dynegy Inc., in which Chevron also took a 28% stake.
However, Chevron
In 2007 sold its 19 percent (at the time) common stock investment in the company for
approximately $940 million, resulting in a gain of $680 million.
In 2001, Chevron Corporation acquired Texaco to form ChevronTexaco. On May 9, 2005,
ChevronTexaco announced it would drop the Texaco moniker and return to the Chevron
name. Texaco remains as a brand under the Chevron Corporation. On August 19, 2005,
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Chevron acquired the Unocal Corporation. Because of Unocal's large South East Asian
geothermal operations, Chevron became the world's largest producer of geothermal energy.
On mid-2007,Chevron Corporation sold all Conocostations in Mississippi to the Texaco
brand a process to be complete at the end of 2007.
In July 2010, Chevron ended retail operations in the Mid Atlantic US, removing the Chevron
and Texaco names from 1,100 stations in Delaware, Indiana, Kentucky, North Carolina, New
Jersey, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, Washington,
D.C., and parts of Tennessee. In November 9, 2010, Chevron Corp. (NYSE:CVX) acquired
Pennsylvania based Atlas Energy Inc. (NASDAQ:ATLS) for $3.2 billion in cash and
additional $1.1 billion in existing debt owed by Atlas.

INTERNAL ENVIRONMENT
VISION
At the heart of The Chevron Way is vision that is to be the global energy company most
admired for its people, partnership and performance. Further, it means to safely provide
energy products vital to sustainable economic progress and human development throughout
the world; are people and an organization with superior capabilities and commitment; are the
partner of choice; earn the admiration of all our stakeholders investors, customers, host
governments, local communities and our employees not only for the goals we achieve but
how we achieve them; deliver world -class performance.

VALUES
The company's foundation is built on values, which distinguishes it and guides the course of
actions. They conduct business in a socially responsible and ethical manner. Also, respect the
law, support universal human rights, protect the environment and benefit the communities
where we work.

INTEGRITY
Chevron is honest with others and themselves. They meet the highest ethical standards in all
business dealings, accept responsibility and hold themselves accountable for their work and
actions.

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TRUST
At Chevron, the employees and administration trust, respect and support each other, and
strive to earn the trust of their colleagues and partners.

PARTNERSHIP
There is an unwavering commitment to being a good partner focused on building productive,
collaborative, trusting and beneficial relationships with governments, other companies,
customers, communities and each other.

DIVERSITY
They learn from and respect the cultures in which they work. Similarly, they value and
demonstrate respect for the uniqueness of individuals and the varied perspectives and talents
they provide. Theirs is an inclusive work environment and actively embrace a diversity of
people, ideas, talents and experiences.

INGENUITY
Chevron seeks new opportunities and out of the ordinary solutions with the use of creativity
to find unexpected and practical ways to solve problems. The experience, technology, and
perseverance enable them to overcome challenges and deliver value.

PROTECTING PEOPLE AND THE ENVIRONMENT


The health and safety of the workforce, protection of our assets and the environment is the
highest priority at Chevron. The aim is to be admired for world-class performance through
disciplined application of the Operational Excellence Management System.

HIGH PERFORMANCE
Chevron is committed to excellence in everything they do, and strive to continually improve.
They are passionate about achieving results that exceed expectations their own and those of
others. And drive for results with energy and a sense of urgency.

ORGANIZATIONAL CULTURE
Chevron uses the "best practices" methodology of knowledge management. The company
uses this methodology to learn faster and better than competitors through benchmarking,

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sharing and implementing best practices, learning from experience and continual individual
learning and personal growth. Chevron views best practices at four levels:

GOOD IDEA: Unproved ideas not yet substantiated by data but which make a lot of sense
intuitively and could have a positive impact on business performance. They need further
review/analysis. If substantiated by data, these ideas could be candidates for implementation
in one or more locations/sites.

GOOD PRACTICE A technique, methodology, procedure, or process that has been


implemented and has improved which business results for an organization. This is
substantiated by data collected at the location. A limited amount of comparative data from
other organizations exists. It is a candidate for application in one or more locations.

LOCAL BEST PRACTICE A good practice that has been determined to be the best
approach for all or a large part of an organization based on an analysis of process
performance data. The analysis includes some review of similar practices outside Chevron.
INDUSTRY BEST PRACTICE
A practice that has been determined to be the best approach for all or large parts of an
organization. This is based on both internal and external benchmarking work, including the
analysis of performance data. External benchmarking is not confined to the organization's
industry.
At Chevron, best-practice teams have been established as permanent components of the
organizational structure. These teams are given a charter to establish best practice criteria,
create best-practice knowledge repositories, and promote and support use of these
repositories throughout the organization. The best-practice teams consist of professionals and
managers with similar responsibilities in different plants and divisions and are led by
functional area experts. The team members meet and communicate on a regular basis to
support the development, operation, and maintenance of best -practice repositories.
Furthermore, these teams ensure easy, fast, and firm- wide access to the repository content
through the use of advanced information and telecommunication tools.
Chevron was one of the first companies to experiment with knowledge mapping through the
development of its "Best Practices Resource Map" - a powerful tool that serves as a kind of
corporate "yellow pages." Roughly following the focus areas of the Malcolm Baldrige
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assessment, the map identifies (through color coding) knowledge-based resources, teams and
networks within the company. The map not only identifies key networks of people (under
such categories as "leadership," "strategic planning," "information and analysis," "human
resource development," "process management," and "customer focus and satisfaction") but
also helps users find more traditional forms of knowledge such as library services.

A CULTURE WHERE KNOWLEDGE MANAGEMENT IS SEEN AS A


BUSINESS STRATEGY
Chevron believes that KM is central to their ability to grow and compete. The company rarely
needs to make a business case for the concept, often has a formal ``knowledge champion'',
and embed significant resources in all areas of the business to ensure that ever-improving
knowledge is accessible to and through its people, processes, and products. Knowledge is
frequently seen as a product at Chevron, who pursue knowledge management with the
conviction that it will have a significant and direct impact on the profitability and viability of
the enterprise.

A CULTURE WHERE THERE IS A TRANSFER OF KNOWLEDGE


AND BEST PRACTICES
Chevron focuses on systematic approaches to knowledge reuse and transfer of best practices
and knowledge to where the company can use them to improve operations or include them in
products and services. Systems and practices to obtain, organize, repackage, and distribute
knowledge are part of the design.
Chevron uses the term ``learning organization'' instead of knowledge management. The
company's learning cycle encompassed data, information, knowledge, intelligence, strategy,
plans, action, and assessment.
The company would then use all this information to assess gaps, further feed data, and make
adjustments for the next cycle. At Chevron, the learning organization involved translating the
benefits generated by this proces s from one part of the organization to the entire company.
The key aspects of Chevron's learning organization were external learning, internal learning,
and knowledge creation. The ``hard'' component of the organization comprised databases,
systems, and pr ocedures for sharing, as well as tools such as e-mail, Lotus Notes, and an

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intranet. The ``soft'' component consisted of the behavioral and cultural changes needed to
support learning and the use of best practices.

A CULTURE WHERE PEOPLE ARE RESPONSIBLE FOR THEIR KNOWLEDGE


Chevron believes that people are the engine of knowledge and should be supported as such.
The company also believes that individuals are personally responsible for identifying,
maintaining, and expanding their own knowledge as well as understanding, renewing, and
sharing their knowledge assets. This is implied by Chevron's perceptions:
1. The bottom-line value of having employees who are broadly knowledgeable and able
to perform competent work; and
2. They understand that successful development of knowledge in individuals cannot be
micromanaged and must be done by the individual.
Chevron's culture is in line with the emerging paradigm that employees are the ultimate
source of new knowledge in a firm and that they are responsible for their own knowledge
development. Expecting people to take personal responsibility for their own knowledge and
the knowledge the firm entrusts to them is essentially an example of a ``pull'' strategy
initiated by the individual rather than pushed by the organization. Furthermore, Chevron's
decentralized organizational structure made its culture one of high trust that fostered shared
learning and emphasized self -management and support of initiators.

A CULTURE OF INNOVATION AND CREATION


Chevron's culture emphasized innovation and the creation of new knowledge through basic
and applied research and development. The company emphasized innovation and knowledge
creation as a priority of its knowledge management activities. Their strategy was to find and
integrate technology from a diverse set of suppliers from the larger world, particularly the
networked world.

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EXTERNAL ENVIRONMENT
RESOURCES
Oil:
For more than 130 years, Chevron has developed some of the world's most complex crude oil
fields. It has a strong position in nearly all of the world's key basins, and an extensive project
portfolio provides the foundation for future growth. Chevron the largest private producer of
oil in Kazakhstan, the top oil and natural gas producer in Thailand, the largest oil producer in
Indonesia and the top leaseholder in the U.S. Gulf of Mexico. In 2010, Chevron produced
2.763 million net oil-equivalent barrels per day from operations around the world.
Numerous major capital projects under way to bring significant new resources to global
markets. The technological capabilities play a pivotal role in making these projects successful
and in producing more oil from mature fields. These projects extend over Africa, Asia, South
America, North America and Europe.

Natural Gas:
Natural gas is a growing segment of Chevron's energy portfolio. Our natural gas resources
span six continents, with significant holdings in Africa, Australia, Southeast Asia, the
Caspian region, Latin America and North America. Chevron has a net production of more
than 5 billion cubic feet of natural gas per day, including equity shares in affiliates, and we
expect to substantially increase this volume over the next decade.
Although world gas resources are plentiful, the regions with natural gas surpluses are often
oceans away from the greatest demand. Chevron has the capabilities to meet the challenges of
developing resources and delivering natural gas to markets where its use is growing. Chevron
is engaged in every aspect of the natural gas businessproduction, liquefaction, shipping,
regasification, pipelines, marketing and trading, power generation, and gas -to-liquids (GTL).
We hold the largest natural gas resource position in Australia through the Gorgon and
Wheatstone projects, the Browse Basin, and the North West Shelf Venture. We also have
significant natural gas holdings in western Africa, Bangladesh, China, Indonesia, Kazakhstan,
North America, the Philippines, South America, Thailand, the United Kingdom and Vietnam.

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Oil Sands:
Oil sands contain a mixture of sand, water, clay and bitumen, an extra-heavy oil that is too
thick to be pumped without first being diluted or heated. Effectively retrieving oil from sand
is a tough challenge. Chevron is using its vast resources of technology and expertise to bring
this energy source to market.
At the Athabasca Oil Sands Project's Muskeg River Mine in Alberta, Canada, giant shovels
capable of scooping nearly 100 tons of bitumen-bearing oil sands in one bite make the job
easier. Workers at mine sites need to extract more than two tons of oil sands to produce one
barrel of usable crude. Chevron holds a 20 percent interest in the project. In order to extract
the bitumen from the oil sands, the ore is mixed with warm water to create a slurry. This
slurry is fed into a processing unit where the bitumen is separated from the water and sand
mixture. The extracted bitumen is diluted with a special solvent and then sent via pipeline to
an upgrading facility near Edmonton. There, it is transformed into a wide range of premium
low-sulfur and low-viscosity synthetic crude oils.

Coal:
As part of its diverse portfolio of energy resources, Chevron owns three U.S.-based coal
mines. Chevron Mining Inc. is one of the oldest continuously operating mining companies in
the United States and currently operates the North River Mine in Alabama, the Kemmerer
Mine in Wyoming and the McKinley Mine in New Mexico. The company's coal sales in
2010 reached 7.8 million tons. In the United States, coal is used primarily to generate
electricity, but it also is a valuable resource for various industries that use its ingredients to
make plastics, tar, synthetic fibers and other products.
The list of resources goes further as:

Geothermal

Solar

Bio- fuels

Gas to liquids

Fuel cells

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MARKETING BRAND
The marketing Brands of Chevron are as following:

Fuel:

Chevron

Standard Oil (in limited circumstances)

Texaco

Caltex

Gulf

Unocal

Convenience stores:

Star Mart

Extra Mile

Redwood Market

Town Pantry

Lubricants:

Delo (sold by Caltex and Chevron)

Havoline (sold by Caltex and Texaco)

Revtex (sold by Caltex)

Ursa (sold by Texaco)

Fuel additives:

TechronChevron, Texaco (phased in during 2005), Caltex (phased in during 2006

and later)

Clean System 3Texaco (phased out during 2005 in favor of Techron)

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TECHNOLOGY
Chevron approaches technology in imaginative and innovative ways to produce energy and
improve lives. With changes in the global energy industry, Chevron is striving to find new
and better ways to meet the world's growing demand for clean, affordable and reliable
energy. Chevron Technology Ventures identify, develop and commercialize emerging
technologies that have the potential to transform energy production and use. Their business
development portfolio includes:

Biofuels

Emerging energy applications

Venture capital

Chevron Technology Ventures Investments searches for early-stage companies working on


new technologies and helps these gifted entrepreneurs realize their vision.

POLITICAL CONTRIBUTIONS
Chevron has strict policies and internal approval processes so that decision making and
reporting on political contributions comply with the letter and spirit of all applicable laws.
Global contributions in 2009 were approximately $2.52 million to support candidates and
political organizations that foster economic development, free enterprise and good
governance. Totals include contributions to support our views on local and state ballot
measures. Chevron employees, through the Chevron Employees Political Action Committee
(CEPAC), contributed $254,000 in 2009 to the election of candidates from both parties for
U.S. federal office, as well as to local and state candidates in certain U.S. jurisdictions. By
policy, CEPAC does not contribute to presidential candidates or national political parties.

MANAGEMENT PRACTICES
OPERATIONAL EXCELLENCE MANAGEMENT SYSTEM
Chevron seeks to develop a culture in which everyone believes that all incidents are
preventable and that "zero incidents" is possible. This requires active leadership and all
employees to be engaged.

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Chevron's Operational Excellence Management System (OEMS) describes the company's


uniform approach to systematic management of safety, health, the environment, reliability
and efficiency. Lloyd's Register Quality Assurance, Inc., attested that OEMS is implemented
throughout the corporation and that it meets all the requirements of both the International
Organization for Standardization's environmental management systems standard (ISO 14001)
and the Occupational Health and Safety Assessment Series requirements for occupational
health and safety management systems (OHSAS 18001).
To achieve Operational Excellence, Chevron created an Operational Excellence Management
System (OEMS) comprising 13 OE Elements and deployed it throughout the company to
drive, continuously impr ove and measure performance.

THIRTEEN ELEMENTS
1. Security of Personnel and Assets - Provide a physical- and cyber-security
environment in which business operations may be successfully conducted.
2. Facilities Design and Construction - Design and construct facilities to prevent injury,
illness and incidents and to operate reliably, efficiently and in an environmentally
sound manner.
3. Safe Operations - Operate and maintain facilities to prevent injuries, illnesses and
incidents.
4. Management of Change - Manage permanent and temporary changes to prevent
incidents.
5. Reliability and Efficiency:
a. Reliability - Operate and maintain wells and facilities to ensure asset integrity
and prevent incidents.
b. Efficiency - Maximize efficiency of operations and conserve natural resources.
6. Third-Party Services - Systematically improve third-party service performance
through conformance to Operational Excellence.
7. Environmental Stewardship - Strive to continually improve environmental
performance and reduce impacts from our operations.

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8. Product Stewardship - Manage potential health, environmental, safety (HES) and


integrity risks of our products throughout a product's life-cycle.
9. Incident Investigation - Investigate and identify root causes of incidents to reduce or
eliminate systemic causes and to prevent future incidents.
10. Community Awareness and Outreach - Reach out to the community and workforce to
engage in open dialogue to build trust and long-term positive relationships.
11. Emergency Management - Prevention is the first priority, but be prepared to respond
immediately and effectively to all emergencies involving Chevron wholly owned or
operated assets. For company products or interests such as common carriers, chartered
vessels and facilities operated by others, be prepared to monitor the response and, if
warranted, take appropriate actions.
12. Compliance Assurance - Verify conformance with OE requirements in applicable
company policy and government laws and regulations. Train the workforce regarding
their OE-related responsibilities.
13. Legislative and Regulatory Advocacy - Work ethically and constructively to influence
proposed laws and regulations and debate on emerging issues.
Leadership is the largest single factor for success in Operational Excellence. So the OEMS
holds Chevron leaders at all levels accountable for reinforcing OE standards and behaviors
and for achieving results the right way, according to company values. These values include
partnership, community support and ethical business practices.

BUSINESS ETHICS
Chevron takes seriously the conduct of its employees and requires questionable conduct to be
reported. This may include, for example, violations of company policy or of the Chevron
Business Conduct and Ethics Code. One reporting method is the Chevron Hotline, which is
operated offsite by Global Compliance Services (AlertLine), an independent agent.
The Business Conduct and Ethics Code contain information about avenues in which
employees report misconduct and a description of how Chevron administers oversight of its
compliance program.

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GOVERNANCE
For Chevron, good corporate governance means being transparent with and responsive to its
stockholders while managing the company for long-term success. We communicate with our
stockholders through reports, press releases and other formats. We meet frequently with
stockholders to discuss governance, financial, environmental, social and policy issues.
Stockholders can direct inquiries to the Board of Directors and submit proposals for inclusion
in our proxy statement. Since 2000, we have worked with proponents of more than 80
stockholder proposals submitted for inclusion in our proxy statement, resulting in the agreedupon withdrawal of more than 25 percent of those proposals. During the 2010 proxy season,
we received eight stockholder proposals covering a range of topics, including corporate
governance, executive compensation, and social and environmental concerns.
Chevron's commitment to good governance is seen in many other ways, too. All our directors
stand for election each year; 12 of our 14 directors are nonemployees and independent; the
board annually elects a chairperson; and we have a lead independent director. The past year,
we added two new directors. Chevron's restated certificate of incorporation and bylaws do not
contain supermajority vote provisions. Stockholders have the right to call for special
meetings and recommend director candidates to the board. The board will rec onsider any
stockholder proposal that receives a majority of votes cast at the annual meeting. In addition,
we adopted a policy of obtaining stockholder approval of any stockholder rights plan.

RESPONSIBILITY MANAGEMENT
PUBLIC POLICY COMMITTEE OF THE BOARD OF DIRECTORS
This committee assists the Board of Directors in identifying, evaluating and monitoring
public policy trends and social, political and environmental issues that could affect the
corporations

business

activities

and

performance.

It

also

reviews

and

makes

recommendations for the corporations strategies related to corporate responsibility and


reputation management.

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GLOBAL ISSUES COMMITTEE


A cross-functional subcommittee of the Executive Committee, this committee oversees
policy and strategy de velopment on issues of worldwide strategic importance, including
corporate responsibility strategy.

LOBBYING
Chevron has a right and responsibility to advocate positions on proposed policies that will
affect the company's ability to meet the growing demand for energy. We lobby ethically,
constructively and in a bipartisan manner through direct communication with public officials.
We also encourage our employees, retirees and others to communicate with officials when
permitted by law. We comply with all registration and reporting regulations related to our
lobbying activities.
Chevron is actively engaging the administration of U.S. President Obama and the U.S.
Congress to provide perspective on the complexity of energy issues affecting the United
States and the world. In 2009, our outreach included recommendations on policy matters
regarding the economy, energy, climate change, international issues, education, and research
and development. The goal is to help shape an effective and responsible U.S. energy policy.
The recommendations include promoting energy efficiency and expanding and diversifying
the country's energy portfolio.

STRENGTHS AND WEAKNESSES


STRENGTHS

Strong market position

Presence across the energy value chain

Strong marketing operations

Steady financial performance

Increasing demand for refined products in China

Increasing demand for liquefied natural gas (LNG)

Capital investments

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Bio-fuels initiative

Integrated business model

Geographic diversity

WEAKNESSES

Legal action by the Iraqi Government

Declining sales of refined products

Declining oil and gas reserves

Economic or industry downturns

Risks associated with conducting business outside the US

Environmental regulations: Chevron ranks #64 in the Toxic 100 list of the Top Corporate
Air Polluters in the U.S. according to the Political Economy Research Institute (PERI)
based on emission quantity and toxicity.

Nigerian rebels have repeatedly targeted Chevron by sabotaging their pipelines and even
by kidnapping Chevron employees.

Poor allocation of resources

Technological benchmark

REFERENCES
Chevron: The Right Hand of the Empire by Oilwatch, 2006
Chevron Corporation (CVX) Financial and strategic analysis review, Aug 2010
Sampson, Anthony. The Seven Sisters: The Great Oil Companies and the World They
Shaped. New York: Viking Press, 1975
www.chevron.com
www.marinefuel.com/chevron-corporation/
www.marketreasearch.com
www.peri.umass.edu/toxic100_2004/

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KFC

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HISTORY
Kentucky Fried Chicken is one of the most world-renowned fast food restaurants in the
world, and remains the world's most popular chicken restaurant chain. Today there are more
than 13,000 chains around the world in 90 different countries and territories. The national
KFC base is in Louisville, Kentucky. Around 8 million people are served at a KFC every
single day.

TIMELINE

1890: Colonel Harland Sanders, the founder of the KFC Corporation, was born.

1932: Colonel Sanders developed his special blend of 11 spices and herbs, which marked
the beginning of his famous Original Recipe chicken.

1935: The Colonel became known as the Kentucky Colonel; this name is what later
became incorporated in the name Kentucky Fried Chicken.

1939: After years spent improving the quality of his products, the Colonel improved his
chicken frying process drastically by purchasing a pressure cooker.

1950: A highway was built right through the Colonel's town where his chicken business
was so he shut the business down and lived off his social security checks.

1952: He couldn't stay away - the chicken was so good that Colonel Sanders began
traveling across the country, selling his chicken to restaurant patrons at a nickel apiece.
This allowed his to begin franchising his special blend of spices for his chicken.

1964: Colonel Sanders sold the KFC franchising corporation, now doing rather well, to
John Brown Jr. for $2 million. At this point in time, there were more than 600 KFC
franchises in the USA.

1966: KFC went public with its franchises and special chicken recipe.

1969: KFC was listed on the New York Stock Exchange for the first time.

1971: Heublin, Inc. acquired over 3,500 Kentucky Fried Chicken franchises for the petty
sum of $285 million.

1973: The first KFC opened overseas, Malaysia being the first lucky recipient of the
American owned and operated corporation.
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1976:

Colonel Sanders received an award for becoming the world's second most

recognizable celebrity.

1980: Sadly, Colonel Sanders passed away. However, his legacy carried on and is still
widely recognized today.

1982: R.J. Reynolds bought Heublin Inc., and in turn KFC became a subsidiary of RJR.

1986: PepsiCo acquired the KFC Corporation from R.J. Reynolds for $840 million.

1995: KFC started an award program, the Colonel's Way Award, to recognize senior
citizens that are living life to the fullest and do all they can despite their age.

1997: PepsiCo announced its spin-off of fast-food restaurants, KFC, Taco Bell, Pizza
Hut, A&W, and Long John Silvers, into a separate company entirely ' Tricon Global
Restaurants.

2000: KFC founded the Colonel's Kids Charity to help kids afford education and get a
good start in life

2002: Tricon Global became Yum! Brands, Inc., which it remains to this day.

2005: Today there are 13,266 KFC franchises around the world, 5,525 in the U.S. alone.

VISION
The vision of bill gates is thorough enough and covers long term goals. His vision is as
following:
Americas Leading Kitchen for Convenient Meals .

MISSION
The mission statement of bill gates and his business is as following:
"To sell food in a fast, friendly environment that appeals to pride conscious, health minded
consumers.

STRATEGY
The company's long-term strategy is focused around key areas of strength and opportunity.

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INTERNATIONAL EXPANSION
Near to 1000 chains have opened from 2005 to 2009-10.

PORTFOLIO OF CATEGORY-LEADING U.S. BRANDS


U.S. system wide same-store sales increased approximately 4% while U.S. same-store sales
at company restaurants increased approximately 2% in 2002.'

GLOBAL FRANCHISE FEES


Global franchise fees, a significant factor in annual profits and cash flow, grew 6% to $866
million. Global franchise net restaurant growth was 2% in 2002.'

ANALYSIS
The Kentucky Fried Chicken Corporation is a very successful company that has grown to be
the fast food giant it is today through good management practices and good planning. Their
mission statement is very clear: recognition is key. They are all about diversity and helping
people growing in any way they can, and focus on customer satisfaction as well. Their parent
corporation, Yum! Brands, Inc., states that they want to put a Yum! on people's faces around
the world. Their goals include being the best in the business, which they have definitely
accomplished, and focusing on customer satisfaction as a major part of their environment.
KFC desires to offer good food, comeback value, and customer-focused teams to consumers
throughout the world; they want to have loyal customers who will come back time and time
again to enjoy their food. From its start in 1939 all the way to the present date, KFC has been
a hit in the fast food industry. Their company history is pretty incredible, especially watching
huge sums of money accumulate for sale. KFC has created a strategy that is focuses on
strength and opportunity. They want to expand internationally, offer consumers more choices
at their restaurants, and provide good services to their customers. Kentucky Fried Chicken
part of a divisional structure, one in which departments are grouped together according to the
outputs of the organization and each separate division is responsible for producing one single
item or product. Kentucky Fried Chicken exhibits culture through employees by having a
wide range of diversity. There are 7,741 KFC's in other countries. People and employees
belonging to an ethnic group often bring their cultures with them, sometimes creating
subcultures. These subcultures are often derived from different customs, values, languages,
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traditions, and beliefs. There are many examples of employee motivation that KFC and their
parent company, have incorporated to empower and stimulate their employees. Ethical
conduct is a big issue within the company; they place high value on honest employees and
ethical treatment of everyone, customer, manager, and employee alike. The Kentucky Fried
Chicken Corporation has done an excellent job in the consumer market, both domestically
and abroad. Not only do they do a wonderful job of planning, organizing, staffing, leading,
and controlling, but they have been very successful at achieving their goals as well.
Now that we have had enough of the introduction, background and other important areas, so
now I will be more specific and precise towards the assignment. I will now directly target the
SWOT analysis along with its culture, ethics and corporate social responsibility etc. This
analysis will help to make certain comments relating to the multinational corporation (MNC).

STRENGTHS

Brand Equity

2nd Only to McDonalds in Foreign Sales $550M

Strong Cash Flows

Generate $1B each year

Very strong Internationally

UK, Middle East, Thailand, China, Japan, Korea, Mexico

Strong Franchise and License Fee revenues for cash flow.

Interactive relationship marketing

Strong trademarks recipes

Ranks highest among all chicken restaurant chains for its convenience and menu variety.

Largest multi-branded restaurant in the world 100 KFC and Pizza Hut combos 600 KFC
and Taco Bell combo

WEAKNESSES

Recent drop in sales for KFC


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Failed to rank in top 20 in growth in 2000.

Same Store sales declined

Lack of point of scale scanning system

Admitted inability to provide quality service

Lack of knowledge about their customers

Lack of relationship building with employees, customers and suppliers i.e. Chick-fil-a

Question of over franchising leads to loss of control and quality

Lack of focus on R&D

OPPORTUNITIES

Growth of 18-24 age demographic

Increase in U.S. median income

International beef scare from mad-cow and hoof and mouth disease

Home Meal Replacement Market will exceed an estimated $577 billion by 2020

Targeting to growing ethnic markets Asian American and Hispanic

New Leadership

Domestic markets

Updating restaurants

Balanced menu

Customer focus

Increase delivery service

THREATS

Rated 83 out of 100 in terms of competitiveness

Increasing wage rates directly affect menu prices

85% annual employee turnover for fast food market

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Supermarkets and new competitors threaten HMR market

International Exchange Rates

Health Trend away from fried foods

Changing customer demands

Quality of Service Focus

CULTURE

Big on diversity in the workplace

Promotes differences in background, ethnic cultures, and values

Team-oriented environment

Focuses on teaching everybody something new

Promotes unity in the workplace

Focuses on building relationships and creating diversity and commitment within the
company and amongst employees and customers

MANAGEMENT PRACTICES
HUMAN RESOURCE MANAGEMENT
We won't make you wing it' is KFC's motto when it comes to training employees. Training
includes:

Workbooks

Quizzes

On-the-job competency based training

Employees are encouraged to work together as a team.

KFC is committed to making sure their people grow to their highest potential.

KFC does their best to make the job interesting and exciting for workers.

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SOCIAL RESPONSIBILITY
KFC has made it their responsibility to consumers that they will provide quality chicken in a
fast, efficient way. They also say that their meat comes about ethically and through humane
treatment. This has not always proved true in the past, since the PETA has become involved
with their warehouses that 'grow' the chickens. KFC has made statements to the patrons of
KFC, though, that the chickens will not be treated badly in the progression from birth to the
processing plant.
KFC sponsors a reward for senior citizens, those who live life to the fullest and are
recognized in their community and also has the Colonel's Kids program, a charity
organization that helps kids become educated and grow up in a better world than that which
they have known. It addresses the child care crisis and steps up to the plate to help out where
possible.
Scholarships and diversity programs are a part of KFC's social responsibility as well and
recently, the PETA group secretly recorded a worker at the Pilgrim's Pride, one of the
processing plants, beating a live chicken against the wall in order to kill it. As soon as KFC
was notified of this treatment, they immediately submitted a written statement saying that the
treatment was 'appalling' and took action immediately, placing an animal welfare expert at
the plant to ensure the ethical, humane treatment of the chickens.
The statement said that: "we do not tolerate animal abuse by any of our suppliers, under any
circumstance.' KFC also told the company Pilgrim's Pride that, "unless they can definitively
assure us there are absolutely no abuses taking place, we will not purchase from this
Moorefield, West Virginia, fac ility.' PETA says that more action should be taken, but KFC
has done all it can to ensure that people are happy with the facilities and means by which
their food comes about.

ETHICAL PRACTICES
Ethics at KFC Constructive aspects of ethics at KFC Kentucky Fried Chicken is very keen
about ethical standards both within and without the company as asserted by their company
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representatives. For instance the company is strict about is vendor engagements. Before a
supplier can secure a contract with Kentucky Fried Chicken, they have to comply with
similar ethical standards as KFC. This means that the supplier must not utilize under age
labour to producer their commodities; they must pay fair wages and mus t also avoid placing
harmful chemicals in their commodities. These concepts have governed the way KFC
chooses other business partners too; they include contractors and manufacturers. By doing,
this, the company is protecting human rights. (Montgomery, 2003) The company also looks
out for the health and safety of their workers. Since KFC is a fast food chain, then its workers
are very busy, the companys representatives affirm that they are always trying to protect
their respective employees from detrimental hazards in the workplace. In line with this, KFC
always ensures that their employees work for them voluntarily. This means that the company
detests forced labour. They also believe in according their employees justice in case o f any
eventuality. Their disciplinary measures have always been fair and few employees complain
about how their administration handles such unusual occurrences. It is a known fact that
some employees in the corporate world utilize mental punishment as a way of repressing their
employees and keep them subservient. However, this is not the case with KFC as no cases
have been reported in the media.
Kentucky Fried Chicken employment practices are also ethical. This is due to the fact that the
company does not discriminate against individuals on the basis of race, gender, disability or
any other factor. The company s recruitment practices largely focus on the capabilities of the
potential candidate rather than on the irrespective race, cultural backgrounds etc. In line with
these practices, the company usually offers overtime for employees who decide to work
beyond the norm al working hours. Besides that, the company has created shift arrangements
so that it can avoid overworking employees at any given time.

TRAINING AND DEVELOPMENT


At KFC the "Customer Service Workers" and "Food Service Workers" have extensive
training in Customer Service, Health and Safety, Cleaning procedures and Food preparation.
All training is completed within specific time requirements using a module based training
program with a strong emphasis on practical hands on learning

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CORPORATE CULTURE
KFC's culture was built largely on Colonel Sanders' laid back approach to management but
before the acquisition of KFC by PepsiCo, employees at KFC enjoyed good benefits, a
pens ion, and could receive help with other non-income needs. This kind of "personal" human
resources management makes for a loyal workforce. Moreover the culture is "fast track"
attitude. Employees do not have the same level of job security.

COMPETETIVE STRATEGY
KFC has a durable competitive advantage share the following characteristics in common:

It has been in business for years

It has made the same product or given the same service for years

It will more than likely continue to make the same product into the future

It spent little money on R& D

It has no need to retool their production plant to make new products

Their unique product or service has a long life span in the marketplace

It serves a repetitive need

Their product or service is fairly simple

COMMENTS/RECOMMENDATIONS
As I am a student and I am no one to give comments/recommendation to such a successful
MNC, still I can try few and those are following:
1. The rating in competitiveness should be viewed and focus should be on more
customer friendly environment and prices.
2. The wages should be increased but the menu prices should not be affected.
3. The HR department should be addressed so that necessary steps are taken for
employee retention.
4. The trans fats should be replaced to make the food more nutritious and healthy.
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5. Changing customer demands should be met with immediate effect.


6. The quality of service should be improved so that the organization becomes
competitive

CONCLUSION
This is now very clear that Kentucky Fried Chicken is one of the worlds famous
organizations due to its style of management, application of corporate culture, ethical
practices and corporate culture. One thing is clear that the reason for KFCs success is their
behavior, conduct and presence of mind along with intelligent and humane management. The
best part done in the strengths they have and how they use them. More over the human
resource department is the most important area which is responsible for the future of the
organization. The human resource practices and the training and development programs have
shown exceptional results and they have fulfilled all the requirements of the acts that ensure
equity in pay and rights. But there is still space for improvements in the organization as it is
discussed in the recommendations section.

REFRENCES
From Web Sites
http: //www.wikipedia.com
http: //www.google.com
http: //www.docstoc.com
http://www.facebook.com
http://www.scribd.com
http://www.kfc.com
http://www.equinekingdom.com
http://hubpages.com

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ABN AMRO

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HISTORY
ABN AMRO Bank is a Dutch bank that has its headquarters in Amsterdam, Netherlands.
Following an acquisition in 2009 of ABN AMRO Group by a banking partnership with the
Royal Bank of Scotland Group, Santander and Fortis it took its current establishment.
However, as Fortis collapsed, the Dutch Government along with Fortis Bank Nederland it
was partly nationalized.
When Aglemene Bank Nederland (ABN) and Amsterdam and Rotterdam Bank (AMRO)
merged together it resulted in the name ABN AMRO which occurred in 1991. After years of
establishing itself ABN AMRO became the second largest bank in Netherlands and eighth
largest bank in Europe by assets in 2007 which resulted in the magazines, The Banker and
Fortune Global 500 placing ABN AMRO at number 15 for the list of the worlds biggest
banks, with over 110,000 employees in over 63 countries.
By the year 2010, the Dutch government appointed former finance minister Gerrit Zalm as
the CEO and the bank was split into two entities; one that was owned by the Dutch
government, called ABN AMRO Bank N.V. and the other owned by The Royal Bank of
Scotland gr oup.

CORPORATE VALUES
The company's corporate values are; Trusted, Professional and Ambitious.
The company believes that to maintain a lasting relationship trust is a vital key. AMRO takes
the time to get to know their customers' needs and aspirations so they can ensure global
satisfaction. Since one of their main value is trust, they claim that whenever they make a
promise ABN AMRO will always live up to it, they are always straight forward and do not
have hidden agendas.
Professionalism is every company's motto, ABN AMRO is no different. According to them
they are genuine in what they do and take responsibility for their customer, which means that
if they have to say "no" they will; if "yes" will not be the right to do. They look for solutions
which are simple and easy to understand and strive to improve themselves daily by being a
team that learns from one another as well as its client.

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Believing in no limits and reaching for the skies is what ABN AMRO follows, as they are
always trying to stretch their boundaries and striving to attain more for their clients. By
responding proactively and researching the market they make it their business to know what
is going on so they do whatever is possible to understand what the client really needs and
crafting innovative solutions. ABN AMRO thinks of the future by being optimistic and
ambitious only to cater to the needs of their clients to offer them exactly what they need and
more.

SWOT ANALYSIS
STRENGTH

Established and trusted name in the market

Recognized as the leader in service excellence

Innovative asset product menu

Pioneering new initiatives-BTF, ATM local switch, debit card

Adaptability to changing environment

Alternate distribution convenience

Employer of choice and resource quality

Low cost structure compared to other foreign banks

WEAKNESSES

Lack of portfolio scale

Tactical and cost conscious approach

Back end systems support

OPPORTUNITIES

Growing market size

Can further capitalize on the bank image of stability and historical presence to further
secure a niche position

Market becoming consumer banking savvy


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Competitors still not service focused for now

De-regulation by the SBP

THREATS

Very strong brand awareness

Large local banks moving aggressively to capture large market share

Competition investing in systems, people and distribution channels

ABN AMRO AND ITS ROLE ON ENVIRONMENT


ABN AMRO's aims have been to reduce its impact on the environment, meaning that they
want to be an energy-efficient company. Their focuses are mainly in Energy, Sustainable
procurement and buildings. The company is seeking to reduce its consumption of energy as
much as they can and have set themselves a target of reduction at 20% by the year of 2010.
They also encourage, whenever it is possible to use renewable energy. ABN AMRO also has
a green electricity agreement framework that covers the Dutch operation which means, that in
Netherlands, 100% of the electricity they consume is green. The company also has a deal
about energy efficiency which is agreed by Holland's bank and insurance companies which
means that the consumption will be reduced by at least 30% between 2005 and 2020.
As ABN AMRO has taken an initiative to reduce its negative impact on the environment,
they try to counter the problem by engaging in sustainable procur ement which means that
when they do businesses with their suppliers only if they meet ABN AMRO's social and
environmental standards. Whilst using paper the company also tries to recycle so they can
reduce the impact as much as they can.
In today's world, buildings are responsible for a large proportion of carbon emissions, thus
ABN AMRO has imposed strict requirements. ABN AMRO is a co-founder and member of
the board of the Dutch Green Building Council which is an organization that develops
sustainability label for Dutch buildings. The council uses the BREEAM-NL method to
measure the sustainability of buildings.

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ABN AMRO AND EMPLOYEE DEVELOPMENT


ABN AMRO's rising success is attributed to its dedication to its employee learning and
personal development. The organization claims that learning is one of its major priorities.
Being a dynamic and rapid growing organization there has to be staff flexibility to adaptation
of new technologies, practices, situations and challenges.
To support its growing success the company offers learning programmes such as, in-housing
training seminars, external courses, short term assignments in offices located overseas, elearning, professional skills training as well as development of programs such as, structural
talent management, full range of training for new and diversified products and many more.
It is obvious that ABN AMRO ever-changing organization which is always looking for new
ways and opportunities for its business to grow. That is why ABN AMRO recognizes that to
survive in todays fast moving culture it has to adapt to continuous development and
innovation which can only be achieved through constantly evolving and learning. It is a
committed in this process which can conclude that ABN AMRO projects itself as the leading
organization. Encouraging autonomy, innovation, ensuring employee morale and satisfaction,
facilitating change and adaptation, increasing responsibility at all levels, making work more
productive and enjoyable and giving incentives to its workers and most of all building its
organization fit for human beings. To conclude, ABN AMRO is a dynamic success story that
has been coming along for decades because the bank believes to always put its client needs'
first and create sustainable long term value for all of its stakeholders which include clients, its
shareholders employees and society at large. No wonder this business is booming and has
already become a household name and a reputed organization.

ABN AMROS PHILOSOPHY


The bank maintains a philosophy of creating maximum economic value for their clients and
shareholders, but not at the expense of human values and principles. It was for this reason
that the head of learning and development in HR invited Impact Factory to be part of their
Career and Leadership Development Programme in 2007.
We are delighted to be rolling out monthly, half day training sessions in Communication
Skills for groups of up to 20 delegates from their Global Markets and Client Relationship
business units. This training is offered as a re sponse to ABN AMROs Employment
Engagement Survey. Their people wanted more Soft Skills training, the bank wanted the best
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communication skills training available, and we are the company to do just that in a way no
one else can.
ABN AMROs L&D team decided on the theme of 'carpe diem' -'seize the day' for the
programme to encourage staff to take up the responsibility for their training needs by
attending the sessions that appeal to them. 'Seize the day' is the perfect banner under which to
promote Impact Factory's dynamic, experiential, thought provoking and practical training
methods. Our considerable experience, gained over many years of providing training in the
financial world underpinned and informed all the work we provided for the delegates.

ABN AMRO AND CLIENTS


It is one of leading financial institution in its home market The Netherlands serving over 4
million clients.
Target clients include

Consumer Clients: Retail and Mass Affluent

Commercial Clients: Small-, mid- and large corporates in The Netherlands and their
activities abroad

Private Clients: domestic and international clients with investable assets >1 million.
Offering a broad range of financial products and services via an extensive network of 510
bank shops, 77 business branches, 65 private banking offices as well as call centers and
Internet.

NEW ABN AMRO BANK KEY STRATEGIC THRUSTS

Focus on Clients

Focus on Profitability

Focus on Stability & Solidity

Resolution of EC Remedy

Integration with FBN

Focus on Dutch Consumer Clients, Commercial Clients in The Netherlands and


Private Clients to secure continuity and further growth of the client base.

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Provide differentiated services to its client segments while continuing to enhance its
sector expertise and product propositions

Protect the current market position and client base in the Dutch market and become
the primary bank of choice for all our clients

Establish a strong organization with clear responsibilities and accountabilities of our


employees

Maintain a relatively conservative risk profile

Maintain adequate capitalization, and strong funding and liquidity position

Build on the existing strengths of the organization in order to prepare for the
envisaged integration with FBN, working out details of the transition plans for each
business

Execute on integration plans to create an even stronger leading bank in The


Netherlands with both banks holding strong positions in retail, private, commercial
and merchant banking

Generate a healthy return of 1015% on risk capital, while applying a sensible and
prudent risk management

Adhere to a cost-conscious management approach, including a restrained


remuneration policy on senior levels

Continue to optimize the cost structure and organization by implementing efficiency


programs

Effective 1 April 2010, the EC Remedy regional branch offices (new HBU II N.V.
and IFN Finance B.V) have been transferred to Deutsche Bank. The transaction
represents the response to the European

Commissions requirement (EC Remedy) for certain activities to be sold in order to


preserve competition. The completion of this transaction (1) enables compliance with
conditions set by the EC for integration of ABN AMRO Bank and FBN in the second
half of 2010.

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The focus of ABN AMRO Bank is to establish itself as a strong bank through its
overall strategy and individual client and supporting divisions strategies, while laying
solid foundations for the envisaged integration with FBN

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EBAY

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INTRODUCTION
eBay Inc. (NASDAQ: EBAY) is an American Internet company that manages eBay.com,
an online auction and shopping website in which people and businesses buy and sell a broad
variety of goods and services worldwide. Founded in 1995, eBay is one of the notable
success stories of the dot-com bubble; it is now a multi-billion dollar business with operations
localized in over thirty countries. [3][not in citation given]eBay expanded from its original "set- time"
auction format to include "Buy It Now" standard shopping; shopping by UPC,ISBN, or other
kind of SKU (via Half.com ); online classified advertisements (via Kijiji or eBay Classifieds );
online event ticket trading (via Stub Hub); online money transfers (via PayPal[4]) and other
services.
The online auction website was founded as AuctionWeb in San Jose, California , on
September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar as part of
a larger personal site that included, among other things, Omidyar's own tongue -in-cheek
tribute to the Ebola virus. One of the first items sold on eBay was a broken laser pointer for
$14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the
laser pointer was broken. In his responding email, the buyer explained: "I'm a collector of
broken laser pointers." The frequently repeated story that eBay was founded to help
Omidyar's fiance tradePez candy dispensers was fabricated by a public relations manager in
1997 to interest the media. This was revealed in Adam Cohen's 2002 book, The Perfect
Store, and confirmed by eBay.
Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll was hired as the first
president of the company in early 1996. In November 1996, eBay entered into its first thirdparty licensing deal, with a company called Electronic Travel Auction to use Smar tMarket
Technology to sell plane tickets and other travel products. Growth was phenomenal; in
January 1997 the site hosted 2,000,000 auctions, compared with 250,000 during the whole of
1996. The company officially changed the name of its service from AuctionWeb to eBay in
September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's
consulting firm. Omidyar had tried to register the domain name echobay.com, but found it
already taken by the Echo Bay Mines , a gold mining company, so he shortened it to his
second choice, eBay.com.(Echobay.com is now owned by Echobay Partners, Ltd., a private
equity firm based inNevis.)

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In 1997, the company received $6.7 million in funding from the venture capital firm
Benchmark.
Meg Whitman was hired as eBay President and CEO in March 1998. At the time, the
company had 30 employees half a million users and revenues of $4.7 million in the United
States. eBay went public on September 21, 1998, and both Omidyar and Skoll became instant
billionaires. eBay's target share price of $18 was all but ignored as the price went to $53.50
on the first day of trading.
As the company expanded product categories beyond collectibles into almost any saleable
item, business grew quickly. In February 2002, the company purcha sed IBazar; a similar
European auction web site founded in 1995 and then bought PayPal on October 14, 2002.
In early 2008, the company had expanded worldwide, counted hundreds of millions of
registered users, 15,000+ employees and revenues of almost $7.7 billion. After nearly ten
years at eBay, Whitman made the decision to enter politics. On January 23, 2008 the
company announced that Whitman would step down on March 31, 2008 and John
Donahoe was selected to become President and CEO. Whitman remained on the Board of
Directors and continued to advise Donahoe through 2008. In late 2009, eBay completed the
sale of Skype for $2.75 billion, but will still own 30% equity in the company.
In July 2010, eBay was sued for $3.8 billion by XPRT Ventures which accused eBay of
stealing information shared in confidence by the inventors on XPRT's own patents, and
incorporated it into features in its own payment systems, such as PayPal Pay Later and
PayPal Buyer Credit.
December 20, 2010, EBay Inc. says it will acquire a German online shopping club brand4friends for 150 million Euro ($197 million) to strengthen the company fashion
business in Europe. It is subject to regulatory approval and expected to close it in the Q1
2011.
Items
Millions of collectibles , decor, appliances, computers, furnishings , equipment , vehicles, and
other miscellaneous items are listed, bought, or sold daily on eBay. In 2006, eBay launched
its Business & Industrial category, breaking into the industrial surplus business. Generally,
anything can be auctioned on the site as long as it is not illegal and does not violate the eBay
Prohibited and Restricted Items policy. Services and intangibles can be sold, too. Large
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international companies, such as IBM, sell their newest products and offer services on eBay
using competitive auctions and fixed-priced storefronts. Separate eBay sites such as eBay US
and eBay UK allow the users to trade using the local currency. Software developers can
create applications that integrate with eBay through the eBay API by joining the eBay
Developers Program. n June 2005, there were more than 15,000 members in the eBay
Developers Program, comprising a broad range of companies creating software applications
to support eBay buyers and sellers as well as eBay Affiliates.

PAYPAL-ONLY CATEGORIES
Beginning in August 2007, eBay required listings in "Video Games" and "Health & Beauty"
to accept its payment system PayPal and sellers could only accept PayPal for payments in the
category "Video Games: Consoles". Starting January 10, 2008, eBay said sellers can only
accept PayPal as payment for the categories "Computing > Software", "Consumer Electronics
> MP3 Players", "Whole sale & Job Lots > Mobile & Home Phones", and "Business, Office
& Industrial > Industrial Supply / MRO" eBay announced that starting in March 2008, eBay
had added to this requirement that all sellers with fewer than 100 feedbacks must offer
PayPal and no merchant account may be used as an alternative. This is in addition to the
requirement that all sellers from the United Kingdom have to offer PayPal. Further, and as
noted below, it was a requirement to offer PayPal on all listings in Australia and the UK. In
response to concerns expressed by the Australian Competition and Consumer Commission,
however, eBay has since removed the policy on the ebay.com.au website requiring sellers to
offer PayPal as a payment option.

EBAY EXPRESS
In April 2006, eBay opened its new eBay Express site, which is designed to work like a
standard Internet shopping site for consumers with United States addresses. It closed in 2008.
Selected eBay items were mirrored on eBay Express, where buyers shop using a shopping
carts to purchase from multiple sellers. The UK version was launched to eBay members in
mid-October 2006 but on January 29, 2008 eBay announced its intention to close the
site. The German version, eBay Express Germany, was also opened in 2006 and closed in
2008.

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SELLING MANAGER APPLICATIONS


At the 2008 eBay Developer's Conference, eBay announced the Selling Manager
Applications program (SM Apps). The program allows approved developers to integrate their
applications directly into the eBay.com interface. The applications created by developers are
available for subscription by eBay members who also subscribe to Selling Manager.

EBAY SPECIALTY SITES


eBay maintains a number of specialty sites. eBay Pulse, for example, provides information
about popular search terms, trends, and most-watched items. Other eBay Community Content
includes the Discussion Boards, Groups, Answer Center, Chat Rooms, and Reviews &
Guides. eBay has a robust mobile offering, including SMS alerts, a WAP site, Java
ME clients, an Android OS application and an Apple iPhone application available in certain
markets.
Best of eBay is a specialty site for finding the most -unusual items on the eBay site. Users can
vote on and nominate listings that they find.
Auction types
eBay.com offers several types of auctions.

Auction-style listings allow the seller to offer one or more items for sale for a
specified number of days. The seller can establish a reserve price.

Fixed price format allows the seller to offer one or more items for sale at a Buy It
Now price. Buyers who agree to pay that price win the auction immediately without
submitting a bid.

Fixed price format with best offer allows the seller to accept best offers. If a
buyer submits a best offer, the seller either rejects or accepts the best offer. If the best
offer is not satisfactory, a seller may submit a counter offer to the buyer. Best offer is not
available for auction style listings. In addition, best offer is not available in every
category. Sellers als o meet specific requirements in order to sell with best offer.

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SELLER RATINGS
In 2007, eBay began using detailed seller ratings with four different categories. When leaving
feedback, buyers are asked to rate the seller in each of these categories with a score of one to
five stars, with five being the highest rating and one the lowest. Unlike the overall feedback
rating, these ratings are anonymous; neither sellers nor other users learn how individual
buyers rated the seller. The listings of sellers with a rating of 4.3 or below in any of the four
rating categories appear lower in search results. Power Sellers are required to have scores in
each category above 4.5
In a reversal of roles, on January 24, 2010 Auctionbytes.com held an open survey in which
sellers could effectively rate eBay itself, as well as competing auction and marketplace
sites. In the survey, users were asked to rank 15 sites based on five criteria:

Profitability

Customer Service

Communication

Ease of Use

Recommendation

After the results were published, eBay had finished 13th overall, edged out by established
sites such as Amazon and Craigslist , as well as lesser-known upstarts like Atomic
Mall and Ruby Lane. In individual category rankings, eBay was rated the worst of all the 15
sites on Customer Service and Communication, and average on Ease of Use. A number of
respondents said they would have given eBay a rating of ten 3 to 5 years ago. eBay was rated
twelfth out of fifteen in the Recommended Selling Venue category.

PROFIT AND TRANSACTIONS


eBay generates revenue from various fees. The eBay fee system is quite complex; there are
fees to list a product and fees when the product sells (Final Value Fee), plus several optional
adornment fees, all based on various factors and scales. The U.S.-based eBay.com takes
$0.10 to $4 (based on the opening price) for a basic listing without any adornments and
8.75% (12% for some categories, e.g. Clothing & Accessories) of the final price (as of May
2009). The UK based ebay.co.uk takes from GBP 0.15 to a maximum rate of GBP 3 per

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100 for an ordinary listing and from 0.75 percent to 10% (writing as of June 2009) percent
of the final price. Reduced FVF's are available to business registered customers. In addition,
eBay owns the PayPal payment system whic h has fees of its own.
Under current U.S. law, a state cannot require sellers located outside the state to collect
a sales tax, making deals more attractive to buyers. Although some state laws require
purchasers to pay sales tax to their own states on out-of-state purchases, it is not a common
practice. However, most sellers that operate as a full time business do follow state tax
regulations on their eBay transactions. However for the tax called Value (VAT), eBay
requires sellers to include the VAT fees in their listing price and not as an add-on and thus
eBay profits by collecting fees based on what governments tax for VAT.[41]
The company's current business strategy includes increasing international trade. eBay has
already expanded to over two dozen countries includin g China and India. The only places
where expansion failed were Taiwan and Japan, where Yahoo! had a head start, and New
Zealand where TradeMe , owned by the Fairfax media group is the dominant online auction
website.
A more recent strategy involves the company increasingly leveraging the relationship
between the eBay auction site and PayPal: The impact of driving buyers and sellers to use
PayPal means not only does eBay turn buyers into clients (as a pure auction venue its clients
used to be predominantly sellers) but for each new PayPal registration it achieves via the
eBay auction site it also earns offsite revenue when the resulting PayPal account is used in
non-eBay transactions. In its Q1 2008 results, total payment volume via PayPal increased 17
percent, but off the eBay auction site it was up 61 percent.
For most listing categor ies, eBay sellers are permitted to offer a variety of payment systems
such as PayPal, Paymate , ProPay, and Moneybookers.
eBay runs an affiliate program under the name eBay Partner Network. eBay affiliate
marketers were originally paid a percentage of the eBay seller's transaction fees, with
commissions ranging from 50% to 75% of the fees paid for an item purchased. In October
2009, eBay changed to an affiliate payout system that it calls Quality Click Pricing, in which
affiliates are paid an amount determined by an undisclosed algorithm. The total earnin gs
amount is then divided by the number of clicks the affiliate sent to eBay and is reported as
Earnings Per Click, or EPC.

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ENVIRONMENTAL RECORD
On May 8, 2008, eBay announced the opening of its newest building on the company's North
Campus in San Jose, which is the first structure in the city to be built from the ground up
to LEED Gold standards. The building, the first the company has built new in its 13-year
existence, uses an array of 3,248 solar panels, spanning 60,000 square feet (5,600 m 2), and
providing 650 kilowatts of power to eBay's campus. All told the array can supply the
company with 15-18 percent of its total energy requirements, reducing the amount
of greenhouse gases that would be produced to create that energy by other means. SolarCity,
the company responsible for designing the array, estimates that the solar panels installed on
eBay's campus will prevent 37 million pounds of carbon dioxide from being released into the
environment as a result of replaced power production over the next three decades. Creating
an equivalent impact to remove the same amount of carbon dioxide from the atmosphere
would require planting 322 acres (1.30 km2) of trees. The design of the building also
incorporates other elements to reduce its impact on the environment. The building is
equipped with a lighting system that detects natural ambient light sources and automatically
dims artificial lighting to save 39 percent of the power usually required to light an office
building. eBay's newest building also reduces demand on local water supplies by
incorporating an eco-friendly irrigation system, low-flow shower heads, and low-flow
faucets. Even during construction, more than 75 percent of the waste from construction was
recycled. eBay also runs buses between San Francisco and the San Jose campus to reduce the
number of commuting vehicles.

ECONOMICS
As eBay is a huge, publicly visible market, it has created a great deal of interest from
economists, who have used it to analyze many aspects of buying and selling behavior, auction
formats, etc., and compare these with previous theoretical and empirical findings.
Strategic evaluation of eBay
1. Online auctions Competitive Forces The Five Forces Model of Competition is a key tool
for diagnosing the competitive environment Substitute products Industry Suppliers
Buyers rivalry Potential new entrants Source: Thompson, Strickland, Gamble (2005) In a
league by itself Case Study FT 06 Group 1 2006 10

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2. Onlin e auctions / Competitive forces 1/4 Industry rivalry How strong are competitive
pressures stemming from the efforts of rivals to gain market positions?* ? The online
auction market changed ? B2B / B2C / P2P a lot since its beginnings ? New entrants over
the past years ? More and more competitors from (search engines, etc.) different
backgrounds entered the market ? Pure markets of auctions vs. e-tailing *Source:
Thompson, Strickland, Gamble (2005) Competition increased as more players entered to
take the opportunities of the fast growing market In a league by itself Case Study FT
06 Group 1 2006 11
3. Online auctions / Competitive forces 2/4 Potential new entrants How strong are the
competitive pressures associated with the entry threat of new rivals?* ? Technological
barriers of entry do ? Traditional retailers and e -tailers not exist are in a similar market to
online auctions ? Traf?c generation is important ? Customers have to be gained from
traf?c ? Customer base retention is important *Source: Thompson, Strickland, Gamble
(2005) With new entrants from traditional industries the market for online auctions
changes In a league by itself Case Study FT 06 Group 1 2006 12
4. Online auctions / Competitive forces 3/4 Substitute products How strong are compe titive
pressures coming from the attempts of companies outside the industry to win buyers
over?* ? Increasing number of ?xed price ? Traditional retailing sales over online auction
sites ? e-tailing ? Search engines and price - comparison websites moving into online
retailing and auctions ? Traditional auctions *Source: Thompson, Strickland, Gamble
(2005) The fast growing nature of the market lead to companies differing their products
slightly to take part in the market In a league by itself Case Study FT 06 Group 1
2006 13
5. Online auctions / Competitive forces 4/4 Suppliers / Buyers How strong are the
competitive pressures stemming from supplier/ buyer bargaining power and sellersupplier collaboration?* ? Suppliers ? Similar pressures Casual sellers Diverse
customer base Hobbyists and Collectors Shift from North America to Asia - Paci?c and
Eastern Europe Power and corporate sellers Fraud ? Buyers Quality checks are
dif?cult Bargain hunters Hobbyists and Collectors Professional buyers *Source:
Thompson, Strickland, Gamble (2005) Especially in the case of online auctions suppliers

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and buyers and their pressure on the companies are ver y similar In a league by itself
Case Study FT 06 Group 1 2006 14
6. A Key success factors Online auction industry B C Online auctions vs. e-tailing eBay In a
league by itself Case Study FT 06 Group 1 2006 15
7. Key success factors Online auction industry The key success factors include product
attributes, competencies, competitive capabilities that have impact on future
competitiveness ? Technology ? Marketing Expertise in technology Brand name ?
Skills and capability Technical assistance Customer service Talented workforce
Accuracy of billing Product innovation Guarantees and warranties e-commerce
Advertising After-sales service For the online auctions industry, the main key success
factors are related to marketing activities In a league by itself Case Study FT 06
Group 1 2006 16
8. Key success factors Online auctions vs. e-tailing Key success factors for online auctions
include the amount of traf?c or security and are quite similar ? Key success factors of the
online ? Further KSF are: auction industry and e-tailing in Gaining a large subscriber
base general are comparable Retaining existing customers ? Auction sites, such as eBay
have either moved into or come from an Security issues (payment and e-tailing
background perception of security) Variety of products In a league by itself Case
Study FT 06 Group 1 2006 17
9. Key success factors eBay The future success of eBay is dependent on the companys
ability to identify and optimally adjust to drivers of success ? Fixed prices ? Expansion of
categories vs. focusing on using full capabilities of Use of large subscriber base to move
current categories from auctions to general (online) ? Other issues retailing Larger,
more established competition International expansion has to be faced Prioritization of
efforts Emphasis on ?xed prices? Satisfying small and large customers In a league by
itself Case Study FT 06 Group 1 2006 18
10. eBay Position of eBay and its competitors Strategic group map In a league by itself
Case Study FT 06 Group 1 2006 19
11. eBay Positioning of eBay and its competitors Under consideration of the identi?ed key
success factors eBays position in the industry can be identi?ed as follows ? eBay ?
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Competition extensive offering of products in trying to copy the business model of


different categories: Collectables, eBay Vehicles, Real Estate, Of?ce equipment dif?cult
to differentiate their product etc. no competitive advantage with regard brand name
eBay is synonymous with to reputation, and brand awareness online auctioning
reputation as a safe and reliable and ?ercely protected by the company In a league by
itself

SWOT ANALYSIS
STRENGTHS

eBay is the leading global brand for online auctions. The company is a giant marketplace
used by more than 100 million people to buy and sell all manner of things to each other.
Pierre Omidyar, a French entrepreneur, was just 28 when he sat down over a long holiday
weekend to write the original computer code for what eventually became an Internet
megabrand. The brand has grown tremendously over the decade or so since its
conception.

The company exploits the benefits of Customer Relationship Management (CRM).


Buyers and sellers register with the company and data is collected by eBay on
individuals. This is the Business-to- Consumer (B2C) side of their business. However the
strong customer relationships are founded on a Consumer-to-Consumer (C2C) business
model, where strong interrelationships occurs, for example where buyers and sellers leave
feedback for each other, and whereby awards are given to the most genuine of eBayers.

The term 'eBay' has become a generic term for online auctions. Other companies with
such a strong position include Hoover for vacuum cleaners, and Google for search
engines. Today it is common to hear that someone is 'ebaying' or is an 'eBayer,' or that
someone is going 'to eBay.'

WEAKNESSES

The organizations work`s tremendously hard to overcome fraud. However, the eBay
model does leave itself open to a number of fraudulent activities. Often the company
deals with such activities very quickly. Fraud includes counterfeit goods being marketed
to unsuspecting (and suspecting!) eBayers. Other forms of theft could include the

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redistribution of stolen goods. It should be pointed out that fraud and theft are problems
with individuals, not eBay. The weakness is that unscrupulous individuals can exploit the
C2C business model.

As with many technology companies, systems breakdowns could disturb the trading
activities of eBay. In the past both eBay and its payment brand Paypal have encountered
shutdowns and outages. As technology improves such a weakness is less and less of an
issue.

OPPORTUNITIES

Acquisitions provide new business strategy opportunities. eBay has agreed to buy online
telephone company Skype Technologies in a deal reported to be worth $2.6 billion.
Skype's software lets PC users talk to each other for free and make cut-price calls to
mobiles and landlines. eBay has been buying up firms - including payment system PayPal
- in an effort to increase the number of services it offers to consumers and keep its profits
growing.

New and emerging markets provide opportunities (Market Development). Countries


include China and India. There, consumers are becoming richer and have more leisure
time than previous generations. Aspirating consumers are a growing segment in many
developing nations.

There are also still opportunities in current markets (Market Penetration). Western Europe
and the USA still have many potential consumers that have yet to discover the benefits of
online auctions. Remember products have life cycles that eventually come to an end, and
such products are ideal for selling and buying on eBay.

THREATS

As with many of the global Internet brands, success attracts compe tition. International
competitors competing in their domestic markets may have the cultural experience that
could give them a competitive advantage over eBay. In fact eBay has found that it has
met with other USA-based Internet companies when trading overseas. For example,
Yahoo! dominates the Japanese market.

Attack by illegal practices is a threat. As with weaknesses above, the brand is attacked by
unscrupulous individuals. For example e-mails are sent to unsuspecting eBayers
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pretending to come from eBay. Logos and the design of the pages look authentic.
However they are designed so that you input private information that the thieves can use
to take passwords and identifications. -so beware!

Some costs cannot be controlled by eBay. For example delivery charges and credit card
charges. If fuel prices were to rise, the cost is passed on to the consumer in terms of
delivery and postal fees. This could make the overall cost of an auctioned item too
expensive. Similarly, if a credit card company such as Visa or Mastercard imposed a
charge for online transaction, the total cost of the same items would increase with similar
consequences.

REFERENCES:
How did eBay start?, About.com. Retrieved on 2007-01-26.
page 36, The eBay Phenomenon by Elen Lewis publ2008 by Marshall Cavendish books
Mullen, Amy. "The history of eBay". Happynews.com. Retrieved 2009-03-24.
Thomas,

Owen

(October

8,

2009). "eBay

founder

McCain". Valleywag (Gawker Media). Retrieved 2009-03-04.

697

factchecks

John

WEATHERFORD

698

COMPANY HISTORY:
Houston-based Weatherford International, Inc. is one of the top five oilfield service
companies in the world, with annual revenues exceeding $2 billion. The company was
created in 1998 from the merger of EVI, Inc. and Weatherford Enterra, Inc. The emergent
company now operates through three divisions --Completion Systems, Drilling & Intervention
Services, and Artificial Lift Systems--offering a broad range of oil-patch services, running
from well installation and completion to production enhancements. Among other things, it
provides fishing services to remove debris from wells and artificial lift systems for use in oil
recovery.

1940-89: EARLY RISE AND OIL BUST SURVIVAL


Weatherford International's name can be traced back to the 1940s, when Jess Hall, Sr.,
formed the Weatherford Spring Company in Weatherford, Texas, a town in north central
Texas, about 25 miles west of Fort Worth. The company originated as a provider of oil
drilling equipment and services. Over the next couple of decades, when the Weatherford
name moved into Europe, Hall's company started acquiring a global reputation as a reliable
"scratcher" and "centralizer," terms relating, respectively, to its casing cleaning and
directional- drilling control services. A good portion of its business came from well retrieval
and fishing service contracts for removing tools and debris from wells.
Weatherford added other services as it grew. Moreover, the oil industry boom of the 1970s
encouraged both expansion and diversification. In fact, by the time the petroleum bubble
burst in the early 1980s, Weatherford's business had broadened considerably. It was dealing
in drilling products and services, cement engineering, production equipment, and specialty
items and applications. Still, despite its global range and diversified services, in 1983 the
company logged the first net loss in its history.
Under Eugene L. Butler, president and CEO, the company struggled to survive the bad times
that closed down a number of over-extended oil service companies. To stay in business, all of
them had to compete in a market demanding up to a 70 percent discount for their services.
Weatherford refused to succumb to the heaviest pressures, preferring instead to downsize and
stress quality goods and services over price. As a result, its sales fell off rather sharply. It
withdrew from some unprofitable markets and concentrated on the Gulf Coast, particularly
offshore and abroad, where the rig count held up better than it did in the United States. It also
699

reduced its corporate headquarters from five floors to one, cut its domestic work force by 68
percent and its international work force by 39 percent, put in effect graduated, across-theboard salary cuts, and consolidated its manufacturing operations. It was reeling badly from
the economic punch, but it survived. It even added some new, specialized services tailormade to meet some of the industry's changing needs. For example, it combined services and
recent technology into a new business, that of reclaiming, stacking, and maintaining pipe
taken from wells for companies contracting the service.
Primarily, the company stayed on hold throughout the 1980s. In 1987, Butler revealed that at
the beginning of the recession Weatherford had actively pursued a merger with one or more
other companies but, for whatever reason, never found any takers. Its only choice was to
contain costs by slimming down to its core business. At the same time, Butler also indicated
that the company would probably sell eventually, though, he stipulated, it was not going to be
given away at "recession prices."
Instead, within a few years Weatherford be gan an aggressive growth cycle through
acquisitions and mergers that transformed it into one of the world's largest oil services
companies. In fact, it had already started on that path four years before its 1995 major merger
with Enterra Corporation.

1990-2000: ACQUISITIONS AND MERGERS


At the beginning of the 1990s, Energy Ventures, Weatherford, and Enterra--the three
companies that would finally combine to emerge as the newly organized and structured
Weatherford International--were all busy growing through vertical expansion and integration.
Energy Ventures (EV) was founded in 1972. It began as an offshore oil and gas explorer and
producer. In 1981 it became a 50-50 partner with Northwest Energy in developing an oil field
in Hockley County, Texas. By the next year, Northwest had gained about a 25 percent share
of EV. Thereafter, Appalachian, EV's majority stock holder, attempted to take control of the
company, but its efforts failed when the oil debacle of the mid-1980s trashed its plans.
However, EV was liquidated and had to be recreated. It emerged again in 1987 and began an
aggressive vertical integration. In the 12 years before its merger with Weatherford Enterra, it
made over 40 acquisitions. Among these were Grant Oil Country Tubular, in 1990, and
Prideco, in 1995. These two subsidiaries were combined as Grant Prideco, giving parent EV a

700

solid position as a major producer and supplier of drill pipe and tubulars. In 1997, when the
company built a manufacturing plant in Canada, it changed its name to EVI.
Enterra, the other company, was a diversified energy service and manufacturing business. It
provided products and services worldwide to the petroleum exploration, production, and
transmission industries. Its special service areas included the rehabilitation of older pipeline
systems and the provision of services and products for drilling and serving both onshore and
offshore gas and oil wells. At the time of its merger with Weatherford, Enterra was
considered one of the industry's leaders in technological research and development (R & D).
It had become an international business in 1988, the year in which, for $35 million, it bought
out CRC Evans. In 1994, in a deal valued at over $310 million, it bought Total Energy
Services Co., making it one of Weatherford's chief competitors and a logical merger target. It
also had an excellent cash flow and zero debt.
Weatherford started its own shopping spree under Phillip Burguieres, who became chairman
of the company in April 1991. Within two years, Weatherford bought eight small companies.
Then, in the summer of 1993, it worked out a $370 million purchase agreement with
Tuboscope Vetco International Inc., also a Houston-based company. The acquisition made
Weatherford the sole company offering comprehensive tubular servicing to the oil industry,
ranging from tubular running services to pipeline coating and inspection. Additional
acquisitions followed through 1993 and into 1994, the year in which, at about the same time,
Weatherford bought Odfjell Drilling and Consulting Co. A/S of Norway and Enterra
purchased Total Energy Services Co.
Coverage of the two acquisitions in a single article in The Oil Daily seemed to hint that the
two growing competitors were on a collision course.
They did not, however, collide; they simply teamed up, creating the world's sixth largest oil
field services company. The deal, the first of two major events that led to the 1998 emergence
of a completely restructured Weatherford International, Inc., was hammered out in 1995.
Both companies had continued purchasing smaller companies through 1994 and into 1995.
Then, in June 1995, they announced the proposed merger, noting that the combined company
would boast over $1 billion in assets and annual revenues of more than $850 million.
Although the deal was "99% to 100% sure," it required the approval of the Justice
Department, with the odds on its blessing set at around 80 percent. The approval was quickly

701

given, though, and by October the merger was a done deal, "a tax-free pooling of interests."
Combined, the two companies became Weatherford Enterra Inc., if only temporarily.
Over the next two years, Weatherford Enterra continued to grow and prosper. The trend in
the oil field service industry was clearly towards the consolidation of groups of companies
into major conglomerates, a trend which seemed to hit one peak in 1998, when there were
two important mergers. First, Halliburton Co. and Dresser Industries Inc. completed a stockswap merger, pushing the resulting company ahead of Schlumberger Ltd. as the world's
largest oil field service company. Within a week thereafter, Weatherford Enterra announced
its impending merger with EVI. Weatherford's president and CEO, Thomas R. Bates, Jr., said
that the joining of the two companies was "a growth story, not a consolidation story that is
painful to employees." That may have been so, but the end result, EVI Weatherford, talked
and walked pretty much like a consolidated duck. The $2.6 billion stock swap had created the
fourth largest oil field service company in the world, a position reflected in its November
1998 change of name to Weatherford International, Inc.
In its first whole year of operations, 1999, in addition to completing the necessary task of
restructuring and reorganizing, Weatherford International arranged over a dozen acquisitions
and strategic alliances. It also established a state -of-the-art, world-class R & D training and
testing facility. At the site, with a derrick, two separate wells, and two additional test cells,
Weatherford gained the ability to test its complete inventory of oilfield tools under fully
simulated conditions.
There were growing pains, however. The petroleum industry had stagnated in the middle of
the decade, and in 1998, when the rig count in North America dropped 38 percent, it went
into a recession that even worsened in 1999. In 1998, even though Weatherford
International's revenue was up over 1997 figures, its earnings dropped sharply, from $187.8
million to $64.8 million.
In early 1999, the decline in profits compe lled Weatherford to lay off 3,300 workers, about
25 percent of its work force, and close 100 North American sales and service facilities. It also
cut its capital budget to $90 million, a drop of 50 percent. Further, it shifted its focus to
international markets, where the rig count drop was only 15 percent. Even with the
retrenchment, 1999 proved to be a grim year. Revenues dropped from over $2 billion to $1.24
billion, producing a net loss of $20.9 million.

702

Made necessary by its major mergers and acquisitions, the company had known that it had to
make some major consolidation and restructuring moves. The industry-wide woes simply
exacerbated its reorganization problems, albeit only temporarily. As Bernard J. DurocDanner, Weatherford's new CEO indicated, the company's greatest challenge was to assemble
all of its acquisitions into a coherent and cohesive whole. By November 1999, the number of
acquisitions made since Weatherford Enterra and EVI merged in 1998 had reached 16 with
an expenditure of about $500 million.
In its consolidation strategies, including its acquisitions and divestitures, Weatherford seemed
to be redefining itself, particularly as it moved into the next century. Major steps included the
1999 merger of the company's gas compression servic es with GE Capital, a subsidiary of
General Electric Co. The result was a new company, Weatherford Global Compression
Services, which became the core of one of the four divisions of Weatherford International,
Inc. However, two years later, for a large stake in the combined companies, Weatherford sold
Weatherford Global Compression Services to Universal Compression Holdings, Inc. In the
interim, Weatherford continued to acquire other companies, despite sustaining losses into
2000, when the industry finally recovered and the company returned to profitability. In 1999,
it had also divested itself of its major subsidiary, Grant Prideco Drilling Products, by spinning
it off to Weatherford shareholders.

CORPORATE OBJECTIVES & STRATEGY


Our primary objective is to provide our shareholders with above-average returns on their
investment through income growth.
Principal components of our strategy include:
Continuously improving the efficiency, productivity and quality of our products and
services and their respective delivery in order to grow revenues and operating margins in all
of our geographic markets at a rate exceeding underlying market activity;
Through a commitment to innovation and invention, developing and commercializing new
products and services capable of meeting evolving needs of our customers; and
Further extending our global infrastructure in scope and scale at a level consistent with
meeting customer demand for our products and services in an efficient manner.

703

MARKETING STRATEGY
They are a leading provider of equipment and services to the oil and natural gas exploration
and production industry. Demand for our industrys services and products depends upon the
number of oil and natural gas wells being drilled, the depth and drilling conditions of wells,
the number of well completions and the level of workover activity worldwide. As a result of
the maturity of the worlds oil and natural gas reservoirs, accelerating production decline
rates and the focus on complex deepwater prospects, technology has become increasingly
critical to the marketplace. Clients continue to seek, test and prove production-enabling
technologies at an increasing rate. Technology is an important aspect of our products and
services as it helps us provide our clients with more efficient tools to find and produce oil and
natural gas. They have invested a substantial amount of our time and resources in building
our technology offerings. They believe our products and services enable our clients to reduce
their costs of drilling and production and/or increase production rates. Furthermore, these
offerings afford us additional opportunities to sell our traditional core products and services
to our clients.

SWOT ANALYSIS
STRENGTH

Weatherford purchase a wide variety of raw materials as well as parts and components
made by other manufacturers and suppliers for use in our manufacturing. Many of the
products sold by them are manufactured by other parties. They are not dependent on any
single source of supply for any of our raw materials or purchased components.

Their principal customers consist of major and independent oil and natural gas producing
companies. Revenue from Petroleos Mexicanos (Pemex) accounted for approximately
13% of our revenue s during 2009 and no other individual customer accounted for more
than 10% of our consolidated revenues. During 2008 and 2007, there was no individual
customer who accounted for more than 10% of our consolidated revenues.

They have well developed supply chain, invoicing and collection processes and
procedures. These undertakings include costs, which we expect will result in long-term

704

benefits of our business processes. There forward-looking statements assume we will


realize the benefits of these efforts.

WEAKNESSES
At December 31, 2009, they employed approximately 52,000 employees. Certain of their
operations are subject to union contracts. These contracts cover approximately two percent of
our employees. They believe that their relationship with their employees is generally
satisfactory but not very good.

OPPORTUNITIES
They offering products can be grouped into ten service lines:
1. Artificial lift systems;
2. Drilling services;
3. Well construction;
4. Drilling tools;
5. Completion systems;
6. Wire line and evaluation services;
7. Re-entry and fishing;
8. Stimulation and chemicals;
9. Integrated drilling; and
10. Pipeline and specialty services.
The rapid increase in energy demand will create more opportunities for him to expend their
business in these product lines.

THREATS

Weatherford operate in many dangerous countries, such as Iraq, in which acts of terrorism
or political violence are a substantial and frequent risk. Such acts could result in
kidnappings or the loss of life of our employees or contractors, a loss of equipment,
which may or may not be insurable in all cases, or a cessation of business in an affected
area. They cannot be certain that our security efforts will in all cases be sufficient to deter
705

or prevent acts of political violence or terrorist strikes against them or their customers
operations.

There principal competitors include Baker Hughes, BJ Services, Halliburton,


Schlumberger and Smith International. They also compete with various other regional
suppliers that provide a limited range of equipment and services tailored for local
markets. Competition is based on a number of factors, including performance, safety,
quality, reliability, service, price, response time and, in some cases, breadth of products.

The concentration of their customers in the energy industry may impact their overall
exposure to credit risk as customers may be similarly affected by prolonged changes in
economic and industry conditions. Those countries that rely heavily upon income from
hydrocarbon exports will be hit particularly hard given the drop in oil prices. Further,
laws in some jurisdictions in which we operate could make collection difficult or time
consuming. They perform ongoing credit evaluations of our customers and do not
generally require collateral in support of their trade receivables. While they maintain
reserves for potential credit losses, they cannot assure such reserves will be sufficient to
meet write -offs of uncollectible receivables or that their losses from such receivables will
be consistent with their expectation

Turmoil in the credit markets and the potential impact on liquidity of major financial
institutions may have an adverse effect on their ability to fund growth opportunities
through borrowings, under either existing or newly created instruments in the public or
private markets on terms.

PEST ANALYSIS
POLITICAL
Federal Regulation and Environmental Matters
There operations are subject to federal, state and local laws and regulations relating to the
energy industry in general and the environment in partic ular. In 2009 there expenditures to
comply with environmental laws and regulations were not material, and they currently do not
expect the cost of compliance with environmental laws and regulations for 2010 to be
material.

706

ECONOMICAL

They are currently involved in government and internal investigations involving various
of our operations. These investigations are not yet resolved, and they cannot anticipate the
timing, outcome or possible impact of the ultimate resolution of these investigations,
financial or otherwise. The governmental agencies involved in these investigations have a
broad range of civil and criminal penalties they may seek to impose against corporations
and individuals for violations of trading sanctions laws, the Foreign Corrupt Practices Act
and other federal statutes including, but not limited to, injunctive relief, disgorgement,
fines, penalties and modifications to business practices and compliance programs. In
recent years, these agencies and authorities have entered into agreements with, and
obtained a range of penalties against, several public corporations and individuals in
similar investigations, under which civil and criminal penalties were imposed, including
in some cases fines and other penalties and sanctions in the tens and hundreds of millions
of dollars. These agencies likely will seek to impose penalties of some amount against us
for past conduct, but the ultimate amount of any penalties we may pay currently cannot be
reasonably estimated. Under trade sanctions laws, the U.S. Department of Justice may
also seek to impose modifications to business practices, including immediate cessation of
all business activities in specific countries or other limitations that decrease our business,
and modifications to compliance programs, which may increase compliance costs. Any
injunctive relief, disgorgement, fines, penalties, sanctions or imposed modifications to
business practices resulting from these investigations could adversely affect our results of
operations. Additionally, during 2008, we incurred $56 million for costs in connection
with our exit from certain sanctioned countries and, to date, we have incurred $106
million for legal and professional fees in connection with complying with and conducting
these on-going investigations. This amount excludes the costs we have incurred to
augment and improve our compliance function in 2008 and 2009. We may have
additional charges related to these matters in future periods, which costs may include
labor claims, contractual claims, penalties assessed by customers, and costs, fines, taxes
and penalties assessed by the local governments, but we cannot quantify those charges or
be certain of the timing of them.

A material change in currency rates in their markets, including the devaluation of the
Venezuelan Bolivar. Quantitative and Qualitative Disclosure about Market Risk could
707

affect their future results as well as affect the carrying values of their assets. World
currencies have been subject to much volatility. As they are not able to predict changes in
currency valuations, there forward-looking statements assume no material impact from
future changes in currency exchange rates.

SOCIAL

In the summers of 2005 and 2008, the Gulf of Mexico suffered several significant
hurricanes. These hurricanes and associated hurricane threats reduced the number of days
on which they and their customers could operate, which resulted in lower revenues than
they otherwise would have achieved. In parts of 2006, and particularly in the second
quarters of 2007 and 2008, climatic conditions in Canada were not as favorable to drilling
as they anticipated, which limited their potential results in that region. Similarly,
unfavorable weather in Russia, Mexico and in the North Sea could reduce their operations
and revenues from that area during the relevant period. There forward-looking statements
assume weather patterns in their primary areas of operations will be conducive to their
operations.

TECHNOLOGICAL
Their ability to deliver their long-term growth strategy depends in part on the
commercialization of new technology. A central aspect of their growth strategy is to improve
their products and services through innovation, to obtain technologically advanced products
through internal research and development and/or acquisitions, to protect proprietary
technology from unauthorized use and to expand the markets for new technology by
leveraging our worldwide infrastructure. The key to their success will be their ability to
commercialize the technology that they have acquired and demonstrate the enhanced value
our technology brings to their customers operations. There major technological advances
include, but are not limited to, those related to controlled pressure drilling and testing
systems, expandable solid tubulars, expanda ble sand screens and intelligent well completion.
There forward-looking statements have assumed successful commercialization of, and aboveaverage growth from, these new products and services, as well as legal protection of our
intellectual property rights.

708

MICROSOFT

709

HISTORY
Bill Gates was born in Seattle in 1955, the second of three children in a well-to-do family.
His father, William H. Gates II, was a lawyer, while his mother, Mary Gates, was a teacher, a
regent of the University of Washington, and member of several corporate boards. Gates was
first exposed to computers at school in the late 1960s with his friend Paul Allen, the son of
two Seattle librarians. By the time Gates was 14, the two friends were writing and testing
computer programs for fun and profit.
In 1972 they established their first company, Traf-O-Data, which sold a rudimentary
computer that recorded and analyzed traffic data. Allen went on to study computer science at
the University of Washington and then dropped out to work at Hone ywell, while Gates
enrolled at Harvard. Inspired in 1975 by an issue of Popular Electronics that showed the new
Altair microcomputer kit just released by MITS Computer, Gates and Allen wrote a version
of BASIC for the machine. Later that year Gates left college to work full time developing
programming languages for the Altair, and he and Allen relocated to Albuquerque, New
Mexico, to be near MITS Computer, where Allen took a position as director of software
development. Gates and Allen named their partnership Micro-soft. Their revenues for 1975
totaled $16,000.
A year later, Gates published "An Open Letter to Hobbyists" in the Altair newsletter, in
which he enjoined users to avoid illegally copied software. Arguing that software piracy
prevented "good software from being written," Gates wrote prophetically, "Nothing would
please me more than being able to hire ten programmers and deluge the hobby market with
good software." In November 1976 Allen left MITS to devote his full attention to Microsoft,
and the company's trade name was registered. In 1977 Apple and Radio Shack licensed
Microsoft BASIC for their Apple II and Tandy computers, with the Apple license going for a
flat fee of $21,000. As Apple sold a million machines complete with BASIC, Microsoft's unit
revenues dropped to two cents a copy.
That same year Microsoft released its second programming language, Microsoft FORTRAN,
which was followed in 1978 by a version of COBOL. Both were written for the CP/M
operating system, one of many available in the rapidly expanding but still unstandardized
microcomputer market. As CP/M was adopted by computer manufacturers including Sirius,
Zenith, and Sharp, Microsoft became the leading distributor for microcomputer languages.

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By the end of 1978 Microsoft had 13 employees, a sales subsidiary in Japan, and $1 million
in revenues. The following year Gates and Allen moved the company to Bellevue,
Washington.

THE EARLY 1980S: ASSOCIATIONS WITH IBM AND APPLE


Microsoft's big break came in 1980 as IBM began developing its Personal Computer, or PC.
While IBM contracted Microsoft to develop languages for the PC, IBM's first choice to
provide an operating system was the leader in the field, Digital Research; however, IBM and
Digital Research were unable to agree on terms, so the contract for the operating system was
awarded to Microsoft. As Microsoft was under a tight deadline and did not have an operating
system of its own, the company purchased the rights to one from Seattle Computer Products
for $75,000. Originally dubbed Q-DOS (for "Quick and Dirty Operating System"), the
product was renamed MS-DOS (for "Microsoft Disk Operating System") and modified for
IBM's purposes. Under the terms of the agreement, Microsoft retained the right to sell the
operating system to other companies and to consumers, while IBM could not. Neither
company could have foreseen the value of this arrangement: as other manufacturers
developed hardware compatible with the IBM PC, and as personal computing became a
multibillion-dollar business, the fast and powerful MS-DOS became the industry's leading
operating system, and Microsoft's revenues skyrocketed.
The year 1980 also saw the arrival of Steve Ballmer, a close friend of Gates from Harva rd,
who was hired to organize the non-technical side of the business. Ballmer later recalled the
company's stormy beginnings under Gates's leadership: "Our first major row came when I
insisted it was time to hire 17 people. He claimed I was trying to bankr upt him."
Conservative in his spending, Gates dictated that the company must always have enough
money in the bank to operate for a year with no revenues. Nearly 20 years later that policy
still stood--in 1999 Microsoft had cash reserves of more than $13 billion and no long-term
debt--while Ballmer, who had by then become Microsoft president, remained Gates's closest
friend and adviser.
In 1981 the company was incorporated as Microsoft, Inc., with Gates as president and
chairman and Allen as executive vice-president. The company closed the year with 128
employees and revenues of $16 million. Two years later Allen left Microsoft after being
diagnosed with Hodgkin's disease. He remained on the board of directors and continued to

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hold more than 10 percent of the company's stock. Also in 1983 Microsoft launched a word
processing program, Word 1.0, in an effort to supplant the category leader, WordStar.
Simpler to use and less expensive than WordStar, Word used a mouse to move the cursor and
was able to display bold and italic type on the screen. Nevertheless, some users felt that the
product was too complex--designed for software engineers rather than business users --and it
was quickly surpassed in the market by WordPerfect, released by the WordPerfect
Corporation. Word did not become a success until its greatly improved version 3.0 was
released in 1986, whereupon the application became Microsoft's best-selling product.
Throughout its history, Microsoft has been known for releasing products that were initially
unsuccessful but eventually grew to dominate their categories. Many reviewers have been
harsh in their criticism: David Kirkpatrick, writing in Fortune, described the first release of
one product as a "typically unreliable, bug-ridden Microsoft mess," while Brent Schlender
noted in the same magazine that "from its beginnings, Microsoft has been notorious for
producing inelegant products that are frequently inferior and bringing them to the market way
behind schedule." These critics note that the success of Mic rosoft has been based not only--or
even principally--on the company's technological prowess, but also on Bill Gates's business
acumen, which combined dogged perseverance, strategic marketing, powerful alliances, and,
increasingly as the years went on, highly aggressive competitive tactics.
Microsoft worked closely with Apple during the development of Apple's Macintosh
computer, which was introduced in 1984. Revolutionary in its design, the Mac featured a
graphical user interface based on icons rather than the typed commands used by the IBM PC,
making its programs simple to use and easy to learn, even by computer novices. Microsoft
introduced Mac versions of BASIC, Word, and the spreadsheet program Multiplan, and
quickly became the leading supplier of applications for the Mac. Revenues jumped from $50
million in 1983 to nearly $100 million in 1984.
Convinced that the Mac's graphical user interface represented the future of end-user
applications, Gates sought to develop an interface manager to work on top of MS-DOS that
would convert the operating system to a graphical model that would be user-friendly and
provide a single method for interacting with the many non-standardized programs designed to
run on the system. Because other companies, including IBM, were working to develop
similar interface managers for MS-DOS, Gates solicited support from hardware
manufacturers and software publishers who were concerned about IBM's continued
712

dominance of the PC market. Compaq, Hewlett-Packard, Texas Instruments, Digital


Equipment Corporation, and others announced their support for the project, called Microsoft
Windows, while IBM, in the face of this opposition, threw its weight behind Vision, a similar
product already being marketed by VisiCalc, while working to develop it s own program,
called TopView. Plagued by delays in development, the release of Windows was repeatedly
rescheduled throughout 1984 and 1985, causing tensions at Microsoft and with other software
publishers who were forced to delay releases of the applications they were designing for the
system. Finally released in November 1985, after some 110,000 hours of frantic work by
programmers, Windows faced a disappointing reception. The system was slow, few
applications were available to run on it, and customers de layed purchase decisions while
waiting for the introduction of TopView.
In 1985 Microsoft also introduced Excel 1.0, a Mac spreadsheet product. Based on the earlier
and less successful Multiplan, Excel gradually took hold against its principal competitor,
Lotus 1-2-3, and eventually came to account for more than $1 billion of Microsoft's annual
revenues. That same year Microsoft began collaborating with IBM on a next-generation
operating system, called OS/2.

THE LATE 1980S: EMERGENCE OF A CORPORATE CULTURE


In early 1986 Microsoft moved to a new 40-acre corporate campus in Redmond, Washington,
near Seattle. Designed to provide a refuge free of distractions for those whose job was, in
Gates's words, to "sit and think," the campus was nestled in a quiet woodland setting and
reflected huge expenditures for tools, space, and comfort. Buildings were designed in the
shape of an X to maximize light, with each programmer given a private office rather than a
cubicle. The buildings featured many small, subsidized cafeterias, as well as refrigerators
stocked with juice and caffeinated beverages. The self-contained, collegiate surroundings
were carefully designed to promote the company's distinctive culture, which one
commentator described as a close approximation of "m ath camp." Like most software
companies, Microsoft had no dress code (although company lore recounts that in 1988 senior
management did express a preference that employees not go barefoot indoors). Employees
were hired on the basis of sheer intelligence, w ith the company selecting only a small fraction
of applicants from the more than 100,000 resumes it received each year, and were expected to
work brutal schedules to bring products to market as quickly as possible. Microsoft paid
salaries that were distinctly lower than elsewhere in the industry, even to their senior
713

executives, but compensated with generous stock options that made thousands of Microsoft
employees millionaires. At the same time, the company tried to maintain a small company
mentality, in which executives traveled coach class, the necessity of additional staff positions
was closely scrutinized, and other unnecessary expenditures were vigilantly avoided.
In March 1986 Microsoft held an initial public offering (IPO) of 2.5 million shares which
raised $61 million. Within a year the stock had risen from $25 to $85, making Bill Gates a
billionaire at the age of 31. The following year Microsoft released its first CD-ROM product,
Microsoft Bookshelf, a collection of ten reference works, as well as Excel for Windows, its
first application for the new operating system. Microsoft also purchased Forethought, Inc., for
$12 million, thereby acquiring that company's PowerPoint presentation graphics program,
and released OS/2 in collaboration with IBM. In November 1987 Microsoft introduced
Windows 2.0, a greatly improved version of the operating system, and by the end of the year
Windows had sold more than one million copies. As Windows began to take hold, more
software companies were convinced to develop applications for the operating system, which
brought it increased usefulness and further sales momentum. In 1988 Microsoft surpassed
Lotus Development Corporation as the leading software vendor, with more than $500 million
in sales. The company was accused of copyright infringement by Apple, which alleged that
Microsoft had copied the "look and feel" of the Macintosh, in a lawsuit that was finally
dismissed after five years of litigation. In 1989 the company introduced Microsoft Office, a
"suite" of programs that eventually came to dominate the market and become Microsoft's
best-selling application product. While the initial release of Office was a discount package,
later versions incorporated standard, shared features and included Word, Excel, PowerPoint,
and the e-mail program Mail, with the Access database management program included in the
Office Professional version.
Before 1990 Microsoft was primarily a supplier to hardware manufacturers, but after 1990
the bulk of the company's revenues came from sales to consumers. That year Microsoft
became the first software company to reach $1 billion in revenues, closing the year with
5,600 employees.

PRODUCT DEVELOPMENT IN THE 1990S


In 1993 Microsoft introduced Encarta, the first multimedia encyclopedia on CD-ROM, as
well as the first version of Windows NT, an operating system for users on corporate

714

networks. While the initial acceptance of Windows NT was disappointing, an upgrade


shipped in September of the following year as NT 3.5 was a dramatic success: winning the
PC Magazine award for technical excellence in system software and named the best
operating system product of 1994, the upgrade boosted sales of NT to more than one million
copies by the end of the year. Microsoft announced an agreement to purchase Intuit, the
producer of the leading package of personal financial software, called Quicken; however,
after the U.S. Department of Justice filed suit to prevent the takeover on the basis of antitrust
concerns, Microsoft withdrew its offer. Revenues for 1994 exceeded $4 billion.
In August 1995 Microsoft launched its next version of Windows, called Windows 95, which
sold more than one million copies in the first four days after its release. For the rest of the
decade Microsoft expanded aggressively into new busin esses associated with its core
franchise. Its projects included two joint ventures with the National Broadcasting Company
under the name MSNBC: an interactive online news service and a cable channel broadcasting
news and information 24 hours a day. The com pany's web-based services included the
Microsoft Network online service, a travel agency, local events listings, car buying
information, a personal financial management site, and a joint venture with First Data that
allowed consumers to pay their bills online. Microsoft purchased 11 percent of the cable
television company Comcast for $1 billion and cut a licensing deal with the largest U.S. cable
operator, TCI Communications, to put Windows into at least five million set-top boxes. The
company also purchased WebTV, whose core technology allowed users to surf the Internet
without a PC. Microsoft's latest generation of Windows, Windows CE, was designed to
expand the franchise into computer-like devices including mobile phones, point-of-sale
terminals, pocket organizers, digital televisions, digital cameras, handheld computers,
automobile multimedia systems, and pagers. By early 1999 the company had secured more
than 100 licensing agreements with manufacturers of these "intelligent appliances."

LEGAL CHALLENGES AND COMPETITION IN THE FUTURE


Microsoft's many critics believed that the company's goal in this widespread expansion was
to control every delivery channel of information, thereby providing the means to control the
content. According to Scott McNealy of rival company Sun Microsystems, "By owning the
entry points to the Internet and electronic marketplace, Microsoft has the power to exercise
predatory and exclusionary control over the very means for people to access the Internet and
all it represents."
715

The U.S. government apparently agreed. After an intensive investigation of Microsoft's


competitive practices that had gone on for much of the decade, in 1998 the U.S. Department
of Justice and a group of 20 state attorneys general filed two antitrust cases against Microsoft
alleging violations of the Sherman Act. The government sought to prove a broad pattern of
anticompetitive behavior on Microsoft's part by demonstrating an array of claims, including
the following: that Microsoft had a monopoly on the market for operating systems; that the
company used that monopoly as a means of preventing other companies from selling its
competitors' products (most notably Netscape's Internet browser); that it was illegal for
Microsoft to bundle its own browser into the operating system Windows 98 as a means of
precluding customers from purchasing Netscape's product; that the company sought to divide
markets with competitors; that Microsoft sought to subvert the Java programming language,
developed by Sun Microsystems, which it viewed as a threat to Windows; and, finally, that
Microsoft's business practices were detrimental to consumers. The case was conducted under
a flurry of media attention, with all parties agreeing that the stakes were extremely high:
should Microsoft win, its brand of extremely aggressive capitalism would secure a legal
blessing; should the company lose, the company could be forced to license the source code
for Windows to competitors, thus destroying its monopoly, or could be broken up into
smaller components, crippling its hold over the marketplace.
The fear and resentment that Microsoft and its founder Gates engendered were testament to
the company's mythic status and Gates's role as the embodiment of the digital era. Gates's
extreme wealth (in early 1999 he was worth $50 billion) made him the subject of constant
scrutiny, while the Internet was rife with Bill Gates "hate pages," named, for example, "The
Society for the Prevention of Bill Gates Getting Everything." Resentment and legal action
notwithstanding, with more than $14 billion in sales in 1998, Microsoft showed no signs of
slowing down.
Microsoft continued to grow rapidly, increasing its net revenue by 29 percent, to $19.7
billion, in 1999. Additionally, net income rose to $7.79 billion, a dramatic 73 percent increase
over 1998. While the antitrust suit against Microsoft showed threats of a forced breakup of
Microsoft, innovations in the company continued. Encarta Africana, the first complete
encyclopedia of black history and culture, was launc hed, as well as Shop, Microsoft's first
online store.

716

UNPRECEDENTED GROWTH IN 2000 AND BEYOND


In 2000 Microsoft acquired Visio Corporation, the top supplier of business diagramming and
technical drawing software. The transaction, at approximately $1.3 billion, became the largest
acquisition in Microsoft history. Also in 2000, Microsoft invested $135 million in the
software publisher Corel. Apparently, Corel negotiated the investment, offering to drop
"certain legal actions" it had against the company, eve n as it had no legal claims filed against
Microsoft. Another transaction--in Microsoft's desire to expand into the television market-involved a $56 million investment in Intertainer Inc, a provider of video-on-demand service.
In the same year, Microsoft increased its employee base by nearly 9,000, from 39,170 to
48,030. The total expenditures took a temporary toll on Microsoft's net income, which
dropped 22 percent, to $7.35 billion, in 2001. At the same time, net revenue continued to
increase, up 10 percent from 2000.
The release of Windows 2000, while causing a stir, was overshadowed by the highly
anticipated debut and worldwide release of Microsoft Windows XP. So confident was
Microsoft in the product, and in its ability to boost worldwide sales of computers (which had
declined 11.3 percent since the September 11 attacks just a month before), they launched a
$250 million ad campaign for the product. The software did not represent a brand new
development, as much of the technology came from that of its pr edecessor, Windows 2000.
But as Paul Thurrott, writer for Network Windows magazine, wrote, "There's no doubt that
we'll eventually look back on Windows XP as one of the key OS releases of all time."
Meanwhile, the Department of Justice ruled that they would not enforce a breakup of
Microsoft. By the end of 2002, the U.S. District Court approved the settlement Microsoft
reached with the Justice Department. The settlement included preventing Microsoft from
benefiting from exclusive deals that could hinder competition; uniform contract terms for
computer manufacturers; the required ability of customers to remove icons from certain
Microsoft features; and a requirement that Microsoft release specific innovational technical
information to its rivals, in order to enforce competition.
Microsoft's net revenue increased to $28.37 billion in 2002, while net income rebounded,
gaining 6 percent from the previous year. In 2003, Microsoft saw an impressive 28 percent
jump in net income, to reach just below $10 billion. T he launching of Windows Server 2003,
the largest software development project in the company's history to date, contributed to the

717

growth. According to Microsoft, Windows Server 2003 would be a more reliable, more
manageable, and more collaborative piece of software. Security would also be tighter,
especially due to a newly built IIS (Internet Information Server) Web Server.
By 2004, with more than 56,000 employees and anticipated year-end revenues of up to $38
billion, Microsoft continued to hold a strong lead in the computer software industry. With an
emphasis on continuous innovation--including such business products as the BizTalk Server
2004--further success seemed ensured. Still, resentment toward Microsoft was omnipresent.
In April 2004, the company was fined by the European Union for abusing its monopoly on
computer operating systems. The fine, at EUR 497 million ($596 million), was not likely to
be the last for Microsoft.

Principal Subsidiaries: Microsoft Asia, Ltd. (Nevada); Microsoft Business Solutions


Aps (Denmark); Microsoft Capital Group, L.P.; Microsoft E-Holdings, Inc.; Microsoft
Finance Company Ltd. (Ireland); Microsoft Ireland Capital Ltd.; Microsoft Ireland
Operations Ltd.; Microsoft Licensing, Inc.; Microsoft Manufacturing BV (Netherlands );
Microsoft T -Holdings, Inc.; MSLI, GP; Round Island, LLC; Round Island One Ltd.

Principal Divisions: Client; Server & Tools; Information Worker; Business Solutions;
MSN; Mobile and Embedded Devices; Home and Entertainment; Other.

Principal Competitors: Apple Computer, Inc.; Hewlett-Packard Company; International


Business Machines Corporation; Logitech International SA; Novell, Inc.; Sony Corporation;
Sun Microsystems, Inc.; Time Warner Inc.; Yahoo! Inc.

Microsofts Organizational Culture


"Microsoft's culture is one that stresses individual responsibility and accountability of
development work and seeks out employees that thrive on the immediacy of generating and
providing valuable information. The extensive research completed by French and Raven
(1959) provide a useful framework by which to analyze the impact Microsoft's culture on the
strategic direction of the company. Candor and directness in communication are also the
foundations of the Microsoft culture, where seniority doesn't matter nearly as much as
intelligence. This interlocking of communications style and culture is critical to the
company's long-term viability and future growth as programmers and computer scientists
have often been attracted to working for the company due to this communication approach."

718

For more than twenty years, Microsoft has focused on making computers easier to use for
individuals with a wide array of difficulties and impairments. From its earliest experiences
with the issues of accessibility, Microsoft has listened, learned, and applied what it's learned.
The result is an increasing momentum toward the goal of accessible technology for everyone.
Our 90,000 employees drive the business, and they

have a responsibility to create a

respectful and rewarding work environment for them.


The diversity of their employees differentiates Microsoft and drives their creativity. They try
to ensure that the cultures and backgrounds of all employees are valued equally, which helps
them attract and retain the best talent.
They work hard to motivate, inspire and nurture their employees around the world. They
offer industry-leading training and development programs to their employees, investing
nearly 3 percent of payroll budget in training and providing access to more than 2,300
courses. The courses offered range from management coaching programs to classes on how
to better use specific software.
To support the physical and mental well being of the employees and balance their work and
home life, Microsoft offers a range of exceptional benefits. These include health-care
coverage, maternity and parental leave, adoption assistance, fitness programs, financial
education, and family backup care arrangements, and other benefits. They also work with
employees to create flexible work arrangements, suc h as telecommuting and flex-time, and
offer office-based conveniences. In addition, well-developed contingency plans in the event
of a pandemic are in place to protect our employee base.
Employee compensation is another area of priority for Microsoft. They are committed to their
pay-for-performance compensation approach, which is designed to attract and reward
exceptional talent. Stock awards, bonus opportunities, and service awards are several ways in
which we demonstrate this approach. Additionally, approximately 90 percent of employees
participate in Microsoft stock programs.
All Microsoft employees have a responsibility to act ethically in their work. They do not
tolerate bribery or corruption. Every employee signs our Standards of Business Conduct, and
receives training on ethical conduct and environmental practices as part of their new
employee orientation

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Networking Groups
A networking tool for Microsoft Customer Service & Support (CSS)World Wide. A vehicle
to discuss hot topics within the industry, new enhancements, jobs, and technologies, and
allow you to network with other professionals involved in Microsoft CSS.

WORK/LIFE EFFECTIVENESS
Empowering Individuals with More Tools and Training

Microsoft Announced Free Accessibility Tools and Training for Developers


Online training and resources can help corporations, governments and NGOs worldwide
make their technology products and services more accessible to people with disabilities.

Office

Announced

Two

Accessibility

Add-ins

The Subtitling Add-In for Microsoft PowerPoint (STAMP) lets you add captions to video
and audio files included in Microsoft PowerPoint 2010 presentations. This also enables
users around the world to subtitle in foreign languages. Save as DAISY for Office 2010
allows you to use Microsoft Word to convert Word Open XML files to the Digital
Accessible Information System (DAISY ) format, which powers digital talking books and
compatible software and Braille readers for those with print disabilities.

2009-2010: Making PCs Accessible to Everyone

2006-2009: Increasing Ease of Access

2005: Technology Leadership

2002 - 2004: Raising Awareness

1999-2001: Progress into the New Millennium

Achieving the Microsoft corporate mission relies on their diverse and talented employees
around the worldthey are critical to the company's long-term success. Located in more than
100 countries/regions, their employees drive their businesses; develop the products, services,
and solutions that our customers want and need; and apply their talents and passion toward
making a difference on the things that matter to them. In FY2010, they directly employed
nearly 90,000 full-time staff worldwideabout 55,000 in the United States and about 35,000

720

internationally. All of the employee efforts are overseen by the Senior Vice President of
Human Resources, who reports to directly to the CEO.
Each year, Micros oft conducts a satisfaction survey among all employees to help us better
understand their experiences. We take the responses to this survey extremely seriously.
Management teams across the company create specific action plans based on the results to
address areas for improvement. These plans are communicated to employees throughout the
year, metrics are tracked with transparency, and senior leadership is held accountable for
improvement against those plans. Action plans have ranged from small changes to very
significant changes, such as adding to our multi-million dollar investments in employee
development.
About 85 percent of Microsoft employees responded to the FY2010 survey. According to its
results:

89 percent of employees feel proud to work for Microsoft.

86 percent would recommend Microsoft as a great place to work.

91 percent feel that they are treated with respect and dignity by their managers.

83 percent feel that their work groups value diverse perspectives.

82 percent have positive opinions of the degree of flexibility that they are given in
doing their jobs.

These results are well above the median benchmark for peer companies.

ENVIRONMENTAL ANALYSIS
While Microsoft is growing financially today, the company is also faced with numerous
problems and challenges nowadays. Alongside this apparent success is a different aspect of
the company. Microsoft has been frequently sued by numerous competitors, U.S. Department
of Justice and 50 states in the U.S. with regards to antitrust violations. The plaintiffs argued
that Microsoft abused its monopoly power in selling operating system and web browsers
when it bundled its Internet Explorer with the Microsoft Windows operating system. This
move enabled Microsoft to dominate the web browser wars and elbow ed its competitors since
consumers now have a free version of Internet Explorer. The U.S. Department of Justice also
alleged that Internet Explorer will only work with Windows and not with other software
made by Microsofts competitors.
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Aside from the ant itrust suit that Microsoft eventually lost, a formidable challenge faced by
the company is the problem of computer and software piracy. Microsoft software and
products are being pirated and copied illegally then sold to the consumers at half the price
with no revenue going to the firm. This is appalling since even products and software not yet
ready for release to the global market are copied and sold. Aside from software piracy there
are also notions, reports and allegations that Microsoft and its programs are very vulnerable
to hackers and computer viruses proliferating in the cyber world. These viruses cause the
computer to act sluggishly losing important data and files. Viruses and other problems
inherent in the programs made by Microsoft creates costumer dissatisfaction, negative
publicity and loss of sales.
Another huge challenge against Microsoft today is the shift of the world market to an open
source program. Open Source programs like Linux are softwares much like the ones made
by Microsoft but wit h a fundamental difference. The difference lies in that Linux is a stable
program, its source code are open and can be modified, it has the best technical support, it
runs on a wide range of hardware and most of all it is free. Since the main advantage of the
Linux is that it is free and can be modified freely, Microsoft and its subsidiary companies and
softwares are put in an unpleasant position. The market would now gradually shift to Linux
and other open source program gobbling up the huge market share a nd monopoly enjoyed by
the company. Linux and other open source program will also force Microsoft to open up the
source codes and basic programming codes of its softwares to the public since the current
trend now in software programming is open sourcing .
Greater competition and struggle in the software business is also a challenge to the growth of
the company. The organization is being threatened by other competitors and other business
enterprises that aim to get a big market share that is solely dominated by Microsoft. Aside
from competition from other companies, there has also been a trend towards liberalization of
the market and the software industry.
Liberalization means the gradual decrease of control on the part of Microsoft with regards to
source codes and other computer programs because of the recent antitrust rulings made by the
U.S. Supreme court. Source codes and computer programs that is unique and the vital in
building computers softwares will be gradually distributed to open source programmer s and
other independent software companies making these source codes available to the public and
breaking Microsofts monopoly on software designing. This liberalization would in turn
722

strengthen other software companies in challenging Microsoft and providing alternative


products to the consumers. This move would also decrease the dependency of the market to
the products offered by the company since the consumers will have a clear and distinct choice
when buying.
To combat these negatives external factors, a clear cut policy must be implemented by the
company. First, the company must diversify its products. Because of recent government
actions and other factors such as new competitors, Microsoft must diversify the products that
it offers to the market. Product diversification would mean the modification of products that
would have an edge over other competitors in terms of performance, ease of use and
compatibility.
Diversification would also mean the production of new and unique products that would be
bought by the market following the example made by Apple Corporation and their portable
music players. Microsoft must also venture producing products and not concentrating all its
resources and manpower on a specific area which is software development and design. It
must increase its focus on game design, software publishing and home entertainment system
to ease the pressure of competition. Diversification would also mean entering new markets
such as China to relieve competition from market rich regions of the world. Microsoft would
benefit greatly if it totally enters the Chinese market because of the huge consumer base and
the cheap labor cost being offered by China.

SWOT ANALYSIS
STRENGTHS

Applications and operations divisions along with recently created online service
network divisions (MSN)

Flexible workforce through contingent workers for seasonal/cyclical projects

Loyal, hardworking, and diverse workforce (20% minority, 26% women) who, in
addition to good compensation, have an opportunity to do well financially through
stock purchases

Multinational corporation operating through regional subsidiaries to minimize cultural


differences in more than 60 countries

723

New product, Neptune , is a Window's interface and is an example of smart software

Relatively rapid product development processes that allow for timely updating and
release of new products

Revenues and profits rising at 30% a year with merger/acquisition or investment in 92


companies over past five years

Software products have high name recognition, broad-based corporate and consumer
acceptance (Word, Excel, PowerPoint, Access), and numerous powerful features that
are in use worldwide, thereby promoting standardization and competitive advantage
through their ease of integration and cost -effectiveness

Top rating from Fortune for best company to work at and most admired company

Windows 95, 98, 2000 series, and Windows NT are globally known as the PC desktop
operating system with a market share of about 88%

World's largest software company with global name recognition and strong reputation
for innovative products

WEAKNESSES

Between 1990-1995, Microsoft leadership failed to correctly anticipate the growth or


popularity of the Internet

Bill Gates has become Microsoft's chief software architect but has not yet developed a
substantially new line of products

Dependency on hardware manufacturers to pre-install Microsoft's PC operating


system

Downside of product launches and deadlines contributes substantially to employee


burnout

Employee turnover has increased from 6% for a ten year period to 7.4%

Falling sales in the operating systems and server software sectors

Frequent reorganization, red tape, and autocratic atmosphere dampen employee


creativity leading to a loss of key personnel and chilling of communication and
innovation; 5-layers of management

724

IRS audits in 1989 and 1990 revealed employment status of contingent workers for
whom Microsoft did not withhold taxes nor allow to participate in Microsoft's
Savings Plus Plan or Employee Stock Purchase Plan, leading to a finding of tax
liability for Microsoft in the "permatemps" Vizcaino litigation

Little or no significant presence in the wireless market and Windows CE has been
disappointing

Not a key player in the Internet space and few products for Internet applications

Perceived by many as a cut-throat competitor that uses its dominant market position
to marginalize competition by stealing/destroying the competition's products, stifling
product innovation, and decreasing the availability of competitor products

Products have a single application focus and do not work well with or on-top of other
products

Reputation has suffered because of entanglement in antitrust and "permatemps"


Vizcaino litigation

OPPORTUNITIES

Cheaper global telecommunication costs open new markets as people connect to the
Internet

Federal trial Judge Thomas P. Jackson's breach of judicial discretion and conduct in
the Microsoft antitrust case clouded the proceedings in Microsoft's favor

Mobile phone applications and exploitation of personal digital assistants represent a


growth industry so that strategic alliances could provide Microsoft with opportunity in
a market where it currently has little or no significant presence

Popularity among people for Internet access

The demand for personal computers in American and global markets remains strong
despite the growth and increasing popularity of personal handheld devices

THREATS

Apple and Linux threaten Microsoft's 88% market share of the desktop operating
market

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Between 1993-95, Sun Microsystems, Netscape, Oracle, IBM, AOL, and other
companies moved into the Internet space and defined it while Microsoft failed to
anticipate its growth or popularity

Currency exchange rates affect demand for application/operation software and


hardware, and fluctuating currencies can negatively impact revenues in the global
marketplace

Department of Justice antitrust litigation and current appeal creates uncertainty among
employees since its outcome is not known

Hardware manufacturers (Sun Microsystems, Oracle, IBM) have collaborated on new


platform technologies that replicate much of the value of Windows

Hardware manufacturers (Sun Microsystems, Oracle, IBM, AOL, and Apple) are
issuing their own pre-bundled programs on their own hardware

Linux influence growing from 7% in 1998 to 17% in 1999

Personal computers, mobile-phones, personal digit assistants, entertainment-oriented


hand-held computers, and similar wireless products for Internet access do not require
Window operating system products

Rapid development of mobile devices that will displace/replace personal computers

Recession or economic slowdown in the U.S. or global market impacts personal


computer equipment sales and their need for an operating systems

Software piracy of commercial and consumer applications software on a global scale


threatens revenue streams

Technology life cycle is shorter and shorter

Unix dominates high-end mission-critical applications and its customers do not


believe Windows can handle these operations

SUPPLY CHAIN PROCESS


Microsoft view their supply chain which includes around 62,000 contractors, suppliers, and
vendors around the world as an extension of the Microsoft business, so their conduct,
conditions, and welfare are important to the sustainability of our business. They perform a
greenhouse gas emissions assessment of hardware suppliers. Hardware represents over 90
726

percent of our direct spending on materials from contract manufacturers. They conduct a
Supplier Satisfaction Survey with 2,300 vendors, who represent 75 percent of our total supply
chain spending. They audited 84 factories and related facilities of our contracted
manufacturing suppliers, and performed 113 follow-up site audits in 2008, to comply with the
Electronics Industry Citizenship Coalition (EICC) guidelines. They are also monitoring the
sub-tier suppliers of our contract manufacturing suppliers, completing 62 initial site
evaluations in 2008. This is part of our effort to delve deeper into our supply chain. They help
extend the life of over 500,000 personal computers each year through their Digital Pipeline
and Microsoft Authorized Refurbisher program.
At Microsoft, the supply chain is an extension of the business. As a result, part of the
commitment to operate responsibly means working to ensure that our 62,000 contractors,
suppliers, and vendors understand and share that commitment. All vendors doing business
with Microsoft must agree to abide by our Vendor Code of Conduct, which sets out their
expectations about ethical business practices, employment practices, and compliance with
environmental and worker safety requirements.
For some types of suppliers, such as those providing contract manufacturing of the Microsoftbranded hardware, we go beyond the Vendor Code of Conduct with additional requirements
and an on-site audit program.
They also work to promote positive environmental and social outcomes from our sourcing
practices, ranging from increasing market demand for greener computers and local organic
food to supporting diverse suppliers.
Their sourcing initiatives are largely decentralized across Microsoft business groups, with
central resources provided by our Corporate Global Procurement Group, Legal and Corporate
Affairs Department, and subject matter experts such as our Director of Supplier Diversity.

CORPORATE GOVERNANCE
Strong corporate governance is a fundamental component of Microsoft's business success,
and we are proud of our actions and achievements in this area. Working with management,
our Board of Directors sets strategic business objectives, ensures that Microsoft has
leadership that is dynamic and responsive, tracks performance, and institutes strong financial
controls. Taking into account the interests of other stakeholdersemployees, customers,

727

partners, suppliers, and the many communities around the world where we do businessis
important to achieving the longterm interests of Microsoft shareholders.

EMPLOYEES AND SUPPLIERS


Our 90,000 employees drive our business, and we have a responsibility to create a respectful
and rewarding work environment for them. We also view our supply chainwhich includes
around 62,000 contractors, suppliers, and vendorsas an extension of the Microsoft
business. Therefore, their conduct, conditions, and welfare are important to the sustainability
of our business.

HUMAN RIGHTS
At Microsoft, we recognize the impact that business, particularly multinational corporations,
can have on the realization of fundamental human rights. Through our business operations
and our citizenship efforts, we seek to help more people and organizations realize their full
human potential, including advancing respect for human rights around the world. To ensure
our own operations respect human rights, we have adopted policies that guide the behavior of
our employees and suppliers throughout the world on issues such as fair employment, privacy
and free expression, supply chain management, and environmental protection. Microsoft has
endorsed the United Nations (U.N.) Global Compact and is committed to its 10 principles on
human rights, labor, the environment, and anticorruption. The U.N. Global Compact is an
international public -private initiative that seeks to promote responsible corporate citizenship
and to help realize a more sustainable and inclusive global economy.

MICROSOFTS GLOBAL CITIZENSHIP


The mission of Microsoft is to help people and businesses throughout the world realize their
full potential. This drives our business and guides our corporate citizenship work. As the
worlds largest software company, we help create social and economic opportunities
wherever we work, live, and do business. Our technology innovations, our people, our
partnerships, and our day-to-day business make a meaningful contribution to the prosperity of
communities and the sustainability of the planet. Broadening access to technology and
technology skills is imperative in strengthening economies globally, unlocking the potential
of individuals and communities, and finding solutions to some of todays most pressing

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societal challenges. Microsoft is working to turn our technology expertise into an engine that
drives global progress.

STRATEGY: ADDRESS SOCIETAL CHALLENGES


1. EDUCATION
Use technology to extend access to education

2. NONPROFIT
Enhance nonprofit effectiveness and capacity through technology

3. HUMANITARIAN NEEDS AND DISASTER RESPONSE


Deploy technology to aid in disaster response

4. ACCESSIBILITY
Make technology accessible to everyone, regardless of age or ability

STRATEGY: STRENGTHEN ECONOMIES


1. JOBS AND ECONOMIC IMPACT
Create new jobs and economic opportunities

2. WORKFORCE DEVELOPMENT
Retrain workers and the unemployed with workforce technology skills

3. INNOVATION
Support and invest in innovation, research, and development

MICROSOFTS CONTRIBUTION TO SOCIETY


IN THE COMMUNITY
Microsoft provides support to communities in three ways: technology skills training,
strengthening nongovernmental organizations through technology, and engaging our
employees in their communities. With our thousands of partners around the world, we are
committed to creating sustainable technology solutions that make a lasting difference in
peoples lives.
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Microsoft Unlimited Potential is where our business and corporate citizenship efforts meet.
Unlimited Potential aims to bring the benefits of information and communications technology
to underserved communities around the world. Our work focuses on transforming education,
fostering local innovation, and enabling jobs and opportunities.

ECONOMIC IMPACT
The IT industry contributes to global economic growth and, together with the innovation it
fosters, is an essential driver of competitive twenty-first-century economies.
Microsoft has a direct economic impact in the places we do business. In FY2010, we directly
employed nearly 90,000 full-time staff worldwide - about 55,000 in the United States and
about 35,000 internationally.
Beyond the direct impact, the business model relies on a network of partners that are
tremendously valuable to their own communities; and generate further innovation, growth
and opportunity. A 2009 study by research firm International Data Corp (IDC) found the
software industry is an especially important part of the IT sector, helping stimulate economic
recovery, growth, and job creation. Findings included:

Microsoft has nearly 700,000 local partnersmost of which are small and medium-sized
enterpriseswhich develop, market, retail, and service our products.

Our local partners and the Microsoft ecosystem employ 14.9 million people, make
approximately $537 billion of their own revenue, and invest $175 billion in their local
economies.

Revenues generated by Microsoft partners remain in local communities: For every dollar
of revenue made by Microsoft, local partners make $8.70 for themselves and their local
economies.

Microsoft also runs programs to support start-up software companies. For exa mple, we offer
free products, guidance, and visibility to potential investors and clients through Microsoft
BizSpark. We helped 23,000 start-ups in the first 11 months of the program, which are
supported by a network of 1,800 venture capital partners, government agencies, and
incubators.

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OPERATING RESPONSIBILITY
Microsoft is committed to responsible and sustainable business practices that consider and
manage the social and environmental consequences of our actions.

GLOBAL PRINCIPLES
ENVIRONMENTAL SUSTAINABILITY
Microsoft is committed to software and technology innovation that helps people and
organizations around the world improve the environment. Our goals are to reduce the impact
of our operations and products and to drive responsible environmental leadership.
Microsoft Environmental Sustainability Strategy focuses on three core areas:
1. Using information technology to improve energy efficiency: They are working to unlock
technology's potential to enable a more energy-efficient economy.
2. Accelerating research breakthroughs: They are researching and developing technologies
to help solve environmental challenges.
3. Demonstrating responsible environmental leadership: They are focused on incorporating
sustainable practices into our operations and minimizing our own environmental
footprint, while growing our business.

HUMANITARIAN AND DISASTER RESPONSE


Natural disasters strike all too often, affecting our communities and our employees around the
world. Information and communications technology are critical in emergency and disaster
response situations, and Microsoft is committed to using our unique resources and expertise
to reduce the consequences of tragedies and to help communities become more resilient.

EMPLOYMENT AND WORKFORCE DEVELOPMENT


Technology is a powerful engine of economic growth and competitiveness. By enabling
innovation, technology can create new companies, industries, opportunities, and jobs. In
addition to its societal benefits, technology-led innovation is a fundamental driver of
Microsoft business.

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Therefore they look to foster innovation inside and outside our business, as well as to support
technology-related jobs and opportunities, through:

Their business and community of partners: The daily workings of their partner-based
business model create nearly 15 million family-wage information technology (IT) jobs in
communities around the world. That accounts for 42 percent of the global IT workforce.
They work to support this modeland the benefits it brings communitiesbecause they
require strong technology-based economies to sustain the business.

Microsoft innovation and R&D: Microsoft was founded on innovation, and continues to
rely on innovation to grow and strengthen their business. As such, Microsoft is investing
in Research (MSR) and a variety of product development projects that gives both a
competitive advantage and help solve some of the worlds biggest challenges.

Microsoft Unlimited Potential: Through Microsoft Unlimited Potential, they invest in


programs, products, and partnerships that catalyze the creation of jobs, business
opportunities, and innovation. They also train people in jobs skills that are needed inside
and outside the technology sector. Employment is increasingly contingent upon
proficiency in technology skills; supporting workforce skills development is good for
society and good for our business.

The Microsoft jobs and workforce development initiatives are managed by the Community
Affairs and Citizenship teams, which report to the Corporate Vice President, Global
Corporate Affairs. Innovation is a cross-company endeavor, with specific programs run by
individual business groups and Microsoft Research.

EDUCATING THE EMPLOYEES


As part of our Microsoft Unlimited Potential efforts, Microsoft is using technology to create
access to quality education for everyone, everywherewhich they see as a fundamental
human right. By educating people to use, create, and value technology, they are empowering
them to participate in the global economy and contribute to their local communities. They are
also creating a future workforce and customer base for our industry.
Students regardless of their location and socioeconomic status are our focus. With this focus,
they build software and create programs to:

732

Foster communication and collaboration among students, teachers, parents, and


employers.

Create opportunities to explore and share insight.

Improve the economic and operational efficiencies of education systems.

They also partner with and support governments, schools, and parents. In FY2010 they
increased their focus on educators.
Microsoft products, research, and programs all contribute to their education commitment.
Cross-company efforts are guided by the Vice President of Microsoft Education and a
multidisciplinary Education Advisory Council.

CONCLUSION
Microsoft with its apparent success in the present must face problems that will be evident in
the near future. Although Microsoft is a leading company in its chosen field of software
industry, the dominance and the monopoly that it enjoys can be erased and its dominance in
the market can be eclipsed by other new companies in the industry. The paper has identified
several problems inherent to the company and have highlighted the effects that these
negatives factors will bring on the overall stability of the company in the future. Problems
such as poor designs, the challenge of other competitors like Linux and tightening
government control are some of the hindrances that will eventually obstruct Microsoft in its
road to progress. To eliminate and to diminish the impact of these problems and difficulties,
the company must undertake needed reforms and initiate policies that will improve certain
aspects of the company. To fully combat the problems being faced by Microsoft, the paper
recommends some course of actions stated below. Microsoft should adapt stringent
maintenance and reliability on its products. It must implement measures that would help curb
the effects of computer viruses and the company must employ stiff computer firewalls against
hackers and identity thieves. Assuming viruses do get into the system, Microsoft must have
an immediate manpower and technical resources to remedy the situation and in addressing
the issues, and helping the costumers with regards to their computer problems. This is very
vital since the absence of frequent maintenance and a customer service hotline could
adversely affect the companys reputation, profits and costumers. With regards to its products
and softwares, Microsoft must be extra watchful when it is going to release a product. It must

733

consider all legal and political changes occurring in the society to avoid being sued and fined
with a heavy sum. This incident is not only counterproductive to the goals of the company
but also damaging to a companys reputation. Microsoft can also win against piracy by
making its products pirate proof, making all softwares and products unable to function when
they are recopies of the original. Employees should also be checked and security measures
should be implemented in the office to prevent the leak of current projects and new softwares
not yet released for the market. In relation to the challenge posed by Linux and the advent of
open source system, Microsoft can use and improve its quality management and maintenance
with regards to a proper operations management. First, Microsoft in order to survive, must
step up its quality management in relative to its products and softwares. Stepping up the level
of quality management is not only improving the excellence and superiority of its products
but also listening to the desires and wishes of the costumers since they are ones that must be
satisfied by the company. Microsoft must replicate the steps and actions that they took that
enabled their Xbox to be a success. It must listen to feedbacks from the public regarding its
products and implementing these feedbacks as a solid answer to the expansion of Linux.

REFERENCES
http://www.microsoft.com/enable/microsoft/history.aspx
http://en.wikipedia.org/wiki/History_of_Microsoft
http://www.brighthub.com/computing/windows-platform/articles/45030.aspx
http://www.microsoft.com/en-us/dynamics/products/nav-supply -chain.aspx
http://www.supplychainer.com/50226711/microsoft_launches_supply_chain_center_of_excel
lence_with_infosys.php
http://www.piesoftwareinc.co.uk/textonly/microsoft.html
http://www.google.com.pk/search?q=microsoft+history+corporation&hl=en&client=firefoxa&hs=iDl&rls=org.mozilla:enUS:official&prmd=ivns&tbs=tl:1&tbo=u&ei=_jucTYaQGoyJrAeC47yLCg&sa=X&oi=timel
ine_result&ct=title&resnum=11&ved=0CGoQ5wIwCg
http://www.google.com.pk/search?q=microsoft+history+corporation&ie=utf-8&oe=utf8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

734

735

GLAXO SMITH KLINE

736

HISTORY
GLAXOWELLCOME
In 1880, Burroughs Wellcome & Company was founded in London by American
pharmacists Henry Wellcome and Silas Burroughs. The Wellcome Tropical Research
Laboratories opened in 1902. In 1959 the Wellcome Company bought Cooper, McDougall &
Robertson Inc. to become more active in animal health. The Wellcome Company production
centre was moved from New York to North Carolina in 1970 and the following year another
research centre was built.
Glaxo was founded in Bunnythor, New Zealand in 1904. Originally Glaxo was a baby food
manufacturer processing local milk into a baby food by the same name: the product was sold
in the 1930s under the slogan "Glaxo builds bonny babies". Still visible on the main street of
Bunnythorpe is a derelict dairy factory (factory for drying and processing cows' milk into
powder) with the original Glaxo logo clearly visible, but nothing to indicate that this was the
start of a major multinational company.
Glaxo became Glaxo Laboratories , and opened new units in London in 1935. Glaxo
Laboratories bought two companies, Joseph Nathan and Allen & Hanburys, in 1947 and 1958
respectively. After the Company bought Meyer Laboratories in 1978, it started to play an
important role in the US market. In 1983 the American arm Glaxo Inc. moved to Research
Triangle Park (US headquarters/research) and Zebulon (US manufacturing) in North
Carolina. Burroughs Wellcome and Glaxo merged in 1995 to form GlaxoWellcome . In the
same year, GlaxoWellcome opened its Medicine Research Centre in Stevenage. Three years
later GlaxoWellcome bought Polfa Poznan Company in Poland.

SMITHKLINE BEECHAM
In 1843, Thomas Beecham launched his Beecham's Pills laxative in England giving birth to
the Beecham Group.
Beechams opened its first factory in St Helens, Lancashire, England for rapid production of
medicines in 1859. By the 1960s it was extensively involved in pharmaceuticals.

THE GSK HEADQUARTERS IN BRENTFORD


In 1830, John K. Smith opened its first pharmacy in Philadelphia. In 1865 Mahlon Kline
joined the business which, 10 years later, became Smith, Kline & Co. Subsequently, in 1891,
737

it merged with French, Richard and Company. It changed its name to Smith Kline & French
Laboratories as it focused more on research in 1929. Years later, Smith Kline & French
Laboratories opened a new laboratory in Philadelphia; it then bought Norden Laboratories, a
business doing research into animal health.
Smith Kline & French Laboratories bought Recherche et Industrie Thrapeutiques (Belgium)
in 1963 to order to focus on vaccines. The Company started to expand globally buying seven
laboratories in Canada and the US in 1969. In 1982, it bought Allergan, a manufacturer of
eye and skincare products. The Company merged with Beckman Inc. later that year and then
changed its name to SmithKline Beckman.
In 1988, SmithKline Beckman bought its biggest competitor, International Clinical
Laboratories, and in 1989 merged with Beecham to form SmithKline Beecham plc. The
headquarters of the Company were then moved to England. To expand research &
development in the US, SmithKline Beecham bought a new research center in 1995. Another
new research centre at New Frontiers Science Park in Harlow was opened in 1997.
In 2000, Glaxo Wellcome and SmithKline Beecham merged to form GlaxoSmithKline.

STRENGTHS & WEAKNESSES ANALYSIS


The GlaxoSmithKline Plc - SWOT Analysis company profile is the essential source for toplevel company data and information. GlaxoSmithKline Plc - SWOT Analysis examines the
companys key business structure and operations, history and products, and provides
summary analysis of its key revenue lines and strategy. GlaxoSmithKline (GSK) is one of the
worlds leading research-based pharmaceutical and healthcare companies. The company is
engaged in the discovery, development, manufacturing and marketing of pharmaceutical and
consumer health-related products. The company primarily operates in 120 countries and its
products are sold in more than 150 countries. GSK is headquartered in Brentford, the UK and
employed 99,913 people as of December 31, 2009. The company recorded revenues of
28,368 million ($44,422.3 million-) during the financial year (FY) ended December 2009,
an increase of 16.5% over FY2008. The operating profit of the company was 8,425 million
($13,193 million-) during FY2009, an increase of 18% over FY2008. The net profit was
5,669 million ($8,877.3 million-) in FY2009, an increase of 20.3% over FY2008. -

738

Calculated using the constant conversion rate of 1 = $1.56593 for the year ended December
31, 2009.
The GlaxoSmithKline Plc - SWOT Analysis company profile is the essential source for tople vel company data and information. GlaxoSmithKline Plc - SWOT Analysis examines the
companys key business structure and operations, history and products, and provides
summary analysis of its key revenue lines and strategy. GlaxoSmithKline (GSK) is one of the
worlds leading research-based pharmaceutical and healthcare companies. The company is
engaged in the discovery, development, manufacturing and marketing of pharmaceutical and
consumer health-related products. The company primarily operates in 120 countries and its
products are sold in more than 150 countries. GSK is headquartered in Brentford, the UK and
employed 99,913 people as of December 31, 2009. The company recorded revenues of
28,368 million ($44,422.3 million-) during the financial year (FY) ended December 2009,
an increase of 16.5% over FY2008. The operating profit of the company was 8,425 million
($13,193 million-) during FY2009, an increase of 18% over FY2008. The net profit was
5,669 million ($8,877.3 million-) in FY2009, an increase of 20.3% over FY2008. Calculated using the constant conversion rate of 1 = $1.56593 for the year ended December
31, 2009.

STRENGTHS:
Strong sales and marketing infrastructure, positions GSK as a marketing partner of
choice.
Industry-leading early to mid stage R&D pipeline
Robust sales growth forecast for launch portfolio
Industry-leading player with regard to implementation of life-cycle management
strategies
Strong business fundamentals and robust balance sheet
Demonstrated ability to drive cost elimination

WEAKNESSES
Mature portfolio of marketed products becoming increasingly exposure to generic
competition

739

Lack of blockbuster product launches following creation (via merger) in 2000


Perceived safety concerns relating to key Avandia product franchise
High dependence on low growth/ highly competitive CNS and respiratory markets
Failure of R&D pipeline to deliver initial commercial expectation.

INTERNAL ENVIRONMENT:
GlaxoSmithKline main objective that they have described as a challenging and inspiriting is
improve the quality of human life by enabling people to do more, feel better and live longer
(2007). They are also the only pharmaceutical company that are developing and researching
for the medicine and vaccine for the World Health Organization or WHOs three priority
which are the HIV/AIDS, tuberculosis and malaria. As of now the company has already
developed some of the leading medicines in the said diseases worldwide (2007).
The company has its main headquarter in the UK and has an operation site in the US
and consider as one of the leader in the pharmaceutical industry in having the estimated seven
percent of the pharmaceutical market in the world (2007).
As of now the company is spending more than 300,000 or US$562,200 in
developing and enhancing their products and employs 15,000 people to create the team that
will do the researching and developing of the medicines and healthcare products. The
company screens over 65 million of compounds in order for them to search for new pr oducts.
Their main targets are to produce medicines and drugs that can help to treat the six major
disease areas namely: asthma, diabetes, mental health, virus control and the digestive
condition. They are also the leader in developing vaccines and treatments for cancer. In 2007,
the company had supply one fourth of the worlds vaccines and had a 23 vaccines in clinical
development (2007).
The company has their approximately 100,000 employees in 117 countries. It is one
of the biggest producers of medicines in the world by producing almost four billion of packs
of healthcare products as well as medicine every year (2007).
The company is not only focusing in purely medicine categories of their products, in
fact they are also offering products that are leaders in their categories such as the Gaviscon
and Panadol for their over-the-counter medicine or OTC; their Aquafresh and Macleans for
their dental products; Nicoretter or Niquitin for their smoking control products; and their
740

Lucozade, Ribena and Horlicks for their nutritional healthcare drinks. They are also showing
good deeds by donating 155 million of albendazole tables that can help to eliminate
lymphativ filariasis or known as the elephantiasis (2007).
It is essential for our environmental sustainability goals to engage employees at all levels of
the organization. The new strategy provides a framework through which each individual can
clearly see how they can act and make a contribution.
We provide training and orientation to our business leaders so they understand the issues and
how best to respond. Specific sustainability and environmental training is managed by
individual sites and is relevant to job roles. Sustainability and environment professionals
receive induction training and undertake regular updates to ensure they are aware of the latest
technical information in their fields, but we need to continue to upgrade the level of
competence of our site environmental staff.

AWARENESS
We raise employee awareness of environmental sustainability through the intranet, regular
internal publications and events. We publish articles on sustainability and environment in
Spirit, our internal magazine, and brief news stories on internal web pages. A number of site
bulletins and functional newsletters also carry articles on sustainability. However, this has
been passive communication and we need to develop more interactive communications to
engage employees.
In 2009 we launched a climate change micro site called Climate Change, GSK and You. The
site explains the importance of climate change, why everyone needs to act, what GSK is
doing and what individuals can do. It includes items that report action to cut carbon dioxide
emissions across the business, and celebrates successes.
Several other areas of the GSK intranet support sustainability and environment, including the
Sustainability and Environment Community site. It shares news on sustainability and
environmental programs within the Group, holds supporting materials for the EHSS
Framework, such as the policy, standards and guidelines, and for training materials and other
documents. We also use it to collect data for measuring performance and reporting results.
Many of our sites celebrate Earth week to raise awareness of environmental issues and to
encourage integrating environmental concerns into the GSK culture and personal lifestyles.

741

Sustainability Awards
The CEOs Sustainability Awards programme recognizes GSK teams for innovation that
creates benefits for society, the environment and our business creativity that achieves a
genuine step change towards sustainability. We publicize the innovative practices that win
awards on a dedicated intranet site.
Any team in GSK may be considered for this award, except from the Sustainability and
Environment Centre of Excellence which administers the scheme. An internal review
committee agrees a shortlist and winners are chosen by a panel that includes experts from
academia, government and public interest groups. Each winner receives a trophy and selects a
charity to receive a donation from GSK.
In 2010 there were 69 entries from 19 countries and nine projects were honored. The winners
in the three categories were:

Sustainable Science & Technology R&D Chemical Development at Steven age in


the UK for a project improving the sustainability of darapladib manufacturing.

Environmental Sustainability Global Manufacturing and Supply Production


Procurement, for embedding sustainability in production procurement ways of working.
The Procurement team developed tools to help staff select suppliers whose production
processes are more sustainable. The tool identifies suppliers that are using sustainable
materials, are efficient at manufacturing our products, have sustainability at the heart of their
organization and understand the impact of their carbon footprint in relation to the products or
processes they use. A training programme has raised awareness and understanding of the
issues, stimulating changes to culture, behaviors and perspectives.

Workforce Sustainability Global Manufacturing and Supply in Gurgaon, India for its
project Nurturing Life, which achieved substantial improvements in sickness and safety at
our Horlicks plants. See more in the feature box in the Health, Safety and Wellbeing section.

742

ORGANIZATIONAL CULTURE:
RESILIENT, DIVERSE AND PERFORMANCE-BASED WORKFORCE
With a 7% share of the world market for pharmaceutical products, the company is one of the
global players in this branch. GlaxoSmithKline (GSK) recognizes that, to succeed in a highly
competitive environment, it needs corporate culture that protects and enhances the resilience
of its workforce. There is recognition that a lack of resilience can adversely impact GSK in
many areas: lack of engagement/commitment, impaired business performance, burnout and in
the area of compliance/litigation. In this context, Team Resilience is an important strategy
and set of management tools to enhance performance and provide human sustainability to
GSK. Resilience is defined as the ability to succeed personally and professionally in the
midst of a high pressured, fast moving and continuously changing environment. The
Resilience strategy represents a proactive, preventive and participative approach. It is driven
by top management engagement and commitment. It involves the use of sim ple and standard
GSK process improvement tools. The interventions that follow assessment concentrate on
individuals, teams and the wider organization. Impact and outcomes are closely evaluated.
Management at all levels are responsible for addressing pressure at GSK. A group
responsible for dealing with employee health supports the workforce and management in
coping with work-related stress, in partnership with Human Resources.
Managers are supported to promote "team resilience" and support the psychosocial wellbeing of their employees. This is achieved through open communication on the sources of
pressure and the understanding of roles, objectives and personal priorities of the individual
and the company. Over 2000 people are currently actively participating in the "team
resilience" process. In addition, "personal resilience" is offered as a course through GSK's
own learning system. This course can help employees to improve their personal resilience
and can be attended either before or during the "team resilience" process.
"GlaxoSmithKline is committed to providing a safe, healthy and productive work
environment for all its employees and for others, who work on, or visit, its sites. A work
environment conducive to good physical, emotional and psychological health is one that is
stimulating, challenging and enriching. Such a work environment strives to meet personal
needs and business goals through enhancing individual health and well being and by
improving the way work is accomplished. This enables individua ls and teams to maximize
743

their potential and contributes to sustainable business success. In GSK this is achieved
through a partnership between the businesses which make up GSK, their line management,
health, safety and human resource professionals and Corporate Shared Service Specialist
support groups."

EXTERNAL ENVIRONMENT:
PHARMACEUTICALS IN THE ENVIRONMENT ISSUE
Pharmaceutical products are designed to cure and treat disease, and to help people be healthy.
However, like many foods and nutritional supplements, they are not always completely
absorbed or broken down by the body. Residues of the pharmaceutical or its breakdown
products (i.e., metabolites) may be excreted as part of normal biological processes. Sewage
treatment systems are not always able to remove these substances and the residues sometimes
pass through treatment facilities and enter rivers, streams or lakes.
Residues of some pharmaceuticals may persist in the environment. Pharmaceutical products
may also enter the environment from unused products being disposed of either into the
sewerage system or in landfill sites. Some pharmaceuticals have been detected in the
environment at very low levels. Pharmaceuticals have probably been in surface waters since
people first started taking medicines ma ny years ago. However, as a result of advances in
analytical techniques, only now can they be detected.
Published studies to date report no appreciable risk to human health for the GSK compounds
considered, but we are aware of increasing reports of studies on pharmaceuticals indicating
potential impacts on aquatic life. GSK is committed to ensuring that our products do not
adversely affect people and the environment. We carry out state-of-the -art environmental
testing on all our pharmaceuticals and use these data in risk assessment models to evaluate
potential for harm to human health and the environment. Evaluations of our compounds do
not indicate an adverse impact to public health or the environment from post-patient releases
to the environment. GSK continues to work with industry groups and regulators to develop
the science and methodologies to evaluate our products and management practices on an ongoing basis.

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GLAXOSMITHKLINE POSITION
1. GSK acknowledges that the presence of low levels of pharmaceuticals in the environment
is a stated concern of some parties and we are working to address the issues. We are
committed to ensuring that our products do not adversely affect people, aquatic life or the
environment in general.
2. As a science -based company, we have an in-depth understanding of the chemical and
biological attributes of our pharmaceutical compounds. We leverage the results of research
by academic, industrial and government organizations and contribute our expertise to
advance knowledge of the environmental impacts of pharmaceuticals.
3. GSK tests and assesses for potential effects on the environment to meet current regulatory
requirements and GSKs internal global Environment, Health and Safety Standards for all
new Pharmaceutical & Consumer Healthcare products before they are launched. In addition,
GSK reviews the evolving science in this area to ensure that we have the best possible
understanding of potential risks and ways to minimize them.
4. We regularly update our testing protocols for new and existing GSK pharmaceuticals as
knowledge and testing methods improve. We conduct tests to determine effects from both
short-term (acute) and long-term (chronic) exposures of aquatic organisms to pharmaceuticals
in the environment, as appropriate for a particular compound based on its environmental
behavior.
5. If environmental risk assessments indicate areas of concern, GSK will communicate with
affected parties such as regulators, patient groups, and others to find methods to manage these
in the context of the health benefits derived by patients.
6. GSK will work with relevant regulatory agencies around the world responsible for
pharmaceutical product approvals to ensure that sufficient data and assessments are available
to allow an understanding of the therapeutic benefit and environmental impact of our
products.
7. At the same time, we will make information on the environmental hazards and impacts of
our products readily accessible.
Data sheets on our pharmaceutical products can be found on www.gsk.com
GSK publishes environmental data, assessments and related topics in the scientific literature
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GSK works with regulators to ensure that relevant precautions are included on labels and in
information to patients.
8. GSK will constantly strive to avoid harm to public health and the environment by
determining the environmental fate and effects of new compounds as part of GSKs
evaluation and risk mitigation measures to manage any adverse impacts of our products.

MANAGEMENT PRACTICES
GSKs Environmental Sustainability Centre of Excellence (CoE) is responsible for
developing strategy, setting standards and providing expert support to the businesses. It will
work with executives with responsibility for sustainability in each business, providing
expert ise and programme and data management and helping to identify step changes towards
sustainability.
Each business, as well as R&D and functional areas such as Procurement and Packaging, is
responding appropriately to make its own contribution to GSKs goals and sustainability
priorities. For example:

Pharmaceutical manufacturing has set up a Sustainable Manufacturing Centre of


Excellence which is providing support and direction to improve sites processes and
reduce waste

The vaccines business has created a Sustainability Council of senior managers with
climate change as its top environmental priority

R&D has a Platform Technology and Science (PTS) group which has developed a
sustainability strategy for R&D

Consumer Healthcare has developed a Bright Green strategy covering six key
environmental sustainability areas

US Pharmaceuticals is piloting a recycling scheme for our respiratory product inhalers


and a similar pilot is starting in the UK in 2011.

GOVERNANCE
Overall responsibility for sustainability and environment rests with the Corporate Executive
Team (CET) which from 2011 will formally review sustainability performance each year.

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A new Sustainability Steering Team of senior executives will oversee GSK's sustainability
plans and programs from 2011. It will meet quarterly to review progress against targets,
identify emergent issues and opportunities, prioritize allocation of funding and revise detailed
objectives.
Board subcommittees have oversight respectively of risk and compliance, audit, and
corporate responsibility and regularly review performance.

POLICY
Environmental sustainability is a key part of our environment, health, safety and
sustainability (EHSS) policy, which defines our aspiration to global leadership and
excellence. The current policy was approved by the CET in 2008. It covers EHSS
fundamentals such as the approach to risk management, our ambition for sustainability and
our commitment to transparency.

MANAGEMENT SYSTEMS
GSK has a comprehensive set of internal standards on environment and sustainability issues
which are accessible to all operations via the intranet.
We use a management system aligned with recognized international standards such as ISO
14001. It is based on a structured framework building on the vision and policies and
supported by standards, guidance materials, tools, training, recognition and audits that help
the businesses to manage these issues.
Targets have been set for five-year periods, originally to 2005 and then 2010. We are
currently developing detailed targets to support the revised environmental sustainability
strategy.
We use internal audit teams to assess systems for managing risks and impacts, compliance
with legislation and performance against our standards. Audits also assess whether
appropriate management systems are in use.

INTEGRATION IN BUSINESS PROCESSES


Our scientists use the Environment, Health and Safety Milestone Aligned Process (EHS
MAP) to integrate sustainability in everyday activity. It helps to identify and address issues
during new product development and supply activities. The EHS MAP helps scientists

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understand the principles and impacts and how to manage them and can identify
opportunities to improve EHS impacts.

PROCUREMENT AND ACQUISITIONS


GSK procurement activities support our sustainability and environmental goals by choosing
energy-efficient equipment and renewable and recycled materials, and working with suppliers
to manage sustainability and environmental risks in our supply chain.
Our due diligence process for acquiring and divesting businesses ensures that sustainability
and environmental issues are considered in contract negotiations and that adequate
management systems are in place. We work with acquired companies to align their
sustainability and environmental, health and safety practices with GSKs.

WAYS IN WHICH STRENGTHS ARE EXPLOITED


The discovery, development and manufacture of pharmaceutical and consumer products
involve the use of hazardous materials and processes. All sites incorporate emergency
response and crisis management programs in their management plans. These programs ensure
that accidents are effectively managed when they occur and that any impact on our business,
the local community and the environment is minimized. Each site conducts an annual review
of its internal emergency response programs and technical capabilities and develops plans to
address any areas needing improvement. Find out more on Health and Safety.
We remain vigilant to stay in full compliance with all environmental laws and regulations but
incurred three environmental fines in 2010.
The largest of these was $16,708 for exceeding acidity limits and failure to notify the local
authority in Upper Merion, US, of a sludge discharge associated with new production
activities. The other fines were for $500 and $250 for sites in the US.

FACTORS CONTRIBUTING TO THE SUCCESS OF GSK


A Decade of Success: GlaxoSmithKline Marks 10 Years as one of The 50 Best Employers in
Canada
Company celebrates fifth consecutive year as a top pharmaceutical employer

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MISSISSAUGA, ON (OCTOBER 28 - 2010)

For the 10th consecutive year,

GlaxoSmithKline has been named one of the 50 Best Employers in Canada, ranking 20th,
following this years annual Hewitt Employee Engagement Survey. This is also the fifth
successive year that GSK has been the top pharmaceutical employer, according to the results
released today by Hewitt. The national list was published by Macleans magazine in
alphabetical order while CanadianBusiness.com, the Toronto Star and La Presse are expected
to publish the results in the beginning of November 2010.

Having GSK recognized as one of the Best Employers in Canada for the last decade is a
milestone achievement for the company - one which reflects our strategic focus on
empowering and engaging our people, said Paul Lucas, President and CEO,
GlaxoSmithKline Inc. Employee participation in this annual survey provides valuable
insight into what GSK is doing well and identifies the areas where we, as a company, should
continue to improve. We value this direct feedback from our employees and strive to enhance
our programs so that GSK remains a great place to work.
This years survey highlights several key factors that contributed to GSKs recognition as a
Best Employer in Canada, including the companys commitment to the health and well-being
of its employees, leadership demonstrated by senior management, physical work
environment, relationships between co-workers, and the companys dedication to corporate
social responsibility.

Over the years, GSK has progressively been working on enhancing and improving facilities,
processes and programs to keep employees engaged and motivated. Among a myriad of
programs and initiatives, the company offers career development programs, comprehensive
wellness services, a compassionate leave program, an employee charitable giving program,
and competitive maternity/parental leave.
I am particularly pleased that this year GSKs dedication to corporate social responsibility
was recognized as one of the key contributors to being named among the top employers in the
country, said Mr. Lucas. At GSK, we are committed to running our business responsibly
and to giving back to the communities in which we live and work.

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Since 1994, GSK in conjunction with The GlaxoSmithKline Foundation has contributed more
than $26 million in humanitarian product donations to Health Partners International of
Canada.
Together with the Canadian Hospice Palliative Care Association and a network of concerned
stakeholders, the GSK Foundation is working to create a public policy environme nt that
recognizes and supports quality end-of-life care as an integral component of Canadas health
care system.
Every year GSK Global publishes a Corporate Social Responsibility Report. The 2009
Corporate Social Responsibility Report outlines commitments in the areas of contribution to
global health, access to medicines, research practices, ethical conduct, environmental
sustainability, supply chains, its employees, human rights, public policy and patient
advocacy, and work with communities.

ABOUT GLAXOSMITHKLINE
GlaxoSmithKline (GSK) is a leading research-based pharmaceutical company with a
challenging and inspiring mission: to improve the quality of human life by enabling people to
do more, feel better, and live longer. This mission gives GSK the purpose to develop
innovative medicines, vaccines and healthcare solutions that help millions of people. GSK is
consistently recognized as one of the 50 best employers in Canada and is a top 15 investor in
Canadian research and development, contributing more than $144 million in 2009 alone.
With a proud tradition of charitable and community support, GSK is designated a Caring
Company by Imagine Canada.

CONCLUSION
The Pharmaceutical industry has a lot of yet untapped potential and it will be interesting to
see how the industry matures over the long term. Undoubtedly, the long history and global
expertise of firms like GSK will stand it in good stated to create and benefit from emerging
global opportunities. Notwithstanding its strengths, complacency must be guarded against
because smaller, agile and innovative firms are on the prowl and all it takes for the small
upstarts is a super drug that can change the entire face of the industry. Weve seen it in
happen in the Information & Communications industry, for all w e know pharmaceuticals may
just be next.
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REFERENCES
http://ivythesis.typepad.com/term_paper_topics/2009/09/glaxosmithklineplc.html#ixzz1KUvKNbuD
http://www.enterprise-for-health.org/network/members/glaxosmithkline.html
http://www.bizadvantage.com/samples/1316.pdf
http://www.ntu.edu.sg/ntc/startups/marketplan.html
http://www.ucc.ie/quality/INTERNET/PESTAnalysis.pdf
www.gsk.com
http://www.mbaware.com/busin.html
www.datamonitor.com
- healthcare reports and company profiles Reference Code: 1316
- Publication Date: 20/08/2001 to 30/08/03
Btiz-Lazo, B. and Holland, S (June 2001) Strategy and structure of the pharmaceutical
industry, Open University
Johnson G and Scholes K (2002) Exploring Corporate Strategy, (Prentice Hall)

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PROCTER AND GAMBLE

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HISTORY IN PAKISTAN:
Procter & Gamble Pakistan, headquartered in Karachi, commenced operations in Pakistan in
1991. Our goal was to become the finest global consumer goods company operating locally
in Pakistan. To fulfill this goal, we are serving Pakistani consumers with premium quality
brands including Head & Shoulders, Pantene, Ariel, Safeguard, Pampers and Always that
strive to make everyday lives better.
As a company with vast global experience, P&G has always believed in the potent ial
Pakistan has as a country. Since its inception in Pakistan, P&G has invested significantly in
Pakistan. In 1994 P&G acquired a soap-manufacturing facility Hub, Baluchistan. In 2004, a
PUR facility was set up to produce P&Gs water purifying technology. The P&G Hub plant is
the first of its kind in the world. It provides people access to safe drinking water and is able to
export millions of liters across the globe. Today, the Hub plant is equipped with state -of-theart manufacturing technologies and quality assurance processes and systems, reflecting the
company's values of safe, hygienic and ethical manufacturing practices.
P&G Pakistan headquarters are consistently upgraded to the company's progressive values.
Investments of $ 1.6 million have taken place in the work-space environment to date. The
P&G Pakistan head office today hosts high-speed digital networks and advanced systems and
facilities.
Strengthening its commitment to invest further in Pakistan, the company has recently setup a
state -of-the-art Ariel plant at Port Qasim. The launch of this manufacturing facility is
testimony of P&Gs successful history in the country and symbolizes P&Gs confidence that
Pakistan will continue to provide a stable and conducive business environment over the longterm. The facility is expected to improve local industrialization prospects by creating
tremendous potential opportunity of business over the next few years.
P&G has attracted outstanding individuals since the day it began operations in Pakistan.
Employees are the foundation of P&G Pakistans success. The company nurtures local talent
in the country and has invested significantly in training and development of its employees.
Currently more than 50 employees from Pakistan are serving in P&G locations abroad.

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COMPANY OPERATIONS:
In July 1, 2007, the company's operations are categorized into three "Global Business Units"
with each Global Business Unit divided into "Business Segments" according to the
company's March 2009 earnings release.

BEAUTY & GROOMING

Beauty segment

Grooming segment

HOUSEHOLD CARE

BABY CARE AND FAMILY CARE SEGMENT

FABRIC CARE AND HOME CARE SEGMENT

HEALTH AND WELL-BEING

HEALTH CARE SEGMENT

SNACKS AND PET CARE SEGMENT

MANAGEMENT AND STAFF:


The board of directors of Procter & Gamble currently has twelve members: Robert A.
McDonald, Charles Lee, Ralph Snyderman, M.D., Margaret Whitman, James McNerney,
Johnathan Rodgers , Ernesto Zedillo, Scott Cook, Patricia A. Woertz, and Kenneth Chenault.
In March 2011 Rajat Gupta resigned from the board after an SEC accusation of Galleon
Group insider trading.
In October 2008, P&G was named one of "Canada's Top 100 Employers" by Mediacorp
Canada Inc., and was featured in Maclean's newsmagazine . Later that month, P&G was also
named one of
Greater Toronto's Top Employers, which was announced by the Toronto Star newspaper.
Motivation act as fuel as a motor cannot run without fuel, workers in an organization need
motivation as such to achieve their goals. P&G's EVP (Employee Value Proposition) unique
is that it is truly holistic, incorporating as many as six pillars that are deemed as the most
important drivers of emplo yee satisfaction.
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PURPOSE OF THE COMPANY:


P&G will provide branded products and services of superior quality and value that improve
the lives of the worlds consumers, now and for generations to come. As a result, consumers
will reward the company with lea dership sales, profit and value creation, allowing the
company people, shareholders and the communities in which we live and work to prosper.
The Purpose of company is to works to unify them in a common cause and growth strategy. It
is powerful because it promotes a simple idea to improve the lives of the worlds consumers
every day. P&G grows by touching and improving more consumers lives in more parts of
the world...more completely. While this statement defines their commercial opportunity, their
culture reflects the broader opportunity of improving lives through and beyond our branded
products and services.

COMPANY VALUES:
INTEGRITY

They always try to do the right thing.

They are honest and straightforward with each other.

They operate within the letter and spirit of the law.

They uphold the values and principles of P&G in every action and decision.

They are data-based and intellectually honest in advocating proposals, including


recognizing risks.

LEADERSHIP

They are all leaders in their area of responsibility, with a deep commitment to
delivering leadership results.

They have a clear vision of where we are going.

They focus our resources to achieve leadership objectives and strategies.

They develop the capability to deliver our strategies and eliminate or ganizational
barriers.

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OWNERSHIP

They accept personal accountability to meet their business needs, improve their
systems and help others improve their effectiveness.

They all act like owners, treating the Companys assets as their own and behaving
with the Companys long-term success in mind.

PASSION FOR WINNING

They are determined to be the best at doing what matters most.

They have a healthy dissatisfaction with the status quo.

They have a compelling desire to improve and to win in the marketplace.

COMPANY PRINCIPLES:
SHOW RESPECT FOR ALL INDIVIDUALS

They believe that all individuals can and want to contribute to their fullest potential.

They value differences.

They inspire and enable people to achieve high expectations, standards and
challenging goals.

STRATEGICALLY FOCUSED IN THEIR WORK

They operate against clearly articulated and aligned objectives and strategies.

They only do work and only ask for work that adds value to the business.

They simplify, standardize and streamline the current work whenever possible.

VALUE PERSONAL MASTERY

They believe it is the responsibility of all individuals to continually develop


themselves and others.

They encourage and expect outstanding technical mastery and executional excellence.

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SEEK TO BE THE BEST

They strive to be the best in all areas of strategic importance to the Company.

They benchmark their performance rigorously versus the very best internally and
externally.

They learn from both their successes and their failures.

EXTERNALLY FOCUSED

They develop superior understanding of consumers and their needs.

They create and deliver products, packaging and concepts that build winning brand
equities.

They develop close, mutually productive relationships with their customers and their
suppliers.

They are good corporate citizens.

STRENGTHS:
v Wide variety of products forming its business segments.
v Stable and established reputation in the market.
v Dominant market position.
v Continuous modification of the structure and internal processes to maximize global
advantage.
v Launching of various initiatives to facilitate knowledge exchange and best practices.
v Strengthened workforce.
v Reward system and training programs.
P&G focuses on five core strengths required to win in the consumer products industry. They
are designed to le ad in each of these areas.

CONSUMER UNDERSTANDING
No company in the world has invested more in market research than P&G. They interact with
more than five million consumers each year in nearly 100 countries. They conduct over
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20,000 research studies every year, and invest more than $400 million annually in consumer
understanding. The insights they gain help us identify opportunities for innovation and better
serve and communicate with their consumers.

INNOVATION
P&G is the industrys innovation leader. Nearly all organic sales growth over the past nine
years has come from new brands or improved products. They also leverage a global network
of research partnersand more than half of all product innovation coming from P&G today
includes at least one major component from an external partner..

Brand-Building
P&G is the brand-building leader of their industry. They have built the strongest portfolio of
brands in the industry with 50 leadership brands that are among some of the worlds bestknown household namesand which together make up 90% of P&Gs sales and more than
90% of profits. Twenty-three of these brands each generate more than $1 billion dollars in
annual sales.

Go-to -Market Capabilities


They have established industry-leading go-to-market capabilities. P&G is consistently ranked
by leading retailers in industry surveys as a preferred supplier. They were also frequently
ranked as the industry leader in a wide range of capabilities, including clearest company
strategy, brands most important to retailers, strong business fundamentals and innovative
marketing programs.

Scale
P&G is creating scale advantage by integrating across their enterprise, consistently acting as
one Company across their businesses and markets. By harnessing the strength of their brands
and categories as one Company, they can better serve more consumers around the globe.
With all of their brands, businesses, and people working in unison, they can create scale
advantages by allocating resources more strategically and efficiently than any individual
business can do on its own. This combination is greater than the sum of its partsand they
are focused on maximizing its potential.

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ACHIEVEMENTS:
In 20 years, P&&G has made remarkable achievements in following areas:

Building Leading Brands

P&&G is the largest consumer products company in China, with annual sales of US$2
billion. We are in No. 1 market share position in all categories where we compete. Rejoice,
Safeguard, Olay, Pampers, Tide and Gillette are currently No.1 brands in China's hair care,
personal cleansing, skin care, baby care, powder detergent and male grooming category
respectively.

Registering Strong Business Growth

P&&G Greater China is one of the fastest growing markets in the world. It is at No.2
position in volume, and among the top 5 markets in value.

Building A Best-in-Class Organization

Together with company business growth, P&G's China staff has grown rapidly. Over 97% of
our Chinese workforce is made up by Chinese nationals. P&&G China exports more
managerial staff to other P&&G markets than the other way around.

Committing to Being A Good Corporate Citizen

P&G has donated over 80 million Yuan (US$10 million) to various charity causes in China,
with Project Hope being the largest recipient of P&G corporate charity donations.

WEAKNESSES:
v Jagers form of leadership.
v Leadership and management style not fit to the corporate culture.
v Wrong timing strategic decision.
v Transfers and relocations led to employee behavioral problems.

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NEW STRATEGIES INVOLVES SUBSTANTIAL COSTS


One of the weaknesses of Procter and gamble is that its implementation of new strategies
involves substantial and significant costs. Additional costs for the company would enable to
allocate larger amounts of money, thus contributing to the additional problems of the
company. In this regard, significant allocating and budgeting must be adjusted in order to
cope with additional costs.

RETRENCHMENT
Another weakness of the company is retrenchment being done, thus, affecting the morale of
the employees. Due to cost cutting, an organization may have the option to retrench, relocate
or even fire their employees to be able to cope with the needed changes being faced by the
company. However, because of such actions, many employees would be threatened, not only
in terms of their performance in the company, but their individual skills and the abilities as
well. In this regard, this is being treated as a weakness of the company, as it provides fear and
anxiety to the employees, being included in the retrenchment and job reduction initiatives.

LOWER REALIZATION OF THE COMPANY


Lower realization means the inability of the company to think about the different problems
and the solutions that might be implemented, In this regard, low realization of the company
entails inactive and passive approach in terms of problems and challenges.

EXTERNAL ENVIRONMENT
ECONOMIC

Focus their greatest resources on the 43 best-selling brands.

Shed 15% of the management staff to help cope with the tough economy.

Adapted to the recession by lowering earning projections.

SOCIAL CULTURAL

HAVE TO KEEP UP WITH CHANGING TRENDS IN CONSUMER DEMAND.

DEMOGRAPHIC

Everybody will use most these products.

Middle to upper class consumers due to the higher price of the brand name products.

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PHYSICAL

GLOBAL IN MORE THAN 80 COUNTRIES.

LEGAL / REGULATORY
Must meet industry regulations and standards in many different countries.
COMPETITION
Three main competitors;

Johnson & Johnson.

Kimberly-C lark.

Unilever.

Medium threat, hard to challenge brand value but relatively easy to enter the market.

INTERNAL ENVIRONMENT:
HUMAN RESOURCES

Rewarded and recognized for their contributions through financial compensation,


promotions and freedom to influence project selection.

Hire and retain some of the most talented people in the industry.

Global training programs on managing the innovation process.

Training for high-potential junior staff.

LOCATION
International operations are concentrated in Europe with a lesser presence in Asia and
Latin America.

An opportunity is available in India, where Unilever dominates and P&G has a small
footprint.

MARKETING
Constant emphasis on building brand recognition and brand value.
In the 1880s it was one of the first companies to advertise nationally.

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In the 1930s, P&G was the first firm to develop the idea of brand management. They
would set up marketing teams for each brand and urge them to compete against each
other.

In the 1930s they used their own soap operas and radio programs to promote their
products and appeal hous ehold women.

LEADERSHIP
A.G. Lafley states that the fundamental role of the CEO is to link the external world with the
internal organization through four key tasks:

To define and interpret the meaningful outside (external environment).

To balance sufficient yield in the present with necessary investment in the future.

To shape the values and set the standards of the organization.

CULTURE
P&G unique organizational structure offers the global scale benefits of an international
company and the local focus to be relevant for consumers in roughly 180 countries where
their brand s are sold. Their corporate structure provides the framework that allows them to
tap the benefits of a global organization with speed and efficiency. Their global operations
keep them ni touch with their local communities. And their strong governance practices
ensure that they conduct their operations with consistently high standards and integrity.
As a build from within organization, 95% of their people start at entry level and then
progress and prosper throughout the organization. This not only creates many wonderful
opportunities to grow and advance, it creates a special camaraderie among fellow P&Gers,
many of whom came up through the ranks together.
At P&G, its about integrity and character. Its about building trust by being open, honest,
straightforward and candid with each other, their customers, consumers and business
partners. They do what they say, and they say what they mean. This is what sets P&G and
P&G people apart.

MANAGEMENT STYLES
The play-to-win innovation strategy has helped P&G regain its industry leadership. It needed
a different management and leadership style and approach. The pre-dominant leadership or

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management style in P&G is that of participatory, delegating, and empowerment.


Management has decentralized decision making process in such a manner that middle level
management most at times do not have to wait for headquarters approval and funding; in
order to embark on certain key innovative projects. Because of the empowerment given to
mid and senior level management within this multinational corporation, it is much easier for
management to customize products and customer services internally. It is abundantly clear
that, the success of this giant corporation can be closely tied to its management and
leadership style.
This is a communication strategy that P&G has been successful in implementing corporate
wide. The reason why leadership hype is critical for innovation, creativity and change in
an organization is that; at P&G innovation or change occurs from top down. This sends a
clear message to everyone that if the entire leadership has changed to accommodate
innovation, its about time for them to change also (employees). Management makes
employees creative and innovative by hyping innovation and making it a priority. To
encourage creativity and innovation within an organization, leadership must hype it; institute
a reward system to compensate creative employees and link innovation and creativity to the
broader mission and vision of the organization.

CONCLUSION:
Three billion times a day, P&G brands touch the lives of people around the world. They are
one of the largest and strongest portfolios of trusted, quality, leadership brands. At P&G, the
people who develo p and build the brands are the foundation of their success. They believe in
the philosophy of quality assurance, ensuring that products of superior quality delight the
world's consumers and effectively provide their businesses and operations with continually
improved quality systems and culture.
They providing consumers with premium quality products, their manufacturing plant at Hub
strives to achieve high-quality manufacturing standards. They are also committed to
providing responsible care to all their employees, their community and the environment
They measure their quality assurance capability by gauging their systems and processes on a
scale of 19 key elements, starting with leadership, training programs and a supply chain, to
handling consumer complain ts. These key elements are the foundation of their quality system

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and ensure that the products they send to their consumers are defect-free, safe, pure and
effective.

REFERENCES:
http://www.pg.com/en_PK/company/our_history.shtml
http://www.pg.com/en_US/company/core_strengths.shtml
http://www.scribd.com/doc/19594884/Proctor -Gamble -Powerpoint-Strategic-Overview
http://www.miniworkshopseries.com/highlights/?p=1330

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ABERCROMBIE & FITCH

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BACKGROUND
Abercrombie & Fitch is an American retailer that focuses on casual wear for consumers ages
18 through 22. With over 300 locations in the United States, the brand is now expanding
internationally. The company also operates three offshoot brands: Abercrombie (children
swear), Hollister Co. , and Gilly Hicks. The company operated a post-grad brand, Ruehl
No.925 that closed in early 2010.
The history of Abercrombie & Fitch spans over three centuries. Key figures who changed and
influenced the course of Abercrombie & Fitch's history include David T. Abercrombie (the
founder), Ezra Fitch (the co-founder), Limited Brands and Michael Jeffries (current
Chairman and CEO).
David Abercrombie founded A&F in 1892 as an upscale sporting goods store. Forming a
partnership with Ezra Fitch, the company continued to expand in the new 20th century. After
Abercrombie left the company, Fitch became sole owner and ushered in the "Fitch Years" of
continued success. After his retirement, the company continued under a succession of other
leaders until its financial fall and closing in 1977. Limited Brands purchased the ailing brand
in 1988 and brought in Mike Jeffries, who revolutionized the image of Abercrombie & Fitch
to become an upscale youthful fashion retailer. Today, the company is a multi-billion dollar
entity continuing to experience economic expansion through the business continuance of
three off-shoot growing concepts and cautious international expansion into key luxury
markets.
Prominent figures who patronized the company in its excursion goods days of the early 20th
century include Teddy Roosevelt, Amelia Earhart, Greta Garbo, Katharine Hepburn, Clark
Gable, John Steinbeck, John F. Kennedy, Ernest Shackleton, and Dwight Eisenhower.
There have been three retailers called Abercrombie & Fitch, and the current A&F shares only
its name with the original business. Founded in 1892 in Manhattan by David T. Abercrombie
and Ezra H. Fitch, the real Abercrombie & Fitch was an elite outfitter of sporting and
excursion goods, particularly noted for its expensive shotguns, fishing rods, and tents. In
1976 Abercrombie & Fitch filed for Chapter 11 bankruptcy, finally closing its flagship
Manhattan store in 1977.
The name was revived shortly thereafter, when in 1978-79, Oshman's Sporting Goods, a
Houston-based chain, bought the defunct firm's name and mailing list. Oshman's re-launched
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A&F as a mail-order retailer specializing in hunting wear and novelty items. It also opened
shops in Beverly Hills, Dallas, and (by the mid-1980s) New York City. Finally, in 1988,
Oshman's sold the company name and operations to The Limited, a clothing-chain operator
based in Columbus, Ohio.
The current version of A&F sells mostly clothes instead of pith helmets or elephant guns, and
describes its retailing niche as an aspirational "Casual Luxury" lifestyle brand.
Especially since 1997, the company has consistently kept a high-profile in the public eye both positive and negative - due to its type of advertising (including its own film and
magazines), its philanthropy, and its involvement in legal conflicts over branding, clothing
style and employment practices. The company has been accused of promoting the
sexualization of pre-teen girls by marketing thongs to 10-year-olds and padded bikini tops to
7-year-olds.

STRENGTHS AND WEAKNESSES


STRENGTHS
One of the major strengths for this company is its experience in the US clothing industry i.e.
for one hundred years. The latter company has been able to compete favourably with UK
retailers because like the US market, UK consumers have a deep respect for quality and this
company is able to offer them that. They have unique garment combinations and their
fragrances also possess this same quality. They are therefore in a position to handle some of
the challenges facing this respective industry.
Besides the latter matter, A&F is succeeding within the UK since there is tendency towards
dressing down in the recent years. Most offices in the IT sector allow casual wear while all
other offices usually have a causal Friday. Consequently, A&F which specialises in offering
luxurious casual wear has higher chances of succeeding in this market than those companies
offering formal clothes as their major product.

WEAKNESSES
One of the issues that has generated a lot of debate about Abercrombie and Fitch is the fact
that the company's marketing strategies do not portray its core idea i.e. that of comfort and a
causal lifestyle. When one examines their adverts, one is likely to find half dressed men and

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women. The company has focused too much on portraying this "sensual" image and has thus
deviated from its core idea which was to offer people casual clothes for their every day needs.
The company has failed to communicate this message even in their online website as readers
are bombarded by scantily dressed models that do not signify the comfortable look.

ORGANIZATIONAL CULTURE
A DEMOCRATIC WORKSPACE
The jury was impressed with the beauty of the outcome. But they also praised the depth of
research underlying the design, particularly the master site plan. Analysis here involved
assessment of sensitive wildlife and wetland issues.
Initial investigation also uncovered Native American archaeological sites that yielded
significant artifacts. The project not only preserves these resources, but highlights them as
features in the site.
A considerable effort was also made to understand the needs of company workers. A&F is
structured into twenty one distinct, but related departments. To better understand the nature
of their activities and provide for necessary adjacencies, the architects interviewed the heads
of all these departments. Several jurors did question why lower -level employees were not
interviewed, however, since their views might have added considerably to the effort.
In negotiating a balance between a traditional office and a more open campus, the primary
precedent was A&Fs vision of an open working environment. But the design also benefited
from a growing body of research on new forms of office design, especially notions of
community and democracy in the workplace, jurors noted. As part of this strategy, the usual
order of private cubicles and common break rooms is inverted, with only a handful of
employees receiving individual offices (largely to allow privacy for legal and/or personnel
matters). Most everyone else works at adaptable groupings of tables, separated from one
another by sandblasted Plexiglas dividers.
The work areas in the main shed structures are also distinguished by a series of so-called
subway-cars, which run down their center and contain pin-up space, conference rooms,
bathrooms, clothing display areas, and storage space.

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Built of a variety of materials from concrete block to wire mesh, they create a sense of scale
within the larger whole.
In the end the principal goal of the design was to afford workers flexibility in carrying out
their assigned tasks. At any given moment an employee might be working alone,
collaborating with others at a group of desks, or visiting members of an adjacent department
in a conference room or at a larger table.
A certain amount of respect for employees comes with such a diminished sense of hierarchy
in the workplace. And
CEO Jeffries wanted to show that he was not exempt from this spirit. Originally, the
treehouse at the entrance to the campus was intended to contain his office. But this was
changed in later versions of the design to a conference room for the entire company. In
addition to signaling a desire for less exclusivity, Jeffries believed the change would make
him less isolated from everyday activities at the company.
In summing up his feelings about the project, one juror praised the extremely human work
environment created by the design team. The complex consistently takes advantage of the
rural setting and context to establish a vital and almost urban sense of place. This is a
company that doesnt like email, Anderson says, because it discourages contact. Such a
bias is clearly manifest in the emphasis on diverse work spaces and alternate meeting areas,
and in the attempt to encourage personal interaction in a more democratic workplace design.

LABOR PRACTICES
In November 2009, Abercrombie & Fitch was added to the "Sweatshop Hall of Shame 2010"
by the worker advocacy group International Labor Rights Forum.

A&F QUARTERLY
Conservative and religious groups called for boycotts of the original American publication of
A&F Quarterly (published from 1997 to 2003) for its sexually explicit nature. The magazine
contained nude photography by Bruce Weber, articles about sex, and recipes for alcoholic
beverages. Also acting as a catalog, the Quarterly displayed the brand's merchandise with
information and prices. Advertisements for the A&F Quarterly appeared in Interview, Out,
Rolling Stone and Vanity Fair.

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Despite a company policy restricting sale of the publication to minors, critics charged that the
publication was readily sold to minors. In 2003, an array of religious organizations, women's
rights activists, and Asian American groups organized boycotts and protests over the
publication, and the "Christmas Edition" of the catalog was removed from stores. Although
Jeffries said he chose to discontinue the catalog, because "Frankly, [he] was getting sick of
the old one; it was getting boring," on June 17, 2010 the company made the announcement,
"The Return of the A&F Quarterly" and invited email subscribers to reserve their $10 copy
for a July 17, 2010 in-store release date.

MANAGEMENT PRACTICES
MANAGEMENT AND MARKETING
HOME OFFICE & CORPORATE OFFICIALS
The Abercrombie & Fitch company headquarters, or "Home Office", is located in New
Albany, Ohio. Home Office is designed as a campus of sorts, and is referred to as such. The
company's merchandise distribution centers (1,000,000sq.ft) are located exclusively on
campus to help ensure brand protection. Also on campus are mock-up stores, one for each
A&F brand, where store layout, merchandise and atmosphere are determined.
The company also has a European office in Milan, Italy.
The following are key corporate officials:

Michael S. Jeffries - Chairman and Chief Executive Officer

Diane Chang - Executive Vice President of Sourcing

Leslee K. Herro - Executive Vice President of Planning and Allocation

David S. Cupps - Senior Vice President, Sec. and General Counsel

Jonathan Ramsden - Executive Vice President and Chief Financial Officer

Amy Zehrer - Senior Vice President of Stores

EMPLOYMENT
The company uses "brand representatives", now called "models," for store customer service.
The models had been required to buy and wear Abercrombie & Fitch apparel, but following a

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company settlement with California state labor regulators may now wear any no-logo
clothing as long as it corresponds with the season. The California settlement also provides
$2.2 million to reimburse former employees for their forced purchases of company-branded
clothing. An "Impact Team" was created in 2004 to control merchandise within each store
and maintain company standards; "visual managers" are responsible for forms, lighting,
photo marketing, and fragrance presentations and to ensure models comply with the "look
policy". Lawsuits have been filed against the company due to alleged discriminatory
employment practices. In 2004, in Gonzalez v. Abercrombie & Fitch Stores (see Legal issues
& Controversy and Criticism below), the company was sued for giving desirable positions to
white applicants, to the exclusion of minorities.

EMPLOYMENT PRACTICES
In 2004 lawsuit Gonzlez v. Abercrombie & Fitch, the company was accused of
discriminating against ethnic minorities by preferentially offering desirable positions to
White American employees. The company agreed to an out -of-court settlement of the class
action suit. As part of the settlement terms, Abercrombie and Fitch agreed to pay US$45
million to rejected applicants and affected employees, include more minorities in advertising
campaigns, appoint a Vice President of Diversity, hire 25 recruiters to seek minority
employees, and discontinue the practice of recruiting employees at primarily white
fraternities and sororities.
In June 2009, British law student Riam Dean, who had worked at A&F's flagship store in
London's Saville Row , took the company to an employment tribunal. Dean, who was born
without a left forearm, claimed that although she was initially given special permission to
wear clothing that covered her prosthetic limb, she was soon told that her appearance
breached the company's "Look Policy" and sent to work in the stock room, out of sight of
customers. Dean sued the company for disability discrimination, and sought up to 20,000 in
damages. In August 2009, the tribunal ruled the 22-year-old was wrongfully dismissed and
unlawfully harassed. She was awarded 8,013 for hurt feelings, loss of earnings, and
wrongful dismissal.
In a lawsuit filed in September 2009 in U.S. District Court in Tulsa by the Equal Employment
Opportunity Commission, 17-year-old Samantha Elauf said she applied for a sales position at
the Abercrombie Kids store in the Woodland Hills Mall in June 2008. The teen, who wears a
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hijab in accordance with her religious beliefs, claims the manager told her the headscarf
violates the store's "Look Policy."
In 2010, a Muslim woman working at a Hollister store in San Mateo, California was fired.
Before being dismissed, Hani Khan had refused Abercrombie & Fitch's HR representative's
demand that she remove her hijab. The representative reportedly stated that the headscarf,
which Khan wears for religious reasons, violated the company's "Look Policy". The civil
liberties group Council on American-Islamic Relations has stated that the dismissal is a
violation of nondiscrimination laws, and filed a complaint with the U.S. Equal Employment
Opportunity Commission.

CUSTOMER ISSUES
DISCRIMINATION AGAINST AUTISTIC PERSON
In 2009 Abercrombie & Fitch was fined more than $115,000 by the Minnesota Department of
Human Rights for refusing to let a teenage girl help her sister, who has autism, try on clothes
in a fitting room. The amount of the fine reflected the company's failure to respond to
complaints by the girls' mother and its subsequent charge that the girl in question did not
really have autism.

VIOLATION OF PRIVACY
A 16-year-old is suing the company after discovering that she was being videotaped in an
Abercrombie & Fitch changing room by an employee, Kenneth Applegate II. Applegate
denied the claim, but co-workers discovered his camera days later with the video on it.

LAWSUITS AGAINST OTHER PARTIES


In 2002, Abercrombie & Fitch filed a lawsuit against American Eagle Outfitters, claiming
that they copied A&F garment designs, among other things. The lawsuit was based on a trade
dress claim, stating that American Eagle Outfitters had very closely mimicked Abercrombie
& Fitch's products' visual appearance and packaging. Specifically, A&F claimed that
American Eagle Outfitters copied particular articles of clothing, in-store displays and
advertisements, and even the A&F product catalog. Despite the admission that American
Eagle may have utilized very similar materials, designs, in-store displays, symbols, color
combinations, and patterns as Abercrombie & Fitch, the court ruled that there was not an

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excessive level of similarity to confuse potential customers, and therefore the court ruled in
favor of the defendant, American Eagle Outfitters.
In 2009, the company filed a lawsuit against Beyonc Knowles , who uses the onstage name
of Sasha Fierce, to stop her from marketing a fragrance named Sasha Fierce, claiming
infringement of A&F's own Fierce fragrance trademark.

ABERCROMBIE BOOSTING INTERNATIONAL PLANS


While domestic sales continue to struggle, Abercrombie & Fitch Co. is stepping up its
international plans.
The New Albany-based retailer opened its first store in a non-English-speaking country with
the Oct. 29 opening of its Milan Abercrombie & Fitch flagship, which includes an
Abercrombie kids store and will accelerate the overseas growth of its Hollister chain.
The most important translatable is that the Abercrombie & Fitch story is transferable to
other cultures, said CEO Mike Jeffries in a Friday conference call. There are Abercrombie
kids everywhere. They love the brand regardless of the language they speak.
Hollister got is sixth and seventh mall st ores in the United Kingdom in the quarter. Jeffries
said all seven U.K. stores are expected to be in the chains Top 10 for sales volume on an
annual basis.
International sales for the quarter ended Oct. 31, including direct-to-consumer sales, were
$88 million, with $61 million coming from the 20 stores in Canada and the U.K. and the two
stores in Italy that opened days before quarter end. The $61 million is 9 percent of
Abercrombies in-store sales for the quarter. Through the first nine months of the year, total
international sales are $220 million, with $151 million coming from the stores.
Five more international Hollister stores will open in the fourth quarter, including one each in
Frankfort and Rome, and the company will open its Abercrombie & Fitch flagship in Tokyo
Dec. 15, a store that has been three years in the making. The companys flagship stores are
larger than the average store and are in high-traffic, tourist areas.
The interesting thing about our business, the most important point of our business, is we sell
the same things everywhere ... the same store experience, Jeffries said. We succeed if
youre in one of our stores and you cannot tell if youre in a specific country.

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The growth wont slow in 2010 with flagships planned for Copenhagen and Fukuoka, Japan,
and an increase in Hollister openings throughout Europe.
CFO Jonathan Ramsden said the company will open 10 Hollisters in Europe this year and
will accelerate to a multiple of that next year.
When we say acceleration, were not talking about 12 or 13, he said, noting that more
details will come in the companys year-end call.
On the domestic front for 2010, a Fifth Avenue location in New York City that was planned
to be an Abercrombie kids shop will now be a Hollister epic store. Epic is the companys
term for its larger, marquee Hollister stores. Jeffries said Hollister has an international
reputation and the Fifth Avenue shop will attract many of the tourist customers who also shop
the Abercrombie & Fitch flagship on Fifth Avenue.

WAYS TO EXPLOIT STRENGTH


MARKETING THE MOST IMPORTANT PART?? SERVICE
Win in this era of a service, good service means the companys attitude, brand reputation, and
with this brings a lot of potential consumers of resources, especially the product after-sales
service, it is related to a brands image established, and even directly affect the survival and
development. After-sales service is the product focus of the entire sales process is the
inevitable product of intense market competition, and brand based on the basis of strong
competitors, but also corporate responsibility and obligation to sell products. In general, most
consumers would think that brand-name products are often better than after-sales service, but
recent
Abercrombie and Fitch Discount Marke t performance of some well-known brands, it seems
that with this run counter to expectations, these brands
Abercrombie and Fitch Latest Style In the face of the basic after-sale problems have taken
evasive attitude to consumers disappointed.
As consumers everyday life of most contact, Abercrombie Discount Store products by the
market attention. Although the Chinese Abercrombie Discount Store brand building only a
few decades of development, has made gratifying achievements, but comparison with foreign
Abercrombie and Fitch Latest Style line, the degree of brand marketing is obviously lagging
behind the market. Currently, the domestic brand-building enterprises are mostly in the
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Abercrombie and Fitch Discount of the primary or intermediate stages of marketing, the
introduction of marketing concept in service and service marketing system building in the
bud, and Abercrombie Discount Store products, brand marketing and after-sale service work
in the fields of marketing research has not caused enough attention, a lot of work remains to
be enterprise to try and explore. Therefore, the subject of complaints for domestic
Abercrombie Discount Store situation is common, and an upward trend. Some Abercrombie
and Fitch Latest Style pursuit of economic interest, will focus on product development,
branding and other aspects of the terminal building, indifferent service to consumers, and the
lack of awareness of services marketing. This re-production and sales, light after-sales
service attitude, will harm the legitimate interests of consumers, to create did not trust the
brand, leading to the phenomenon of product decline in sales, limit its rapid development.
Looking at the market those legendary brand, almost all in the service of no small effort from
top to bottom, this is an important reason for its success one. Therefore, enterprises in the
provision of affordable products, but also to provide comprehensive after-sales service to
consumers, so as to accumulate loyalty for the brands market support, a solid market base.
So, increasingly demanding customer service, more and more detailed now, how to do a good
Abercrombie and Fitch Latest Style sales service work?
Establish the correct concept of service is the first step Abercrombie and Fitch Latest Style
action. Brand Abercrombie and Fitch Discount enterprises need to learn the concept of
service marketing to gain experience in domestic and foreign effective services, integration
and innovation, its unique service concept with its own system. Convey this concept through
to raise staff awareness of service, which really carry out the implementation of all aspects of
enterprise production and operation. Meanwhile, the Abercrombie and Fitch Latest Style
should also be gradually standardized services, particularly to improve the psychological
quality end sales and service skills, to recognize that after-sales service and pre-sale service is
equally important to high quality comprehensive services to meet consumer who needs to
service a brand conducive to competitive advantage. Secondly, good after-sales service also
provide premium services beyond the expectations of consumers. In accordance with current
industry

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WARRANTY
Provides the industry free of charge for up to three packs of three months, after three months
of paid service, this Abercrombie and Fitch Latest Style can be extended according to the
actual situation of three guarantees the scope and timing of repair, the quality of the
products in question do appear to be recognized and returned to continuously improve the
quality of after-sales maintenance, increase maintenance and other services free of charge, to
enhance consumer satisfaction with the work of the after-sales service, training brand loyalty.

EXTERNAL AND INTERNA L ENVIRONMENT


EXTERNAL ENVIRONMENT
Political factors
Political factors can have a direct impact on the way business operates. Every decision made
by the government can have a direct or indirect effect. Every country that A&F operates in
has a free market-oriented economy with rules and regulations to protect patent and
intelligent right from imitation. It helps companies to protect their property. But there are also
rules, regulations and laws A&F has to follow such as rights of employees, workers and
shareholders. The effect employee laws have are significant, because of the labor intenseness
of the apparel industry. Trade regulations play an important role too, as it is exposed to
overseas competition from nations where their employees receive much lower wages

Economic Factors
Like every business A&F is affected by booms and slumps of the economy as a whole.
Furthermore factors like the oil price, inflation and interest rates affect A&F. 90 Percent of
total expenditures consist of the major components like food, services, housing and apparel.
Of these only apparel and service had a statistically significant change of a 6.2 percent
decrease in 2003.

Social Factors
Population characteristics are called demographics. In other words statistics about age, sex,
income, ethnicity, marital status and similar personal attributes on individuals in a region.

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Having a good understanding of this information can assist in determining whether a product
has any potential or appeal to customers.

INTERNAL ENVIRONMENT
The clothing retail market is one of the most fiercely competitive industries within the UK
economy. In order for companies to stay ahead, they must look for ways in which they can
offer an outstanding product or service. (Dibb, Simkin, Pride and Ferrell, 2006)
One way in which these companies are achieving the latter is through their choice of
purchase location. Independents, chain stores, fashion multiples and sports shops are
currently characterizing the clothing and apparel industry. Besides this, the choice of location
is usually linked to certain age groups. For instance, fashion multiples are normally
associated with younger shoppers while departmental stores may be open to a wider variety
of shoppers. In the latter mentioned outlets, men are penetrated a little more than are women
except for a few exceptions. There are certain scenarios that seem to be lacking a competitive
edge within this industry. For instance, the use of traditional mail catalogues is slowly
becoming outdated owing to the fact that these catalogues are printed quite early in the
season. Therefore, such methods cannot be able to accommodate the changes in prices
synonymous with prevailing business conditions.
While online shopping is slowly becoming an influential force in the clothing industry, there
are a number of hurdles that are yet to be overcome through such approaches. First of all,
consumers may be hesitant to give personal details about their credit cards across the internet
due to increasing cases of cyber crime. (McDonald, 2006) Another factor that could be
causing this hesitation towards online shopping in the clothing and apparel industry is the
tendency for users to try out clothes before buying them. The latter issue may not be
important when buying other products across the internet (examples include books) but this is
an issue that is unique to what A&F are offering. Additionally, online purchases are
determined through brand recognition. Since A&F began its operations in the UK less than
two years ago, then they may not qualify as one of the market leaders in the clothing industry.
The clothing and apparel industry is increasingly becoming open to intrusion by external
operators because of the fact that mot established clothing brands are venturing into other
products. For instance, Ted Baker leading clothes retailer has now introduced skincare
products. Abercrombie and Fitch may have to contend with the fact that mid market retailers
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are increasingly going to be sidelined. This is largely because brand awareness is an


important factor in this industry. Certain types of clothes are now being associated with
certain companies. For instance, in order to purchase jeans consumers will go to company
A'. In order to buy ports shoes, purchasers will go to company B'. Consequently, such
established brands are likely to maintain sales since they are firmly established. Retail
companies trying to make it in the industry may not be able to do very well.
Lastly, the United Kingdom clothing market is fast becoming one characterised by extremes.
Exclusive designer stores are placed in one line of the industry. On the other hand, there are
discount stores to cater for the lower end of the market. The mid market retailers are finding
it highly difficult to curve out a place within the retail industry. An example of a company
that had to close down because of the latter issue was C&A. It is also particularly interesting
to note that a number of large supermarkets or retail chains are now offering clothing and
examples here include Tesco Plc and ASDA. Such companies are all worth considering when
doing business within this industry.

CONTROVERSY AND CRITICISM


Since its re -establishment in 1988, Abercrombie & Fitch has faced numerous accusations in
regards to its employment practices, merchandise, and advertising campaigns which have
been described as sexually explicit and racist.
A&F agreed to pay $40 million by the Equal Employment Opportunity Commission
("EEOC") to all African American, Asian, and Latino applicants who were discriminated
against by the company. The applicants argued that the company expected them to work only
in low-visibility jobs in the back of the store. The EEOC required A&F to provide equal
opportunity to everyone regardless of race, ethnicity, or gender.

ANALYSIS
Abercrombie and Fitch has established itself as a brand that young people can relate to and be
comfortable in. Although it does not have retail outlets in Pakistan, it still caters to quite a
few people over here; who either import the products or go to other retailers who keep the
products but sell them at a more expensive price. Starting off as a shop that housed sporting
equipment, Abercrombie and Fitch has since the years of inception become the most
favourite brand in casual wear and has been, over the years, endorsed by names such as
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Katherine Hepburn, John F. Kennedy, Teddy Roosevelt and Amelia Earhart among others.
Although the company filed for bankruptcy, it was revived and came back to the public eye
with an agenda to take the world by storm. Its advertising campaigns as well have both been
the center for positive and negative light. They have been criticized for sexualizing young
adults.
Abercrombie have been in the clothing industry for a hundred years now and to some extent
have dominated a segment of the industry as well. The company has established itself as a
company that promotes quality as well and is thus able to compete with the UK competitors
as well. In the UK especially, a dressing down trend has been developed. Either office
have all casual wear atmosphere or a casual wear atmosphere and that is where Abercrombie
hits the mark; it sells casual yet trendy casual trendy as it is deemed, and it caters to those
audience.
However, the company does not portray the idea of a comfort lifestyle.

All their

advertisements seem to portray something else. They seem to be portraying sensuality and
their adverts sport half dressed models. People have complained of low self -esteem because
they feel incompetent as opposed to the models that seem almost perfect.
The Abercrombie and Fitch off ices have also been credited as being democratic. However,
it was added to the "Sweatshop Hall of Shame 2010" by the worker advocacy group
International Labor Rights Forum in 2009 and a lawsuit was also filed against them
(Gonzales vs. Abercrombie and Fitch Stores, 2009). The company has been criticized for
selecting and preferring

white applicants to minorities. Women wearing the Islamic

headgear hijab were also discriminated. The employees were supposed to buy and wear
company clothes while dealing with customers, but that was reversed due to a settlement, the
employers were now allowed to bear anything as long as it didnt bear any logos for other
companies. The A & F Quarterly, a magazine published by the company was also the subject
of boycott due to explicit content like nude photography, recipes for alcoholic beverages etc.
Customers have also filed complaints against the stores. A lawsuit was filed in 2009 because
a girl was not allowed to help her sister who had autism try on clothes. The workers later said
that the girl did not really have autism which was proved to be untrue. Another girl
complained that an employee videotaped her while she was changing. The employee denied it
but other co-workers found is camera that proved the girls claim to be true. However, A & F
has filed lawsuits too. It sued the company American Eagle in 2002 because they claimed that
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it copied a few of their designs, advertisements and even catalogs, the courts however ruled
in favour of American Eagle. The company also filed a lawsuit against Beyonce who wanted
to launch her perfume called Sasha Fierce but Abercrombie already had a perfume called
Fierce which is their most heavily marketed perfume for women.
Abercrombie is however boosting its plans for sales abroad.
Although it has been the center of criticism, it also has a lot of positive points too.

CONCLUSION
In any case, A&F still has a strong brand reputation: customers know what it represents, their
looks are still somewhat relevant, but interest in it is lagging in the U.S. At the same time, it
is still considered one of the leading specialty retailers in the world. Time will tell but test
flagship stores in London, Tokyo, and Milan have shown immense success, and it is likely
any growth will be fueled from internationalization in the near future.

REFERENCES
Abercrombie and Fitch Official Site
http://www.abercrombie.com/webapp/wcs/stores/servlet/HomePage?langId= 1&storeId=11203&catalogId=10901
Abercrombie and Fitch SWOT, April 2 09,
http://www.zimbio.com/Abercrombie+and+Fitch+Clothing/articles/14/Abercrombie+Fitch+S
WOT+Analysis
Meeting Preview Abercrombie and Fitch, July 7 2007
http://fashioninvestor.blogspot.com/2007/07/shareholders-meeting-preview.html
The Greatest Success Story, Kensao, July ^ 2009
http://www.kensao.com/shopping/clothing/abercrombie -and-fitch-the -greatest-success-storyof-the-past-20-years/
The Success of Abercrombie and Fitch, 22 may 2009
http://www.tellthing.com/merit/note/170624/us -retailer-abercrombie -amp;-fitch-success.html

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DUNLOP TYRES

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HISTORY:
From its very beginnings it is obvious what Dunlop set out to do, to deliver a better driving
experience for drivers and a better riding experience for riders.
Funnily enough the story does not start on four wheels or even on two, but on three. In 1888
Dunlops founder, John Boyd Dunlop, was watching his young son riding his tricycle on
solid rubber tires over cobbled ground. He noticed that his little boy was not going very fast
and did not seem very comfortable. In trying to provide his son with a smoother ride and
better handling Dunlop took the tricycle, wrapped its wheels in thin rubber sheets, glued them
together and inflated them with a football pump. That way he developed the first air
cushioning system in history, and laid the foundation for the first pneumatic tire.
Dunlop immediately patented his idea and started to develop his invention into a commercial
venture, founding what quickly became known as the Dunlop Pneumatic Tire Co. Ltd. In
1890 Dunlop opened its first tire plant in Dublin, Ireland and three years later its first tire
factory in mainland Europe in Hanau, Germany. By 1895 Dunlop tires were also being sold
in France and Canada, and manufactured in Australia and the USA. By 1898 the business had
outgrown its Dublin base, and production was transferred first to Coventry, England and then
in 1902 to the 400 acre site in Birmingham, England - later known to the world as Fort
Dunlop. In 1910 Dunlop planted its flag in Malaya, establishing 50,000 acres of rubber
plantation. In 1913 the first Japanese tire factory opened its gates in Kobe. In twenty years,
Dunlop had made the solid tire obsolete and grown from pioneer to the first global
multinational company. It manufactured worldwide, and sold worldwide.
By the start of World War II, Dunlop was the byword for success in a range of activities not
only tires where it reigned supreme on and off the racetrack, but also brakes, wheels, golf and
tennis balls, flooring, and other industrial rubber products. It was a supremacy that was to last
until the end of the 1960s.
In 1984 came the consolidation of Dunlops European and US tire operations with its
Japanese business, as part of the Sumitomo group. In 1999 Sumitomo and The Goodyear Tire
& Rubber Company decided on a global alliance, becoming the worlds biggest tyre
producer. Dunlop in Europe is now part of that joint venture encompassing six companies
and is embedded within Goodyear Dunlop Tires B.V.

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ENVIRONMENT:
COMMITTED TO PROTECTING THE ENVIRONMENT:
At Dunlop, they are committed to protecting and respecting the environment. Leading vehicle
manufacturers use our tires as original equipment because they trust and respect our quality,
development techniques and innovation. However, this alone is not enough. We must also
meet the demands of the environment by adopting sustainable practices and using our
resources more efficiently. They practice the latest manufacturing and management
techniques and work only to the highest standards as outlined in international standards.

Here are some of the activities

Introduction of an Environmental Management System (EMS) as part of our


integrated quality, environment, health and safety management system

Promotion of EMS to our customers, suppliers and contractors

Environmental performance targets to meet our legal, operational and business


requirements

Regular audits and reviews on our environmental performance

Environmental awareness training for all directors and senior management

Appointment of environmental coordinators to ensure our EMS is implemented and


maintained in line with ISO 14001
Continual re-alignment of our environmental policy and business objectives

Continued commitment
They have a series of procedures and initiatives to ensure continual improvement of our
environmental performance
Dunlop set environmental objectives every year as part of our business planning process.

Design
Whatever the tyre, our design engineers deve lop quality products that meet the demands of
our customers - and the environment.

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Here are some examples:

Extensive market research, research and development, computer modeling and


rigorous testing

Continual improvement of our low -rolling resistance tires (offering lower temperature
generation and attrition without loss of grip) for longer lasting products and improved
fuel economy

Development of new materials and compounds for lighter and more durable tires

Manufacturing
While their production efficiency increases every year, we have also successfully reduced our
energy consumption and waste.

Energy consumption
Today, they need an average of 40% less energy to make a tire than in 1985.
Here are some examples of their savings:
Improved insulation and condensation recovery
Idle running systems added to machinery
75% reduction in N0x emissions
30% reduction in steam and electricity

Reducing waste
By addressing every aspect of production, our internal waste reduction programmed has
achieved considerable cost savings - and reduced our impact on the environment.
They are also:
Working throughout Europe to exceed the requirements of forthcoming environmental
legislation on scrapping tires
Always exploring alternative recycling methods
We recycle

Rubber

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Polythene

Wood

Metal

Paper

Plastics

Improving distribution
They always strive to become more efficient and environmentally responsible in our logistic
operations.
Here are some of our improvements:

New warehouse with paperless, computer-driven system and high-fidelity relays

Demountable fleet with smaller aerodynamically sound vehicles

Widened delivery area

Once-only product handling

Where appropriate, we adopt inter modal from Europe

Tire recycling they are opposed to using landfills for tire disposal and believe tires can be
used for their energy. Tires yield a calorific value about 10% higher than coal so, for
example, their energy can be used to manufacture cement or generate electricity - if
combusted in an environmentally acceptable way.
Raw materials their materials department sources raw materials that improve product
performance and minimize environmental impact. In practice:

They convert raw materials into rubber compounds and their components with
maximum safety we handle and transport our materials in line with strict standards to
minimize adverse effects on our employees and the environment. We have replaced
materials known to contain nitrosamine or nitrosamine generators with safer
alternatives, such as 'green' silica technology. We have replaced oils containing poly
aromatic hydrocarbons (PAHs) and substituted solvent -based products with aqueous
alternatives. All these advancements have reduced our waste significantly. Also, when
we can't recycle waste, we can now dispose of it safely.
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STRENGTHS:
VISION:
A significant player in the African and Latin American markets, a brand of choice,
exceeding customer expectation and continuously enhancing stakeholder value

VALUES:
C- CARE FOR CUSTOMERS
R- RESPECT FOR STAKE HOLDERS
E-EXCELLENCE THROUGH TEAM WORK
A- ALWAYS IMPROVING
T- TRUSTWORTHINESS
E- ETHICAL PRACTICES
S- SAFETY FIRST
ISO CERTIFICATION:
ISO 2000: 2008

FACTORS CONTRIBUTING TO INTERNAL SUCCESS:


INNOVATION TIMELINE:
How the business has evolved
Dunlop's history is rich with important innovations that have improved the driving experience
for everybody on the road. If the discovery of the aquaplaning phenomenon, the invention of
"fail safe" tires, and the introduction of the 3S -technology stand out as highlights, Dunlop is
proud of numerous other inventions during the past 100 years that have made the driving
experience a better and more enjoyable one for every driver.
They owe it to our founder and have continuously lived up to the promise he made.
1922 Development of the first Dunlop steel bead tire with a woven cord casing trebled tire
life. Together with the well base, single piece wheel this became the industry standard.

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1994 World innovation: Dunlop presents the first ultra light construction belt tire. It reduces
the vehicle weight by about 12 kg. Development of the Instant Mobility System (IMS) as a
substitute for the spare wheel - in case of a puncture a latex compound is injected into the tire
sealing it. 1997 Dunlop introduces the high performance tire SP Sport 9000, a completely
new profile technology.
2002 Dunlop introduces the 3S -technology. An innovative asymmetrical tri-area tread is the
basis of tires born to equally unite the aspects of Silent running, Spottiness, and Safety.

MANAGEMENT STYLES :
Main resource of Dunlop is in realizing its am bition. Therefore, Management style practices
are an integral part of their business strategy and an important line responsibility, and these
management practices are done by the Human Resource Managers. It is the responsibility of
the Board of Management to establish corporate HRM policies and to make sure these
corporate policies are properly executed. The Board of Management is professionally
supported by the corporate HR Department. It is the responsibility of each member of the
Board of Management to hold unit managers, who report to him, accountable for their HRM
responsibilities. Within corporate guidelines, every unit manager is responsible for HRM in
his unit, with Professional support being provided by its HR manager.
Dunlop fosters
leadership
individual accountability and
Teamwork.
Each Dunlop manager has to make sure that the corporate policies in the fields of Personnel
& Management Development, Education & Training and Compensation & Benefits are
implemented and that the common issues Accountability, Managing the Difference and
Mobility get proper attention.

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MANAGEMENT PRACTICES:
Personnel & Management development:
Dunlop Personnel & Management Development policy is based on the view that individual
and professional development motivates people and contributes to a flexible organization in
which all positions are staffed by capable, accountable and committed Employees.

Career advancement:
They practice to a high degree "promotion from within" at unit level and Company-wide,
taking account of both meeting job requirements and preferred profile, and individual
ambition in future career prospects.

Education & Training:


Dunlop Education & Training policy is based on the view that the knowledge, attitude and
skills of our employees are among the most important assets to realize our ambition. As a
consequence, Education & Training is an essential part of our HRM policy.

Women rights:
Treat women workers on the same footing as male workers in all aspects of employment
including hiring, salary, bene fits, advancement, discipline, termination and retirement.

Anti harassment policy: They are committed to fostering work environments where all
individuals are treated with respect, professionalism and courtesy. No employee is subjected
to any physical, psychological or verbal harassment and or abuse.

Working Hours:
The Company Dunlop ensures that regulations governing the overtime or weekend hours and
job operations, for employees of certain ages considered juveniles are stringently followed.

WAYS IN WHICH STRENGTHS ARE CULTIVATED:


Dunlop company policy on human resources is to attain the highest standards of
professionalism throughout the organization by recognizing and revealing individual
capabilities, productivity, commitment and contribution. Company firmly believes that the
continued progress and success of the Company depends upon to a great extent on its
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personnel. Only with a carefully selecting, well trained, achievement orientated and dedicated
employee force, can maintain its Leadership in the Refining industry. Following are the
human resource policies:
1. Employ the best-qualified persons available, recognizing each person as an
individual thus affording equal opportunity.
2. Pay just and responsible compensation in line with the industry standards, job
requirements and work force.
3. Help employees to attain their maximum efficiency and effectiveness through a
well-rounded training and development program.
4. Provide and maintain comfortable, peaceful and orderly working conditions.
5. Promote from within whenever possible and provide opportunities for growth
and promotion to the employees.
6. Treat each employee with fairness and respect and in return expect from him in
service marked by dedication, devotion, commitment and loyalty.
7. Encourage each employee to improve and develop himself and thereby prepare
him for positions of higher responsibility.
8. Recognize and reward efficiency, team work, discipline and dedication to duty
and responsibility.
9. Exhaust all means to resolve Labor -Management differences, promptly and
amicably, if any.
10. Provide a wholesome and friendly atmosphere for harmonious Labor
Management relations

ORGANIZATIONAL CULTURE:
1. Global Workforce Development The Centre of Expertise for the enterprise in
individual, leade r and organizational learning and development.
2. Health and Medical Services Provides health and wellness resources to Chevron
employees and organizations around the world to improve productivity, reduce safety
risks, and enhance a healthy work environment.

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3. HR Strategy, Planning and Communications Provides people and HR strategy;


planning and communication consulting; competitive intelligence; talent management
metrics and analysis.
4. Social Responsibility believes in respect for the community and preserving the
environment for our future generations and keeping national interests paramount in all
our actions.
5. Learning and Innovation Embrace lifelong learning and innovation as an essential
catalyst for our future success. We believe in continuous improvement and to seize
opportunities inherent in change to shape the future
6. Employee Retention High quality employees attraction and retention is very
important. The Company will offer competitive wages and benefits to the deserving
candidates. The Company strongly be lieves in personal development and arranges
employee -training programs on regular basis.
7. Team Work Believe that competent and satisfied people are the Companys heart,
muscle and soul. They savor flashes of genius in organizations life by reinforcing
attitude of team work and knowledge sharing based on mutual respect, trust and
openness.

CONCLUSION:
After completing my all research work I have concluded that the employees working in a
chevron strive to keep themselves abreast with the new developments in their respective areas
and they even dont hesitate to take initiatives that could bring improvements in the way of
their working. The Company encourages and facilitates its employees in the activities of
knowledge sharing, research and development and promoting the change management
culture. And the company tries to make utmost efforts to foster team work in their respective
areas of operation and they give special attentions to their management areas. All employees
are to be treated with respect. The Company is highly committed to providing its employees
with a safe, healthy and open work Environment, free from harassment, intimidation, or
personal behavior not conducive to a productive work climate.
Whereas after gathering all information and research, I have concluded Dunlop fosters
leadership, individual accountability and teamwork. Their employees are professionals whose
791

entrepreneurial behavior is result -oriented and guided by personal integrity. They strive for
the success of their own units, in the interest of the whole of Dunlop. They offer rewarding
and challenging assignments with room for initiative. In this respect, policies can be
established and common HRM issues can be achieved.

RECOMMENDATION:
After completing my research I would like to recommend that Dunlop tires Company should
have:

accountability

Dunlop manager should be responsible to set clearly defined targets for their employees, to
communicate sincerely about their performance and to be specific with regard to the
subsequent measures. In this respect, any errors will be regarded as opportunities to improve
performance rather than as obstacles for further development.

Mobility:

Dunlop employees should have a high degree of mobility in their careers, creativity in their
thinking, and initiative in their actions. They should have an "open mind" and feel challenged
rather than threatened by the new and the unexpected.

Pathways

Technical employees should participate in pathways, which help employees to establish


development plans that can provide technical and non-technical training, and provide
opportunities for career growth.

Performance management process

They must set their goals for professional development that align with achieving your work
units business objectives.

REFERENCES:
^ http://www.dunlop-tires.com/dunlop_uk/what_sets_dunlop_apart/history
^ Rubber and Plastics News June 1997
^ Goodyear form 10-Q for quarter ended June 30, 1999, p.28

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^ formula1.com confirming Pirelli for 2011


^ Pirelli commence tyre testing
^ Michelin: Tyres not flawed, just unsuitable. www.crash.net Retrieved 2 December 2006
^ Bridgestone take pop at Michelin over USGP '05. www.crash.net Retrieved 2 December
2006
^ Michelin looking to fly in new tyres www.-itv-f1.com Retrieved 5 August 2006
^ Stoddart comments on US Grand Prix www.motorsport.com Retrieved 5 August 2006
^ a b Letters between representatives of Michelin and Charlie Whiting, the FIA Formula One
Race Director www.newsonf1.net Retrieved 5 August 2006

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WALT DISNEY

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HISTORY
Although it is now one of the largest corporations in the world, the Walt Disney Company
started as a small animation studio in the garage of Walt and Roy Disneys grandfather. This
tiny venture was founded on October 16, 1923 and in 2006, Walt Disneys company had
grown to revenues of $34.3 billion. The first project the Disney brothers worked on was a
series entitled Alices Wonderland, and in 1925, Walt Disney convinced his brother to
rename the studio to Walt Disney Studios. After several smaller successes and failures, the
first Mickey Mouse cartoons Plane Crazy and Steamboat Willie were released to audiences in
1928. As it was the first cartoon with sound to achieve popularity, Walt Disney was able to
expand his ventures a year later into three additional companies: Walt Disney Enterprises,
Disney Film Recording Company, and Liled Realty and investment Company. Over the next
several years, what would become some of Disneys most beloved characters were
introduced: Pluto in 1930, Goofy in 1932, and Donald Duck in 1934. It was in 1937 that the
studios first feature-length animation film was released, Snow White and the Seven Dwarfs,
and it made history books by being the first animated feature film ever produced. The next
year, Walt Disney merged all of his companies under one title, Walt Disney Productions, and
in 1940 the production house released both Pinocchio and Fantasia. As the studio began to
grow, the United States foray into World War II caused a slowdown in film production as
Disney was instead contracted to create morale -boosting government propaganda. The next
10 years were relatively slow for Disney, and films created were solely low budget or took
years to produce Bambi was in production for 6 years before its theatrical release. In 1950,
the company was revived with the release of Cinderella, and 1952 saw Walt Disney begin to
plan the Walt Disney Productions theme park. It wasn't until 1967 that work actually began
on the theme park, though it had certainly help ed that the company went public ten years
prior. The Walt Disney World Resort opened in Orlando, Florida in 1971, and Disney began
to make its foray into live-action films. Although there were many ups and downs in the
years following Walts death, the company continued to make a name for it and forge ahead
to new grounds. While there have been plenty of roadblocks in the new millennium such as
the controversy over CEO Michael Eisners policies and several hostile bid takeover attempts
the company has managed to push through to continue holding its place as one of the
largest and most influential companies on the planet..

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DISNEY`S ORGANIZATIONAL CULTURE


"From the beginning, starting with Walt Disney, we have had five things that make me proud
to be part of this Company: high-quality products, optimism for the future, great storytelling,
an emphasis on family entertainment and great talent, passion and dedication from our Cast
Members."
- Marty Sklar Vice Chairman and Principal Creative Executive Walt Disney Imagineering
The Walt Disney Company has come a long way from the days of Steamboat Willie in 1928.
But it is still true to its core mission of providing quality entertainment for people around the
world. This is what we do. And we continue to do it better than anyone else does. So what
does it mean to be part of the Disney team?

VALUES MAKE OUR BRANDS STAND OUT


INNOVATION

We follow a strong tradition of innovation.

QUALITY

We strive to follow a high standard of excellence.

We maintain high-quality standards across all product categories.

COMMUNITY

We create positive and inclusive ideas about families.

We provide entertainment experiences for all generations to share.

STORYTELLING

Every product tells a story.

Timeless and engaging stories delight and inspire.

OPTIMISM

At The Walt Disney Company, entertainment is about hope, aspiration and positive
resolutions.

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DECENCY

We honor and respect the trust people place in us.

Our fun is about laughing at our experiences and ourselves.

VISION AND MISSION


One of the reasons why Disney has a reputation of delivering a seamless "magical"
experience to its guests in all of its operations - theme parks, hotels, restaurants, retail stores,
etc. - is because it has one overriding vision and mission for all of its business
operations. "The mission of The Walt Disney Company is to be one of the world's leading
producers and providers of entertainment and information. Using our portfolio of brands to
differentiate our content, services and consumer products, we seek to develop the most
creative, innovative and profitable entertainment experiences and related products in the
world."

Perks
The Walt Disney Company designs our unique programs and services to add a little magic to
the lives of our employees and Cast Members. We design our wide variety of programs and
services to assist professionally, as well as personally. Here is just a sample of our work and
life "extras":

A Wide Range of Benefits, including Health, Dental, Life Insurance and more

Complimentary Theme Park Passports

Educational Reimbursement

Learning and Development Opportunities

The Walt Disney Company Foundation Scholarship Program

Employee Stock Purchase Program

Disney TEAM Discounts, including Disney products and merchandise

Credit Unions

Educational Matching Gifts Program

Disney Volunteers

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Service Awards

Personal Assistant Network

WORK/LIFE EFFECTIVENESS
At Disney, their people are the most valuable asset and who are committed to fostering a
culture that exhibits this value. Disney goal is to enable employe es to maximize their
contribution to the company while also maintaining effectiveness between their work and
personal lives. Disney advocate flexibility in the workplace to empower employees, teams
and managers to hold discussions about both the needs of the business and each employee's
individual Work/Life Effectiveness goals, and then to construct a plan for fulfilling both
priorities. As individual circumstances vary, solutions that enable flexibility can be different,
including informal and formal flexible work arrangements such as variable daily work times,
work-from-home, and part -time work arrangements.

Learning
At The Walt Disney Company, we know our employees and Cast Members make the magic
happen. Since our brands are innovative, entertaining and inviting, we create a similar
learning environment that encourages employees to learn and develop in engaging and
empowering ways.
The Walt Disney Company provides a menu of training programs and learning opportunities,
designed to build the capabilities of its employees and Cast Members around the world,
including:

Disney programs

New Hire Orientation

Disney Dimensions, an Executive Development Program

Disney Way I designed to showcase the various Disney businesses to managers and
above

Disney Ethics, Inte grity, and Diversity Programs

Professional Development

Management/Leadership Development

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Computer Skills

Career Management Program


Disney is committed to developing its workforce and helping employees achieve their
personal and professional best. Through an intensive, 1 year Career Management Program,
Disney strives to develop, fully engage, and retain high-performing talent. Specifically,
participants in the program spend maximum number of hours per month developing and
strengthening network and mentorin g relationships; engaging in new activities; and exploring
new assignments or positions at Disney. Managers participate in a kickoff session and a midprogram discussion with the coach and participant, in addition to holding monthly careerrelated discussions with participants.

ENVIRONMENTAL ANALYSIS
INTERNAL ENVIRONMENT
Disney thrives on being the best in whatever it does, from offering the best customer
experience to recruiting the best and brightest talent. In fact, its employees view Disney
diversity in itiatives as a competitive advantage that fosters a winning culture and leverages
the vast skills, similarities and differences of the Disney team so that they can be the best in
the global marketplace.

Disney encouraging stance


At Disney, the management is committed to understanding and responding to the challenges
women face around the world in balancing their professional and personal needs. It
understands the importance of providing meaningful opportunities and resources to support
women's success in Disneys business. The managements focus on building a global
Women's Strategy across all Disney locations provides them the tools they need to fully
access and leverage female talent globally.

Cross-Cultural Training
Disney Diversity strategy is focused on driving an environment of inclusion, where
employees are embraced and accepted as an integral part of the team wherever they work.
The management is committed to cross-cultural training and eliminating barriers that hinder
their multicultural team from achieving their personal and professional best. Additionally,
799

working successfully with people from different cultures and countries is a skill that greatly
impacts Disney`s ability to compete in the global markets its employees serve.

Recruiting Policy
Disneys recognizes that a diverse workforce is critical to the exploration of new ideas and
the creation of innovation. It is committed to ensuring its managers identify the best and
brightest diverse candidates in the marketplace to join the Disney team. The ir relationships
with diverse partners are what help them reach multicultural consumer groups across the
world and recruit the best and brightest talent.
Disney actively recruits women and minorities by sponsoring professional conferences,
career fairs and community events with minority organizations. It partners with a number of
organizations to identify new talent, including:

Workforce Diversity
Disneys workforce is made up of approximately 100,000 employees who live and work in 6
continents and deliver products and services to more than 190 countries. There is indeed a
great accommodation for every sort of person and from across the globe. Women, young, old
etc everyone has placed but the only thing is the potential.

EXTERNAL ENVIRONMENT
AOL TIME WARNER, INC.
The recent AOL/Time Warner merger is one of the most significant mergers in the history of
corporate America. For years, Time Warner was a media giant, producing films, television
networks, professional sports, and digital media. They also held the brand name, Warner
Brothers. America Online is currently the #1 internet service and owns Netscape and
CompuServe. Together, AOL Time Warner, Inc. will challenge the industry dominance of
The Walt Disney Company.
AOL Time Warner, Inc. is Disney's chief competitor. This company not only challenges
Disney's television interests, but also looks to be competitor in merchandising. The Warner
Brother label will be the name brand name in this merchandising effort. The merger put the
final nail in the coffin of The Go Network and has had a significant effect upon Disney
Internet interests.

800

Viacom
Viacom is the world's third largest media company. They operate well known affiliates such
as CBS Enterprises, Paramount Television, Blockbuster Video, and Infinity Broadcas ting.
Viacom also produces TV shows and motion pictures through popular cable outlets. The most
popular of these channels are Black Entertainment Television, Showtime, MTV Networks,
and the United Paramount Network (UPN).
CBS promises new programming and a strong late night lineup that may challenge the
success of ABC and their hit television show, "Who Wants To Be A Millionaire". CBS offers
a huge threat to the future of The Walt Disney Company and The ABC television network. In
order to maintain its posit ion as the world's #1 media conglomerate, Disney must continue to
improve upon the quality of its television programming.

Fox Entertainment
The Fox Entertainment Group is a serious competitor to the strength of Disney's television
networks. Popular Fox shows, such as Ally McBeal, and sporting interests, such as the
broadcasting rights to the National Football league have challenged Disney's television
dominance.
IDC reported that Disney lost more server market share than any of the top four competitors
in that arena. IDC's Q4 2006 estimates show Disney's share of the server market at 8.1%,
down from 9.5% in the previous year. This represents an 8.8% loss year-over-year, primarily
to competitors EMC and IBM.

SWOT ANALYSIS OF DISNEY


STRENGTHS

It is the larges t media and entertainment company in the world.

It has become one of the biggest Hollywood studios.

Disney Company owns 11 theme parks and several channels.

Disney employees 150,000 people.

Innovative ideas

801

Global standardization

It is among the popular brand names in the world.

It has well established divisions Walt Disney Studio Entertainment, Disney-ABC


Television Group, Disney Interactive Media Group, Disney Consumer Products,
Walt D isney Parks and Resorts, Disney Interactive Studios.

Increasing trends in overall revenues and profits.

Disney holds US$ 62.497 billion of assets.

Popular characters

High brand awareness among the people.

Differentiation

The Walt Disney logo is famous.

Walt Disney was ranked 8th in the Top 100 Global Brands.

WEAKNESSES

High operating cost

Frequent change in top management

The $1.8 Billion park has only 16 attractions.

Religious welfare group protest against the release of material which was found
offensive by many people.

Poor working conditions in factories that produce their merchandise.

Disney was also criticized by animal welfare group for their caring procedure for
animals at Disneys Animal Kingdom theme Park.

Poor management.

Disney has been blamed of having sexual implication or references concealed in some
of their animated movies, including The Lion King, The Little Mermaid, Aladdin,
Who Framed Roger Rabbit, and Disneys original releases of The Rescuers.

High investment with high risk involved.

802

Continuous innovative ideas are required to retain the attention of customers.

Limited range of target audience mainly Children.

OPPORTUNITIES

Move into different segments

Proper inventory management

Market development in untapped countries.

Reduction in operating costs.

Disney music channel

Benchmarking to improve management practices.

Disney school of management and training

Online Websites

Develop more attractions for theme park.

THREATS

Security Threats due to terrorism

Employee retention

High competition in Media Industry.

Facing fierce competition from Paramount Parks, Universal Studios and Six
Flags Theme Parks.

Social and ethnic groups.

Government policies

High demanding market in terms of innovation.

Increasing salaries and labor cost.

Recession

Maintain product differentiation.

Tight competition in national and international markets.


803

Searching, paying and retaining innovative people.

Piracy

DISNEY EXPLOITATION OF ITS STRENGTHS


Disney maintained and increased their competitive advantage. They use the most productive
and innovative form of ideas and shape it into best picture with available best technology.
They have one of the best production team and very friendly and best environment to work
in. They have all the available tools to have an edge over others. They maintain their global
standards and quality of work.

GLOBAL PRINCIPLES.
CAPITALIZE ON CURRENT EVENTS
Mickies dog was named Pluto after the new planet discovered.

GET YOUR EMPLOYEES BEHIND YOUR PRODUCT


Give party after any success.

EMBRACE NEW TECHNOLOGY


Added sound to mickie`s voice. Accepted new technology and implement it.

SURPRISE
They have added surprises to their inventions. The years of Millions Dreams.

DETAILING
Paid attention all sort of details.

EVOLVE
Creation of toon town

FOR THEIR EXISTING EMPLOYEES


Different sort of benefits for them in different ways.

804

CONCLUSION
Disney is a company that understands proper diversification. Walt Disney intuitive
comprehension of synergy, magic, in his lexicon, is the driving force behind the companys
continued success. While imperfect in the present day, Disneys creative use of
diversification ultimately has the potential of creating a vast amount of shareholder value
through propagating this, magic, throughout society in ways previously unimagined.

REFERENCES
http://www.providence.edu/polisci/students/disney/competitors.htm

"Guide

to

Electronics". Greenpeace International. Retrieved (2011-01-13).


http://www.articledashboard.com/Article/A-Brief -H istory-Of-Disney/
http://www.google.com.pk/search?q=global+perspectives+walt+disney+company.
http://corporate.disney.go.com/corporate/cr_business_standards.html
http://www.scribd.com/doc/3708923/Walt-Disney
http://www.google.com.pk/imgres?imgurl=http://www.realestatechannel.com/newsassets/hong-kong-disney.jpg&imgrefurl

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Greener

SMITH & WESSON

806

INTRODUCTION
Smith & Wesson (NASDAQ: SWHC) (S&W) is the largest manufacturer of handguns in
the United States. The corporate headquarters is in Springfield, Massachusetts. Founded in
1852, Smith & Wesson's pistols and revolvers have become standard issue to police and
armed forces throughout the world. Consequently they have been used by sport shooters and
have been featured in numerous Hollywood movies, particularly Clint Eastwood's Dirty
Harry. Smith & Wesson has been known for the many types of ammunition it has introduced
over the years, and many cartridges bear the company's name.

HISTORY
In 1852 partners Horace Smith and Daniel B. Wesson formed a company to produce a leveraction pistol nicknamed the Volcanic pistol. The company became known as the "Volcanic
Repeating Arms Company"; financial difficulties caused it to come into the majority
ownership of investor Oliver Winchester. Previously, in the late 1840s, Daniel Wesson's
brother Edwin, of Hartford, Massachusetts, had manufactured revolvers under the name of
Wesson & Leavitt. After Edwin Wesson's death, that firm continued under the supervision of
Thomas Warner.[3]
In 1856 the partners left the Volcanic Company to begin a new company and to manufacture
a newly-designed revolver-and-cartridge combination which would become known as
the Smith & Wesson Model 1.[3] The success of Model 1 was due to a combination of new
innovations, the bored through cylinder and the self-contained metallic cartridge. A man by
the name of Rollin White had patented his invention, patent (#12,648, April 3, 1855) on
bored-through revolver cylinders for metallic cartridge use. Smith & Wesson negotiated with
Rollin White for assignment of the patent, agreeing to pay him a small royalty on every pistol
sold. In return, White agreed to pay any legal fees associated with the defense of his patent
against any infringements. For more than one decade Smith & Wesson was the sole
manufacturer of this technological improvement. However, the success did not come without
a fight. Other manufacturers quickly developed unique metallic cartridges and cylinders
designed to circumvent White's patent. White took these manufactures to court, where he
eventually won in 1862, however full implementation of the ruling did not take effect until
1865. The timing of the founding of this new company proved quite opportune for the

807

partners, since the onset of the American Civil War five years later produced a great demand
for Smith & Wesson's products, specifically the Smith & Wesson Model 2.[3]
In 1867, Smith & Wesson began a global sales campaign that introduced the company's
revolvers and ammunition to new markets, such as Russia , and established the company as
one of the world's premier makers of firearms.[3] The Smith & Wesson Model 3, eventually
became known as the "Russian Model" and was a favorite of US Lawman, Wyatt Earp. The
US Army adopted the Model 3 as the "Schofield" and used it throughout the Indian Wars of
the West.
In 1964 the company passed from Wesson family control, and subsequently several
conglomerates took control of it.
Between 1987 and 2001 Smith & Wesson was owned by the British engineering
company Tomkins PLC.

S&W ORGANIZATIONAL CULTURE


1. Director Qualifications
Independence and Other Qualifications. A majority of the members of the Board of Directors
must meet the criteria for independence required by the Nasdaq Stock Market. The
Nominations Committee is responsible for reviewing with the Board, on an annual basis, the
requisite skills and characteristics required for new Board members as well as the
composition of the Board as a whole. This assessment may include, among other things, the
following:

Diversity, age, background, skills, and experience.

Personal qualities and characteristics, accomplishments, and reputation in the business


community.

Knowledge and contacts in the communities in which the Company conducts business
and in the Companys business industry or other industries relevant to the Companys
business.

Ability and willingness to devote sufficient time to serve on the Board and committees of
the Board.

808

Knowledge and expertise in various activities deemed appropriate by the Board, such as
marketing, production, distribution, technology, accounting, finance, and law.

Fit of the individuals skills, experience, and personality with those of other directors in
maintaining an effective, collegial, and responsive Board.

Nominees for directors will be made or recommended by the Nominations Committee in


accordance with the policies and principles in its charter and as determined by the Board of
Directors.

Invitation to Serve
The invitation to join the Board should be extended by the Board itself, by the Chairman of
the Nominations Committee, and by the Chairman of the Board.

Board Size
The Board and the Nominations Committee will assess from time to time the number of
members on the Board of Directors. The Board will consider an increase in the membership
of the Board to accommodate the availability of an outstanding candidate or to meet other
needs.

Change of Positions
The Board will consider whether individual directors who change the responsibility they held
when they were elected to the Board should continue to serve on the Board. The Board does
not believe, however, that in every instance a director who retires or changes from the
position held when the director joined the Board should necessarily leave the Board. There
should, however, be an opportunity for the Board, through the Nominations Committee, to
review the continued appropriateness of Board membership under the circumstances.

Service on Other Boards


No director should serve on the boards of more than three other public companies unless it is
determined, based on the individual facts, that such other service will not interfere with
service on the Board. Directors should advise the Chairman of the Board and t he Chairman of
the Nominations Committee in advance of accepting an invitation to serve on another public
company board.

809

Term Limits. The Board does not believe it should establish term limits. While term limits
could help insure that there are fresh ideas and viewpoints available to the Board, term limits
involve the disadvantage of losing the contribution of directors who have been able to
develop, over a period of time, increasing insight into the Company and its operations and,
therefore, provide an increasing contribution to the Board as a whole. As an alternative to
term limits, the Nominations Committee will review each directors continuation on the
Board at least every three years. This will allow each director the opportunity to confirm his
or her desire to continue as a member of the Board and the Board, through the Nominations
Committee, to consider the appropriateness of the director's continued service.

Retirement of Directors
The Board of Directors does not believe it should establish a mandatory retirement age. The
Board and the Nominations Committee will review, in connection with the process of
selecting nominees for election at annual meetings of stockholders, each directors
continuation on the Board upon a director reaching the age of 70.

2. Director Responsibilities
Responsibility and Indemnification
The basic responsibility of the directors is to exercise their business judgment to act in what
they reasonably believe to be in the best interests of the Company and its stockholders. In
discharging this obligation, directors should be entitled to rely on the honesty and integrity of
the Companys senior executives and its outside advisors and auditors. The directors will also
be entitled to be covered by reasonable directors and officers liability insurance purchased
by the Company on their behalf; to the benefits of indemnification to the fullest extent
permitted by law and by the Companys certificate of incorporation, by-laws, and any
indemnification agreements; and to exculpation as provided by state law and the Companys
certificate of incorporation.

Time Commitment
Directors are expected to attend Board meetings and meetings of Board committees on which
they serve, to spend the time needed to discharge their Board duties in a reasonable manner,
and to meet as frequently as necessary to properly discharge their responsibilities.

810

Information and data that are important to the Boards understanding of the business to be
conducted at a Board or committee meeting should generally be distribut ed in writing to the
directors before the meeting, and directors should review these materials in advance of the
meeting.

Separation of Duties
The Board has no policy with respect to the separation of the offices of Chairman and the
Chief Executive Officer. The Board believes that this issue is part of the succession planning
process and that it is in the best interests of the Company for the Board to make a
determination when it elects a Chief Executive Officer.

Agendas
The Chairman should establish the agenda for each Board meeting. At the beginning of each
fiscal year, the Chairman should establish a schedule of agenda subjects to be discussed
during the year to the degree this can be foreseen. Each Board member may suggest the
inclusion of items on the agenda. Each Board member also may raise at any Board meeting
subjects that are not on the agenda for that meeting. The Board will review the Companys
long-term strategic plans and the principal issues that the Company will face in the future
during at least one Board meeting each year.

Executive Sessions
The independent directors will meet in regularly scheduled executive sessions, generally in
connection with regularly scheduled Board meetings. The director chosen to preside at each
of these meetings, or the method of selecting the director to preside at such meetings, and the
name or names of that director or directors or method of selection, will be disclosed in the
annual proxy statement.

Attendance at Annual Meeting, of Stockholders.


The Company believes that it is important for and encourages the members of the Board of
Directors to attend annual meetings of stockholders. To facilitate this, and to the extent
reasonably practicable, the Company endeavors to schedule a regular meeting of the Board of
Directors on the same date as the annual meeting of stockholders.

811

Spokespersons
The Board believes that the management speaks for the Company. Individual Board
members, from time to time, may meet or otherwise communicate with various constituencies
that are involved with the Company. It is expected, however, that Board members would do
this with the knowledge of the management and, absent unusual circumstances or as
contemplated by the committee charters, only at the request of management.

3. Board Committees
Establishment of Committees
The Board at all times will have an Audit Committee, a Compensation Committee, and a
Nominations Committee. All of the members of these committees will be independent
directors under the criteria established by the Nasdaq Stock Market, subject to the limited
exceptions provided for therein. Members of the Audit Committee also must meet the
standards set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934.
Committee members will be appointed by the Board upon recommendation of the
Nominations Committee taking into consideration the desires of individual directors. It is the
sense of the Board that consideration should be given to rotating committee members
periodically, but the Board does not believe that rotation should be mandated as a policy.

Committee Charters
Each committee will have its own formal written charter. The charter for each committee will
set forth the purposes, goals, and responsibilities of the committee as well as qualifications
for committee membership, procedures for committee member appointment and removal,
committee structure and operations, and committee reporting to the Board. Each committee
charter will also provide that the committee will annually evaluate its performance.

Committee Meetings
The Chairman of each committee, in consultation with the committee members, will
determine the frequency and length of the committee meetings consistent with any
requirements set forth in the committees charter. The Chairman of each committee, in
consultation with the members of the committee and management, will develop the
committees agenda. At the beginning of each fiscal year, each committee will establish a
812

schedule of agenda subjects to be discussed during the year, to the degree these can be
foreseen. The schedule for each committee will be furnished to all directors.

Committee Advisors
The Board and each committee have the power to hire and compensate independent legal,
financial, and other advisors as they may deem necessary, without consulting with or
obtaining the approval of any officer of the Company in advance.

Delegation
The Board, from time to time, may establish or maintain additional committees as necessary
or appropriate.

4. Director Access to Officers and Employees


Directors have full and free access to officers and employees of the Company. Any meetings
or contacts that a director wishes to initiate may be arranged through the CEO or the
Secretary or directly by the director. The directors will use their judgment to ensure that any
such contact is not disruptive to the business operations of the Company and will, to the
extent not inappropriate, copy the CEO on any written communications between a director
and an officer or employee of the Company.
The Board, as appropriate in its uj dgment, may invite senior officers of the Company to
attend Board meetings. If the CEO wishes to have Company personnel attend meetings on a
regular or periodic basis, this suggestion should be brought to the Board for approval.

5. Director Compensation
The form and amount of director compensation will be determined by the Compensation
Committee in accordance with the policies and principles set forth in its charter, and the
Compensation Committee will conduct an annual review of director compensation. The
Compensation Committee will consider that directors independence may be jeopardized if
director compensation and perquisites exceed customary levels, if the Company makes
substantial charitable contributions to organizations with which a director is affiliated, or if
the Company enters into consulting contracts with (or provides other indirect forms of
compensation to) a director or an organization with which the director is affiliated.

813

6. Director Orientation and Continuing Education


Each new director should participate in an orientation program, which should be conducted
promptly following the meeting at which a new director is elected. This orientation may
include presentations by senior management to familiarize each new director with the
Companys strategic plans; its significant financial, accounting, and risk management issues;
its compliance programs; its Code of Conduct; its principal officers; and its independent
auditor. In addition, the orientation program should include visits to the Company's
headquarters and, to the extent practical, certain of the Companys significant facilities. All
other directors are also invited to attend the orientation program.

7. Compensation and Management Succession


The Compensation Committee also will determine, or recommend to the Board of Directors
for determination, the compensation of the CEO and other executive officers of the
Company.
The Nominations Committee should make an annual report to the Board on succession
planning. As appropriate, the entire Board will work with the Nominations Committee to
nominate and evaluate potential successors to the CEO. The CEO should at all times make
available his or her recommendations and evaluations of potential successors, along with a
review of any development plans recommended for such individuals.

8. Annual Performance Evaluation


The Board of Directors will conduct an annual self-evaluation to determine whether it and its
committees are functioning effectively. The Nominations Committee will receive comments
from all directors and report annually to the Board with an assessment of the Boards
performance. This assessment will be discussed with the full Board following the end of each
fiscal year. The assessment will focus on the Boards contribution to the Company and on
areas in which the Board or management believes that the Board could improve.

814

ENVIRONMENTAL ANALYSIS
INTERNAL ENVIRONMENT
Their Code of Conduct covers a wide range of business practices and procedures. It does not
cover every issue that may arise, but it sets out basic principles to guide the directors,
officers, and employees of the Company. All Company directors, officers, and employees
should conduct themselves accordingly and seek to avoid even the appearance of improper
behavior in any way relating to the Company. In appropriate circumstances, this Code should
also be provided to and followed by the Companys agents and representatives, including
consultants.
Any director or officer who has any questions about this Code should consult with the Chief
Executive Officer, the Chief Financial Officer, or legal counsel as appropriate in the
circumstances. If an employee has any questions about this Code, the employee should ask
his or her supervisor how to handle the situation.

1. Scope of Code.
This Code is intended to deter wrongdoing and to promote the following:

honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships;

full, fair, accurate, timely, and understa ndable disclosure in reports and documents the
Company files with, or submits to, the Securities and Exchange Commission (the
SEC) and in other communications made by the Company;

compliance with applicable governmental laws, rules, and regulations;

the prompt internal reporting of violations of this Code to the appropriate person or
persons identified in this Code;

accountability for adherence to this Code; and

adherence to a high standard of business ethics.

2. Compliance with Laws, Rules, and Regulatio ns


Obeying the law, both in letter and in spirit, is the foundation on which the Companys
ethical standards are built. All directors, officers, and employees should respect and obey all
815

laws, rules, and regulations applicable to the business and operations of the Company.
Although directors, officers, and employees are not expected to know all of the details of
these laws, rules, and regulations, it is important to know enough to determine when to seek
advice from supervisors, managers, officers or other a ppropriate Company personnel.

3. Conflicts of Interest
A conflict of interest exists when an individuals private interest interferes in any way or
even appears to conflict with the interests of the Company. A conflict of interest situation
can arise when a director, officer, or employee takes actions or has interests that may make it
difficult to perform his or her work on behalf of the Company in an objective and effective
manner. Conflicts of interest may also arise when a director, officer, or employee, or a
member of his or her family, receives improper personal benefits as a result of his or her
position with the Company. Loans to, or guarantees of obligations of, employees and their
family members may create conflicts of interest.
Service to the Company should never be subordinated to personal gain or advantage.
Conflicts of interest, whenever possible, should be avoided. In particular, clear conflict of
interest situations involving directors, officers, and employees who occupy supervisory
positions or who have discretionary authority in dealing with any third party may include the
following:

any significant ownership interest in any supplier or customer;

any consulting or employment relationship with any customer, supplier, or


competitor;

any outside business activity that detracts from an individuals ability to devote
appropriate time and attention to his or her responsibilities to the Company;

the receipt of non-nominal gifts or excessive entertainment from any organization


with which the Company has current or prospective business dealings;

being in the position of supervising, reviewing, or having any influence on the job
evaluation, pay, or benefit of any family member; and

Selling anything to the Company or buying anything from the Company, except on
the same terms and conditions as comparable directors, officers, or employees are
permitted to so purchase or sell.
816

It is almost always a conflict of interest for a Company officer or employee to work


simultaneously for a competitor, customer, or supplier. No officer or employee may work for
a competitor as a consultant or board member. The best policy is to avoid any direct or
indirect business connection with the Company's customers, suppliers, and competitors,
except on the Company's behalf.
Conflicts of interest are prohibited as a matter of Company policy, except under guidelines
approved by the Board of Directors. Conflicts of interest may not always be clear-cut and
further review and discussions may be appropriate. Any director or officer who becomes
aware of a conflict or potential conflict should bring it to the attention of the Chief Executive
Officer, the Chief Financial Officer, or legal counsel as appropriate in the circumstances. Any
employee who becomes aware of a conflict or potential conflict should bring it to the
attention of a supervisor, manager, or other appropriate personnel.

4. Insider Trading
Directors, officers, and employees who have access to confidential information relating to the
Company are not permitted to use or share that information for stock trading purposes or for
any other purpose except the conduct of the Company's business. All non-public information
about the Company should be considered confidential information. To use non-public
information for personal financial benefit or to tip others who might make an investment
decision on the basis of this information is not only unethical and against Company policy
but is also illegal. Directors, officers, and employees also should comply with insider trading
standards and procedures adopted by the Company. If a question arises, the director, officer,
or employee should consult with the Companys Chief Financial Officer.

EXTERNAL ENVIRONMENT
5. Corporate Opportunities
Directors, officers, and employees are prohibited from taking for themselves personally or
directing to a third party any opportunity that is discovered through the use of corporate
property, information, or position without the consent of the Board of Directors. No director,
officer, or employee may use corporate property, information, or position for improper
personal gain, and no director, officer, or employee may compete with the Company directly

817

or indirectly. Directors, officers, and employees owe a duty to the Company to advance its
legitimate interests when the opportunity to do so arises.

6. Competition and Fair Dealing


The Company seeks to compete in a fair and honest manner. The Company seeks competitive
advantages through superior performance rather than through unethical or illegal business
practices. Stealing proprietary information, possessing trade secret information that was
obtained without the owners consent, or inducing such disclosures by past or present
employees of other companies is prohibited. Each director, officer, and employee should
endeavor to respect the rights of and deal fairly with the Companys customers, suppliers,
service providers, competitors, and employees. No director, officer, or employee should take
unfair advantage of anyone relating to the Companys business or operations through
manipulation, concealment, or abuse of privileged information, misrepresentation of material
facts, or any unfair dealing practice.
To maintain the Companys valuable reputation, compliance with the Company's quality
processes and safe ty requirements is essential. In the context of ethics, quality requires that
the Company's products and services meet reasonable customer expectations. All inspection
and testing documents must be handled in accordance with all applicable regulations.
The purpose of business entertainment and gifts in a commercial setting is to create good will
and sound working relationships, not to gain unfair advantage with customers. No gift or
entertainment should ever be offered, given, provided, or accepted by a director, officer, or
employee, family member of a director, officer, or employee, or agent relating to the
individuals position with the Company unless it (1) is not a cash gift, (2) is consistent with
customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe
or payoff, and (5) does not violate any laws or regulations. A director or officer should
discuss with the Chief Executive Officer or Chief Financial Officer, and a employee should
discuss with his or her supervisor , any gifts or proposed gifts that the individual is not certain
are appropriate.

7. Discrimination and Harassment


The diversity of the Companys employees is a tremendous asset. The Company is firmly
committed to providing equal opportunity in all aspects of employment and will not tolerate

818

any illegal discrimination or harassment or any kind. Examples include derogatory comments
based on racial or ethnic characteristics and unwelcome sexual advances.

8. Health and Safety


The Company strives to provide eac h employee with a safe and healthful work environment.
Each officer and employee has responsibility for maintaining a safe and healthy workplace
for all employees by following safety and health rules and practices and reporting accidents,
injuries, and uns afe equipment, practices, or conditions.
Violence and threatening behavior are not permitted. Officers and employees should report to
work in a condition to perform their duties, free from the influence of illegal drugs or alcohol.
The use of illegal drugs in the workplace will not be tolerated..

9. Record -Keeping
The Company requires honest and accurate recording and reporting of information in order to
make responsible business decisions.
Many officers and employees regularly use business expense accounts, which must be
documented and recorded accurately. If an officer or employee is not sure whether a certain
expense is legitimate, the employee should ask his or her supervisor or the Company's
controller. Rules and guidelines are available from the Accounting Department.
All of the Companys books, records, accounts, and financial statements must be maintained
in reasonable detail, must appropriately reflect the Companys transactions, and must
conform both to applicable legal requirements and to the Compa nys system of internal
controls. Unrecorded or off the books funds or assets should not be maintained unless
permitted by applicable law or regulation.
Business records and communications often become public, and the Company and its officers
and employees in their capacity with the Company should avoid exaggeration, derogatory
remarks, guesswork, or inappropriate characterizations of people and companies that can be
misunderstood. This applies equally to e-mail, internal memos, and formal reports. The
Companys records should always be retained or destroyed according to the Companys
record retention policies. In accordance with those policies, in the event of litigation or
governmental investigation, directors, officers, and employees should consult with the

819

Companys Chief Financial Officer or legal counsel before taking any action because it is
critical that any impropriety or possible appearance of impropriety be avoided.

10. Confidentiality
Directors, officers, and employees must maintain the confidentiality of confidential
information entrusted to them by the Company or its customers, suppliers, joint venture
partners, or others with whom the Company is considering a business or other transaction
except when disclosure is authorized by an executive officer or required or mandated by laws
or regulations. Confidential information includes all non-public information that might be
useful or helpful to competitors or harmful to the Company or its customers and suppliers, if
disclosed. It also includes information that suppliers and customers have entrusted to the
Company. The obligation to preserve confidential information continues even after
employment ends.

11. Protection and Proper Use of Company Assets


All directors, officers, and employees should endeavor to protect the Companys assets and
ensure their efficient use. Theft, carelessness, and waste have a direct impact on the
Companys profitability. Any suspected incident of fraud or theft should be immediately
reported for investigation. Compa ny assets should be used for legitimate business purposes
and should not be used for non-Company business.
The obligation to protect the Companys assets includes its proprietary information.
Proprietary information includes intellectual property, such as trade secrets, patents,
trademarks, and copyrights, as well as business, marketing and service plans, engineering and
manufacturing ideas, designs, databases, records, salary information, and any unpublished
financial data and reports. Unauthorized use or distribution of this information would violate
Company policy. It could also be illegal and result in civil or even criminal penalties.

12. Payments to Government Personnel


The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or
indirectly, to officials of foreign governments or foreign political candidates in order to
obtain or retain business. It is strictly prohibited to make illegal payments to government
officials of any country.

820

In addition, the U.S. government has a number of laws and regulations regarding business
gratuities that may be accepted by U.S. government personnel. The promise, offer, or
delivery to an official or employee of the U.S. government of a gift, favor, or other gratuity in
violation of these rules would not only violate Company policy but could also be a criminal
offense. State and local governments, as well as foreign governments, may have similar rules.

13. Corporate Disclosures


All directors, officers, and employees should support the Companys goal to have full, fair,
accurate, timely, and understandable disclosure in the periodic reports required to be filed by
the Company with the SEC. Although most employees hold positions that are far removed
from the Companys required filings with the SEC, each director, officer, and employee
should promptly bring to the attention of the Chief Executive Officer, the Chief Financial
Officer, the Companys Disclosure Committee, or the Audit Committee, as appropriate in the
circumstances, any of the following:

Any material information to which such individual may become aware that affects the
disclosures made by the Company in its public filings or would otherwise assist the
Chief Executive Officer, the Chief Financial Officer, the Disclosure Committee, and
the Audit Committee in fulfilling their responsibilities with respect to such public
filings.

Any information the individual may have concerning (a) significant deficiencies in
the design or operation of internal controls that could adversely affect the Company's
ability to record, process, summarize, and report financial data or (b) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company's financial reporting, disclosures, or internal controls.

Any information the individual may have concerning any violation of this Code,
including any actual or apparent conflicts of interest between personal and
professional relationships, involving any management or other employees who have a
significant role in the Company's financial reporting, disclosures, or internal controls.

Any information the individual may have concerning evidence of a material violation
of the securities or other laws, rules, or regulations applicable to the Company and the
operation of its business, by the Company or any agent thereof, or of violation of this
Code.
821

14. Waivers of the Code of Conduct


Any waiver of this Code for directors or executive officers may be made only by the Board of
Directors or a committee of the Board and will be promptly disclosed to stockholders as
required by applicable laws, rules, and regulations, including the rules of the SEC and
NASDAQ. Any such waiver also must be disclosed in a Form 8-K.

15. Publicly Available


This Code shall be posted on the Companys website.

16. Reporting any Illegal or Unethical Behavior


Directors and officers are encouraged to talk to the Chief Executive Officer, the Chief
Financial Officer, or legal counsel, and employees are encouraged to talk to supervisors,
managers, or other appropriate personnel, when in doubt about the best course of action in a
particular situation. Directors, officers, and employees should report any observed illegal or
unethical behavior and any perceived violations of laws, rules, regulations, or this Code to
appropriate personnel. It is the policy of the Company not to allow retaliation for reports of
misconduct by others made in good faith. Directors, officers, and employees are expected to
cooperate in internal investigations of misconduct.
The Company maintains a Whistleblower Policy, for (1) the receipt, retention, and treatment
of complaints received by the Company regarding accounting, internal accounting controls,
or auditing matters and (2) the confidential, anonymous submission by the Companys
employees of concerns regarding questionable accounting or auditing matters.

17. Enforcement
The Board of Directors shall determine, or designate appropriate persons to determine,
appropriate actions to be taken in the event of violations of this Code. Such actions shall be
reasonably designed to deter wrongdoing and to promote accountability for adherence to this
Code and to these additional procedures, and may include written notices to the individual
involved that the Board has determined that there has been a violation, censure by the Board,
demotion or re-assignment of the individual involved, suspension with or without pay or
benefits (as determined by the Board), and termination of the individual's employment or
position. In determining the appropriate action in a particular case, the Board of Directors or
such designee shall take into account all relevant information, including the nature and
822

severity of the violation, whether the violation was a single occurrence or repeated
occurrences, whether the violation appears to have been intentional or inadvertent, whether
the individual in question had been advised prior to the violation as to the proper course of
action, and whether or not the individual in question had committed other violations in the
past.

SWOT ANALYSIS
STRENGTHS

Thompson/Center Arms, Inc., a premier designer and manufacturer of premium hunting


rifles, black powder rifles, interchangeable firearms systems and accessories under the
Thompson/Center brand. Smith & Wesson licenses 0shooter eye and ear protection,
knives, apparel, and other accessory lines.

Smith & Wesson is the largest manufacturer of handguns in the United States and one of
the most recognizable brands in the world. They manufacture and distribute a full line of
firearms for defense, law enforcement, hunting and sporting.

They provide products that are utilized by virtually every police agency and military force
around the world and The Smith & Wesson Academy is America's longest running
firearms training facility for law enforcement, military and security professionals. Law
enforcement personnel from every state and over 50 foreign countries have come to the
Springfield, Massachusetts facility to receive state-of-the-art instruction, to prepare for
and exceed the demanding needs of law enforcement. The academy's superior training
gives today's police force the tools necessary to handle tomorrow's most extreme
situations.

They are a company dedicated to research and development and have produced the first
American made double action auto-loading pistol, stainless steel firearms and perimeter
security systems and have driven product development for more than 150 years.

In 2009 they won the first ever ASIS Accolades Award for the Expeditionary Mobile
Barrier (EMB) in the category of Most Transformational Product or Service. The EMB is
a completely mobile barrier that can stop a 7,500-pound vehicle traveling 45 miles-perhour. This product increases the likelihood that vehicle occupants will be unharmed. It is

823

immediately resettable after impact, with few or no replaced parts. An adjustable net
allows the system to secure a variety of roadway widths without requiring additional
parts.

Smith and Wesson's Universal Safety Response (USR) serves a variety of clients in the
defense, transportation and petro-chemical industries, as well as corporate facilities,
airports, Fortune 500 companies, national laboratories and museums. USR's security
systems are also used by the US Homeland Security and to safeguard high-risk facilities.

They are a leading advocate of the development and use of firearms safety devices,
incorporated multiple safety features into each of their handguns, maintained the
country's longest-running shooters training facility, promoted the NSSF "Child Safe" gun
lock program nationwide, and they currently license numerous safety devices to the
shooting sports market.

Despite the economic recession in the Unites States, sales grew 13.2% in 2008.

They have a 70% market share in the handgun segment of the firearms industry in the
United States.

WEAKNESSES

Only 7% of their sales are produced from international venues. A vast majority of their
sales are in the United States market, and while they are an international company, their
sales and market share in foreign markets are low.

They do not dominate the hunting enthusiast market.

From 2004 to 2009, sales of revolvers dropped from about 40% of the company's sales to
around 20%.

OPPORTUNITIES

To diversify and add breadth to its brand, the firm licenses its name to makers of apparel,
watches, sunglasses, gift sets, and more.

The creation of law enforcement products that do not injure public offenders; such as
guns that shoot "bean bags" or "large pellets."

824

Technological advancements for this company are always leading to more opport unitiesfor instance they could create a gun that has fingerprint recognition capabilities and can
only be fired by whoever programmed the gun.

Expanding its products in the areas of tactical and long-gun lines, as well as non-firearm
products and services.

THREATS

Their major competitors are Browning Arms, Glock and Ruger.

Sales of firearms in the United States are based on laws passed by the government giving
citizens the right to carry weapons; however, this is a hotly debated issue and could
change.

Expanding into foreign markets is challenging due to political and legal laws prohibiting
the sale and use of weapons. In some countries only law enforcement is allowed to carry
weapons.

S&W EXPLOITATION OF ITS STRENGTHS


S&W is maintained and increased their competitive advantage. They want to maintain a low
cost position to maximize the value passed on to customers, while driving costs lower and
lower. They also want to drive aggressive pricing and profitability gain share. S&W wants to
always put customers first and remain aggressive about driving improved customer value
across all S&W business. Employee support of Product Leadership, Customer Experience,
and Globalization is also important to the company. They want to have the best product in the
marketplace and gain as much share in the market as possible. One way of achieving this
would be to drive more than two-thirds of their sales and service transactions online.
S&W 's strategies are built around several key elements: build-to-order manufacturing, mass
customization, partnerships with suppliers, just-in-time inventories, direct sales, market
segmentation, customer service, and extensive information sharing with both supply partners
and customers. With build-to-order manufacturing, S&W built its s, workstations, and servers
to order based on the needs of their customers. The orders were directed to the nearest
factory. They reorganized plants and shifted to "cell manufacturing" whereby a team of
workers assemble one PC rather than typical assembly line production. The result of this
change was that there was no-in-house stock of finished goods inventories and they did not
825

have to wait for resellers to clear inventories before new models could be pushed into the
marketplace.

SERVICES
In addition to providing some of the highest quality products available today, Smith &
Wesson is committed to providing our customers with support and services second to none.
When you purchase a Smith & Wesson handgun, you receive the Smith & Wesson
Advantage, comprised of four service features:

1. Lifetime Service Policy


We will repair any defect in material or workmanship without charge to the original
purchaser for as long as you own the handgun.

2. Expedited 911 Priority Service


This service is available in the event emergency repairs are needed by law enforcement,
military, or government personnel. This service allows you to expedite the prompt repair and
return of your handgun.

3. Easy Access Customer Support


Our customer support representatives are available to assist your every need.

4. Pride
Our customer support staff is proud to represent Smith & Wesson. They are dedicated to
helping customers and look forward to providing you with a level of support equal to the
quality level of Smith & Wesson products. Call us any time, even before you make your
purchase. Our customer support team is product knowledgeable and can help you decide
which model best suits your needs.

REFERENCES
www.smith-wesson.com/
http://en.wikipedia.org/smith-wesson,_Inc.
http://www.lotsofessays.com/viewpaper/1693757.html
http://condor.depaul.edu/aalmaney/StrategicAnalysisofsmithandwesson.htm

826

CATERPILLAR

827

BRIEF HISTORY
Caterpillar Inc. also known as "CAT", designs, manufactures markets and sells machinery
and engines and sells financial products and insurance to customers via a worldwide dealer
network. Caterpillar is the world's largest manufacturer of construction and mining
equipment, diesel and natural gas engines and industrial gas turbines. With more than US$7
billion in assets, Caterpillar was ranked number one in its industry and number 44 overall in
the 2009. Caterpillar stock is a component of the Dow Jones Industrial Average.
Caterpillar Inc. traces its origins to the 1925 merger of the Holt Manufacturing Company, the
inventor of the crawler tractor, and the C. L. Best Tractor Company, creating a new entity,
the California based Caterpillar Tractor Company. In 1986, the company re-organized itself
as a Delaware corporation under the current name; Caterpillar Inc. Caterpillar's headquarters
are located in Peoria, Illinois, United States

BUSINESS DESCRIPTION
Caterpillar Inc. (Caterpillar) is engaged in the manufacturing of construction and mining
equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric
locomotives. Caterpillar operates in three principal lines of business: Machinery, Engines and
Financial products. Machinery line of business includes the design, manufacture, marketing
and sales of construction, mining, and forestry machinery. Engines line of busines s includes
designs, manufactures, marketing and sales of engines for Caterpillar machinery; electric
power generation systems, and marine, petroleum, construction, industrial, agricultural, and
other applications and related parts. Financial Products princ ipal line of business consists of
Caterpillar Financial Services Corporation (Cat Financial), Caterpillar Insurance Holdings,
Inc. (Cat Insurance) and their respective subsidiaries. During the year ended August 31, 2010,
Caterpillar acquired Electro-Motive Diesel, Inc. (EMD).

CATERPILLAR'S WORLDWIDE CODE OF CONDUCT


Caterpillar Worldwide Code of Conduct, first published in 1974, defines what we stand for
and believe in, documenting the uncompromisingly high ethical standards our company has
upheld since its founding in 1925. This web site helps Caterpillar employees put the values
and principles expressed in their Code of Conduct into action every day by providing detailed
guidance on the behaviors and actions that support our values of

828

Integrity
Excellence
Teamwork and
Commitment
Caterpillar Worldwide Code of Conduct was most recently updated in July 2010 in
connection with their Vision 2020 strategy update. The updates to the Code of Conduct
included adding references to interactions with their distributors and listing certain laws with
which they comply in their worldwide activities. They also noted each employee's personal
responsibility to enhance stockholder value and the responsibility of leaders to set an example
and "live by the code.

GOVERNESS
Caterpillars corporate governance program ensures we serve the interests of stockholders
and other stakeholders with the highest standards of responsibility, integrity, and compliance
with all laws. These standards are guided by our board of directors and global management
team, who work to oversee the companys actions, performance and governance policies.

INTERNAL ENVIRONMENT
MANAGEMENT
Caterpillar has a corporate governance structure where the Chairman of the board also acts as
Chief Executive Officer (CEO Glen Barton). The Board of Directors is fully independent and
is made up of non-employee directors selected from outside the company. Several group
presidents report to the CEO, and multiple vice presidents report to each group president.
The board has four committees:

Audit

Compensation

Governance and

Public Policy

829

MARKETING
Deal in very specialized segments not really to the general public but now pushing

smaller

machinery as well. It offers best value in the market; the company doesnt mean top-of-theline products for every customer. Instead it provides for each customer the right product.
Glen Barton, chairman and chief executive officer of Caterpillar, expressed this commitment
in short, When you buy the iron, you get the company. Practically, this means that in every
industry market served by Caterpillar, the customer gets not only a high quality product, but
also a comprehensive solution of his specific problem as well. This customer-oriented
approach embraces the companys expertise of the problem, choice of relevant new or used
machinery and equipment, a customized offer of a deal (sale, rental or subcontracting
options) and appropriate financial options. This approach also covers training of a customers
employees, after-sale repair a nd maintenance service, and supplies of spare parts.

PRODUCTIONS/OPERATIONS
Caterpillar products are distributed to end-users in nearly 200 countries through Caterpillar's
worldwide dealer network 220 dealers. Caterpillar's dealers are independently owned and
operated businesses with exclusive geographical territories. Dealers provide sales,
maintenance and repair services, rental equipment, and parts distribution. Finning, a dealer
based in British Colombia, Canada, is Caterpillar's largest global distributor. Most dealers use
the Dealer Management System called DBS (Dealer Business System) for their day to day
operations.

RESEARCH AND DEVELOPMENT


Caterpillar is changing at a rapid pace and on a global scale. They expect that the worlds
infrastructure needs to grow well into the next decade, and their focus on new product design
and development is leading them towards the way to meet customer needs in a sustainable
way. In 2008 they robust investment in Research and Development (R&D) for new products.
Beside from this they also created a global R&D footprint to support global growth and to
increase customer value around the world. They pledge to provide customers with the quality
products and services they expect and deserve from Caterpillarnow, and into the future.
Caterpillar Research and Development investment reached $1.404 billion dollars in 2007.
And they say that our investment will continue to grow to support new products and
technological innovation.
830

COMPUTER INFORMATION SYSTEMS


Caterpillar inc tried to boast the best and fastest computer network in the industry and it is
linked with its subsidies, distributors and dealers and with customers.

FINANCIALS
LIQUIDITY RATIOS

2001

2000

COMP

CURRENT RATIO

1.29

1.3

1.4

1.82

QUICK RATIO

1.05

1.02

1.11

1.3

LEVERAGE RATIOS

2002

2001

2000

COMP

TOTAL DEBTS

.83

.81

.82

.84

2001

2000

COMP

PROFIT MARGIN

3.9%

3.9%

5.2%

ROA

2.41% 2.61% 3.4%

1.6

ROE

14.6% 14.36%

18.4% 7.8

PROFITABILTY RATIO

2002

2002

2.29

EXTERNAL FACTORS
External factors that can affect the environment of caterpillar are as follows:
Slowdown in growth
Customer Loyalty
Bargaining Power
Dollar Value

CULTURE OF ORGANIZATION:
Caterpillar is considered as a leader of competitive market environment which means, first of
all, to look for new ways of business growth and raising profit margins. Such a constant
search for cultural change has been institutionalized at Caterpillar since 2001, when its
management started to embed the 6 Sigma continuous innovation strategies throughout the
company. The strategy enables Caterpillar to engage teams of employees in brain storming to
solve multiple problems such as long-term planning of production and sales, enhancing

831

product quality and competitiveness, improvements in after-sales services and spare parts
supplies, and savings in distribution and logistics related costs. By setting the global standard
of the 6 Sigma businesses culture for large companies Caterpillar has confirmed its leadership
position as a company that is developing effectively even in the currently recessionary world
economy.

FACTORS CONTRIBUTING TO ITS INTERNATIONAL SUCCESS


Following are some factors which I think contributed a lot in the international success of
caterpillar:
Companys global growth vision to be First in Customer Value.
Company always looked for new ways of business growth and raising profit
margins.
Constant search for cultural growth
Marketing strategy of caterpillar (customer oriented)
Companys customer satisfaction strategy (realized through a global network
of independent dealers)

SWOT ANALYSIS:
STRENGTHS
Global market leader
Improving financial condition
Diversified geographical spread
Mix of business reduces earnings volatility
Strong dealer network

WEAKNESS
Falling sales in Europe, Africa and the Middle East
High debt structure
Dealers low confidence of Caterpillars forecasting system
832

OPPORTUNITIES
Opportunities in China and India
Increasing construction activity due to growing population
Joint development and acquisition programs

THREATS
Rise in raw material prices
Mining dependent on coal prices and global GDP
UAW contract expiration can lead to production interrupt

CONCLUSION
From above da ta I came to know that Caterpillar Inc is one of the leading industrial
machinery and equipment manufacturing Machinery Company in the world and its name is
associated with the highest level of quality products and services. Its products and product
support services are sold worldwide into a variety of highly competitive markets and it has
very good marketing strategy to get competitive edge over its competitors , i.e. customer
oriented strategy.
It tries to fully satisfy its a employees thats why almost 69,000 employees worldwide are
employed here and major emphasis is on employee performance and for that employees are
given freedom of work and freedom of expression and it follows all the codes of conduct
given by law governing bodies Caterpillar carefully measures their culture because a weak
culture can cost an organization hard cash. Caterpillar Inc. has enjoyed success with the
cultural assessment process it developed to measure and then enhances its work atmosphere.
Another reason which I think played an important and significant role in its success is that it
clearly defined its Critical success factors that help the organization and its personnel to
understand the key areas in which to invest their resources and time
From the above data also came to know that the reason behind its success and to get the
competitive edge over its competitors is by focusing on following three factors
Organizational culture

833

Quality control
Cost focus

Organizational culture:
Creating a culture that engaged employees, while focusing on safety and diversity"

Quality control
Accelerating the pace of quality improvement for its products, while focusing on improving
new product introduction and continuous product improvement processes"

Cost focus
Implementing processes to become the highest-quality, lowest cost producer of our highvolume products in each hemispheric currency zone"

REFERENCES
http://213.194.86.162/Webtools/Basvurular/!webpubpic/file/Caterpillar.pdf
http://www.entrepreneur.com/tradejournals/article/135285285.html
http://www.mightystudents.com/essay/Caterpillar.Case.Study.6894
http://www.usrccne.org/news2.phtml?m=140
http://university-essays.tripod.com/critical_success_factors_csf.html

834

SECTION C: STUDY OF COUNTRIES


ON REGIONAL BASIS

835

ANGLO CLUSTER

836

INTRODUCTION
The Anglo cluster comprises Australia, Canada, England, Ireland, New Zealand, South
Africa, and the United States of America. These countries are all developed nations,
predominantly English speaking, and were all once British colonies. Today, they are amongst
the wealthiest countries in the world. The Anglo cluster is characterized by an individualistic
performance orientation. Further, although they value gender equality, the Anglo cluster
countries tend to be male -dominated in practice. Effective leadership in the Anglo cultures is
affected by a combination of charismatic inspiration and a participative style.
The Anglo cluster is based on several factors including ethnic and linguistic similarities, and
migration patterns originating centuries ago from Northern Europe. These migrants fused
their culture with the local Celtic culture in Britain, giving rise to an Anglo culture that later
diffused through the English migrants
Family businesses are important to the Anglo cluster. Seventy five percent of 800,000
companies in Australia (Baring 1992), 76 percent of the top 8,000 companies in the U.K.
(Stoy Hayward 1989), and about 90 percent of all businesses in the U.S. (Pistrui et al.
2000are estimated to be family businesses. Gupta et al. (2008a) conclude that most family
businesses in the cluster assure transparency and due diligence by regulating the involvement
of family.

COMMON CHARACTERISTICS /SALIENT FEATURE


The seven countries in this cluster share three important characteristics:
Their national language is predominantly English,
They were all members of the British Empire and
They all embody developed Western economies, with the possible exception of
South Africa.
Family businesses are important to Anglo -cluster
Less reliance on formal rules and procedures
More equal power distribution.

837

This cluster also believes that there should be more equality for women and a greater
humane orientation
Decision making is slow

ANGLO CULTURES
Unlike the other clusters, the Anglo cultures are spread around the world, containing the
remnants of the British Empire. Apart from England and Ireland, the epicenter of British
colonial power, these countries comprise much of the New World, whose white population
came initially from England and Ireland, and later from other European nations. Central to
their development has been Judeo-Christian values, the sense of tolerance introduced by
Oliver Cromwell in the Seventeenth Century, a strong legal infrastructure, and naval control
of the high seas. These values underlie all the countries of the Anglo cluster, giving them a
sense of confidence and power. More recently, all of the countries of the cluster have become
much more racially diversified as immigration from Asia, Latin America, and Africa to the
developed nations of the world increased.
Anglo culture is distinguished by its strong performance orientation, but weak family
orientation. Yet, the Anglo cluster strongly believes in the value of family orientation and of
gender egalitarianism, though not in the value of institutional collectivism and uncertain

POLITICAL ENVIRONMENT
Today, the countries in the Anglo cluster are pluralist democracies, and each nation now
presents an egalitarian global face. Despite this, each of the countries Continues to exhibit
xenophobia beneath the faade of national camaraderie. As each government protects itself
and its own interest. Events in Australia, where the government refused admission to MiddleEastern refugees, and in the USA, where popular anti-Muslim sentiment followed horrendous
acts of terrorism in New York and Washington have highlighted the fragility of this faade.
In all cases, the ubiquitous balances of majority rule with Minority rights still remains
unsettled, a paradox in the New World democracy.

ECONOMIC ENVIRONMENT
The Anglo cluster countries, whose population of 437 million is only 7% of the worlds
population, accounted in 2002 for 40% of the worlds Gross National Product, or 12 trillion
838

US dollars. The US economy has dominated the economic landscape of this cluster. The US
represented 75% of the clusters GDP, and 30% of the worlds economy. Still, the other
countries clearly represent a significant and powerful sector of the worlds economic output.
This is reflected in the relative high ranking of the countries in terms of GNP per person.
Further reflecting the economic strength of the cluster, the Anglo countries account for 25%
of world trade, 34% of manufacturing added value, and 21% of agricultural added value.
Besides this, with the exception of South Africa, all of the countries score highly on the
Human Development Index, indicating that their populations share a high standard of living
and quality of life.

TECHNOLOGICAL ENVIRONMENT
Technological environment of Anglo cluster exerts considerable effect on it. It is one of the
top determinants of success of Anglo cluster. Technology continuously keeps on changing.
The time gap between idea and implementation is falling rapidly. Technology technique of
Anglo cluster converting inputs to outputs in accomplishing a specific task. It increases in
knowledge, the enhancement in skills, or the discovery of a new or improved means that
extends people's ability to achieve a given task. Technological advancement in the Anglo
cultures is precious by a combination of compelling encouragement and a participative style.

GREETING ETIQUETTES
First impressions are a really important aspect of Anglo cluster culture. A handshake is
the most common form of greeting among them people and is customary when you are
introduced to somebody new. Handshakes are firm, brief, and confident. They stand while
being introduced. Only the elderly, the ill and physically unable persons remain seated
while greeting or being introduced. Maintain eye contact during the greeting. In most
situations, they can begin n calling people by their first names. Most people will insist
that others call them by their nickname, if they have one. The only proper answers to the
greetings "How do you do?" "How are you?" or "How are you doing?" are "Fine,
"Great," or "Very well, thank you." This is not a request for information about your wellbeing; it is simply a pleasantry. "See you later" is just an expression. People say this even
if they never plan to see the person again. When saying good-bye, they may say "We'll
have to get together" or "Let's do lunch." This is simply a friendly gesture.

839

MEETING ETIQUETTES
Shake hands with everyone at the meeting upon arrival and departure. For an initial meeting,
dressing conservatively is always in good taste. Women can wear business suits, dresses or
pantsuits. Men should wear a business suit. Arrive on time for meetings since time and
punctuality are so important to Anglo cluster. They view it as a sign of disrespect for
someone to be late for a meeting or appointment. Meetings may appear relaxed, but they are
taken quite seriously. If there is an agenda, it will be followed. At the conclusion of the
meeting, there will be a summary of what was decided, a list of who will implement which
facets and a list of the next steps to be taken and by whom. They appreciate politeness and
expect others to adhere to the proper protocol for any given situation. Meetings are generally
well-organized and adhere to time schedules. Meetings may seem more self-governing as all
participants will engage and contribute. When presenting information, it is important to have
facts and figures to substantiate claims and promises. They are essentially rational and logical
and thus they will not be convinced by emotions, passion or feelings. They are often
uncomfortable with silence. Silence is avoided in social or business meetings. It is very
important to meet deadlines. People who miss deadlines are viewed as irresponsible and
undependable. Participation is expected in meetings. A quiet person may be viewed as not
prepared or as having nothing important to contribute.

COMMUNICATION STYLES
The y value logic and linear thinking and expect people to speak clearly and in a
straightforward manner. To them if you dont tell it how it is you simply waste time, and
time is money. Try not to be insulted by the directness. They will use the telephone to
conduct business that would require a face-to-face meeting. Their communication style is
essentially realistic and relies on common sense. They consider it rude not to let a person
complete their thought before entering the discussion. They like their space and prefer to be
at an arms length when speaking to someone. There is often an element of humor, often selfdeprecating, in their speech. They always ask questions when they do not understand
something. They are not ashamed to admit what they do know. They will assume you
understand something if you do not tell them otherwise. It is very important in written
communication to spell names correctly and have correct titles. If they are unsure of these,
they call the person's assistant to get the correct s pelling and title.

840

SOCIETAL PRACTICES
. In terms of societal practices the Anglo cluster manages in the mid range of all the
dimensions except for a high score on Power Distance and a low score on Gender
Egalitarianism. in this cluster high emphasis is on
authority,
power differences and
status
This cluster is quiet liberal in its Endorsement of gender roles but its members still perceive
themselves to live in a male dominated society
The Anglo cluster scores high on values of Performance Orientation, Humane
Orientation
Family Collectivism and Future Orientation The performance orientation of this cluster
can be traced back to the Protestant mentality of the British as they established their colonies
and trade routes throughout the New World. Today, countries in this cluster, especially the
USA and South Africa strongly Endorse achievement, especially in the pursuit of material
wealth.
This cluster reflects a male dominated society in practice, Gender Egalitarianism rates quite
high as a value. Although gender inequality exists in these societies but on the other hand
there is a realization amongst societal members that this should be reduced further.
The high score on Family Collectivism reflects this clusters members desire to have more
pride and loyalty in their families. This is especially interesting because these cultures are
traditionally individualistic. There is a general belief in this the cluster that there should be
more interdependence in the family unit and pride in the family structure.
Anglo cluster believe that there should be less Uncertainty for rules, regulations, and status in
their cultures. The member of this cluster seem to be contented with practices in respect of
institutional collectivism the encouragement and reward of collective action the history of
the Anglo cultures, reflects that these cultures see their individualism to be derived from the
struggle for self dependence and personal material possessions. So far we have focused on
the cluster as a whole. There are, nonetheless, distinct differences between the countries in
the cluster.
841

Overall, the Anglo cluster emphasizes performance and looks toward the future. Anglo
cluster countries feel moderately assertive, but feel that there should be less Reliance on
formal rules and procedures and more equal power distribution. This cluster also believes that
there should be more equality for women and a greater humane orientation

CULTURAL TRAITS WITH STRENGTHS AND WEAKNESS


Cultural trait
Individualism

Strengths

Creativity

Lack of unity

Mental

Lack of respect and praise

independence

Lack of cultural styles

Lack of a team ethic. When the

Open mind

Weakness

Difficult

for

an

egotist to exploit

team

the masses

individual within it

More

likely

make

the

to

right

decision

suffers,

so

does

every

Lack of assertiveness to push


through a decision

More likely to never make a


decision

Humility

More inclined to

Apathy

Tall poppy syndrome

Difficulty in giving credit where

back up words with


actions

Critical

Laid back

More likely to find


faults in an idea so

thinking

that they can be

credit is due

remedied

Risk of breaking something that is


not broken

Thick skin

842

Poor leadership abilities

EFFECTIVE LEADERSHIP IN THE ANGLO CLUSTER


LEADERSHIP STYLES
Charismatic
Team-Orientated and
Participative leadership
Humane leadership
Autonomous
Self protective
Among above styles charismatic .team oriented and participative styles are perceived to be
the most effective in the Anglo cluster.
The leadership behaviors that characterize a charismatic leader include Being visionary and
inspirationa l and appealing to the underlying values of followers. Although this value -based
style is effective across all the cultures in this cluster, it is necessary for the leader to
understand the nuances of each culture and which specific behaviors are perceived to be
effective.
A team-orientated leadership style is consistent with the low Power Distance and
Uncertainty Avoidance values identified in this cluster. Team-orientated leaders use a
collaborative approach to work by utilizing team structures, being diplomatic and inspiring a
shared vision.
In this cluster more emphasis is placed on participative leadership as a means to facilitate
effective leadership. The logic to this is that as the countries in this cluster are relatively
individualistic in cult ural orientation, and all are democracies, people place great emphasis on
their freedom and being able to have their say. It is therefore very important for a leader to
recognize this, to include all relevant parties in the decision making process, to dele gate
responsibility, and not to try to lead uncompromisingly from the top.

Implications for Executives


To summarize the Anglo cluster we can say that its societal culture is first and foremost
performance orientated. Further, its culture is distinctly male -dominated, although managers
843

desire a reduction in this inequality. This cluster is highly individualistic although there is a
desire for societies to become more loyal and committed to their families. This has started to
occur with collective reward being valued above individual based rewards.
The most effective leadership style in this cluster is a charismatic value-based style,
encompassing a need to be visionary and to inspire followers. An effective leader must also
use both a team-orientated and participative leadership style. Such a style focuses on the team
through collective goals and rewards while allowing the team to set its own structure and take
responsibility: a participative leadership style.
Analyzing clusters of cultures provides a useful framework to understand the broader themes
and values of culturally similar countries. The Anglo cultures are major players on the
worlds economic and political landscape. Understanding the Anglo cluster then, is
particularly useful for executives of multi-national organizations, for organizations exporting
to these markets or thinking about entering them, and for researchers interested in crosscultural issues.
The key conclusions for managing in the Anglo cluster will be discussed in two parts:
(1) Organizational structure and strategy, and
(2) Managing people.

Structure and Strategy


For organizational structure, one of the key challenges is to balance the current individualist
practices in organizations with the desire to be more collectively focused. For example,
structures need to be in place to allow individuals to achieve, and to be rewarded for
achieving, their goals. Simultaneously, organizational members need to work within a greater
team environment that shares its successes and rewards for group achievement. In the Anglo
cluster of countries, this all needs to be done without the overt use of structure, power or
hierarchy. There is an inherent dislike for rules and authority in this cluster and any
organization, or leader for that matter, will quickly become ineffective if they use or
encourage an authoritarian approach.

Managing people
Under this heading, one of the key requirements for executives is to actively encourage and
promote gender equality. While gender inequality appears to be the norm in the Anglo
844

cultures, managers aspire to greater equality. In particular, the individualistic nature of these
societies encourages managers to promote on the basis of merit as opposed to status,
hierarchy, or gender. By using a meritocratic approach to managing people, leaders will
address both the gender inequality and achievement orientated aspects of this cluster. The
desire by managers to have a more group-orientated workplace is also important for
managers to consider. Encouragement of individuals to work as part of a team toward a
common goal would seem therefore to be desired in these cultures.

CONCLUSIONS:
From the above data we concluded that. These countries are the legacy of the British Empire,
and are now all pluralistic democracies, where English is the most spoken language. Our
analysis shows that these are performance-orientated male -dominated societies that value
individualism and, paradoxically, gender equality. They also desire to become more loyal and
committed to family life, and value collective rewards although, again, this is not reflected in
practice. Leadership in these countries is ideally charismatic and inspirational, but needs also
to demonstrate a participative style. We also found that in Anglo cluster organizations need to
recognize the individualist needs of organizational members, but at the same time they must
provide incentives to encourage more teamwork and cooperation. Finally, managers in these
cultures need to tackle the issue of promoting more gender equality, where achievement is
based on merit, rather than sex or other irrelevant factors.

845

PAKISTAN-IRAN-TURKEY CLUSTER

846

INTRODUCTION
PURPOSE
The purpose of this project is to see the countries of Pakistan, Iran and Turkey, their business
environment, their culture and its impact over the business environment. Here another
important point is the strategies that could be useful to the other regions of the world before
entering in to the selected region. The purpose is also to see the potential of the market of the
selected region and its prospects. As this region is flooded with talent but not utilized or have
no right direction to follow. The foreign companies must come and utilize them as the talent
can do wonders. These are few things that give a birds eye view of the whole scenario.

OBJECTIVE
The objectives of this project are very clear like the management practices of the selected
region, the entry strategies of other outside investors, the entry barriers offered by the host
nations, the sort of business that this region may accept the dimensions of the culture in this
region, communication styles, their structures, business negotiations, and their behavior in the
workplace. More over this study will help the outside or the foreign investors to look at the
above mentioned points and how they can cope with them before entering this region. We
have tried our best to up bring the major business trends and related things in the region of
Pakistan, Iran and Turkey that can be helpful to the multinational corporations who are
interested in doing business here.

BACKGROUND OF THE REGION (BIRDS EYE VIEW)


VALUES IN CULTURE OF PAKISTAN

Facts and Statistics


Location: Southern Asia, bordering Afghanistan 2,430 km, China 523 km, India 2,912 km,
Iran 909 km
Capital: Islamabad
Population: 19 crore (approx)
Ethnic Make-up: Punjabi, Sindhi, Pashtun (Pathan), Baloch and
Religions: Muslim 97% (Sunni 77%, Shi'a 20%), Christian, Hindu, and other (inc. Sikh) 3%)
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Language in Pakistan
Urdu is the only official language of Pakistan. English is generally used instead of Urdu in
this regard. English is the lingua franca of the Pakistani elite and most of the government
ministries.
Urdu is closely related to Hindi but is written in an extended Arabic alphabet rather than in
Devanagari. Urdu also has more loans from Arabic and Persian than Hindi has.
Many other languages are spoken in Pakistan, including Punjabi, Siraiki, Sindhi, Pashtu,
Balochi, Hindko, Brahui, Burushaski, Balti, Khawar, Gujrati and other languages with
smaller numbers of speakers.

Islam
Islam is practiced by the majority of Pakistanis and governs their personal, political,
economic and legal lives. Among certain obligations for Muslims are to pray five times a
day - at dawn, noon, afternoon, sunset, and evening. Friday is the Muslim holy day.
Everything is closed. During the holy month of Ramadan all Muslims must fast from dawn to
dusk and are only permitted to work six hours per day. Fasting includes no eating, drinking,
cigarette smoking, or gum chewing.

The Family
The extended family is the basis of the social structure and individual identity. It includes the
nuclear family, immediate relatives, distant relatives, tribe members, friends, and neighbors.
Loyalty to the family comes before other social relationships, even business. Nepotism is
viewed positively, since it guarantees hiring people who can be trusted, which is crucial in a
country where working with people one knows and trusts is of primary importance.
The family is more private than in many other cultures. Female relatives are protected from
outside influences. It is considered inappropriate to ask questions about a Pakistani's wife or
other female relatives. Families are quite large by western standards, often having up to 6
children.

Hierarchical Society
. Pakistan is a hierarchical society. People are respected because of their age and
position. Older people are viewed as wise and are granted respect. In a social situation, they
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are served first and their drinks may be poured for them. Elders are introduced first, are
provided with the choicest cuts of meat, and in general are treated much like royalty.
Pakistanis expect the most senior person, by age or position, to make decisions that are in the
best interest of the group.

VALUES IN CULTURE OF IRAN


Location: The Middle East, bordering Afghanistan 936 km, Armenia 35 km, Azerbaijanproper
432 km, Azerbaijan 179 km, Iraq 1,458 km, Pakistan 909 km, Turkey 499 km, Turkmenistan
992 km
Capital: Tehran
Climate: mostly arid or semiarid, subtropical along Caspian coast
Population: 79,018,924
Ethnic Make-up: Persian 51%, Azeri 24%, Gilaki and Mazandarani 8%, Kurd 7%, Arab 3%,
Lur 2%, Baloochi 2%, Turkmen 2%, other 1%
Religions: Shi'a Muslim 89%, Sunni Muslim 9%, Zoroastrian, Jewish, Christian, and Baha'i
2%
Government: Islamic republic
The Iranian Language
Iran has a heterogeneous population speaking a variety of Indo-Iranian, Semitic, and Turkic
languages. The largest language group consists of the speakers of Indo-Iranian languages,
who in 1986 comprised about 70 percent of the population. The speakers of Indo-Iranian
languages are not, however, a homogeneous group. They include speakers of Persian , the
official language of the country, and its various dialects; speakers of Kirmanji, the term for
related dialects spoken by the Kurds who live in the cities, towns, and villages of western Iran
and adjacent areas of Iraq and Turkey; speakers of Luri, the language of the Bakhtiaris and
Lurs who live in the Zagros; and Baluchi, the language of the semi nomadic people who live
in southeastern Iran and adjacent areas of Afghanistan and Pakistan. Approximately 28
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percent of the population speaks various dialects of Turkish. Speakers of Semitic languages
include Arabs and Assyrians.

Family Values
. In Iran, the family is the basis of the social structure. The concept of family is more private
than in many other cultures. Female relatives must be protected from outside influences and
are taken care of at all times. It is inappropriate to ask questions about an Iranian's wife or
other female relatives. Iranians take their responsibilities to their family quite seriously.
Families tend to be small, only 1 or 2 children, but the extended family is quite close. The
individual derives a social network and assistance in times of need from the family. Elderly
relatives are kept at home, not placed in a nursing home. Loyalty to the family comes before
other social relationship, even business. Nepotism is considered a good thing, since it implies
that employing people one knows and trusts is of primary importance.

Public vs. Private


. Iranians see themselves as having two distinct identities: "zaher" (public) and "batin"
(private). When they are in public, they must conform to accepted modes of behaviour. It is
only within their homes among their inner circle that they feel free to be themselves. Family
members are always part of the inner circle. The inner circle forms the basis of a person's
social and business network. Friendship is very important and extends into business. The
people from the inner circle can be relied upon to: offer advice, help find a job, or cut through
bureaucracy.

Iranian Politeness
. Taarof is a system of politeness that includes both verbal and non-verbal communication.
Iranians protest compliments and attempt to appear vulnerable in public.
. They will belittle their own accomplishments in an attempt to appear humble, although other
Iranians understand that this is merely courteous and do not take the words at face value.
. In adherence to taarof, if you are ever offered something, like a tea or sweet, even if you
want it, at first decline it until their insistence becomes greater.

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VALUES IN CULTURE OF TUKEY

Facts and Statistics


Location: southeastern Europe and southwestern Asia (that portion of Turkey west of the
Bosporus is geographically part of Europe), bordering the Black Sea, between Bulgaria and
Georgia, and bordering the Aegean Sea and the Mediterranean Sea, between Greece and
Syria
Capital: Ankara
Climate: temperate; hot, dry summers with mild, wet winters; harsher in interior
Population: 88,893,918
Ethnic Make-up: Turkish 80%, Kurdish 20% (estimated)
Religions: Muslim 99.8% (mostly Sunni), other 0.2% (mostly Christians and Jews)
Government: republican parliamentary democracy
The Turkish Language
The official language, Turkish, is the first language spoken by 90% of the 63m population.
Minority languages include Kurdish, spoken by 6% of the population. Arabic is spoken by
1.2% of the Turkish population; most of those speakers are bilingual Arabic and Turkish
speakers. Other minority languages include Circassia, spoken by more than 0.09% throughout
the country, Greek, Armenian and Judaism, a Romance language spoken by Jews.

REGIONAL COOPERATION FOR DEVELOPMENT (R C D)


On the sidelines of an emerging Arab unity starting in 1956 with the seizing of the Suez
Canal by Egypt, non-Arab Muslim countries Iran, Pakistan and Turkey had established the
RCD (Regional Cooperation for Development) in 1964. At that time all three RCD members,
along with the UK, had belonged to the CENTO (Central Treaty Organization) or the
Baghdad Pact formed in 1955 and which was subsequently officially dissolved on the heels
of the Iranian revolution in 1979. Iraq had officially pulled out of CENTO in 1959 following
the revolution by Abdul Karim Qassem who overthrew the monarchy in 1958. Gemal Abdel
Nasser of Egypt, an Arab nationalist subscribing to growing Soviet influence in the Arab
world was a sharp contrast to Irans Reza Shah Pehlavi, Pakistans Ayub Khan and Turkeys
Suleiman Demirel who were all pro-west and with the exception of Pakistan had diplomatic
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relations with Israel. CENTOs goal was to contain Soviet Communist expansion whereas
Egypt was strongly promoting Soviet influence along with Syria, Iraq and Jordan.

ECONOMIC COOPERATION ORGANIZATION (E C O)


The Economic Cooperation Organization (ECO) is an intergovernmental organization
involving seven Asian and three Eurasian nations. It provides a platform to discuss ways to
improve development and promote trade, and investment opportunities. The ECO is an ad
hoc organization under the United Nations Charter (Chap. VIII). The common objective is to
establish a single market for goods and services, much like the European Union. ECO's
secretariat and cultural department are located in Tehran, its economic bureau is in Turkey
and its scientific bureau is situated in Pakistan. The organization's population is 416,046,863
and the area is 8,620,697 km.The organization was founded by Turkey, Iran and Pakistan.

HISTORY OF ECO
Economic Cooperation Organization is an intergovernmental regional organization
established in 1985 by Iran, Pakistan and Turkey for the purpose of promoting economic,
technical and cultural cooperation among the member states. It was the successor
organization of what was the Regional Cooperation for Development (RCD), founded in
1964, which ended activities in 1979. In the fall of 1992, the ECO expanded to include seven
new members, namely Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan,
Turkmenistan and Uzbekistan.
The status and power of the ECO is growing. However, the organization faces many
challenges. Most importantly, the member states are lacking appropriate infrastructure and
institutions which the Organization is primarily seeking to develop, to make full use of the
available resources in the region and provide sustainable development for the member
nations.
The Economic Cooperation Organization Trade Agreement (ECOTA) was signed on 17 July
2003 in Islamabad. ECO Trade Promotion Organization (TPO) is a new organization for
trade promotion among member states located in Iran (2009).

ORGANIZATIONAL STRUCTURE
The following organs exist:

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1.

The Council of Ministers (COM) is the highest policy and decision-making body and
is composed of Ministers of Foreign Affairs or such other representatives of the
Ministerial rank as may be designated by the Government. The council of Ministers
meets at least once a year by rotation among the Member States.

2.

The Council of Permanent Representatives (CPR) is consisting of the Permanent


Representatives/Ambassadors of the Member States accredited to the Islamic
Republic of Iran as well as to the ECO and the Director General for ECO Affairs of
the Ministry of Foreign Affairs of the Islamic Republic of Iran.

3.

The Regional Planning Council (RPC) is composed of the Head of the Planning
Organization of the Member States or such other representatives of corresponding
authorities.

4.

The General Secretariat consists of six Directorates under the supervision of the
Secretary General and his Deputies. Two Specialized Agencies and six Regional
Institutes are acting under the supervision of the General Secretariat.
o

Directorate of Industry & Agriculture

Directorate of Trade & Investment

Directorate of Energy, Minerals & Environment

Directorate of Transport and Communications

Directorate of Economic Research & Statistics

Directorate of Project Research

ACTIVITIES
Activities of ECO are conducted through Directorates under the supervision of Secretary
General and his Deputies which considered and evolve projects and programmes of mutual
benefit in the fields of:
1.

Trade and Investment

2.

Transport and Telecommunications

3.

Energy, Minerals and Environment

4.

Agriculture, Industry and Tourism


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5.

Human Resources & Sustainable Development

6.

Project & Economic Research and Statistics

OBJECTIVES
1.

Sustainable economic development of Member States;

2.

Progressive removal of trade barriers and promotion of intra- regional trade; Greater
role of ECO region in the growth of world trade; Gradual integration of the economies
of the Member States with the world economy;

3.

Development of transport & communications infrastructure linking the Member


States with each other and with the outside world;

4.

Economic liberalization and privatization;

5.

Mobilization and utilization of ECO region's material resources;

6.

Effective utilization of the agricultural and industrial potentials of ECO region;

7.

Regional cooperation for drug abuse control, ecological and environmental protection
and strengthening of historical and cultural ties among the peoples of the ECO region;
and

8.

Mutually beneficial cooperation with regional and international organizations.

PRINCIPLES OF COOPERATION
1.

Sovereign equality of the Member States and mutual advantage;

2.

Linking of national economic, development plans with ECO's immediate and longterm objectives to the extent possible;

3.

Joint efforts to gain freer access to markets outside the ECO region for the raw
materials and finished products of the Member States;

4.

Effective utilization of ECO institutions, agreements and cooperative arrangements


with other regional and international organizations including multilateral financial
institutions;

5.

Common endeavors to develop a harmonized approach for participation in regional


and global arrangements;

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6.

Realization of economic cooperation strategy; and Exchanges in educational,


scientific, technical and cultural fields

ECO Trade and Development Bank


The Economic Cooperation Organization Trade and Development Bank (the Bank) was
established by the three founding members of the Economic Cooperation Organization
(ECO) in 2005; Iran, Pakistan and Turkey. Its subscribed capital is 300 million SDR, which is
to be paid by the member countries equally. For the first five years starting from November
2006, the first President of the Bank is from Turkey (Mr. Murat Ulus) and the position of the
President will pass to other member countries on a four -year rotation basis after the first five
years. The headquarters of the Bank is in Istanbul, Turkey.
The miss ion of the ECO Trade & Development Bank is to initiate, promote and provide
financial facilities to expand intra-regional trade and to promote the economic development
of ECO member countries.

ECO CULTURAL INSTITUTE (ECI)


ECO Cultural Institute (ECI) is af filiated with ECO and aims at fostering understanding and
the preservation of the rich cultural heritage of its members through common projects in the
field of the media, literature, art, philosophy, sport and education.
ECI's Charter was signed on 15 March 1995 in Islamabad, Pakistan.

ANALYSIS OF THE REGION


HISTORY OF TRADE
GLOBALIZATION
Globalization describes the process by which regional economies, societies, and cultures have
become integrated through communication, transportation, and trade. The term is most
closely associated with the term economic globalization: the integration of national
economies into the international economy through trade, foreign direct investment, capital
flows, migration, the spread of technology, and military presence. However, globalization is
usually recognized as being driven by a combination of economic, technological, sociocultural, political, and biological factors. The term can also refer to the transnational

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circulation of ideas, languages, or popular culture through acculturation. An aspect of the


world which has gone through the process can be said to be globalize.

Effect of globalization on the world


Globalization has various aspects which affect the world in several different ways
1.

Industrial emergence of worldwide production markets and broader access to a


range of foreign products for consumers and companies. Particularly movement of
material and goods between and within national boundaries. International trade in
manufactured goods increased more than 100 times (from $95 billion to $12 trillion)
in the 50 years since 1955.China's trade with Africa rose sevenfold during 200007
alone.

2.

Financial emergence of worldwide financial markets and better access to external


financing for borrowers. By the early part of the 21st century more than $1.5 trillion
in national currencies were traded daily to support the expanded levels of trade and
investment.

As of 20052007, the Port of Shanghai holds the title as the World's busiest port.
3.

Economic realization of a global common market, based on the freedom

of

exchange of goods and capita


4.

Almost all notable worldwide IT companies have a presence in India. Four Indians
were among the world's top 10 richest in 2008, worth a combined $160 billion. In
2007, China had 415,000 millionaires.

5.

Job Market- competition in a global job market. In the past, the economic fate of
workers was tied to the fate of national economies. With the advent of the information
age and improvements in communication, this is no longer the case. Because workers
compete in a global market, wages are less dependent on the success or failure of
individual economies. This has had a major effect on wages and income distribution.

6.

Political some use "globalization" to mean the creation of a world government


which regulates the relationships among governments and guarantees the rights
arising from social and economic globalization. Politically, the United States has
enjoyed a position of power among the world powers, in part because of its strong and
wealthy economy. With the influence of globalization and with the help of the United
856

States own economy, the People's Republic of China has experienced some
tremendous growth within the past decade. If China continues to grow at the rate
projected by the trends, then it is very likely that in the next twenty years, there will
be a major reallocation of power among the world leaders. China will have enough
wealth, industry, and technology to rival the United States for the position of leading
world power.
Among the political effects some scholars also name the transformation of sovereignty. In
their opinion, 'globalization contributes to the change and reduction of nomenclature and
scope of state sovereign powers, and besides it is a bilateral process: on the one hand, the
factors are strengthening that fairly undermine the countries' sovereignty, on the other most
states voluntarily and deliberately limit the scope of their sovereignty'.
7.

Informational increase in information flows between geographically remote


locations. Arguably this is a technological change with the advent of fiber optic
communications, satellites, and increased availability of telephone and Internet.

8.

Language the most spoken first language is Mandarin (845 million speakers)
followed by Spanish (329 million speakers) and English (328 million speakers).
However the most popular second language is undoubtedly English, the "lingua
franca" of globalization:

9.

About 35% of the world's mail, telexes, and cables are in English.

10.

Approximately 40% of the world's radio programs are in English.

11.

English is the dominant language on the Internet.

12.

Competition Survival in the new global business market calls for improved
productivity and increased competition. Due to the market becoming worldwide,
companies in various industries have to upgrade their products and use technology
skillfully in order to face increased competition.

13.

Ecological the advent of global environmental challenges that might be solved with
international cooperation, such as climate change, cross-boundary water and air
pollution, over-fishing of the ocean, and the spread of invasive species. Since many
factories are built in developing countries with less environmental regulation,
globalize and free trade may increase pollution and impact on precious fresh water

857

resources(Hoekstra and Chap again 2008).On the other hand, economic development
historically required a "dirty" industrial stage, and it is argued that developing
countries should not, via regulation, be prohibited from increasing their standard of
living.

London is a city of considerable diversity. As of 2008, estimates were published that stated
that approximately 30% of London's total population was from an ethnic minority group. The
latest official figures show that in 2008, 590,000 people arrived to live in the UK whilst
427,000 left, meaning that net inward migration was 163,000.
14.

Cultural growth of cross-cultural contacts; advent of new categories of


consciousness and identities which embodies cultural diffusion, the desire to increase
one's standard of living and enjoy foreign products and ideas, adopt new technology
and practices, and participate in a "world culture". Some bemoan the resulting
consumerism and loss of languages. Also see Transformation of culture.

15.

Spreading of multiculturalism, and better individual access to cultural diversity (e.g.


through the export of Hollywood). Some consider such "imported" culture a danger,
since it may supplant the local culture, causing reduction in diversity or even
assimilation. Others consider multiculturalism to promote peace and understanding
between people. A third position that gained popularity is the notion that
multiculturalism to a new form of monoculture in which no distinctions exist and
everyone shifts between various lifestyles in terms of music, cloth and other aspects
once more firmly attached to a single culture. Thus not mere cultural assimilation as
mentioned above but the obliteration of culture as we know it today. In reality, as it
happens in countries like the United Kingdom, Canada, Australia or New Zealand,
people who always lived in their native countries maintain their cultures without
feeling forced by any reason to accept another and are proud of it even when they're
acceptive of immigrants, while people who are newly arrived simply keep their own
culture or part of it despite some minimum amount of assimilation, although aspects
of their culture often become a curiosity and a daily aspect of the lives of the people
of the welcoming countries.

858

16.

Greater international travel and tourism. WHO estimates that up to 500,000 people are
on planes at any one time.[citation needed] In 2008, there were over 922 million
international tourist arrivals, with a growth of 1.9% as compared to 2007.

17.

Greater immigration, including illegal immigration. The IOM estimates there are
more than 200 million migrants around the world today. Newly available data show
that remittance flows to developing countries reached $328 billion in 2008.

18.

Spread of local consumer products (e.g., food) to other countries (often adapted to
their culture).

19.

Worldwide fads and pop culture such as Pokmon, Sudoku, Numa Numa, Origami,
Idol series, YouTube , Orkut, Facebook, and MySpace; accessible only to those who
have Internet or Television, leaving out a substantial portion of the Earth's population.

The construction of continental hotels is a major consequence of globalization process in


affiliation with tourism and travel industry, Darkish Grand Hotel, Kish, Iran
20.

Worldwide sporting events such as FIFA World Cup and the Olympic Games.

21.

Incorporation of multinational corporations into new media. As the sponsors of the


All-Blacks rugby team, Adidas had created a parallel website with a downloadable
interactive rugby game for its fans to play and compete.

22.

Social development of the system of non-governmental organizations as main


agents of global public policy, including humanitarian aid and developmental efforts.

23.

Technical

24.

Development of a Global Information System , global telecommunications


infrastructure and greater transporter data flow, using such technologies as the
Internet, communication satellites , submarine fiber optic cable, and wireless
telephones

25.

Increase in the number of standards applied globally; e.g., copyright laws, patents and
world trade agreements.

26.

Legal/Ethical

27.

The creation of the international criminal court and international justice movements.

859

28.

Crime importation and raising awareness of global crime-fighting efforts and


cooperation.

29.

The emergence of Global administrative law .

30.

Religious

31.

The spread and increased interrelations of various religious groups, ideas, and
practices and their ideas of the meanings and values of particular spaces

FREE TRADE AGREEMENTS UNDER GLOBALIZATION


NAFTA (NORTH AMERICA FREE TRADE AGREEMENT)
ECO (ECONOMIC COPERATION ORGANIZATION)
EU (EUROPEAN UNION)
There are many other agreements in the Asian and the African region.

WORLD TRADE ORGANIZATION (WTO)


The World Trade Organization (WTO) is an organization that intends to supervise and
liberalize international trade . The organization officially commenced on January 1, 1995
under the Marrakech Agreement , replacing the General Agreement on Tariffs and Trade
(GATT), which commenced in 1948. The organization deals with regulation of trade between
participating countries; it provides a framework for negotiating and formalizing trade
agreements, and a dispute resolution process aimed at enforcing participants' adherence to
WTO agreements which are signed by representatives of member governments and ratified
by their parliaments. Most of the issues that the WTO focuses on derive from previous trade
negotiations, especially from the Uruguay Round (19861994).
The organization is currently endeavoring to persist with a trade negotiation called the Doha
Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable
participation of poorer countries which represent a majority of the world's population.
However, the negotiation has been dogged by "disagreement between exporters of
agricultural bulk commodities and countries with large numbers of subsistence farmers on the
precise te rms of a 'special safeguard measure' to protect farmers from surges in imports. At
this time, the future of the Doha Round is uncertain."

860

The WTO has 153 members, representing more than 97% of the world's population, and 30
observers, most seeking membership. The WTO is governed by a ministerial conference,
meeting every two years; a general council, which implements the conference's policy
decisions and is responsible for day-to-day administration; and a director-general, who is
appointed by the ministerial conference. The WTO's headquarters is at the Centre William
Rappard, Geneva , Switzerland.

BUSINESS ENVIRONMENT AND THE REGION


THE POLITICAL ENVIRONMENT
The political environment of any region is the backbone of any system. Now this has
obviously some good points and also some bad points. Here in this region the political system
is not full of character so it becomes mixed with the big investors and foreig n bodies for their
own personal or organizational goals. What they exactly do is the engagement with the
political parties and get successful in implementing the strategies that are good for the region
as a whole and against them.
The political environment has good points like the betterment of the people selflessly,
without any personal interest. The acts like giving the power or delegating the power to the
provinces and making them strong. This is basically to strengthen ones own roots. It is a
very famous saying that when the governments are stable only and only then the economic
system is strong and when the economic system or economy of a region is strong then it is
successful, prosperous and self sufficient. Our region is now trying hard and especially the
youngsters are realizing the problems of the region and are taking sensible and intelligent
long term decisions for betterment.

POLITICAL RISK (MACRO/MICRO)


Political Risk: High
This regions population represents a mixture of Eastern and Western cultures.
They seek membership in the European Union (EU) and, while talks have commenced,
some strong opposition among current EU membership suggests that accession will most
likely not occur in the near term. Issues such as the status of Kurds in Turkey and the political
treatment of Cyprus will negatively impact the regions prospects of EU membership. More

861

over this region has not given a very god response to the United States of America as they
have a nuclear issue here and their interruption in the war on terrorisms has made the political
structure of the region fragile. This is simply not related to the war on terrorism but it is due
to the terrorist activities in the region.
The political leaders acts have made them misleaders. Their weak political structure and the
policies have threatened the regions economy. There is a lack of competent workforce in the
politics of this region. This has not just affected the pharmaceutical industry but on a macro
level the whole industry. So to be on the safe side the governments of this region have come
up with some attractive policies regarding the trade and services industries from the inside as
well as the outside.

EXPROPRIATION RISK
Once the step was taken by one of the regions government o expropriate the business centres
and private property . this act created a lot of haste and frenzy in the private investors who
once left the region . this act shattered the trust o the local as well as the trust of the foreign
investors. Then after a long time the confiscation was stopped and the governments made a
policy to never do such acts as they were the major hurdles in the way of regions
development.

TRANSFER RISK
Transfer risk is the risk associated to the transfer of the funds, foreign exchange or something
in terms of money.
When we focus the region, we find it very pleasant to see and hear that the restrictions over
the transfer of the funds or the foreign is zero. Any company, either from the local
background or the foreign back ground can easily step in to the market of this region. This is
one of the most attractive and significant step that the government has taken to attract the big
foreign tycoons. Now a large number of businesses are targeting this region as the
liberalization of trade is considered as the best in the world around. The governments of this
region are seriously and sincerely thinking about more liberal policies in order to help and
assist the economy as well as the operating businesses in the region. These acts are the ones
that are the requirement of the prevailing time and only these policies can exploit the young
talent in this region because naturally when the companies with state of the art setups and
research and development will come and hire the people, they will definitely develop them
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which in result will not even improve the semi skilled labor force in to skilled ones but it will
also create job opportunities for the regions people.

OWNERSHIP RISK
This is the type of risk which is not so common and it is not practiced a lot n the world except
some backward regions. According to this the rights of ownership are held with the
governing body and the party has no right to either own or buy a property.
The region of Pakistan, Turkey and Iran are considered to be one of those regions which are
striving very hard to come out of the economic miseries in the present world. Another
remarkable achievement is the 100% ownership rights to the foreign operators in the region.
This step has influenced the world so much that in the recent years this region has recorded
the record reserves of foreign exchange. This is not the end , one of the countries in the
region has flourished so much that it has applied to join economically with the famous union
of the twenty two European nations that is the European union.
The region under focus is also in alliance since 1965 in an economic agreement RCD
(Regional cooperation for Development) that finally converted in to the ECO (Economic
Cooperation Organization). So within and outside, many great economic activities have taken
place and especially this region has developed in such a great pace that many other European
and Asian nations have joined the Economic Cooperation Organization

INSTITUTIONAL INSTABILITY
The institutional instability in the region had risen so much that the foreign direct investments
came to the dead level. We would like to tell you that corruption in any field in Pakistan is
not considered too bad in this region where as the other regions of the world find corruption
as one of the least graded act. Corruption is one of the strongest reasons for the instability in
the political system. Other reasons behind the political instability are the immature class of
politicians and the thirst to rule using the pettiest tactic that is leg pulling.
So the foreigners should consider this as one of the point to reconsider or re think in entering
this region.

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SHORT TERM GOVERNMENTS


As we have given an insight of the political scenario of this region so it is clear that if there is
instability in the institution of politics the governments are definitely going to be short term
in terms of tenure which will not let the flow of policies consistent.

POLICY MATTERS
As all of the headings that are discussed are dependent on another so the policy will also get
affected as the policy makers are the politicians and the bureaucracy whose relation is of boss
and assistant. The policies of the region are the determinants of the level of business
prevailing in the region. The better the policies, better the business from inside and outside.
So the policy portion of the region is now on the verge of improvement and we have seen it
in the recent years.

THE LEGAL ENVIRONMENT


ISLAMIC LAW
The region under focus is or belongs to Muslims or simply the religion followed is Islam. We
all have a very clear understanding that Islam is a complete code of life which includes the
law relating to life and business of the living beings. This region is considered to be the
strong followers of Islam and its teachings. The Holy Prophet Hazrat Muhammad Sallalla Ho
Alaihe Wassallam has preached the law of Islam regarding business. The trade in is lam is
considered as Baraka. The rule of trade in Islam stands on justice, equality and fair play.
Islam doesnt restrict the one from doing business but it has a standard set for spending the
earnings from it. There should be no trade that creates threat for the other businesses.
Corruption is restricted in doctrine of Islam and trade along with a very polite and sincere
manner is prescribed in it. Islam has a great concept of zakat for the well being of the society
which is compulsory for every Muslim. There are very strong words used in Quran who offer
corrupt practices of any type in business under Islam. Hence there is so much in Islam about
trade but the main teachings are honesty, fairness, justice and correct measurement etc. our
scope of knowledge is short but the best business practices can be found from our religion
Islam. So the Islamic law is preferential over every law in this region of the world.

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FREE ZONES AND FUNDS


Under the law of the region the concept of free business zones is introduced massively and
aggressively to attract more and more o the foreign investor in the region. Under the law of
this region certain funds for the facilitation of the free zones have been established. This act
by the law has an encouraging affect on the business environment of this region

FDI FACILITATIONS
This has already been discussed in the upper section that initiatives have been taken to
increase the foreign direct investment in the region. Here the law has also facilitated the
business by intervening in the accumulation of the direct investment s from the foreign
investors to help the people of the region and the economy which will finally make the
business environment conducive for the business in the selected region. Now the policies that
are made are due to the Interference of law.

FOREIGN INVESTMENT PROMOTION AND PROTECTION ACT


Furthermore the law has involved its self in to the correct business practice by formally
announcing the promotion of the foreign direct investment. It is not about just protection but t
is about its full protection. Anyone found guilty in doing corrupt practices in regard to the
foreign direct investment would be penalized and will have to face the harsh consequences.

PRIVATIZATION
The region has formally established departments to handle privatization effectively. This
region has facilitated the process of privatization under the legal frame work and they are
offering a handsome amount of share of companies for privatization.

THE TECHNOLOGICAL EN VIRONMENT


One of the most important factors is the telecommunication channel that has brought in
wonders in the world of business. The positive impacts of the technological environment are
heavier in weight than the negative ones. Technological environment has following positive
and negative impacts in the region.
1.

The work forces are facing the worse of all, the downsizing. This is creating a big
economic and social problem and can be hazardous to the regions economy. On the

865

other hand from the perspective of the owner, this is a blessing to have a small but
efficient work force.
2.

The introduction of technology has reduced the human error in the business
environment.

3.

The work which was once static in nature is now portable.

4.

The economies of scale have been achieved on cost of reduced salaries

E-COMMERCE AND BUSINESS


In todays world the issue is saving the costs the products that are ready for sale. What ebusiness has given is the cost leadership and effectiveness. The e-business in this region has
started and has delivered its services but main issues of mistrust and frauds have still put
questions on its applicability. To answer these questions these service providers have proved
themselves that they are reliable. E business has given access to the whole global market or it
would be appropriate to say that the e-business has made the business and its environment
boundary less. Big names are Amazon, buy.com, e-bay that has provided their services with
trust and protection from hackers.
While these businesses were operating, they also inspired the local people of the region and
now days there are many local e-businesses established and going fine with it. Now you just
need is a fascinating, full of ads and a precise or in depth web site for doing business. No
need for retail outlets and related stuff.

TELECOM MUNICATION SECTOR


The telecommunication sector in this region of world has made drastic changes in the way
people communicated. This technology has invited and made the conditions conducive for
the outside/foreign firms to step in and start putting their capital in the business.
The concept of total internal reflection has changed the world in such a way that it has given
the internet such a speed that was never possible in the past. Many foreign firms have taken
the advantage of the privatization policies of this region and have bought considerable
number of shares of the local companies. These foreign companies have changed the old wire
with that of a fiber optic wire that has given speed and saved the cots as well.

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The concept of wireless electricity is picked from the concept of cellular phones. This
concept has saved a lot of ele ctric cable cost and its conductivity cost as well.
The mobile telephone technology has made the business local and has brought low
connectivity rates hence saving the money of the uses. This region has a very high ratio of
usage of cellular phones. The business of cellular phones has targeted a large range of market
segment including the lower, middle and upper classes of the region.

A BETTER AND EFFICIENT REPLACEMENT


The era of information and communication technology or the ICT has made this region full of
attraction. People are running for products related to ICT. They are now better off with the
solutions given by the telecommunication. Things have become short in size and bigger in
purpose, efficiency and precision. This field has created a lot of jobs in the region and has
helped support the armed forces as well. The application of the telecommunication has helped
to achieve the better time management. This has also proved to be the competitive edge and
the countries in present are relying and future will rely on technology in order to beat the
each other.

ETHICS AND CORPORATE SOCIAL RESPONSIBILITY AND THE REGION


ETHICS
Ethics are the projected or visible part of any person, nation, or precisely a business. Ethics
are situational and depend on region to region, business and person to person. We can also
say them that the law, rule, good or bad according to the majority of people or business or a
nation. Ethics are important because when we talk of multiculturalism we must keep in mind
the diverse workforce. So ethics should be given core importance for a successful business
either inside or outside the country.

CORPORATE SOCIAL RESPONSIBILITY


Corporate social responsibility is another important factor that has to be there where there is a
business activity. Actually CSR is the benefit to the society without any secret or disguised
business mission. There should be a service to the society or the surrounding without any
profit maximizing or other business strategy. If these conditions are fulfilled only then a firm
or an organization is practicing the corporate social corporate responsibility.

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CORPORATE GOVERNANCE
Corporate governance is the framework that the governments issue to the business units or
simply it is set of tools. The governments of the selected regions have given very detailed
corporate governance rules that are compulsory to follow.

LABOR LAWS AND ARTICLES


1.

Article 11 of the Constitution prohibits all forms of slavery, forced labor and child
labor.

2.

Article 17 provides fundamental right to exer cise the freedom of association and the
right to form unions.

3.

Article 18 says every citizen; subject to qualifications can enter a trade, business or
profession of his/her choice.

4.

The article 25 of the Constitution provides following guidelines for the equality of
citizens:

5.

All citizens are equal before law and are entitled to equal protection of law.

6.

There shall be no discrimination on the basis of sex alone.

7.

Nothing in this Article shall prevent the State from making any special provision for
the protection of women and children.

Article 26 says no person otherwise qualified can be discriminated against in the


matter of employment on the basis of race, religion, caste, sex, residence or place of
birth (Exceptions: specific services can be reserved for members of either sex if such
posts/services require duties which cannot be adequately performed by the members
of other sex, e.g. Lady Health Visitor)

The article 27 puts complete ban on discrimination on the basis of sex in appointment
in the service in Pakistan, provided that the performance and functions of the job
can be carried out by, and is deemed suitable for, both sexes.

Article 32 of the constitution says that special representation shall be given to women
in local government institutions (i.e., local bodies).

Furthermore, article 34 states that steps shall be taken to ensure full participation of women
in all spheres of national life
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Article 37(e) makes provision for securing just and humane conditions of work,
ensuring that children and women are not employed in vocations unsuited to their age
or sex, and for maternity benefits for women in employment.

Article 38(a) of the constitution commits the State to secure the well-being of the
people, irrespective of, inter-alia, their sex by raising their standard of living, by
preventing the concentration of wealth and means of production and distribution in
the hands of a few to the detriment of general interest and by ensuring equitable
adjustment of rights between employers and employees, and landlords and tenants.

STATUS OF WOMEN
The status of women in the eastern societies is in terms of respect but the women are not
allowed to work in corporate environments. There is discrimination in work place as far as
women are concerned. There are articles in the institution of the region about giving equal
opportunity on work place without any special treatment to the women. From the last decade
the presence of women has become a compulsion and firms and business units of the region
are following them.

HOSTILE WORK ENVIRONMENTS (FEW)


The workplace can be hostile from many aspects like issues can be there if an Indian comes
to a firm operating in Pakistan may feel the environment hostile. Similarly if a Kurd comes to
a Turkish firm he may face the same consequence. If a Jew operates as a head of the firm in
Iran may not stay there for long due to many factors. So it is clear that there is a sort of
hostile environment prevailing in the region but it is towards a little group, otherwise the
region is conducive for the multi cultural teams to come and do business.

CORRUPTIONS
The region has suffered from wars and other environmental in stabilities which gives births to
these un- ethical practices. Nepotism is a sort of corruption in the profession but this has
become a part of entering in to the organization and also for ones selection for a job. These
practices can pose a very negative impact on the western investors because their values come
in conflict with ours and things start to get far from each other and firms reconsider their
operations in this region.

869

One of the most important improvements in the system of this reason is the expected
endurance of one of the country in to a very famous and prestigious region i.e. the European
Union EU. This is a proof that the corrupt practices are getting negligible in the region and
they will one day be eradicated.

CULTURAL DIMENSIONS AND THE REGION


In the world of management sciences many scholars, professors and practitioners have come
like Maslow. Mr. Hofsted and Trom penaar opened a new gateway in the management
sciences by introducing the unique cultural dimensions that impacted the life of an individual,
business country and regions of the world. Following are the dimensions of the region of
Pakistan, Turkey and Iran is as following:
HOFSTEDES CULTURAL DIMENSIONS

POWER DISTANCE
Power distance around the region is 63% which shows that the culture is power oriented and
unequal power distribution is common. Here the observable thing is the bad practice of the
power distribution.

UNCERTAINTY AVOIDANCE
The uncertainty avoidance index shows 73% on the graph. This means that the region is the
one who dont want to be in an uncertain environment.

INDIVIDUALISM
The individualism in the society is 35.3% which is a proof that the society doesnt believe in
one man but a group. It also shows the level of freedom in a society.

MASCULINITY
The index of masculinity is 51% which shows that the individuals prefer to go for money,
prestige, status. As this is a society where there is a family preference first and a transition is
taking place in the culture.

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TROMPENAARS SEVEN D FRAMEWORK FOR CULTURE

PARTICULARISM
This region realizes the fact that for every situation there must be different set of rules and
standards will take place.

COMMUNITARIANISM
The group or community is the basis for this region. Whether its happiness or sorrow, win or
loose and reward or scrutiny, its all about the group.

EMOTIONAL
Eastern nations are naturally sentimental and rely more on relations so they try but still find it
difficult to keep their feelings hidden.

DIFFUSE
As a family structure prevails in this region so the people are very cautious in judging people
and giving them space in their public side as the space given in the public gives place in the
private place as well.

ASCRIPTION
Here the people tend to remember others from the achievements done or the status.
Achievement is not of core importance in the region.

SYNCHRONOUS
People do here multi tasks but at any instance they can cancel a business deal and that is
taken as quite normal.

EXTERNAL
The happenings done to the people are taken as the external source. Anything done to them
will not come in the criteria of owning responsibility.

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MANAGING ACROSS CULTURE AND THE REGION


STRATEGIES TO FOLLOW WHILE ENTERING THE RESPECTIVE REGION

USING AN AGENT OR A DISTTRIBUTOR


Many foreign firms in this region appoint local agents to provide market intelligence and to
facilitate distribution. These agents typically work on a fixed commission.

ESTABLISHMENT OF AN OFFICE
A business in this region may be organized as a sole proprietorship, a partnership, or as a
public or private limited company. Foreign investors generally establish limited companies.
Companies are also required to register with the Income Tax Department of the Revenue.

FRANCHISING
The concept of franchising is gradually gaining acceptance in this region, especially in the
hospitality sector. Several major U.S. hotel chains, along with restaurants, and car rental
companies are currently represented here through franchisees. Franchising provides foreign
companies with a fairly swift way to enter the market without a major capital commitment.
By operating through local franchisees, foreign firms can gain access to local expertise and
significantly reduce the problems of adjusting to an unfamiliar business environment.
However, franchising in this region is not without drawbacks. Potential areas of tension
between franchiser and franchisee include quality control, intensity of marketing efforts by
the local franchisee, and possible conflict of interest on part of the franchisee. The local
affiliate may end up as a competitor once the franchise agreement expires or is terminated.
A key consideration in establishing a franchise operation in this region is quality control,
particularly if the enterprise proposes to use locally produced items. All imported food items,
particularly meat items, must be certifiably "Hilal" (slaughtered in accordance with proper
Islamic ritual). Selection of a franchisee is critical because usually it involves a long-term
relationship. Prior to entering into an agreement with a local company

JOINT VENTURES AND LICENCING


The three principal routes to entering this region market are: (1) formation of a wholly owned
private company; (2) formation of a public limited company (foreign firm retains majority
control, but seeks public participation through stock issuance); and (3) establishment of a
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company in cooperation with joint venture partners who supply local expertise, management
and capital. The joint venture may be either a private or a public company. Joint ventures can
be an attractive option in this region today because there are many local entrepreneurs who
have built a substantial base in their industrial enterprises and are seeking to combine their
knowledge of local markets with foreign capital and technological know -how. The foreign
joint venture partner limits its initial country exposure while enjoying the support of a local
partner in a new market. Prominent joint ventures have been established in the automobile,
fertilizer, electronic, financial services, food and consumer product sectors

DISTRIBUTION AND SALES CHANNEL


Many famous brands have been in collaboration with the local distributors for the sake of
entry in the country. This is another simple tactic and way to get in to the market of this
region.

POLY CENTRIC APPROACH


While entering the markets of this region make sure that the polycentric or situational
tailoring strategy regarding the production of the goods and the services in kept in mind. All
the MNCs operating in the region have enjoyed the majority market share due to the fact that
they applied a polycentric approach.

DEALING WITH THE CRO SS CULTURE DIFFERENCE


SIMPLIFICATION
This region has a potency to grade the west and look at them from a single view that they are
all one. Whether this is a European or a n American they are graded the same. This situation
is common when some bad or corrupt practice is performed by on belonging to the west.
Then sort of a stereotype is made for all belonging to west and operating in the region.

MEETING THE HIGH CONTEXT CULTURE


A high context culture takes place in the region as they believe more in the relationship. They
go for a long term relationship and expect the other party to be loyal to them, respect them
and stand with them. They do not like people who just talk of business when they meet .a
verbal promise is more important than a written one. The outsiders are immiscible in the high

873

context society. People take responsibility of work done on them; it either may be good or
bad.

ORGANIZATIONAL CULTURE, DIVERSITY AND THE REGION


THE DIMENSIONS OF THE CORPORATE CULTURE IN THE REGION
As this culture is family oriented but when it comes to work the things become a bit different.
The dimensions in the corporate culture are important and show us the culture on following
grounds:

CONDUCT
The conduct of the corporate world in this region is pragmatic in nature as the need of the
market or simply demand is put first.

CONTROL
The control policy is very tight. Although there is family structure but it doesnt mean that
the employees are empowered.

COMMUNICATION
The communication in his region is closed. There is no concept of sharing the information of
the corporation with the workforce.

IDENTITY
The work setup in this region is purely corporate. The authority is vested with the executive.

MOTIVATION
The motivation is activity based as the standards are followed and formal settings and
procedures are supported.

RELATIONSHIP
Although a family culture prevails but when it comes to job the core significance remains at
job. When the job is done then the needs of the individuals are fulfilled generously.

874

ORGANIZATIONAL CULTURE OF MNC IN THE REG ION


FAMILY CULTURE
The Asian culture in majority is like a family. The region under observation is basically
Asian in nature and the fact that the elders are respected more. Here seniority is gene rally
main reason for a promotion. The one who may be more competent might not get the
promotion due o his hierarchy level. The elder is the authority and his every decision is
respected and is not challengeable. The elder cares for the subordinates as a fatherly presence
and takes care of them at personal level and he takes responsibility of the work done by the
subordinates but the fact is that this society is really focused on the individuals as well. In a
family structure much focus is on relationship of one another and trust factor is important.

MULTI CULTURALISM PREVALENT


HOMOGENEOUS GROUP
Majority of the groups found in the region are homogeneous. Even if the outside firm is
operating in this region, only its top management is going to be in the position of the top
management. Other employees working at any level are mostly the local ones.
But the international trade agreements are changing the environment to such an extent that
the workforce is getting diverse. The multi-culturalism can be graded as increasing on a very
slow rate. This rate is slow as the western world is leading in every field so the people from
this region go there in masses but the ratio of their people coming here are very small in
number. The multiculturalism is directly dependant over the modernization.

CROSS CULTURAL COMMUNICATION, NEGOTIATION AND THE REGION


THE COMMUNICATION PROCES IN THE REGION

VERBAL COMMUNICATION STYLES


INDIRECT
Read between the lines is the correct statement to show the culture of this region. Only
close relatives are spoken directly. So for checking out the correct meaning asking a question
from different angles can be helpful.

875

SUCCINCT
People say very few words and mean much. The region is never direct or elaborative in
nature.

CONTEXTUAL
Focus is on the relationships of the parties. If one makes a good relation, it is evident that
they will earn the contract.

AFFECTIVE
The facial expressions along with the language and its tone should be critically observed.
Learning these behaviors by the outsiders can be a key element for business.

NON-VERBAL COMMUNICATION
KINESICS
Looking in to the eyes of people and talking in this region is considered to be sincere and
loyal.

OCCULESICS
Gazing is used to show aggression in this region and even if the talk has converted in to
informal style the sitting etiquettes are maintained.

PROXEMICS
The people in this region come so close that they start talking to you while coming in to your
intimate space. For them it is a feeling of close relation. So dont move backwards.

CHROMATICS
Never take a gift of white flower during business deals as this is considered the color for
marriage.

COMMUNICATION FLOWS
DOWNWARD FLOW
The family culture follows a strict chain of command and things are delegated from up to
down in this cultur e.
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COMMUNICATION BARRIERS
LANGUAGE
An interpreter can be a helpful tool to solve this problem. But now a days English is adopted
as the business communication language.

CULTURAL
This must be learnt before coming it to a business deal or negotiation that understanding the
selective words and expressions of the hosts.

PERCEPTUAL
The perception may differ between two negotiators so prior study of other cultures is
recommended.

NEGOTIATION PROCESS
MAKING PLANS
Primary and back up plans are made before the meeting starts.

MAKING RAPPORT
Relation is made to check the potential and the willingness of the people that can they go a
long way.

TALKING BUSINESS
When it is clear that the party is interested in doing business then the negotiation starts.

USE OF TACTICS
PERSUATION
Be aware that you have full knowledge of the other partys position. Be aware that extreme
tactics can be repelled back if other party is visiting the host.

TIME
It is common in this region that time is often used as a tactic. Parties delay the negotiation
and bring the other party forcefully near towards its deadline.

877

USE OF THREATS
Be very care full. If an outsider gives threat to the host then he could either apply the same or
simply finish then deal.

SILENCE
To get more and more knowledge and extraction of information the hosts remain quiet.

AGREEMENT OR DISAGREEMENT
Finally the one with strong nerves wins the agreement.

STRATEGY IMPLEMENTATION AND THE REGION


APPROACHES TO FORMULATING AND IMPLEMENTING
STRATEGY

ECONOMIC IMPERATIVE
DIFFERENCIATION AND SEGMENTATION
The market of the region supports the product that is different for different segments. So any
foreign body with intensions to start business must keep this crucial agreement in mind.

POLITICAL IMPERATIVES
COUNTRY RESPONSIVE AND PROTECTING LOVCAL NICHE
MARKET
The region has a strong ideology to never destroy the local market and always protect it.
Those coming from the outside must take care of the local niche market and the protection.
Their product line should be in line with the demand of the customers.

QUALITY IMPERATIVE
TOTAL QUALITY MANAGEMENT
The best advice for the foreign firms is to follow a set of standardized methods and
international standards on regular basis. They must try to reach or exceed the regions
demands.
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ADMINISTRATIVE COORDINATION
DECISION BASE DON MERITS
It is an obligatory phase for the outside company to apply the decision according to the
environment of the region. As the east and the west have a difference of 180 degrees in the
business management and related aspects.

GLOBAL VS REGIONAL STRATEGIES


MULTI-DOMESTIC STRATEGY
The region is diverse in nature and hence they require different set of products at national
level. Here the global integration is low as the products or services which are same for every
region are minimal.

SPECIALIZED STRATEGIES
According to the region the specialized strategy favorable for the host region is as follows:

BOTTOM OF THE PYRAMID


A strategy in which the hidden talent from the 3rd world countries is extracted for benefit of
both the insider and the outsider should prevail.

ENTRY BARRIERS
There are a number of entry barriers that have caused hindrance in the international business
are as following:

QUARANTINE

TARIFFS AND QUANTITATIVE RESTRICTIONS

IMPORT LICENCES AND OTHER RESTRICTIONS

STANDARDS, TESTING, LABELING, AND CERTIFICATION

SERVICES BARRIERS

INVESTMENT BARRIERS

CORRUPTION

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DIRECT TAXES

INDIRECT TAXES

MANAGEMENT PRACTICES IN THE REGION


AUTOCRATIC
An Autocratic style means that the manager makes decisions unilaterally, and without much
regard for subordinates. As a result, decisions will reflect the opinions and personality of the
manager; this in turn can project an image of a confident, well managed business. On the
other hand, subordinates may become overly de pendent upon the leaders and more
supervision may be needed.
There are two types of autocratic leaders:
1.

The Directive Autocrat makes decisions unilaterally and closely supervises


subordinates;

2.

The Permissive Autocrat makes decisions unilaterally, but gives subordinates latitude
in carrying out their work.

PARENTALIST
A more Paternalistic form is also essentially dictatorial; however, decisions take into account
the best interests of the employees as well as the business. Communication is again generally
downward, but feedback to the management is encouraged to maintain morale. This style can
be highly advantageous when it engenders loyalty from the employees, leading to a lower
labour turnover, thanks to the emphasis on social needs. On the other hand for an autocratic
management style the lack of worker motivation can by typical if no loyal connection is
established between the manager and the people who are managed. It shares disadvantages
with an autocratic style, such as employees becoming dependent on the leader.

COMMENTS/ RECOMMENDATIONS
There are few recommendations that can be helpful in rectifying the business environment.
They are following:

880

1. The custom policies must be made free from bad practices, bribes and long confusing
phases.
2. The custom policies must be relaxed so that the foreign investors do the trade with the
region in a free and open environment.
3. Red-tapism should be rectified and the rules and the procedures must be relaxed. The
bureaucratic part must be defined with their limitations and strong policies should be
there for the one who exceeds his authority or misuses it.
4. People from the bottom must be given chance or simply the strategy i.e. specialized
the bottom of the pyramid must be practically applied by the foreign investors while
starting their projects in this region so that the hidden talent can contribute to the
economy.
5. Instead of buying the products from outside the transfer of technology should be on
the primary importance so that the region becomes self sufficient and they can expand
their outside region operations and enhance the business productivity.
6. The trade restrictions must be liberalized to attract FDI.
7. The proper application of WTO can be useful for the regions better business.
8. Trainings of cultures must become a formal practice of the regions cooperations.
9. Simplification should be removed by being adaptive to change and be flexible to
different conditions.
10. Approach has to be proactive in nature for development.
11. The research and development to be a n obligatory department of all local
organizations for breakthroughs.
12. The utility of a very important part of society i.e. women in the work force on equality
and merit basis to be introduced.

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CONCLUSION
SUMMARY STATEMENT
The overall region is rich and conducive for doing business. The internal and external
environmental issues have played a major part in keeping them away from a modernized
society. People of the region are sincere but expect the same from the other side as well.

THE CLINCHER
The region is moving towards a positive economy and environment. The application of
knowledge has started and things have changed a lot as they were fifty years back. The region
is full of resources but unfortunately they are either hidden or not exploited. A give and take
strategy by the foreigners can be a good option. They give business to the region and in return

882

LATIN AMERICA CLUSTER

883

DETERMINANTS
Argentina, Brazil, Venezuela and Chile are the emerging economies from the Latin American
region. Hence it is important to have a look at their political, economic and legal systems and
their standing in the Greet Hofstedes cultural dimensions model.
ARGENTINA
Politics of Argentina takes place in a framework of a federal presidential representative
democratic republic, where the President of Argentina is both head of state and head of
government , and of a multi-party system. Executive power is exercised by the government.
Legislative power is vested in both the government and the two chambers of parliament. The
Judiciary is independent of the executive and the legislature. The Legal system of Argentina
is one of the few in the world that mix Civil and Common law . The two pillars of the civil
system are the Constitution of Argentina (1853) and the Civil Code of Argentina (1871).
Argentina's economy is one of the richest and most diversified in Latin America. The nation
has a variety of natural and other resources which have combined to produce an economy that
is based on a strong industrial base, an export-oriented agricultural sector, and a growing
service sector. The Argentine population is highly educa ted and skilled, and the country has a
variety of natural resources including lead, zinc, copper, iron petroleum, uranium, and rich
agricultural areas. However, after repeated periods of military dictatorship, the nation faced a
variety of economic problems when the first sustained period of civilian control of the
government began in 1983. By 1989, the nation had an enormous external debt, and inflation
had reached a level of 200 percent per month. In response, the government undertook a
variety of programs to reform and reinvigorates the economy. In 1991, it initiated a series of
programs which provided a fixed exchange rate between the Peso and the U.S. dollar and
ultimately reformed the banking system. This dramatically lowered inflation and helped
stabilize the economy. The government in 2001 continued an economic program which raised
taxes and cut government spending in an effort to lower the nation's budget deficit and
overall debt.
CULTURAL DETERMINANTS:
Argentina is similar to many of the Latin American countries in analysis of the Hofstedes
Dimensions.

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Uncertainty Avoidance Index (UAI)


The high Uncertainty Avoidance Index (UAI) ranking of 86 indicates the societys low level
of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict
rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this
population is to control everything in order to eliminate or avoid the unexpected. As a result
of this high Uncertainty Avoidance characteristic, the society does not readily accept change
and is very risk adverse.
Based on our studies and data, the large majority of predominantly Catholic countries (those
with Uncertainty Avoidance as their highest ranking Dimension) have a low tolerance for
ambiguity. This creates a highly rule -oriented society that institutes laws, rules, regulations,
and controls in order to reduce the amount of uncertainty within the population.
BRAZIL
POLITICS OF BRAZIL:
Politics of Brazil takes place in a framework of a federal presidential representative
democratic republic, whereby the President of Brazil is both head of state and head of
government , and of a multi-party system. Executive power is exercised by the government.
Legislative power is vested in both the government and the two chambers
of the National Congress. The Judiciary is independent of the executive and the legislature.
Brazil is divided into 27 states, including the Federal District.
Brazilian law derives from Portuguese civil law and is based on statutes and, partly and more
recently, smula vinculante (stare decisis ). According to the judiciary structure framed in the
Brazilian Constitution, judicial power is divided between the State judicial branch and the
Federal judicial branch, each having a different jurisdiction. State-level courts make decisions
on all criminal and civil cases, with regional federal courts acting as courts of appeal. A
Supreme Court called Supreme Tribunal Federal makes final, binding decisions in legal cases
and on interpretations of the Constitution.
Brazil has a moderate free market and export-oriented economy. Measured nominally, its
gross domestic product surpasses a trillion dollars, the tenth in the world and the second in
the Americas; measured by purchasing power parity, $1.9 trillion, making it the eighth largest

885

economy in the world and the second largest in the Americas, after the United States, In
Reais (Brazilian currency), its GDP is estimated at R$2.6 trillion Reais in 2007.
CULTURAL DETERMINANTS:
Brazil is similar to many Latin American countries when analyzing Hofstede's Dimensions.
Uncertainty Avoidance (UAI)
Brazil's highest Hofstedes Dimension is Uncertainty Avoidance (UAI) is 76, indicating the
societys low level of tolerance for uncertainty. In an effort to minimize or reduce this level
of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The
ultimate goal of this population is to control everything in order to eliminate or avoid the
unexpected. As a result of this high Uncertainty Avoidance characteristic, the society does
not readily accept change and is very risk adverse.
Individualism (IDV)
Brazil has a slightly higher Individualism (IDV) rank of 38 compared to the average Latin
population score of 21.
Collectivism:
However, virtually all the Latin countries are considered to be Collectivist societies as
compared to Individualist cultures. This is manifest in a close long-term commitment to the
member 'group', be that a family, extended family, or extended relationships. Loyalty in a
collectivist culture is paramount, and over -rides most other societal rules.
VENEZUELA
Government of Venezuela is a federal republic governed by a constitution. There are five
branches of government: Executive, Legislative, Judicial, Citizen, and Electoral. The chief
executive is President of Venezuela who is both head of state and head of government, and of
a multi-party system. Executive power is exercised by the President. Legislative power is
vested in the National Assembly. Venezuela is a limited democratic federal republic. It is
composed of states whose leadership (governor and legislative assembly) is popularly
elected. In recent years, there has been substantial delegation of authority to popularly
elected municipal governments although the justice system (e.g. courts, police, and
corrections) is still in the hands of the central government. The country is divided into 20

886

states (each presided over by a popularly elected governor), 2 federal territories, the Federal
District, and numerous island dependencies in the Caribbean.
The economy of Venezuela is based in large part on petroleum. The petroleum sector
dominates the economy, accounting for roughly a third of GDP, around 80% of export
earnings, and more than half of government operating revenues. Venezuela is the fifth biggest
member of OPEC by production. From the 1950s to the early 1980s the Venezuelan economy
was the strongest in South America. The continuous growth during that period attracted many
immigrants. During the collapse of oil prices during the 1980s the economy contracted. With
the recent rise in oil prices and rising government expenditures, Venezuela's economy grew
by 9% in 2007. However, there is still considerable income inequality. Although often
portrayed as a command economy.
Government spending as a percentage of GDP in Venezuela in 2007 was 30%, smaller than
other capitalist countries such as France (49%) and Sweden (52%). According to official
sources, the percentage of people below the national poverty line has decreased significantly
during the presidency of Hugo Chavez, from 48.1% in 2002 to 30.2% in 2006.
CULTURAL DIMENSIONS:
Venezuela is similar to other Latin American countries when analyzing Hofstede's
Dimensions, yet has unique characteristics by possessing extremes in all four Hofstedes
Dimensions - three on the high end of the scale and one on the low end. The first significant
exception is that unlike all other Latin countries, except Panama, Venezuela's highest
Dimension ranking is not Uncertainty Avoidance (UAI).
Power Distance (PDI)
Venezuela's highest ranking Dimension is Power Distance (PDI) with an 81, compared to an
average of 70 for the average of all other Latin countries. This is indicative of a high level of
inequality of power and wealth within the society. This condition is not necessarily subverted
upon the population, but rather accepted by the culture as a whole.
Uncertainty Avoidance (UAI)
Venezuela's Uncertainty Avoidance (UAI) of 76 is slightly below the Latin average of 80,
indicating the societys low level of tolera nce for uncertainty. In an effort to minimize or
reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and
implemented. The ultimate goal of this population is to control everything in order to
887

eliminate or avoid the unexpected. As a result of this high Uncertainty Avoidance


characteristic, the society does not readily accept change and is very risk adverse.
Masculinity:
Venezuela has the highest Masculinity ranking among the Latin countries at 73, compared to
an average of 48. This indicates the country experiences a higher degree of gender
differentiation of roles. The male dominates a significant portion of the society and power
structure. This situation generates a female population that becomes more assertive and
competitive, although not at the level of the male population.
Individualism (IDV)
Venezuela has a very low Individualism (IDV) ranking at 12, compared to other Latin
countries (average of 21). The score on this Dimension indicates the society is strongly
Collectivist as compared to Individualist. This is manifest in a close long-term
Commitment to the member group is that a family, extended family, or extended
relationships.
Collectivism:
Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and
regulations. The society fosters strong relationships where everyone takes responsibility for
fellow members of their group.

INVESTMENT OPPORTUNITIES
Companies interested in doing business in Latin America should consider the following
Fewer Restrictions on Foreign Exchange:
Most countries have liberalized their currency controls so that there are few restrictions on
currency conversion and capital transfers to and from the region. In March, Brazil largely
ends its restrictions on international currency transfers and payments in Reais, the local
currency.
Fewer Restrictions on Foreign Investment:
Economic nationalism has declined, except in Venezuela under Chavez. In general, foreign
investment is permitted in virtually ever y sector and there is substantial foreign investment
from Spain, Europe, Japan and the U.S., in banks (particularly by Spanish or US banks),
888

telecoms, and even utilities. Restrictions, such as Mexico's restriction on the foreign ownership of oil, are rare. In order to invest in Latin America, to establish a sales or corporate
presence, or to source products or services, it is necessary to navigate through issues such as:
1. Corporate Structure:
The options for structuring subsidiaries are similar to those in the United States: limited
liability corporations, or partnerships. The vehicle should be chosen based on the foreign
company's sales goals and tax considerations. Often at least two shareholders or quota
holders are required. Generally setting up a company takes about a month.
2. Labour/Employment:
Latin America's labour laws are very similar to restrictive European laws, except that labour
costs are lower than in Europe. Labour laws tend to favour the employee, so your company's
growth must be carefully considered. Employees may be more difficult to dismiss than U.S.
employees.
3. Intellectual Property Rights:
Latin America is also famous for piracy, but careful planning in regard to your copyrights,
trademarks and patent rights can help you minimize this danger. Statutory protection tends to
be good, but enforcement lags.

LATIN AMERICA BUSINESS ENVIRONMENT:

INTRODUCTION
Latin American business environment improved dramatically in the first half of the year
accelerating the economic recovery that began in late 2009. Accelerated economic growth
threatened to generate inflationary pressures, but in most countries inflation remained
moderate. Growth also translated into social gains, most immediately a decline in
unemployment. However, as the global recovery lost steam in some regions in the second
half of 2010, there was concern that Latin Americas recovery would also stall, but the
anticipated slowdown had yet to occur as the regions economies entered into Q4. This
resilient recovery, anchored in sound macroeconomic policies, favorable articulation with the
evolving global economy and dynamic domestic markets, indicates that for most countries
the business environment is likely to remain attractive for some time to come.

889

EXTERNAL ENVIRONMENT
There is no question that Latin America benefited from an improved external environment
during H1 2010, although internal factors also accounted for the regions strong recovery.
Prior to the 2008-9 financial crisis, governments adopted policy measures to make their
economies less vulnerable to external shocks and to reposition themselves within the global
economy by expanding trade and investment flows with emerging markets, most importantly
China. These steps promise to stand Latin America in good stead in the face of future
downturns.

Regional Developments:
U.S.-Latin American engagement lacked focus:
Despite Senate confirmation of Arturo Valenzuela as the Obama administrations point
person on Latin America, the two wars and economic problems at home pushed Latin
America down on its agenda. The surge in anti-immigration sentiment also injected a serious
irrita nt into U.S. Latin American relations. In the meantime, the pending Free Trade
Agreements (FTA) with Colombia and Panama continue to languish in Congress despite
repeated assurances from the president that he would secure passage. Growing violence in
Mexic o forced Washington to give priority attention to its southern neighbor.

Latin America took steps to realign its foreign relations:


Led by Brazil, the Latin American governments responded to Washingtons neglect by
strengthening regional Cooperation, diversifying their international relations and pushing for
a greater voice in the UN, IMF and WTO. They also took steps to create a Latin Americanonly organization that would supplant the Organization of American States. Brazils
ascendance to leadership in the region and its status in global affairs eclipsed Venezuela,
which faced serious economic problems. While trade agreement negotiations with the U.S.
languished, Latin American governments negotiated and signed trade agreements with other
major countries, such as the EU, China and Canada. For its part, Canada (which has FTA
with Chile, Costa Rica, Peru, Colombia and Panama) announced that it would negotiate
additional agreements.

890

DOMESTIC ENVIRONMENT
The domestic environments of all 18 countries improved in Q4 2009. The upturn accelerated
in H1 2010 in most countries before showing signs of softening in H2. Latin Americas quick
economic turnaround, which was shaped by both a favorable external environment and sound
domestic policy-making, had positive effects on the social and political environments as well.
Improved economic and social conditions reinforced a growing consensus that the region had
turned an important corner and has become an attractive place to invest and do business.
Latin America made significant gains on all external fronts except overseas remittances,
which picked up but remained below pre-crisis flows. Foreign direct investment (FDI) gained
momentum during the year and did return to pre -crisis levels, although there continued to be
significant differences among countries (Figure 5 and Table 4 do not include projections for
2010). Led by the South American commodit y economies, exports were expected to rise by
over 20% in 2010, according to ECLAC (Figure 6 and Table 5 document the 2009 decline in
both exports and imports), producing trade surpluses. Current account balances varied across
the region. A final sign of growing external confidence in Latin America were improved
country risk ratings.

SOCIAL ENVIRONMENT
The rapid resumption of growth helped head off a reversal in the social advances, declining
unemployment, poverty and inequality, achieved during the growth-with-low-inflation cycle
prior to the crisis. Conditional cash transfer programs also played an important role in
reducing poverty and lowering inequality. Between 2002 and 2008, 41 million Latin
American were lifted out of poverty (ECLAC).
Improving social environment reinforced economic recovery and centrist politics
Rising wages translated into a surge in consumer spending that helped cushion Latin America
from the weak recovery of its traditional trading partners, most importantly the U.S.
Crime and threats to personal security persisted:
Although most alarming in Mexico, drug-related violence deepened in Central America
where it was linked to urban gangs. Venezuela emerged as an even more dangerous place.
Even countries like Peru and Chile have seen an increase in rural violence.

891

POLITICAL ENVIRONMENT
Latin Americas political environment has become more business friendly over the past
decade. Last years quick economic recovery helped institutionalize the centrist Democratic
politics that were taking hold in much of the region. In the four countries with Populist
political arrangements, Venezuela, Nicaragua, Ecuador and Bolivia, the business
Environments remained problematic.
Elections confirmed convergence around centre
Of the six presidentia l elections held since September 2009, the candidates of leftist parties
won in Uruguay and Bolivia; the candidates of the right in Honduras, Chile and Colombia
and an avowedly centrist candidate won in Cost Rica.
Popular incumbents resisted re-election and strengthened democracy
In a victory for democratic succession, the presidents of Chile, Costa Rica, Colombia and
Brazil left office with high approval ratings. Meanwhile the populist executives sought to
extend their terms in office.

POLICY ENVIRONMENT
Moderate policies reflected, and reinforced, the growing centrist political consensus. The
quick recovery confirmed the efficacy of consistent macroeconomic policies prioritizing
fiscal discipline, inflation-rate targeting and floating exchange rates. The more successful
countries further added conditional income transfer programs, thereby moving beyond the
Washington consensus model of the 1990s to a hybrid Latin American approach.

MANAGEMENT STYLES
LATIN AMERICA
In a study of managerial styles (Williamson, Perryman, Foreman, 2003) among female
executives in Nicaragua and Costa Rica, Hofstedes 1980 work s revisited, which identified
the components of high power distance. These include:
1) Employee fear to express disagreement with management;
2) Employee identification of autocratic or paternalistic management styles and
3) Employee preference for an autocratic rather than participatory management style.
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These components strengthen the association between power distance and authoritarianism in
the culture. In the case of Nicaragua and many other Latin American countries, such as the
Dominican Republic and Guatemala, long-lasting dictatorships and feudal agricultural
systems have been present for most of their history, consequently many of these nations
citizens are comfortable, and in many instances, prefer controlled, authoritative
environments.
Paternalism and hierarchical relationships are the norm in many business organizations in
Latin America. Paternalism is comprised of two main aspects:
1) The power to make decisions for others and,
2) A responsibility for dependents. The style is also typical of pyramid based leadership, as
information travels from the top towards the bottom/It is extremely rare for the inverse to
occur, thus making improvement initiatives, such as total quality management (TQM)
difficult to fully implement.
For the most part, the leadership style of Latin American managers is described as
authoritarian and autocratic. Countries with significant European influence, such as Costa
Rica, tend towards low power distance ratios with managers practicing a participative style of
management. Contrastingly, countries with a strong Mestizo influence, such as Mexico, have
higher power distance ratios with managers employing a more authoritative style. Overall,
Latin American managers are paternalistic and autocratic in nature, especially when
compared to those from the US. However, sweeping generalizations can lead to flawed
perceptions, as the greater an understanding of the culture the greater the acknowledgement
of exceptions to the rule.

ATTRACTION FOR MNCS IN LATIN AMERICA


1. The economy of Latin America is the biggest attraction for the MNCS to enter into Latin
American countries.

2. Power distance is very low in which people work as a group and everybodys opinion is
taken under consideration before making any important decision

3. High Universalism is practiced


4. People are very much punctual and they are workaholic people

893

5. People in Latin America are very much effective in work


6. Every individual believes that he or she owns the organization
7. High achievement and high competence oriented people
8. There emphasis is on profit maximization, organizational efficiency and high productivity
9. They keep the appointments strictly and show a strong preference for following plans as
they are laid out and not deviating from them

10. In Latin America only Brazil follows the emotional relationship other than Mexico,
Venezuela, Argentina and etc.

ENTRY BARRIERS AND WAYS TO OVER COME THEM


Multinational corporations mainly enter industries where barriers to entry and concentration
are relatively high, and at first they increase the number of firms in the host country market.
In the long run, they may contribute to a more concentrated market, although efficiency may
improve, especially if protection does not guarantee an easy life for the multinational
affiliate. However, most available evidence has to do with multinationals' entry into host
countries' industries rather than with their presence the dynamic aspects of multinationa ls'
relationship to their competition in host country markets. Most evidence on multinationals'
effects has to do with effects in industrial countries, and it is impossible to disregard the risk
that the multinationals` entry into developing countries may replace local production and
force local firms out of business, rather than force them to become more efficient. Merger or
direct acquisition of existing companies in a new market is the most straightforward method
of new market penetration employed by multinational corporations. Such an entry, known as
foreign direct investment, allows multinationals, especially the larger ones, to take full
advantage of their size and the economies of scale that this provides. The rash of mergers
within the global automotive industries during the late 1990s are illustrative of this method of
gaining access to new markets and, significantly, were made in response to increased global
competition.
Multinational corporations in Chile also make use of a procedure known as sequential market
entry when seeking to penetrate a new market. Sequential market entry often also includes
foreign direct investment, and involves the establishment or acquisition of concerns operating
in niche markets related to the parent company's product lines in the new country of
894

operation. Argentina's Sony Corporation made use of sequential market entry in the United
States, beginning with the establishment of a small television assembly plant in San Diego,
California, in 1972. For the next two years, Sony's U.S. operations remained confined to the
manufacture of televisions, the parent company's leading product line. Sony branched out in
1974 with the creation of a magnetic tape plant in Dothan, Alabama, and expanded further by
opening an audio equipment plant in Delano, Pennsylvania, in 1977.
After a period of consolidation brought on by an unfavourable exchange rate between the yen
and dollar, Sony continued to expand and diversify its U.S. operations, adding facilities for
the production of computer displays and data storage systems during the 1980s. In the 1990s,
Sony further diversified it U.S. facilities and now also produces semiconductors and personal
telecommunications products in the United States. Sony's example is a classic case of a
multinational using its core product line to defeat indigenous competition and lay the
foundation for the sequential expansion of corporate activities into related areas.
Finally, multinational corporations often access new markets by creating joint ventures with
firms already operating in these markets. This has particularly been the case in countries
formerly or presently under communist rule, including those of the former Soviet Union,
Eastern Europe, and the People's Republic of China. In such joint ventures, the venture
partner in the market to be entered retains considerable or even complete autonomy, while
realizing the advantages of technology transfer and management and production expertise
from the parent concern. The establishment of joint ventures has often proved awkward in the
long run for multinational corporations, which are likely to find their venture partners are
formidable competitors when a more direct penetration of the new market is attempted.
Multinational corporations are thus able to penetrate new markets in a variety of ways, which
allow existing concerns in the market to be accessed a varying degree of autonomy and
control over operations.
The development of the tradable sector has been, and remains, a permanent concern for
policy makers in Argentina, Brazil and Chile (A -B-C). Strengthening international
competitiveness is the key to the region's perennial challenge to generate a net export surplus
sufficient to finance debt-service obligations without constraining domestic demand growth.
The policy debate on the tradable sector often focuses on the risks of specialisation in
primary goods related to their declining share in international trade and price volatility. Until
the early 1980s, trade barriers and low income elasticitys of primary goods were used as an
895

argument to justify import substitution policies and controls on imports of capital goods.
Following trade liberalisation of the late 1980s and 1990s, a more horizontal approach was
adopted. The main policy issues evolved towards how to diversify exports and produce more
value-added products. In this context, the existing trade barriers in OECD countries are seen
as an obstacle preventing these economies from realising their competitive potential. By
limiting exports these trade barriers jeopardise sustainable growth. They re duce the capacity
to import, in particular investment goods that underpin transformation and long-term growth.
Domestic policies have not always been consistent with the aim of developing the tradable
sector. In Argentina, despite the economic drive from market-oriented reforms during the
1990s, the economy was unable to accommodate to the constraints of a fixed exchange rate
enshrined in a currency board. Although a Competitiveness Law was passed in 2001, this was
insufficient to reinvigorate the economy. In early 2002, Argentina had to abandon the
currency board and fell into a severe economic and debt crisis. After defaulting on public
debt and a large exchange rate correction, the Argentinean economy started to recover in
2003. In Chile, despite early and far-ranging liberal reforms, the slowdown of investment and
growth following the emerging market crises of 1997-98 gave weight to the view that the
country's traditional export structure is a handicap as it makes it less resilient to external
shocks. Bra zil, where structural reforms were undertaken in the early 1990s within a fragile
macroeconomic framework, had to abandon its managed peg regime in 1999.

LATIN AMERICA MULTINATIONAL


An exciting phenomenon is taking place in Latin America. Chilean companies are operating
plants in Peru and Argentina. Brazilian firms are investing not only in neighbouring
countries, but also in the United States and Europe. US workers who once fretted about
losing jobs to Mexico are now working in Mexican-owned plants in the United States. The
firms making this happen are part of an Emerging group of Latin American firms many are
referring to as multi-LatinasLatin American Multinational Corporations (MNCS).The
expansion of the multi-Latinises generally viewed as a positive trend, part of overall growth
in foreign direct investment (FDI) flows in the region over the past decade and a sign of the
increasing Sophistication of Latin American firms. But how important is this trend and how
can it be explained? What are the implic ations for the region? The benign view of FDI was
not always predominant. Following The World War II strategies of import substitution for
economic development spread throughout Latin America. Countries combined high tariffs
896

with restriction on MNC activity. FDI, regardless of its source, was regarded with suspicion.
Critics argued that foreign firms exploited local markets, monopolizing rather than diffusing
their know-how and repatriating exorbitant profits. Even in this environment, a first wave of
multilatinas emerged in the late 1960s and 1970s, as firms established operations in mostly
neighbouring countries to serve local markets. Typically driven by the need to bypass tariffs,
these earlier MNCs were quite different from todays multilatinas. Beginning in the 1980s,
Latin American countries began to liberalize their economies. The 1980s debt crisis severed
developing countries access to credit and portfolio investment and instilled the view that
state intervention had failed. After decades of scepticism, a broad consensus began to emerge
regarding the potential benefits of FDI to host economies through the provision of capital,
technology, and know -how. Almost every country in Latin America reduced trade barriers,
opened to foreign investment, and relaxed exchange controls. FDI soared worldwide in
the1990s, growing more than 25 percent per year in Latin America. While some predicted
that the fall in tariffs would discourage intra-regional FDI, relaxation of capital controls and
FDI restrictions enabled Latin American companies to transfer capital abroad more easily and
investing neighbouring countries. At the same time, new regional pacts, such as Mercosur
facilitated expansion abroad, and privatizations in neighbouring countries afforded
opportunities for acquisition.

THE EXPANSION OF LATIN AMERICA MULTINATIONAL:


While many are heralding the emergence of multilatinas, the scarcity of data on intra-Latin
American FDI makes it challenging to determine how significant this trend really is.
Nevertheless, the available numbers are suggestive. Annual FDI outflows from Latin
America surged from local business and government networks. Foreign firms seeking to
reduce risk by diversifying geographically or to take advantage of access to cheaper capital
than is available to local firms could achieve these objectives through portfolio holdings, thus
avoiding the complexities of operating in a different political, legal, and cultural
environment.

A generally accepted view holds that multinational activity arises from the possession of
firm-specific intangible asset such as patents, technologies, brands, and organizational
know-how that enable a foreign firm to outperform their local competitors.

897

Because high transaction costs can make selling or leasing these assets to other firms
unfeasible, firms prefer to engage in foreign activity directly. At first glance, emerging
market multinationals would not seem to fit the logic of this conventional wisdom: firms
in developing countries are generally not known for having the most innovative
technology or access to superior human capital. Moreover, standard economic models
predict that countries with relatively low supplies of skilled labour or capitalthat is,
emerging marketswill host foreign MNCs rather than establishing their own affiliates
abroad. How, then, can the existence of these world-class multinational firms from
emerging markets, and in particular from Latin America, be explained? Taking a broader
view of what constitutes intangible assets helps to explain the existence of these MNCs.
In relation to their northern competitors, third-world multinationals are often closer to
their host countries geographically, culturally, economically, and politically. As such,
their know -how and technologies may be particularly well suited for the other emerging
markets where they invest, and they may possess competitive advantages that enable
them to circumvent or exploit local institutional voids.

Early work on the subject found the third-world MNCs of the 1960s to possess superior
knowledge of small-scale labor -intensive technology.

The Mexican baker, Group Bimbo, is an example of a company that has successfully
exploited institutional voids.

Through backward integration into distribution, the firm developed a remarkable network
capable of delivering fresh bread to millions of different points of sale, often quite small and
in hard-to-reach locations. By exploiting this capability as they expanded across the region,
they successfully competed with rivals relying on inefficient outside providers. Strategic
reasons can also drive a firms decision to expand abroad. In the absence of fully developed
financial markets, international expansion may help lower financing costs. CEMEX has been
particularly successful in this regard, channelling its financing activities through its Spanish
subsidiary and securing developed-country interest rates on its debt. A buy-or-be-bought
environment in some of the consolidating industries might also be driving the growth of the
multilatinas. With the growth of global players and opening of markets, local firms may need
to expand internationally in order to compete. While in these in 2004.

898

The growth in the number of merger and acquisition deals reported by Securities Data
Corporation (SDC) also illustrates the rise of the multilatinas. Before1993, the average
number of foreign deals reported for the largest Latin American countries was about four per
year. This rose to about 25 in the mid-1990s and to about 40per year in the late 1990s and the
early 2000s.The multilatinas are a varied group. Although the leading firms tend to be
headquartered in the largest countries, Brazil, Mexico, Argentina, and Chile, most other
countries can boast some MNCs. Five of the top 25 multilatinas are steel companies from
Brazil, Argentina, and Mexico. Many companies are leaders in their respective industries,
such as the Brazilian Gerdau Group, which owns steel mills in Argentina, Canada, Colombia,
the United States, and Uruguay. Several emerged from privatized companies, such as the
Brazilian mining and oil companies, Companhia Vale do Rio Dolce and Petrobras. Most
multilatinas tend to expand regionally before venturing farther abroad. For consumer
products, this can often be due to the fact that the cultural similarity of mos t Latin American
countries makes regional firms better able to cater to regional tastes. The El Salvadoran
restaurant chain Pollo Campero and Mexican tortilla manufacturer Gruma, for instance, have
facilities throughout the region, including the United Sta tes. At the same time, a firm that
lacks international experience might want to acquire the skills needed to manage across
borders by first learning in a country that is similar and nearby. This could explain the path of
the Argentine candy manufacturer Arco, which established distribution facilities throughout
the region before building a plant in the United Kingdom. CEMEX, the third-largest producer
of cement in the world, captures many of these trends. Formerly Cementos Mexicans, the
company began to establish operations abroad in the late 1980s and early 1990s, by acquiring
distribution facilities in Spain and the United States. The company subsequently continued its
international expansion, in the Caribbean, South America, and then farther afield to Egypt. In
2000, its acquisition of Southdown in the United States transformed CEMEX into the largest
producer of cement in North America. In 2004, the company closed a deal worth nearly US$6
billion in the United Kingdom. A world leader not just in terms of size, CEMEX began
exploiting state-of-the -art information technology even before its European rivals, enabling it
to dramatically improve the operating efficiency of its acquisitions.

899

ANALYSIS
After completing our all research we have analyzed some points for the Development of
Latin America and Their Pacific Rim Countries.

Personal Relationship
Personal relationships count low between Latin American negotiators. They are very
competitive during negotiations and are inclined to stress short term results. The building of
long term relationships follows the successful completion of business deals.

Time Orientation
There are cultural variations in how people understand and use time. Researchers have found
that individuals are divided in two groups in the ways they approach time.
1.

Monochromic individuals

2.

Polychromic individuals

MONOCHROMIC INDIVIDUALS
These Individuals are those who prefer to complete one task at a time. For them, taskoriented time is distinguished from socio-emotional time. In other words, there is a time to
play and a time to work. These individuals value punctuality, completing tasks, and keeping
to schedules. They view time as if it were linear, that is, one event happening at a time.

POLYCHROMIC INDIVIDUALS
On the other hand, are more flexible about time schedules; they have no problem integrating
task-oriented activities with socio-emotional ones. For them, maintaining relationships and
socializing are more important than accomplishing tasks. These individuals usually see time
in a more holistic manner; in other words, many events may happen at once. Latin America,
the Middle East, and Africa are places where the Polychromic orientation prevails.

Context of Communication
This dimension has to do with the way people communicate with each other. Some cultures
value a high context communication style while others value a low context style.

900

HIGH CONTEXT CULTURES


In high context cultures, information is either in the physical context or internalized in the
person. Behavioral rules are implicit; in other words, the context is supposed to give you the
cues you need to behave appropriately. In these cultures, members tend to use a more indirect
style of communication. Examples of societies that value this communication style include
Latin American countries.

LOW CONTEXT CULTURES


In low context cultures, information is part of and conveyed through the verbal content of the
communication. The rules and expectations are explained and discussed; individuals tend to
prefer a more direct communication style

CONCLUSION:
After completing our research we have concluded that Understanding cultural nuances can be
the difference between success and failure when dealing with customers in other countries.
Most international credit executives are well aware of this fact and strive to avoid the obvious
land mines. Yet, even the most seasoned international credit professional occasionally
stumbles, especially when transacting business in the Pacific Rim, where business attitudes
and behaviours are quite different than what most managers are accustomed to. To be
successful in the Pacific Rim countries, the international credit professional will study
behaviour, learn about verbal and nonverbal differences that exist, and probably use a "gobetween" to help develop the desired relationship. "The credit manager should understand
how important the go-between is in the Pac Rim country, in Pacific Rim Countries cultures
depend upon on trust or the OIL OF LIFE.
In Latin America and there in Pacific Rim Countries there is no growth puzzle. Growth
has not been higher in the post-reform period not because of a failure of reforms to yield the
growth payoff that they should have been expected to do on the basis of international
experience, but because of the combination of an unfavourable external environment with
insufficient depth and breadth of reform. We also estimate the long-run growth payoff of
macroeconomic reforms, the additional gains that can be achieved by deepening this first
generation of reforms, and the potential payoff from broadening the scope of reform into a
second generation of reforms encompassing deeper structural and institutional areas. Latin
901

America has achieved everything successfully, and while the reforms that have been
implemented have indeed delivered the boost in growth that they could have been expected to
provide on the basis of international evidence, reaching much higher long-term growth rates
in the region, beyond historical growth rates and approaching the rates of high growth
regions, will require both an intensification of reform along the dimensions already
implemented and a broadening of reform to incorporate changes in structural characteristics
of Latin American economies that are still inhibiting growth in the region. Research has
show n that different cultures hold different perceptions of Latin American. For instance, most
cultures think that Latin Americans are hard working. The Latin American negotiator prefers
to negotiate on (his own) or to have a very small negotiating team of, at most, two or three
people. If he has a team, he wants to be in control of that team. He is the leader and he will
not allow anyone in his team to do anything without the approval or authority of the leader.
The American culture focuses on the individual

his performance, initiative and

accomplishments. They also prefer to deal with one issue at a time. They are usually exact
with information to back up proposals. Also they directly deal with differences and they like
to make formal presentations. Detailed discussions of issues are common. Here is the table of
Latin Americas Pacific Rim Countries which explains the decomposition of Per Capita
Growth Reduction (1991-95 compared to 1976-80)
The above table shows a key advantage of panels including extra-regional countries, is that
they permit employ an alternative standard of comparison, relying on cross-regional
comparative analyses, to supplement the country-by-country time series dimension. In this,
the unit of analysis cannot be the country. Instead, we compare regional aggregates. The
decomposition of the growth shortfall between aggregate growth performance in Latin
America and other regions during the reform period 1991-95 can also illustrate the role of
recent reform and the remaining reform agenda needed to close the growth gap.

REFRENCES
http://www.wharton.universia.net/index.cfm?fa=viewArticle&id=901&language=english
http://www.infoplease.com/ipa/A0107419.html
http://www.state.gov/r/pa/ei/bgn/35754.htm
http://www.highbeam.com/doc/1G1-81478017.html

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http://www.kwintessential.co.uk/intercultural/management/colombia.html
http://en.wikipedia.org/wiki/List_of_companies_of_Colombia
http://en.wikipedia.org/wiki/United_States_%E2%80%93_Colombia_Free_Trade_Agreemen
t
http://www.state.gov/e/eeb/rls/othr/ics/2009/117429.htm
http://rru.worldbank.org/BESnapshots/Panama/default.aspx
http://www.kwintessential.co.uk/intercultural/management/panama.html
http://www.ehow.com/how_2317706_overcome-barriers-entry.html
http://www.reportlinker.com/r0704/Colombia -industry-reports.html
http://www.tradingeconomics.com/economics/industrial-production.aspx?symbol=cop
http://www.infoplease.com/ipa/A0107870.html
http://panama-information.executivehotel-panama.com/
http://www.mexicomissouri.net/index.aspx?NID=78
http://www.google.com.pk/#hl=en&biw=1419&bih=715&q=about+panama+economy&aq=f
&aqi=&aql=&oq=&gs_rfai=&fp=90819833851a597b
http://www.brentblack.com/pages/aboutus_business_practices.html
http://escapetopanama.com/livinginpanama.htm
http://www.businesspanama.com/specials/trade.php
http://www.worldbusinessculture.com/Mexican-Management-Style.html
http://www.suite101.com/content/how-to-overcome-barriers-of-entry-a47625
http://en.wikipedia.org/wiki/Mexico#Economy
http://leeiwan.wordpress.com/how -to-do-business-in-mexico-parts-1-28/
http://www.economywatch.com/companies/forbes-list/mexico.htm
http://www.mexconnect.com/articles/3-business-entry-into-mexico
http://grouplamerica.com/mexico.htm

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GERMAN CLUSTER

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INTRODUCTION
All the countries in the Germanic Region are parliamentary democracies, with power held by
the majority in parliament. Each Germanic parliament is known by a different name, and
there is wide variation between them in terms of numbers of Member of parliaments.
Germanic countries are amongst the richest countries in the world. These countries share a
similar philosophical approach to governance and distribution of wealth. In all aspects of
governance, consensus -building is very important for decision-making by government
bodies.
This Whole-of-government approach is implemented in foreign policy matters. These
countries support a separation of military/civilian matters and view themselves as impartial
mediators. They widely ascribe to the concepts of a welfare state, in which all citizens are
given equal access to all types of benefits, such as health care and unemployment. This
analysis will be covering common approaches to governance and challenges faced by
Germany, Austria and Switzerland.
A major challenge of doing business internationally is to adapt effectively to different
cultures. Such adaption requires the understanding of cultural diversity, perceptions,
stereotypes and values. However, a word of caution must be given when discussing these
country profiles as there are always individual differences and even subcultures within every
country.
Parliamentarianism, democracy, a high proportion of women in the national parliaments and
a well developed welfare model are all characteristic of politics in the Germanic Region
where Germanic co-operation enjoys widespread popular support; it is difficult to find
associations or organizations in any of the Germanic countries that do not co-operate with
corresponding organizations in the other countries. In this respect, the Germanic Association
has been both a major source of inspiration and a driving force for other countries in the same
region.
The prevailing objective of this project is also to examine the interaction of national culture
diversity and organizational cultures and to discuss ways in which MNCs can manage the
often inherent conflicts between national and organizational cultures. Many times the cultural
values and resulting behaviors that are common in a particular country are not the same as
those needed for a successful MNC; therefore MNCs must learn to deal with this diversity.
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As a person in charge, you need to know the people youre working with. Leading teams in a
global environment requires a whole set of new expertise because working virtually
magnifies the cultural challenges that universal organizations look. In Managing across
Cultures: The Seven Keys to Doing Business with a Global approach are the seven keys for a
global mindset. They include items such as: relationships, communication styles, hierarchy
and empowerment, all of which will significantly impact the way people from different
cultures work together and interact.

LITERATURE REVIEW
To understand Germanic region properly we did a detailed analysis of its culture, political
risks management practices and identified opportunities for different MNCs who want to
start their businesses there. This document also includes statistical facts to illustrate our
analysis more noticeably.
To verify the differences between both the cultures and their effect on the corporate world
and cultures prevailing in the organizations, weve used Hofstedes and Trompenaars model
of cultural dimensions. The dimensions in this model confidently predict the differences in
the organizational cultures and how do their values extracted from their basic culture help
them to act in the organizations they are working for.
The strategic predispositions differentiate both the regions by explaining how MNCs tend to
operate in both the regions. This helps in the expansion of our knowledge about their
respective cultures.
As there are a lot of issues related to government that impact and business foreign
investments. One of the biggest emerges from the political situation of the countries. These
include internal and external factors affecting the subject region. Following paper have the
detailed analysis of the political risks about the Germanic region.
We shall also discuss the different dimensions which recognize the type of cultures practiced
in the MNCs surviving in both the regions to verify the difference between organizational and
corporate cultures in both the regions of study.

Cultural Diversity
Organizations of countries in the Germanic region have a slight variation when it comes to
their management approaches. Germany and Austria, have decentralized decision making as
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their culture is slightly different than the others. People in both these countries are strongly
related and mostly share the similar beliefs and values. They share a rich culture and
Germany having been isolated, due to its historical events has a slightly different culture.
People feel related to each other and there exists a sense of belongingness. In Switzerland the
managers are seen more as facilitators or coaches. They believe in the egalitarian approach.
Both the countries believe in taking risk as they can be much more innovative. Whereas the
rest of the countries do are afraid of the negative ramifications of risk! Germany and Austria
possess informal procedures as they practice de -centralized decision making and a flat
organizational structure. As they are risk takers, then that makes them highly innovative!

Centralized

Germany

Switzerland

Austria

Centralized

Centralized

Decentralized decision making

decision making

decision making

Safety

Safety

vs.

Decentralized decision
making
Safety vs. Risk

Risk is dramatically impacted by the


negative ramifications of failure

Individual vs. Group Group rewards

Individual

rewards

rewards

Informal

vs.

Formal Formal

procedures
Co-operation

procedures
vs. Co-operation

Formal

Group rewards

Informal procedures

procedures
Co-operation

Co-operation

Both

Both

Competition
Short-term vs. Long- Both
term horizons
Stability vs. Innovation

Readiness

for High resistance Highly Innovative

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change is low

to Innovation

People in Germanic region give more importance to qualifications. And their communication
styles are mostly direct.

Market Overview
The German economy is the world's fourth largest and, after the expansion of the EU,
accounts for more than one-fifth of European Union GDP. Germany is the United States'
largest European trading partner and is the fifth largest market for U.S. exports. Germanys
"social market" economy largely follows free-market principles, but with a considerable
degree of government regulation and generous social welfare programs.
Germany is the largest consumer market in the European Union with a population of nearly
82 million. However, the significance of the German marketplace goes well beyond its
borders. An enormous volume of worldwide trade is conducted in Germany at some of the
worlds largest trade events, such as MEDICA, Hannover Fair, Automechanika, and the ITB
Tourism Show. The volume of trade, number of consumers, and Germanys geographic
location at the heart of a 27-member European Union make it a cornerstone around which
many U.S. firms seek to build their European and worldwide expansion strategies.
Austria, with a population of 8.4 million, is a dynamic European Union member country
offering export opportunities for companies of all sizes. For firms looking to expand in
German Cluster, Austria offers attractive features as regional headquarters location, and
recent Austrian governments have sought to increase encourage this through economic
reforms and by highlighting Austrias historical and economic ties to the surrounding region.
At present, approximately 350 U.S. firms only have subsidiaries, affiliates, franchisees, and
licensees in Austria. About 150 of these companies have regional responsibilities for Central
European, Eastern European, or Balkan countries.

ANALYSIS OF GERMANIC CLUSTER


Entry Strategies

Express commitment to the market and establish long-term relationships

Work directly with a importer/distributor for maximum market penetration


908

Be prepared to meet customers needs and willing to sell in small volumes

Offer high quality and environmentally friendly products

Enter the market early to gain and maintain competitive edge

Eva luate carefully prospective partners technical qualifications and ability to cover
the German regions

The best strategy for a business to Austria is usually to select one distributor or agent for the
entire Austrian market. Some companies appoint distributors in Germany who cover all of
German-speaking Europe, including Germany, Austria, and most of Switzerland. But this
works best for businesses with a limited number of customers and end-users in Austria. In
such cases, a distributor might be located in Munich instead of Vienna. Austrian buyers are
sensitive to agents or distributors based elsewhere and may give priority to competitors with a
more dedicated Austrian presence.
The most successful market entrants are those that offer innovative products featuring high
quality and modern styling. Germans are responsive to the innovation and high technology,
such as computers, computer software, electronic components, health care and medical
devices, synthetic materials, and automotive technology. Germany boasts one of the highest
Internet access rates in the EU and new products in the multi-media, high-tech and service
areas offer great potential as increasing numbers of Germans join the Internet generation.
Certain agricultural products also represent good export prospects for producers. Price is not
necessarily the determining factor for the German buyer, given the German markets demand
for quality. The German market is decentralized and diverse, with interests and tastes
differing dramatically from one German state to another. Successful market strategies take
into account regional differences as part of a strong national market presence. Experienced
representation is a major asset to any market strategy, given that the primary competitors for
most com pany products are domestic firms with established presences. Firms can overcome
such stiff competition by offering high-quality products, services at competitive prices, and
locally based after-sales support. For investors, Germanys relatively high marginal tax rates
and complicated tax laws may constitute an obstacle, although deductions, allowances and
write-offs help to move effective tax rates to internationally competitive levels.

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Entry Barriers
In theories of competition in economics, barriers to entry are obstacles that make it difficult
to enter a given market. The term can refer to hindrances a firm faces in trying to enter a
market or industry - such as government regulation, or a large, established firm taking
advantage of economies of scale - or those an individual faces in trying to gain entrance to a
profession - such as education or licensing requirements.
The entire subject matter of the threat of new entrants and the issue of barriers to entry all
depends on where you are coming from or your business position in the market.
If you are already in the industry you want the highest possible barriers but if you are outside
the market looking for the path of least resistance to get in, preferably you want low barriers
for you but the highest barriers for every other likely entrant.
Because barriers to entry protect incumbent firms and restrict competition in a market, they
can contribute to distortionary prices. The existence of monopolies or market power is often
aided by barriers to entry.
Political stability risk:
The risk of political instability in Germanic region is low. They have a long tradition of open
and transparent parliamentary democracy and enjoy a deserved reputation as a politically and
socially stable region. All the main political parties and groups support the institutional
setting and the basic political structures of the countries within the region.
Security risk:
Germanic region has excellent relations with its European neighbors and does not face any
conventional military threats. There is little hostility to foreign ownership of businesses and
investment in Austria which is widely accepted contributes to maintaining prosperity.
Germany has excellent relations with its European neighbors. In addition to its long-standing
position outside military alliances, the government will continue to stress the country's
traditional role as a protector of human rights. Switzerland is an active participant in
international peacekeeping, particularly under the support of the UN.
Legal & regulatory risk:
The quality of the judiciary is high in the Germanic region. The regions legal code is well
developed, enforced fairly, and is not open to political interference. Patents, trademarks,
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copyrights and industrial designs are all legally recognized in Germany. Switzerland has a
fair legal system that is closed to political interference. The quality of the judicial system is
high and the country's legal code is well developing. The quality of Austria judicial service is
high and the country's legal code is well developed. Contracts can be enforced, while there is
very little risk of expropriation. German and Swiss law generally provides sufficient
protection of all property rights, including most intellectual property, although as in many
European countries Internet piracy remains a problem.
Government effectiveness risk:
Germanic region benefits from stable, effective and accountable governance in a political
system that is highly decentralized. In Germany government policies are strongly favorable to
business enterprise and investment. Although social solidarity is a feature of Switzerland, this
is combined with a belief in the efficiency of free markets, which the courts are inclined to
uphold. These well-established traditions provide a considerable degree of assurance that the
institutional framework will remain generally favorable for business. Austria political system
has traditionally been characterized by co-operation between the parties and between the
government and the social partners.
Foreign trade & payments risk:
Foreign trade and payments risk is generally low in Germanic Region. Tariffs for trade in
goods are set by the EU; barriers remain considerable for many agricultural products.
Otherwise trade in goods is free. Germanys foreign trade regime is shaped by its
membership of the EU. Within the EU, there is full freedom of movement for goods,
services, capital and people, while trade with non-EU states is governed by an assortment of
preferential and multilateral trade agreements. Moderate customs duties are generally the
only restrictions on imports of manufactured goods into the EU.
Financial risk:
The financial markets are generally well supervised; meeting all international obligations,
including capital-adequacy requirements in Germanic Region. Switzerland has a
sophisticated financial system characterized by high standards of financial services provision
and a generally effective system of regulation. Germany has an advanced and complex
financial system that complies well with international codes and standards. German banks
and insurance companies have been at the forefront of financial industry consolidation across
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the Germanic countries, while the capital markets are highly developed. Austria has a small
but highly developed financial sector. Both businesses and individuals will continue to have
access to a wide range of equities, bonds, derivatives and other financing vehicles.
Labor market risk:
Germanic region has very developed labor market. Germany has a loose labor market
regulation with a generous social safety net. Turnover in the labor market is therefore high.
On the other hand the labor market is one of the weaker areas of Austria and Switzerland
business environment, on account of the country's relatively high unit labor costs, restrictive
labor laws and a high degree of wage regulation. Such factors are, however, offset by the
high quality of the labor force and the relatively good industrial relations environment, which
has resulted in a low number of industrial disputes and working days lost.
Infrastructure risk:
The overall quality of Germanic region infrastructure is very high. Successive governments
of all the countries within the region have given top priority to developing transport
networks, funding improvements to existing infrastructure as well as large-scale projects.
Germany is a world leader in production of energy from renewable sources and has been selfsufficient in energy production since 1997; the risk of power shortages is low. Switzerland is
one of the most technologically advanced countries in the world, and consistently ranks
among the leading nations in terms of fixed-line, mobile phone, personal computer, Internet
and broadband penetration. The overall quality of Austrias infrastructure is high. Difficult
topographical conditions ensure considerable investment in the maintenance, upgrading, and
extension of road and rail networks.
The World's Least Corrupt Nations, 2010

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According to the annual survey by the Berlin-based organization Transparency International,

Denmark, New Zealand, Singapore, Finland, and Canada are perceived to be the world's least
corrupt countries, and Somalia, Myanmar, Afghanistan, and Iraq are perceived to be the most
corrupt. The index defines corruption as the abuse of public office for private gain and
measures the degree to which corruption is perceived to exist among a country's public
officials and politicians. It is a composite index, drawing on 13 different expert and business
surveys. Only 178 of the world's 193 countries are included in the survey, due to an absence
of reliable data from the remaining countries. In the 2010 survey, 75% scored below five.
Country Rank

Country

2010 CPI Score

Denmark

9.3

New Zealand

9.3

Singapore

9.3

Finland

9.2

Sweden

9.2

Canada

8.9

Netherlands

8.8

Australia

8.7

Switzerland

8.7

10

Norway

8.6

11

Iceland

8.5

913

12

Luxembourg

8.5

13

Hong Kong

8.4

14

Ireland

15

Austria

7.9

16

Germany

7.9

Germanic Europe Clusters Leadership Profile Scores

914

Industrial Relations and Forms of Cooperation

HOFSTEDES CULTURAL DIMENSIONS


Power Distance:
Germanic region have a lower power distance according to Hofstedes Cultural Dimensional
Analysis. In this cluster mainly parents treat children as equals, Inequalities among people are
minimum, hierarchy in organizations is established for practical reasons, decentralization is
popular, there is a narrow salary range between different organizational levels, subordinates
expect to be consulted, Ideal boss is a resourceful democrat, subordinate -superior relations
are pragmatic, privileges and status symbols are frowned upon, manual work has the same
status as office work, power is based on formal position, expertise, and ability to motivate,
and finally peers tend to develop harmonic relations and cooperate with each other.

Individualism:
As seen individualism is higher at the Germanic end, which means that the ties between
individuals are loose: everyone is expected to look after him/herself and his/her immediate
family, children learn to think in terms of I, everyone is expected to have a private opinion,
Individual interests prevail over collective interests, there are higher rights to privacy,
ideology of individual freedom prevail, organizations adjust themselves to satisfy individual
needs, self -actualization by every individual is an ultimate goal, individual incentives are
based on "pay for performance, and people seek and praise out performers and champion In
the Germanic, promotions are based on market value.

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Masculinity:
Germanic cluster is high on masculinity and in this region emotional gender roles are clearly
distinct. Men are supposed to be assertive, tough and focused on material success, whereas
women are supposed to be more modest, tender, and concerned with the quality of life. In
Germanic cluster:

Challenge, earnings, recognition and advancement are important.

Men are assertive, ambitious and tough.

Women are tender and take care of relationships.

Being responsible, decisive, and ambitious is for men; being caring and gentle is for
women.

Womens ambition is channeled toward mens success.

Job choice is based on career opportunities.

Management ideal: Decisive and Aggressive.

There is resolution of conflicts by letting the strongest to win.

Uncertainty Avoidance Index:


Germanic Cluster is high on uncertainty avoidance, their tolerance for risk and in this region
uncertainty is a threat in life, there is high stress and anxiety, there is a fear of ambiguous
situations and unfamiliar risks, people seek more clarity and fixed rules, and there is a
comparatively more belief in expert and technological knowledge. The regions investment
decisions reflect its relatively high uncertainty avoidance. In addition to investments, the
countries high uncertainty avoidance also reflects Germanic Clusters comfort of social
interaction, and their willingness to take risks relating to safety. When com pared to the
United States (46), this cluster is much more willing to take higher risks.

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TROMPENAARS CULTURAL DIMENSIONS


Achievement vs. Ascription:
The Germanic culture is an achievement culture. Organizations surviving in this culture,
where employees are accorded status based on how well they perform their functions. High
achievers are given higher status in such cultures! Achievers must continue to prove their
worth, as status is accorded based on their actions. Some of the characteristics of the people
in Germanic clusters pertain to:

Respect for superior in hierarchy depends on his / hers knowledge and skills.

Titles are used to reflect the competence of a person.

Decisions are challenged by anybody on technical and functional ground.

In negotiations technical advisers and knowledgeable people are used for convincing.

Individualism vs. Communitarianism:


Countries in the Germanic region are high in individualism which affects their organizational
culture. People make their own decisions and achieve success alone. Emphasis is on personal
responsibility and decision-making, and negotiations are made on the spot. The individuals
are compensated for higher performance, job mobility and turnover is high.

Internal vs. external:


In an internalistic culture like that of in the Germanic region people believe that what
happens to them is their own doing. They believe they are in full control of their destinies,
often externalist people adapt to external circumstances. Some of the characteristic s of this
region on the basis of their internalistic culture is:

Often dominating attitude and tendency to aggressiveness.

Playing tough is legitimate.

Focus is on self, own group and own organization.

Discomfort when environment seems out of control or changeable.

It is most important to win the objective.

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Neutral vs. Emotional:


In neutral cultures like that of the Germanics, emotions are held in check. People dont show
their feelings. And as it goes in the corporate world, the communication style adapted is,
direct and people stick to the point. They tend to be upfront and in-expressive. Unlike people
who tend to be emotional and express feelings openly. People do not reveal what they are
thinking or feeling, the cool and well-controlled conduct is admired, statements are
monotonic and lack emotional tone, the entire negotiation is typically focused on the object
or proposition being discussed, and behavior during negotiations tends to be detached, distant
ambiguous and cool

Specific vs. Diffuse:


The Germanic region has specific culture. People from such culture have individuals who are
open to sharing a large public space with others, a small private space they guard closely, and
share with only friends and associates. Due to this in organizations employees show a strong
separation between work and private life. Invitations to public spaces are common. Some of
the main characteristics of Germanic culture in this respect are:

Direct to the point, purposeful in relating, precise, definite and transparent


(low level of communication context).

Structuring the meetings with time slots, intervals and agenda.

Study of the objectives, principles and numerical targets of the specific


organization in consideration.

Refraining from titles or acknowledge skills that are irrelevant to the issue
being discussed.

Private and business agendas are kept separate from each other.

Sequential vs. Synchronic:


In sequential cultures as specified in the Germanic region, people tend to do one activity at a
time. Hence in the organizations, appointments are strictly kept, with a strong preference for
following plans. Some noticeable aspects of Germanic cluster in this regard are:

People only do one activity at a time.

918

Keep appointments strictly; schedule in advance and do not run late.

Relationships are generally subordinate to schedule.

Strong preference for following initial plans.

Time is tangible and measurable.

Universalism vs. Particularism:


Universalistic countries present in the Germanic region focus more on formal rules than
relationships. Nations characterized by high universalism believe that their ideas and
practices can be applied worldwide without modification. To sum it all up:

People seek fairness by treating all like cases the same way.

Focus more on rules than relationships.

Business loyalty is based on general rules, standards and values of the society.

Detail written legal contracts are very important.

Signed contracts are irrevocable stipulations of commitment.

STRATEGIC PREDISPOSITION
GERMANIC REGION:
Multi-national Corporations in the Germanic countries adapt to the approach of geocentric
predisposition and ethnocentric predisposition. As the countries in the Germanic region tend
to be a lot more exposed and do not have as much cultural variations as compared to the west,
they have no problems in surviving in the Germanic region.

TYPOLOGY OF ORGANIZATIONAL CULTURES

919

Countries in the Germanic region lie in between the project oriented culture and fulfillment
oriented culture. They possess the combined attributes of both the cultures. Organizational
culture in the Germanic region is oriented to work, which typically is undertaken by teams or
project groups. Change in this culture comes quickly. Trompenaar found that the motivation
of those in guided missile culture tends to be more intrinsic than just concern for money and
benefits. It is also incorporated with the incubator culture which is based on the premise that
the role of organizations is to serve as incubators for the self -expression and self fulfillment
of their members. This culture has little formal structure. Leadership in this culture is
achieved and not gained by position.

MANAGEMENT STYLES OF GERMANIC CLUSTER:


Cross cultural management needs to recognize that Germanics value the specialized
knowledge that employees at all levels bring. As in most egalitarian cultures, positions of
authority are earned largely on the basis of individual achievement and people at all levels of
the organization, while respecting authority, are free to aspire to those positions. The role of
the leader is to harness the talent of the group assembled, and develop any resulting
synergies. The leader will be deferred to as the final authority in any decisions that are made,

920

but they do not dominate the discussion or generation of ideas. Praise should be given to the
entire group as well as to individuals.

Approach to Change:
In the Germanic region intercultural adaptability and readiness for change is developing all
the time. It is seen to have a medium tolerance for change and risk. It is important for
innovations to have a track record or history noting the benefits if they are to be accepted and
implemented. The fear of exposure, and the potential of embarrassment that may accompany
failure, brings about aversion to risk. Because of this attitude, intercultural sensitivity is going
to be required, especially when conducting group meetings and discussing contributions
made my participating individuals.

Approach to Time and Priorities:


Germanic regions culture is a controlled-time culture, and adherence to schedules is
important and expected Missing a deadline is a sign of poor management and inefficiency,
and will shake peoples confidence. People in controlled-time cultures tend to have their time
highly scheduled, and its generally a good idea to provide and adhere to performance
milestones. Effective cross-culture management skill will depend on the individuals ability
to meet deadlines.

Decision Making:
Companies are relatively flat with few hierarchical layers. Managers do not flaunt their
positions and prefer to be seen as members of the team. Although not as group focused as
some other cultures, employees often subjugate their desires for the good of the group.
Managers generally act as coordinators or team leaders rather than autocratic micromanagers. They are task-oriented and emphasize achieving a goal, productivity and profits.
They expect their employees to do their job in a professional manner. Germanics are often
quite comfortable working in teams and do not expect to be singled out for their contribution.
Cross cultural management needs to understand the Germanics fundamental belief in an
egalitarian society. This means they support a participative management style. Most
employees are members of a union. The pay scales for the same job are relatively equal
across companies, so employees seldom move companies in an attempt to secure more pay or
perquisites.

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Communication and Negotiation Styles:


Cross cultural communication should be relatively straight forward when dealing with the
Germanic region. They like to get down to business quickly and are direct and frank
communicators. They are detail-oriented and negotiations are normally carried out in a
reserved and polite manner. Decisions are normally made after consulting with everyone
involved.

Etiquette & Customs


For the business person who works internationally, doing business in a foreign country brings
with it certain intercultural communication challenges. From the simple differences in the
way people meet, greet and eat to the more complex differences in communication,
presentations and negotiation it is always a benefit to get to understand a country's business
culture, protocol and etiquette.

Germany
Meeting Etiquette

Greetings are formal.

A quick, firm handshake is the traditional greeting.

Titles are very important and denote respect. Use a person's title and their surname
until invited to use their first name. You should say Herr or Frau and the person's title
and their surname.

In general, wait for your host or hos tess to introduce you to a group.

When entering a room, shake hands with everyone individually, including children.

Dining Etiquette:
If you are invited to a German's house:

Arrive on time as punctuality indicates proper planning. Never arrive early.

Never arrive more than 15 minutes later than invited without telephoning to explain
you have been detained.

922

Send a handwritten thank you note the following day to thank your hostess for her
hospitality.

Business Etiquette and Protocol:

Germans do not need a personal relationship in order to do business.

They will be interested in your academic credentials and the amount of time your
company has been in business.

Germans display great deference to people in authority, so it is imperative that they


understand your level relative to their own.

Germans do not have an open-door policy. People often work with their office door
closed. Knock and wait to be invited in before entering.

Appointments are mandatory and should be made 1 to 2 weeks in advance

Letters should be addressed to the top person in the functional area, including the
person's name as well as their proper business title.

If you write to schedule an appointment, the letter should be written in German.

Punctuality is taken extremely seriously. If you expect to be delayed, telephone


immediately and offer an explanation. It is extremely rude to cancel a meeting at the
last minute and it could jeopardize your business relationship.

Meetings are generally formal.

Initial meetings are used to get to know each other. They allow your German
colleagues to determine if you are trustworthy.

Meetings adhere to strict agendas, including starting and ending times.

Maintain direct eye contact while speaking.

Business dress is understated, formal and conservative.

Men should wear dark colored, conservative business suits.

Women should wear either business suits or conservative dresses.

Do not wear ostentatious jewelry or accessories.

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Austria
Meeting and Greeting:
Handshakes are the norm in Austria when entering a meeting. It is important that you shake
hands with all attendees and that your handshake is firm and confident and that eye contact is
maintained.
Austrians adhere to a fairly formal culture and it is unlikely that body contact will progress
beyond the handshake (e.g. pat on the back etc.) unless you are family or close friends.
When doing business in Austria you should use honorific titles where necessary. After the
initial meeting, in which an individual will be introduced with their honorific title and
surname, it the surname can be dropped and the honorific title only used. If someone does not
have an honorific title, then you should use 'Herr' to address a man and 'Frau' to address a
woman with their surname. You should wait for your Austrian hosts to determine when it's
appropriate to move to the use of first names.

COMMUNICATION:
When doing business in Austria you will notice that Austrians are very direct in their
communication and tend not to furnish their speech with pleasantries or non verbal body
language cues. Since they expect to be taken at their word, you should therefore not take
offence at this. Individuals from indirect cultures often it a challenge to accustom to this
particular style.
Austrians only employ minimal body language when conversing and appreciate personal
space during any interaction. You may find however, that as you get to know people better,
that they become more animated or emotive in their communication.
Meetings and Negotiation:
Austrians place great emphasis on supporting data and as such, if presenting an idea or
proposal during a meeting, it is recommended that you back your presentation up with graphs
or other supporting data which clearly demonstrates the points you are making.
You will find that your hosts are meticulous about detail and it is important therefore that the
data is robust and does not lay grounds for challenge. You are also advised to have any
materials translated into both English and German.

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Switzerland
Meeting & Greeting:
When meeting people, shake hands. Swiss society is rather formal and people tend to address
each other, whether colleague, neighbor or acquaintance, by their surname. This is not only a
sign and respect but one of the manifestations of the Swiss propensity for privacy. However,
in some of the multinationals in Switzerland this is changing and first names are a little more
common.
At first always address someone first by his or her professional title and family name. Only
when invited, one use first names
Switzerland has four official languages - German, French, Italian and Romansch. Romansch
is spoken by 1 percent of the population in the eastern part of the country. Swiss-German is a
dialect spoken in all the German-speaking cantons.
In German-speaking Switzerland, use the courtesy titles "Herr" to address a man and "Frau"
to address a woman; in French-speaking areas, use "Monsieur" and "Madame"; in Italianspeaking areas, use "Signore" and "Signora".
Corporate Culture:

The Swiss take punctuality for business a nd social meetings very seriously and expect
that you will do likewise. Call with an explanation if you will be delayed.

Business cards in English are acceptable. Hand your business card to the receptionist
upon arrival for a meeting. Give a card to each person you meet subsequently.

Generally, English is spoken in business with foreigners. Inquire beforehand to


determine if an interpreter is needed.

Business climate is very conservative. Meetings are generally impersonal, brisk,


orderly, planned and task oriented.

The Swiss tend to get right down to business after a few minutes of general
discussion.

Presentations and reports should be orderly, well-prepared, thorough and detailed.

The Swiss are fair bargainers but not hagglers. Discussions are detailed, cautious, and
often pessimistic. Decisions are made methodically.
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It is not acceptable to call a Swiss businessperson at home unless there is an


emergency.

WHY IS IT IMPORTANT TO REMOVE BARRIERS?


Open markets, both in the Germanic region and in the EU and in ternationally, increase
competition, put pressure on prices and increase demands on quality of goods and services.
Markets that are open to competition are also vital to stimulate economic growth and job
creation. This benefits both consumers and businesses. For small countries like the Germanic
countries in particular, which have open economies and a large number of small and mediumsized enterprises, the eradication of unnecessary barriers is vital. Free markets provide
consumers with more options and better goods and services at lower prices.
Trade barriers reduce welfare, while the removal of trade barriers will present Germanic trade
and industry with new opportunities, both in the Germanic region and in the rest of the world.
About 20% of internationa l trade in the Germanic region is between the Germanic countries.
Its important that companies in the Germanic region consider the entire Germanic region as
their domestic market.
Several studies have been undertaken in order to survey the trade barriers encountered by
companies. In the goods sector the problems are particular big in areas where there are no
harmonized regulations, and where figures are available to describe the problems. In a
Germanic report from 2007, 56% of the businesses surveyed state that they experience
barriers when trading goods and services in the other Germanic countries. 23% of the
businesses experience the approval and labeling of goods as a barrier.
An EU survey from 2002 indicates that 35% of businesses encounter problems in connection
with approval of their goods in other EU countries. An analysis of enquiries made to the Euro
Info Centers show that about 60% of cases in the non-harmonized area with respect to goods
relate to problems with national, technical specifications. A survey by UNICE in 2004
showed that over half of businesses do meet the requirements to adapt their goods to national
regulations, and 46% are ordered to put their goods through extra testing according to further
national regulations.
4 out of 10 companies in the Germanic region report that one barrier is a lack of information
about the possibilities of utilizing Germanic resources (a well-educated workforce,
specialized research, etc).The trade barriers above clearly have negative economic
926

consequences for producers, who suffer increased costs or losses as a result of adapting the
goods to multiple markets, re-testing them or in the worst case scenario refraining from
marketing the goods in other countries apart from their home country. It is difficult to
quantify the economic costs. There are no known recent studies on this issue in the Germanic
countries. The EU has attempted to calculate the costs and has found that they constitute
between 2% and 10% of total production costs, depending on the type of goods and the
differences in national technical specifications combined with the need for more testing and
certifications. Whether the national technical specifications are legal or not has not been
taken into consideration.
Trade barriers also have consequences for consumers, leading to more expensive goods and
services or poor consumer choice.

HOW CAN CROSS-BORDER BARRIERS BE REMOVED?


Harmonization of regulations at EU level
An effective way to remove trade barriers is to harmonize regulations so that the same
regulations apply in every country. This is commonly done with respect to goods so that the
same regulations apply in all countries. According to the European Commission, about 75%
of all industrial goods in the EU are now harmonized. This is done in various ways. The most
recent and most effective method is to only include essential requirements concerning health,
the environment and/or the safety aspects of products in the directives. The directives then
just have to refer to European standards prepared by European standardization organizations
commissioned by EU and EFTA. Technical requirements are specified in the standards.
Standards that are based on directives are called harmonized standards. If a product is
manufactured in accordance with a harmonized standard, it is considered to meet the
requirements of the directive, and it should be labeled with the CE mark. This mark
guarantees free circulation in all of the EU/EEA. EU products directives apply in all the
Germanic countries.

Agreements b etween the Germanic countries


There are several agreements between the Germanic countries to facilitate cross-border
mobility. Most of the agreements regulate citizens rights, but some are also relevant to trade

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and industry activities. Examples are the agreement between the Germanic countries to avoid
double taxation of income and assets and the agreement on a common labor market.
Standardization:
Standardization, i.e. preparation of common guidelines is a common method of harmonizing
requirements for goods and services. A standard describes important aspects of goods,
services and/or working procedures, including test methods. Unlike regulations, standards are
not compulsory, except when governments compliance with the standard or when contracts
or agreements specify that it must be used. Standards may be international, European or
national, depending on the standardization body issuing the standard. Harmonized standards
are European standards issued by the European standardization bodies CEN, CENELEC and
ETSI, by mandate from the EU Commission and EFTA. Such standards shall be established
as national standards in the EU/EEA nations.
Standards are developed in cooperation with the users for areas where the market desires a
level playing field. Standardization has been of crucial importance to establishing EUs
internal market and international trade. Standardization promotes national competitiveness,
contributes to innovation and the development of safe goods and safe production processes.
By participating in international work on standardization, Germanic companies can promote
their own solutions and gain access to international markets.

Why Do Business In Germanic Countries?


The group of countries known as the Germanic region includes Germany, Austria and
Switzerland. This region is an attractive market for MNCs seeking stability and diversity.
Over 24 million consumers, many with strong family ties to the United States, constantly
seek high-quality, reputable products from abroad. MNCs already active in the region rarely
encounter trade barriers or market access difficulties, which is one reason why increasing
numbers of U.S companies are entering the market.
Each country boasts its own strengths, but as a whole, they are known for their technical
expertise, successful traditional and New Economy industries, English-language skills and
receptivity to new products and technologies.
All five countries represent a unified market, making it easier for MNCs to market and sell
their goods throughout the region. Norway and Iceland are not members of the European
Union (EU), but they are joined to the EU market as members of the European Economic
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Area (EEA) agreement. The Germanic countries also serve as an entry port into a much
broader market, including the three Baltic nations (Estonia, Latvia and Lithuania), northwest
Russia, Poland and even northern Germany. The Germanic countries are proud of their highly
developed infrastructures, transportation routes and transparent, investor-friendly economies.
There are many organizations that are eager to help identify the best opportunities for
business in this region. The Department of Commerce employs American and foreign
Commercial Service specialists in U.S. embassies overseas who assist American companies
in exploring concrete market opportunities in each country. American Chambers of
Commerce (Am Cham) are also active in Germany, Austria and Switzerland. Their specialists
help to better understand the local tax structure, investment policies, employment issues,
cultural sensitivities and the general business/corporate atmosphere. The U.S. embassies and
Am Chams work very closely together. They have access to a wealth of information
regarding the best prospects for Germanic industry sector that will company valuable time
and resources.

Germany
Germany has the largest economy in Europe with a 22% share of Euro zone GDP and
access to 454 million consumers. Productivity has risen by more than 30% in the past 5 years.
It is the world's second largest exporter - "Made in Germany" is a seal of quality recognized
around the world. It is at the heart of Europe and shares borders with every major economy in
central Europe, providing instant access to both established markets in Western Europe and
emerging markets in central and Eastern Europe. It has a highly sophisticated infrastructure;
motorways, railways and a state-of-the-art telecommunications network ensure that goods
and IT services are delivered quickly and dependably. Germany is the most innovative nation
in Europe - more than 20% of European patents are held by Germans. Germany's professional
training, universities and research and development rank highly in international comparison.
It is one of the most accessible, liberal and stable social markets in Europe. Germany's
international capital market and financial services are repeatedly quoted by businesses of all
sizes as one of Germany's distinct advantages. It is the most dynamic European player in the
New Economy with internationally recognized high-tech clusters throughout the country.
Germany has a proven track record. Over 22,000 foreign companies operate in Germany,
employing in excess of 2.1 million staff, generating trillions of Euros in turnover.

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Germany is an important trade partner for many countries in the world. Learning how to do
business in Germany and understanding its culture, business practices, business etiquette and
protocol will only enhance the skills of international business people and lead to greater cross
cultural success.

Austria
Austria has a thriving, diversified economy with strong service, tourism, and highly
specialized agricultural sectors, as well as growing foreign trade. It is estimated that nearly
half of all domestic jobs in Austria are connected to the export industry in some way. Since
joining the EU in 1995 and adopting the Euro, Austria has attracted an increasing amount of
foreign investment. Austrias superior quality of life, low unemployment and crime, and
central location in Europe makes it an ideal place for business expansion or relocation.

Austrians place great emphasis on order and efficiency. Appointments are arranged far in
advance and schedules are followed closely. If you need to cancel or postpone a meeting,
contact your Austrian counterpart immediately.
P unctuality is crucial for establishing strong business relationships in the Austrian business
environment. Your timely arrival at business appointments and social engagements is viewed
in the Austrian professional environment as an indicator of your ability to manage
responsibilities and attend to details.
Business practice in Austria is conservative, traditional, and individualistic; teamwork and
consensus-building are not particularly important, and meetings follow a rigid agenda and are
generally not a forum for sharing personal opinions or brainstorming.

Switzerland:
There are whole numbers of good reasons to transact investments in Switzerland.

Moderate taxation of the enterprises (in particular also for the Holding companies)

Fiscal easement for new enterprises

Political and monetary stability

Prestige realm and competent banking with world-wide structure

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Excellent geographical location (Switzerland = Junction in Europe)

Competence consultation, very high level of education of the workers

Exemplary infrastructure

First-class communication Levels

Excellent education Levels

Well trained an mobile workers

Social and work peace

Optimal security for humans and goods

Best traffic conditions (on rail, road and in the air)

Innumerable leisure-time facilities as well as fascinating and intact landscapes

The Germanic countries share many economic and political similarities that make them
particularly attractive to different MNCs. In each, the business climate is transparent and
healthy; the number of market access issues with the other states is minimal; and the local
workforce is educated, skilled and generally speaks English fluently.
All of these countries can boast high rates of Internet penetration, home computer usage and
acceptance of new technologies. Major industries across the board include IT, biotechnology,
pharmaceuticals, shipping/distribution and tourism.

CONCLUSION
The Germanic cluster pretty much likes to work like a well oiled machine. They have a set
game-plan, a keen eye for goal and they have a specified routine/order which they follow to
achieve their goals. There is a clearly defined hierarchy, which makes it much easier and
faster to get tasks done. They try to use time as a resource and opt to do things as fast as they
can. However, despite this fact, they arent very rash in making decisions, since their ability
to make these swift calls comes from experience, which is handed down from the higher
order to the lower and so on.
To sum it all up, the Germanic culture and the culture of other parts of the world consist of a
number of variations. There are a number of reasons for these differences, but at the end of

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the day the prime factors for these differences are due to the varying culture and the
drastically different geographical region of the two countries. While belief plays a crucial role
in determining the culture of the region, the culture itself helps to determine the norms and
values of the area, hence setting a tone for the organizational climate. These organizations
then go on to set their own rules and regulations based on these climates, which then help
determine their climate.
As shown in our project, via the aid of models and diagrams, the variations in the cultures of
the regions is more than just apparent. These variations then go on to acting as hindrances or
barriers for MNCs who wish to go international and in order to go international and expand
in a regions like Pakistan, India, and the Arab countries, they need to overcome these
barriers. At times this can get rather frustrating, but if the tips that we have given in our
recommendations get followed, then they can be overcome with the least amount of hassle.
All in all, the Germanic cluster is like a machine, that gets what its want and almost never
fails at doing so, There are occasional stumbles when change is required, since being a
machine they arent very adaptable to change, however, that is hardly ever the case, since
they have perfected their trade down to the very last detail.

RECOMMENDATIONS

Firms of the world must also carry out a thorough analysis of the culture variation if
any of the entrepreneurs intend to start off with their firm in the Germanic regions. As
the environment is varying of what is experienced in others part of the world, it is
important for him/her to be quite aware of the corporate environment.

Communication style in the Germanics is direct and a conservative country isnt


really used to that. Often too, a collectivism oriented country also tends to incorporate
social lives with professio nal and time factor isnt of too much importance. Which is
not what one could get in the Germanics? Hence its necessary for such a countrys
firm to get used to such things in order to be successful in the Germanic environment.

In the Germanic countries advertising strategies must be dealt with care as there might
be terminologies or techniques which might prove offensive!

Germanic region should create the importance of labor in every organization on its
own bases.
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REFERENCES
http://www.kwintessential.co.uk/resources/global-etiquette/austria-country-profile.html
http://www.ediplomat.com/ np/cultural_etiquette/ce_ch.htm
http://www.ita.doc.gov/exportamerica/NewsFromCommerce/nfc_GermanicRegion.pdf
http://www.london.diplo.de/Vertretung/london/en/04/Business__location__Germany/Ten__r
easons__seite.html
http://www.eiu.com
http://www.germanic.org/en
http://www.Germanicinnovation.net/_img/07259nicegrensehenglow1.pdf
http://www.kwintessential.co.uk/intercultural/management/pakistan.html
http://www.noble -house-ag.ch/eng/download/NOBLE_HOUSE_GB
http://www.kwintessential.co.uk/etiquette/doing-business-austria.html
http://www.communicaid.com/access/pdf/library/culture/doingbusinessin/Doing%20Business%20in%20Austria.pdf
http://www.austrade.gov.au/Doing-business-in-Austria/default.aspx

ARAB CLUSTER

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INTRODUCTION
The Arab cluster often comprises of countries such Egypt, morocco, turkey, Kuwait and
Qatar, Algeria, Tunisia and Bahrain. These Arab countries are, situated in the Middle Eastern
part of the world where they are often also referred to as the Middle Eastern countries of the
world. There countries exhibit a medium level of human development as compared to
countries in other clusters and are extremely affluent in oil resources that drivers the economy
for the greater good. The Arab cluster is predominately Muslim with societal norms and
values and religious and social characteristics that are strikingly similar. The societies in the
Arab cluster are highly group-oriented, hierarchical, and masculine with a low future
orientation.

ELEMENTS OF ARAB CLUSTER:


DEMOGRAPHIC AND ECONOMIC PROFILE
The demographic region where the countries in the Arabic region cluster are situated extends
from Turkeys partial location in the Balkans in the west, to the Arab Peninsula in the east,
and from the north-eastern Africa to the Atlantic Ocean. These countries are regionally
located close to each other in the Middle Eastern part of the world, where a significant
portion of their land is in south-western Asia and northern Africa. The region has been a
convenient bridge between Africa and Eurasia in all periods of history.
About 164 million people inhabit in an area of approximately 864,000 miles. The range
among the countries in the cluster in terms of area and population is large. Typically, the
societies in the Arabic cluster reflect a medium level of Human Development Index, which
represents quality of life, education and life expectancy in the countries.
Economic standing and wealth of the cluster can mainly be explained by large oil and natural
gas reserves explored in the region. Kuwait has the 2nd largest oil reserves in the world after
Saudi Arabia. The private sectors in the two states consist mainly of mostly small and
medium size organizations. Agriculture is limited due to a lack of arable land and water.
Hence the Arab cluster stands strong in the Economic profile

934

THE CURRENT POLICTICAL SYSTEMS


Differences arise in the Arab cluster as far as the political systems of these countries are
countries. Some of the countries in the Arab cluster are republics such as Turkey and Egypt
where as in Qatar the power is vested in the hands of the Amir, which is the sole authority
and holds the post of the prime minister. Kuwait and Morocco are run by monarchy. There
exists for every political system in each of the Arab cluster countries an advisory council and
this is common to every. At the moment, there is political turmoil in the region, with most of
the population unsatisfied with the ruling authorities and governance.

RELIGIOUS IDEOLOGY AND SOCIO-CULTUAL ASPECT/SOCIO CULTURAL ELEMENTS


Religious Ideology
The countries in this cluster have common values and practices that often attribute to their
similarities in religion, economic, social, political and historical characteristics, likewise these
are the characteristics that differentiate them from all of the rest of the countries around the
world. The population in the Arab cluster predominately accept and follow the religion of
Islam. Egypt has a population that is 90% Sunni whereas the remaining 10% are Coptic
Christians. Similarly, Kuwait has a majority of Sunnis in a 70% proportion to a 30% of Shia
population and a marginal population of Christians and hence this way most of the Arab
countries are predominantly Muslim with differing sects, school of thought and levels of
orthodoxy with a marginal number of Christian population. In these countries, the social and
ethical obligations of a Muslim are based on the belief that the Islamic community is a
brotherhood where equality in personal worth regardless of status and wealth prevail. The
acceptance of Islam as religion has had a great influence on the social values and practices of
the society along with the legal systems in the countries of the Arab cluster. In these areas the
Islamic Sharia is the supreme law and has served as the major religio-administrative force
for centuries with a partial practice of this system in most of the Arab countries except
Turkey. There exist two divergent trends of religious and more secular approaches in these
nations

SOCIO-CULTURAL CHARACTERISTICS AND ELEMENTS:


The Arab cluster is a set of countries that hold many commonalities along such dimensions

935

Language
While countries often differ in their language, the Arab cluster demonstrates language an
identity that is common to all of the Arab countries that is Arabic and hence deserves much
focus and attention while describing the socio-economic characteristics of the society. The
Arab cluster seems to be more conscious of their language than found in any other region of
the world. The language inculcates in them the sense of identity and membership among the
countries amidst the differences in race, religion, tribe or region. However, Turkey is the only
country in the Arab cluster that does not speak Arabic and instead speak Turkish.

Ethnicity
The Ethnicity in the Arab countries is often defined along language, culture and the descent.
As long as ethnicity is described along an ancestry, the Berbers, Circassians, Assyrians and
Chaldeans emerge as one of the dominant ethnic groups in the Arab cluster. However, with
the increase in population mobility across borders and greater influx of people and migration
there has been seen changes in the demographics as far as the ethnic groups are concerned.
For example, Kuwait a wealthy oil producing attracted a large number of individuals that has
resulted in a multi-ethnic society with people from different ethnic groups residing in the
country and the same has been observed for many of the Arab cluster countries as they make
their way towards progressive economic growth and development.

Clothing
The Arab cluster has a characteristic element in the clothing of Muslims, which is the veil
and headscarf; it has over the years served as a symbol of protection and mark as distinction
for women. However, it is as an indication of the limited pa rticipation of women in the public
activities of the society where the men are, found dominating. The current clothing for men is
highly influenced by the western style of dressing, however the ottoman headgear in the form
of fez is, considered the traditional and characteristic article of male clothing existing in
various forms and reflecting the various social differences within the Arab countries.

Food
Dietary habits in societies of the Arabic cluster are, manifested according to the Islamic
propositions.

936

Body Space
Body space or proxemics shifts dramatically.. Most Arabs consider about one quarter of that
distance to be appropriate. It is not uncommon to feel the breath of the other party on one's
face in the proper Arab distance.

Haptics
Haptics or touc hing behaviour also differs radically. Arabs of the same gender are very
haptic, that is they touch extensively when speaking. Arm-patting and even knee -touching is
not uncommon. Men often walk hand in hand in many parts of the Arab World. Greetings are
usually accompanied by hugs and gestured kisses between men. Touching between genders
in much of the Arab World is, by contrast, totally forbidden in public. While

Time Conception
The Arab World runs on what Edward Hall called "polychromic" time. In the Arab
conception, time is fluid. In the Arab World, as in all polychronic cultures, preset schedules
are subordinate to interpersonal relations so that personal ties affect the schedule. In short, the
schedule is flexible. In the Arab conception of time, each task is handled through completion
and as a result multiple tasks can be undertaken simultaneously. Because people in authority
must give the people who are with them as much time as needed to complete the task at hand,
Arab culture relies heavily on people who screen for these people. This in turn encourages
personal relationships at work in order to receive preferential treatment and not be screened
out.

BUSINESS ENVIRONMENT :
POLITICAL
The Arab region has been a region of exemplary political stability with stable monarchies and
governments that have ruled over the region since years. Most of these ruling parties have
had over the years made great efforts to encourage private sector coope ration, formulating
consistent regulatory environments, making greater efforts into creating an environment for
private businesses to operate within the region. This is seen in the number of reforms brought
into the business regulations that have been made within the Arab cluster by the government
to encourage business start-up which otherwise was considered a rather difficult task
937

previously. The Arab cluster has been able to revise many of their policies such as their
taxation policies, trade restrictions over the years and continue to do so amidst the political
volatility and turmoil with significant improvements in the credit information system and
cross-border trade as of 2011.

ECONOMIC
The Economic growth in the Arab region has remained bimodal with a high growth rate for
some countries of the region while a moderate growth rate for the remaining. However, the
economic growth has remained, steady with its obvious difficulties amidst the rise and fall of
oil prices. Until late 2010, the region was on track for a recovery from the global crisis.
Growth accelerated to 3.9 percent in 2010 from 2.1 percent in 2009, mainly driven by the
regions oil exporter countries however the recent developments, have changed the entire
outlook that is the: the unrest in the region and the surge in global fuel and food prices. As a
result, the near-term economic outlook is subject to unusually large uncertainties stemming
from the fluid political and security situation in the region.

SOCIAL
The Arab cluster is characterise d by relatively strong performances in the Health and
Economy and education sub-indexes, raising the levels of prosperity in the region with people
gaining more awareness than before. However, there was seen a low level of individual
freedom in the society which hindered most of the businesses in the region. The region has a
seen a population growth rate of 2.5 in 2005 which is expected to reduce to 2.3 by the year
2015 with a population with 35% under the age 15 as of 2005 and 32.1 in 2015 and 3.9 in
the age of 65 and above in 2005 and 4.4 in 2015

TECHNOLOGICAL
The cluster has increased its publication output nearly tenfold from 1996 through 2004, and
has been ranked first in terms of output growth rate followed by China. Despite the
limitations in funds, facilities, and international collaborations, the scientists remain highly
productive in several experimental fields, such as pharmacology, pharmaceutical chemistry
, organic chemistry, and polymer chemistry. The scientists from Iran are also helping
construct the Compact Muon Solenoid, a detector for CERN's Large Hadrons Collider. Hence
even though it might seem so that the Arab cluster is lagging in terms of technology but they

938

are slowing and gradually matching up their level of technology to that of other western
countries, attributed as the technologically advanced countries.

VALUES DOMINANT IN THE ARAB SOCIETY:


The key practices and values in the society of the Arab cluster countries can be described
along nine dimensions along with the various leadership qualities of the managers of these
countries.

The Arab cluster is rated high on group and family collectivism and power distance and low
on future orientation and gender egalitarianism. The other dimensions along which the
practices and values of the Arab cluster are studied are uncertainty avoidance, institutional
collectivism; humane orientation, performance orientation and assertiveness are rated in the
mid range. Family in this cluster stands at the heart of the society with self-interest
subordinate to the interests of the family. Young individuals who get married often live with
their family after marriage often leading to larger families and encourage joint families. There
is often found a great deal of in-group relationships and hence the extent of collectivism is
not just confined to families but beyond that. This strong sense of commitment of the Arab
people to their families and in -group relationship can often be attributed to the religion Islam
they practices that preaches goodwill and equality, requiring each individual of the society to
maintain respectful relationships with their fellow beings. The high importance that is
939

associated with relationships, results in the hierarchy that prevails within the society where
there is a requirement to respect the hierarchy and show respect to the elde r to and those who
are in supreme authority. These norms that are the requirements for sustaining in the Arab
cluster, permeates into other institutions of the society as well promoting inequality in power
distribution measuring higher on the power distanc e dimension for most of the societies in the
Arab cluster which they often attribute to be a reflection of what their religion Islam
proposes. The Arab cluster is scales low on the future orientation and it only exists because of
their fatalist ideologies, they believe strongly in fate, which they believe to be the article of
faith. They believe that all deeds that occurred in the past and that will occur in the future are
prearranged and within Gods preordaining resulting in a passive attitude towards the future.
The network of interdependency in the society of the Arab cluster serves as a means to cope
with uncertainty and deeds to come in the future. They are more tolerant of the uncertainties
in the environment than those societies that rank higher on individualism. The society is also
characterised by high masculinity and sharp gender differences where woman are required to
assume roles that require a woman to stay at home while the man to run errands that requires
them to leave home. The education level of women in such a society is often very low as
compared to that of men by encouraging girls to spend more time at home, expecting them to
acquire the skills that are required of them for successfully running a household while the
boys to get education and take on the roles outside home. All of which propagates a society
dominated by men.

LEADERSHIP/MANAGEMENT STYLE

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The leadership factors used to identify the leadership attributes that are most suited in the
Arab society, that were identified are; charismatic, autonomous, humane, self-protective and
team oriented. Team oriented and charismatic are perceived to be the most prevalent and
effective in the Arab cluster. It is to say that, team oriented leaders are group oriented and
team builders. They exhibit characteristics that are collaborative, loyal and consultative. They
coordinate and integrate the activities of others, are diplomatic, intra-group conflict avoiders
with a win-win problem solving aptitude. Charismatic leaders on the other hand are visionary
and future oriented, inspirational and motivational with a high level of confidence building
attributes. They are risk takers and self- sacrificial carrying qualities of honesty and integrity.
Such leadership qualities are in synchrony with the society i.e. Team-oriented leadership is
consistent with the family and in-group orientation of the culture of the Arab societies. On the
other hand, requirements of the tasks and the goals often require the leader to be
transformational and more oriented to the future and performance contrary to the existing
culture of the Arab cluster.

DECISON MAKING STYLES:


LEADERSHIP STYLES
Individ

Risk

ualism

Auto

Pseudo

Consultat

Participat

Pseudo-

Delegati

cratic

ive

ive

participat

ve

consult

ive

ative
Individualism

1.00

Risk

0.19

1.00

Autocratic

0.18

0.18

1.00

Pseudo-

0.10

0.07

0.18

1.00

Consultative

0.27

0.21

0.02

0.27

1.00

Participative

0.22

0.08

-0.04

-0.03

0.36

1.00

Pseudo-

0.23

-0,02

0.17

0.09

0.20

00.45

consultative

participative

941

1.00

Delegative

0.07

0,25

0.18

-0.05

0.25

0.22

0.16

1.00

Above discussed were some of the leadership styles best suited to the Arab cluster, it is also
worth mentioning the decision making styles of the executives in the Arab cluster which we
were able to study with the help of a study conducted by Abbas J Taj which he presented in
his research paper. He was able to assess the decision-making styles most common to the
Arab countries along by studying them along dimensions such as individualism, risk,
Autocratic, Pseudo-consultative, consultative, participative, pseudo-participative and last but
not the least delegative. The table below show his findings
The strong preference of Arabian executives toward the consultative style is consistent which
reflects the impact of Islamic and tribal values of the Arab cluster. They reinforce
consultation in every conduct; it is a common practice of the members of the Arab society to
consult on matters of importance.

In fact, consultation mechanisms, counter- poise to

autocratic rule, are a particular feature of traditional Arab society. Another aspect that is
worth mentioning is that of pseudo consultative, the preference for the pseudo-consultative
style can be traced to the authoritarian element in the Arab political and social environment
while the least preferred styles are autocratic, pseudo-participative, and delegative. In terms
of attitude toward risk and individualism, interesting cultural factors stand out again. Arab
executives score low on attitude toward risk except on two issues: adherence to
predetermined steps and being cautious in making decisions. The Arab historically looks with
contempt at strict rules and procedures. They believe that rules are manmade and should be
treated with flexibility. In addition, enforcement of rules and regulations is usually contingent
on the personality and power of the individuals who make them. Likewise, the tendency not
to be cautious in making decisions reflects a strong inner security that stems from religious
belief. In the context of individualism, participants generally display a moderate tendency.
They score low, however, on three items related to the issue of loyalty and individual fame.

ENTRY BARRIERS
OPPORTUNITIES & ATTRACTIONS FOR MNCS IN ARAB REGION
Arab Region is one of the best places to set up business operations. The conditions, rules and
laws for the same are very liberal and attractive as compared to many other countries. Thus
942

Arab world has established itself as a great economic force, attracting more and more
organizations, entrepreneurs and investors to set up their businesses here.
There are many options for foreign or international corporations wanting to start operations
or initiate new businesses in Arab. They can start by creating a trading relationship. For many
companies, there are advantages if they have a presence in Arab to research market
conditions, establish contacts, meet prospective customers, and finalize transactions and
orders.
Like if we talk about Qatar, oil and gas reserves have transformed Qatar from an
impoverished outcrop on the Arabian Peninsula into one of the richest countries in the world.
The oil deposits located and exploited from the 1970s onwards were of unusually high quality
and generated a substantial income for the country. In addition, one of the worlds largest
natural gas fields, known as the North Field, was discovered in Qatari waters in the late
1980s. Measured by revenue, gas production has now outstripped oil and is set to remain
Qatars principal source of income for the foreseeable future.
Arab Region is a heaven for businesses. Anybody who wants to establish a business, or start a
business venture on their own or in partnership, there are a couple of issues one should take
note of:
1) There is no tax in most of the Arab countries.
2) Secondly, you are required by law to have a local Sponsor.
In Arab import business revenue is humongous. Like in Dubai, it exceeds $14 billion
annually. Dubais non-oil imports have risen sharply and there is a lot of scope for greater
expansion. Dubai is becoming a hub for trading and is in turn becoming a major supplier for
neighbouring countries. With a growing number of expatriates, there is an increasing demand
for foreign food products, latest electronic goods and other high-end products. So Dubai is
definitely a great market and there are plenty of opportunities for greater export trading and
establishing export businesses. There are no stringent foreign exchange rules, quotas or
conditions. The import duties are low, and many products are exempt from taxation. The
transportation facilities from the port to warehouses are unmatched in terms of efficiency and
operations. So it is easy to transport and store goods in less time thus increasing profit
margins.

943

POLITICAL RISK FACTORS IN ARAB REGION


Recent events surrounding the Arab world debt standstill raise broader questions about the
political risks of investing in the Arab world. The good news is that growth and FDI have
risen markedly in recent years; yet, risks undoubtedly remain. I researched the issue in depth
for new Perspectives from the Multilateral Investment Guarantee Agency (MIGA) that
highlights the diversity of risks within the Arab World.
The Arab World, like other developing regions, provides both potential risks and rewards for
international investors. The most important message from the Perspectives piece, though, is
that risks vary significantly by country, by sector, and by project. As a result, its crucial not
to take a one-size-fits -all approach to investing in the region.
The Arab World is perceived as being prone to war and civil disturbance. Yet available data
from the Berne Union shows no claims for war and civil disturbance in Arab countries. Here
we see a considerable gap between perceptions and reality.
Moreover, while most Arab nations hold substantial reserves, lowering the risks associated
with the transfer and convertibility of domestic currency, this masks some significant
variability. Foreign exchange reserve levels among countries in the region vary from four to
12 months of import cover. Expropriation events have been rare but high-profile in the Arab
World. Notably, since 2005, Berne Union data show eight cases of expropriationnone in
the Arab World.
Many investors enter into contracts with host governments, and in these cases breach of
contract risks are paramount. The World Banks governance indicators reveal a gradation in
the quality of governance and access to legal redress in the region; nine Arab countries are
above the global mean, 13 are below.
National laws and practices over arbitration also vary considerably. Important regional
arbitration centers are in Cairo, Dubai, and Bahrain. New centers are in the process of being
established in Saudi Arabia and Qatar, and in the Dubai International Financial Centre. Many,
but not all, Arab states subscribe to the key international arbitration agreements, conventions,
and organizations.
These are some examples of the Arab Worlds great diversity with respect to issues that
impact political risk. Again, its important to stress that investors should understand the

944

specific political risks they are facing. From there, investors can work to protect against and
manage these risks effectively, including through the use of political risk insurance, where
appropriate.
REFORMS IN 2007/2008
Econo

Starti

Deali

Employ

Register

Getti

Protecti Payi

Tradi

Enforci Closin

my

ng

ng

ing

ing

ng

ng

ng

ng

ng

workers

property

credit

investo

taxes

acros

contrac

busine

ts

ss

busine with
ss

permi

rs

ts

borde
rs

Algeria
Bahrai
n
Comor
os

Djibout
i
Egypt

Iraq
Jordan

Kuwait
Lebano

n
Maurit

ani

Morocc
o
Oman
Qatar

945

KSA

Sudan
Syria

Tunisia

UAE
Gaza

Yemen

The most dramatic regulatory reforms in the Arab World made it easier to start a business by
reducing the time, number of procedures and costs associated with start-ups. Doing Business
also analyzed reform trends over the past 5 years.* Once again, starting a business is the top
area of reform in the Arab World for the 5 year period tracked, with reforms seen in Egypt,
Jordan, Lebanon, Mauritania, Oman, Saudi Arabia, Syria, Tunisia, West Bank and Gaza and
Yemen.
In a region once known for prohibitive entry barriers, from June 2007 to June 2008, 10 of the
20 Arab economies examined simplified their start-up procedures and reduced costs. Two
Arab countries-- Tunisia and Yemen --eliminated the minimum capital requirement for
starting a business; while Jordan reduced it by more than 96%. Yemen also launched a onestop shop to make it easier to start a business
Syria was the second biggest reformer in business start -up in the region. Syria issued a new
company law and commercial code that took registration out of the court, introduced
statutory time limits and made using lawyers optional. But along with these reforms, Syria
also made starting a business more difficult: a 33% increase in its minimum paid-in capital
requirement. Lebanon and Oman improved the efficiency of their one-stop shops for business
start-up. The procedures that used to take 46 days in Lebanon now take 11.
Egypt was a top global reformer in 2007/08. Following on the previous reforms, Egypt
further reduced registration costs and its minimum paid-in capital requirement. Saudi Arabia
continued to simplify commercial registrations and reduced fees by 80%. Computerization of
the registry in West Bank and Gaza reduced registration time.
The second most popular reforms were in the area of getting credit information. Five Arab
countries reformed in this area: Egypt, Morocco, Tunisia, United Arab Emirates, West Bank
946

and Gaza. The third most popular were reforms to ease trading across borders. Four Arab
countries reformed in this area: Djibouti, Egypt, Morocco and Syria.

ENTRY STRATEGIES
The entry strategy options that are available to the individuals wanting to operate their
businesses in the Arab cluster can be determined by the categories of companies that present
in the Arab cluster.
There are seven categories of business organizations in Arab cluster.
1. General Partnership Company
2. Partnership-en-commendams
3. Joint venture company
4. Public Share holding Company
5. Private Shareholding Company
6. Limited liability Company
7. Share Partnership Company

Forms of Businesses in Arab Region


The appropriate form depends largely on the product or service. All standard international
forms of business relationships are recognized in Arab. It is difficult to freely state which
form is most appropriate since it largely depends on the product or service, as well as the
maturity of the business and the probable market penetration.
Small companies with financial and manpower restraints usually rely on agents or distributors
to sell their products. This form of distribution is most favoured by companies that have
limited overseas market experience or exposure. There are low investment risks and this form
permits penetration into a foreign market which otherwise would be impossible.
A company that has done its due diligence and has invested in a serious market analysis for
its products would most likely prefer to enter into a partnership or joint venture. This permits
it to have a participation in the development, marketing and growth of the product, and
allows it to invest capital or know -how in the venture, maximizing growth potential. Many

947

times, it is preferable to license the rights to a local manufacturer rather than enter into a
possible competitive situation with the local company.

Joint Venture Company


Establishment of joint ventures is a common practice in Arab countries. A major motivation
for joint ventures is to pair foreign firms with Arab partners to compete in segments of the
government procurement market or in other markets subject to government regulation, such
as telecommunications, computers and capital goods. Formation of a joint venture can be
accomplished through a variety of business entities.
A joint venture is a company concluded between two or more parties to share the profits or
losses of one or more commercial businesses being performed by one of the partners in his
personal name. The company shall be confined to the relationship between the partners and
will not be affected by third parties. A joint participation venture is restricted to the
arrangement between the partners therein and must not be made to third parties. Between the
partners themselves, the arrangement is essentially a partnership. Each partner conducting
business will generally do so in his own name and will not declare the interest of the other
partners to others. The liability of the partners who are conducting business is unlimited with
respect to the liabilities of the company. If the liability of the other partners is disclosed, the
venture will be treated for every purpose as a general partnership. There are no registration
formalities for this type of company as it is not a distinct legal entity.
A joint venture company uses the business name and the license of the partner conducting the
business. A Memorandum of Association should, however, be prepared to indicate the rights
and liabilities of the partners and the method of distribution of the profits and losses.

Licensing
Licens ing agreements are common forms of accessing the Arab market. A major concern of
foreign companies trading with Arab is protection of intellectual property rights is often
inadequate and uncertain. Serious gaps exist regarding patent protection for pharmaceuticals,
trademarks and trade secrets.

Partnership Company
A general partnership is an arrangement between two or more partners whereby each of the
partners is jointly and severally liable to the extent of all their assets for the companys
948

liabilities. T he Commercial Companies Law provides that only UAE nationals are allowed to
be partners in a general partnership company. There is no prescribed minimum capital
requirement for the establishment of Partnership Company.

Branch of a Foreign Company


A branch office is legally regarded as part of its parent company and does not have a separate
legal identity from that of its parent company.
Branch offices are nevertheless required to have a national agent. If the agent is a company, it
must be wholly owned by UAE nationals. The national agent, however, will not acquire any
rights or interest in the business of the branch office and will simply provide services on
matters which concern federal and local government departments.
Nations differ in the degree of demographic heterogeneous. While many nations are highly
demographically heterogeneous, the Arab cluster is a homogeneous cluster in terms of racial
composition, culture, and religious belief. A number of researches conducted on the business
level strategies have been able to hypothesize the conditions that determine the business level
strategies that apply to individual countries specific to their conditions and environment.
Hence, we were able to conclude that other things being equal, the greater a nation's
demographic heterogeneity, the greater the prevalence of focus strategies among firms in that
nation. At the same time, the greater a nation's demographic heterogeneity, the less the
prevalence of broad-scope cost leadership strategies among firms in that nation. Likewise,
the higher a nations per capita income, the greater the prevalence of differentiation strategies
is more suitable. Likewise, the more bimodal a nation's income distribution, the greater the
prevalence of focus strategies among firms in that nation hence when a nation's income
distribution is bimodal, specialized market niches are created for luxury products that will
appeal to the nation's economic elite, Those specialized niches can be profitably exploited by
firms using focus strategies. Hence keeping in light the above discussion, the Arab cluster
countries, have a high per capita income, and are highly homogenous and the society is not
very bipolar which is suggestive that such nations broad-scope cost leadership and
differentiation st rategies be improvised such nations

949

BUSINESS CULTURE:
COMMUNICATION ETIQUETTES:
Choice of Words
Arabs use certain words in their business correspondence that convey respect and place a
human touch in their business. The following are some words which are often used:

Kind: Thank you for your kind cooperation, we would like to receive your kind quote, we
have received your kind message, kindly quote us the following.

Honour: It is our honour to supply your company with the following information, thank
you for giving us the honour of quoting you; it is an honour to serve your company.

Other words that will also create a favourable impression for your correspondence are:
appreciate consideration, help and the like.

VERBAL COMMUNICATION
The same guidelines for written communication apply here with more emphasis on speaking
simple, clear English with no slang. Many Arabian businessmen and businesswomen have
high education degrees from the United States, Britain, France and other countries, and they
are very fluent in a second or even a third language. A good rule though is to assume that
they are not fluent in your native language.
Subjects to Avoid

Avoid discussing certain issues that might cause conflict or discomfort to your Arabian
listener

A good rule is to avoid these subjects unless you have a very good relationship with your
business partner or you are interested in learning more about a subject.

Private Issues
Although Arabs are approachable, friendly, and humorous, there are issues that are kept
private. T hey rarely talk about their family or spousal problems even with their close friends
or relatives.

950

Criticism
Another aspect of communication that Arabs keep private is criticism. If there is a need to
deliver criticism to an individual, it is always done one on one, not in the presence of others.
This is done to protect the dignity of the criticized person and to ensure that criticism will
have a better chance of being accepted in a constructive manner. Criticism is geared towered
correcting a situation, not toward humiliating the criticized person, and that's why it is a
private communication.
Invitations:
Arabs are known to be very generous. It is part of their culture and an important aspect of
their personality. If you are meeting with an Arabian businessman in his office or in a trade
show and there is mutual interest in becoming business partners, you will probably be invited
to dinner or lunch even if you have already discussed and agreed on the business relationship.
BEFORE THE MEETING

Work Hours

Most businesses have two daily working periods. The morning period lasts from
8:00am/9:00am until 1:30pm/2:30pm. The afternoon period is from 4:00pm/5:00pm
until 8:00pm/9:00pm. In the hours between the two working periods, people usually
go to their homes, have lunch, and take a nap. The hot weather is the determining
factor behind this habit; if you live there, you will appreciate this resting time. On
Friday, which is a religious day to Muslims, the majority of businesses close (except
for shops of course).

Setting up Appointments

Sometimes when trying to set up meeting dates with your clients you will find that their
answer is something like "Whenever you are in the area, give us a call". Don't interpret
this as a sign of lack of interest in your business. It is equal to an answer that sets a
specific date and time.

Let your clients know in advance that you will be visiting them and ask them to inform
you what they might need before the meeting (catalogues, samples, prices, shipping costs,
etc.)

951

Meeting Length and Punctuality

When you are setting up appointments, take into account that the meeting most likely will
take longer than you expected.

It is advisable to set at maximum two appointments in the same working period (for the
morning period or the afternoon period)

Punctuality in set appointments is not a very high priority

Dress Code
Arabs are mostly conservative in their way of dressing. If you are a man, avoid wearing
earrings or other jewellery because it might distract the attention of your listeners from the
main issue at hand. If you are a woman, it is preferable to wear a long dress or a jacket with a
long skirt. Furthermore, both men and women should avoid wearing clothes with very loud
colours.
AFTER THE MEETING
At the beginning, there will be greeting words and talk about other than business matters.
Even by the end of the meeting, when business discussions are over, your host may go back
talking about non-business subjects.
When business discussions start, it is a good idea to take notes. Information will include your
prospective client's current needs, what they are looking for, problems they have faced
before, experiences they had before with certain products, who are their suppliers, how do
they do business, etc. The information given to you, even quotation requests, might not be
available in a written form and that's why it is important that notes be taken
Expect to have your meeting interrupted many times by people visiting your host, employees
needing approval or a signature, and incoming phone calls. These interruptions do not mean
that they are not interested in your business; it is just the business atmosphere there.
Do not use pressure sales tactics or deadlines. Pressure sales tactics are viewed as signs of a
bad deal and raise the flag of suspicion about what you are selling. Try to maintain your
composure and not get upset. Price negotiations are performed in a friendly and relaxed
atmosphere. Check the market if possible and compare your product quality, specification
and prices.

952

Arabs always try to ensure that their guests are very comfortable and treated with respect and
friendliness; they avoid directly rejecting offers and invitations because it might cause
discomfort to their guests and hence to them. So, rejection of an offer is done in a very subtle
way.
Decisions are made in slow and cautious steps. So you need patience, a good character that
exhibits honesty, trustworthiness, and willingness to develop a human relationship before a
business one. To help understand your Arabian clients, the following are some signs that
your client is very interested in your business:

They ask to meet with you more than once.

They are putting a lot of effort into the negotiation process.

After hearing your offer, they inform you of their company success stories, the amount of
business they do, and the benefits of granting them your business and product distribution
rights.

SLOW BUSINESS BEGINNING


Business in the Arabian region has a relaxed atmosphere and moves slowly; you need to be
patient in or der to see the results of your efforts. A considerable number of Arabian
companies lack marketing skills and experience in customer support. Ask for assistance and
feedback from your new agents to ensure that the plans accommodate the different
environment.
As a manufacturer or a service provider, if you do your homework at the beginning stage of
searching for representatives, you will save yourself a lot of headaches, lost efforts, and
negative or weak product appearance in the new market. The more you are involved in
establishing your product in the new market, the more experience and valuable information
you will gain and the better relationship you will have with your distributors.
Expect that your clients will request that you give them a lower price or extend a discount
citing many reasons for the request:

It is their first order.

They have received a better pricing from another overseas supplier.

953

They can obtain the same items locally for the same cost you quoted them or even a little
bit higher tha n what you quoted them.

The quoted price (after adding to its shipping and tariff costs) will not enable them to sell
it locally with a good profit margin or they will not be able to compete with other similar
products in the market.

Price negotiation is part of doing business in the Arabian market. It is considered an art and a
way to enjoy doing business. It is important to know that it is not always the case that they
are only trying to get a better pricing from you but it could be a valid reason and an accurate
description of the current situation. Other strategies your Arab clients might use to get a
better pricing from you could be:

Their initial quotation request does not specify a quantity but implies that the quantity
will depend on the pricing you will provide them with, which might lead you to think that
the better pricing you provide, the more quantities they will be requesting.

They might place a quote request for a huge quantity which will probably cause you to
give them the best price you ha ve.

What to do in such cases?

Do not lose your coolness or express any emotions of mistrust or anger. Remember that
this is part of doing business and a fun thing to do.

When you receive a quotation request without specifying a quantity or a quotation request
with a huge quantity, don't rush to give your best and bottom pricing. Expect that price
negotiations will follow and you want to be able to make more profit for your company
and at the same time be able to give your Arabian client discount so he can know you are
flexible with him and that he has achieved a better price for his company when he
negotiated with you.

Before providing a quote, if possible, do some research to know the pricing of the same
product or similar ones in the destination market.

It is a good idea in every quote you give, to provide them with a quantity/price quote.
Which means your quote specifies certain prices for a range of quantities. In this way, in
future correspondences, you have a range to work with instead of negotiating on the
bottom price you have offered.
954

Some Arabian companies prefer to pay using a letter of credit especially when it is one of the
first business purchases from a new foreign supplier. It is very helpful to provide your clients
with literature that is produced in their own language, especially if the literature will be
passed by your overseas partners to their customers. Every market has its own marketing and
advertising rules and every audience is approached differently. In almost all the Arabian
countrie s advertisement should not directly or explicitly contain comparison between two
different brands for the same type of products Telemarketing and mail-marketing are
nonexistent.

HOW TO WIN YOUR ARAB CLIENTS FRIENDSHIP AND BUSINESS

The more you know about your clients and their customers, the more accurate and
adequate your decisions and business policies will be. Try to know what is appreciated
and what is disliked in their culture in terms of habits, traditions, and business
intera ctions, and utilize that knowledge.

Study the environment that surrounds your clients' businesses in terms of laws,
regulations, difficulties, opportunities, and the like.

Develop more than a business relationship and seek your clients' friendship by show ing a
genuine interest in their culture, being flexible, serving their other needs, and maintaining
a continuous communication channel regardless of business activities and volume

Be patient, always ask for their feedback, invite them to share their opinio ns and
suggestions in the decisions and policies that involve them, listen attentively and try to
understand what they are communicating to you without underestimating their knowledge
or overestimating yours.

When you offer your products and services to new overseas clients, you will notice that
some will respond to you immediately while many will not. That is especially true when
dealing with the Arabian market. Arabian businesses are cautious and take their time
when approached by a new overseas company. They need to develop a trust relationship
with the foreign supplier. Recognition is a step to achieving that, so do not give up too
soon.

Employ the following in your business:

Flexibility in payment terms.


955

Regular visits to your agents to better understand the market and build more than a
business relationship.

Provide financial and professional support to your agents in the field of marketing,
such as advertisements, seminars, training, etc.

Employ enough centralization and authority in your export or international sales


department in order to increase the speed of your response and delivery to your agents
and clients inquiries and orders.

Set your international prices competitively by studying comparable products in the


targeted market.

MANAGERIAL IMPLICATIONS:
There is a high importance placed on family and in-group relationships in the Arab cluster,
which provides paramount implications in conducting business in the Arab world. Families
own most of the businesses that exist with important positions mostly held by senior
members of the family. Therefore, it is important for those interested in seeking business in
the Arab world that they build key relationships with the bureaucrats for finalizing business
deal. Likewise, businesses place strong emphases on personal contacts than on procedures
thus spending more time on personal relationships before going into business. National
culture of the Arab countries has significant implication for MNCs wanting to operate in
these nations and hence impacting the entry modes of businesses. Thus, companies that are
planning to enter into the Arabic markets, joint venture type of entry modes would be quite
difficult due to lack of relationships and trust.

The negotiation process of international

business may require more time and more events of socialising may be introduced into the
process. Conflict resolution is another unique issue in this cluster, typical open confrontation
techniques that would normally be used in organisation do not have wide application in
organisations in this cluster and the use of third- party for resolving conflict would often be
used. The introduction of a third party in resolving the conflicts is a reflection to express their
solidarity as a nation and is a part of the team oriented leadership style as mentioned is
perceived to be most effective in this cluster.

956

ORGANISATION IMPLICATIONS:
QUALITIES

ORGANISATIONAL IMPLICATIONS
Organizational development and various job design methods can

Hopefulness

be introduced without serious resentment.


Equity issues are favorably viewed by members of organizations;

Egalitarian

a flat structure with fewer hierarchical levels is preferred.


Decision making styles center around groups; team work and task

Consultative/participative forces may be utilized as mechanisms to advance organizational


change.
Dysfunctional conflict is easily avoided; intangible to other
Sensitivity to rituals and people's beliefs motivational system is acceptable, negotiation
to other peoples beliefs

styles place emphasis on emotions and feelings; concession


seeking, and expect long-term venture or relations

Love of normative and


philosophical arguments
Infatuated

with

Organizations are open to changes as along as changes appear to


conform to the ideal form; concepts and theories of management
developed abroad are not dismissed

ideal New and modern concepts of management can be utilized and a

forms

search for new forms of organization is facilitated


Speed of decision making, flexibility, and tolerance for ambiguity

Intuitivenes

can be enhanced.
Mediation, compromise, and concessions are easy to attend,

Avoidance

of

public dysfunctional conflicts can be avoided. One-on-one performance

conflict and criticism

evaluation is preferred, and personal rather than impersonal


procedures are effective.

9.

Self-

and

social

censorship

Strategies to enhance group cohesiveness can be easily


implemented, and organizational goals, if clarified, can be met

10. Al-Din Alamal Hard

Hard work and commitment to organizational goals can be

957

work and commitment to sustained.


organizational

goals

(religion is work)
Al-Din

Al-Maamala( Human relations, concerns about other values and beliefs and

religion is found in the treating them on equal basis with affection can be maintained in
way of dealing other)

an organizational setting
Growth in all its forma( size, market number of products) is

Respect for trade

preferred

Respect for agreed upon


authority
Resentment

Consensus and continuity of organization can be maintained

of Only agreed upon rules and procedures are observed, while direct

authoritarian roles

harsh orders are dysfunctional

Consultative/participative Prior consultations with formal and informal leaders are


procedures
Courage

Equity and social justice

necessary to ensure commitment to goals


Confronting oppression and voicing concerns about wrong doing
in organizations are valued
The appearance of fairness in evaluation and reward, and linking
reward to performance appeal to employees.

REFERENCES
Simcha Ronen and Oded Shenkar: Clustering Countries on Attitudinal Dimensions: A
Review and Synthesis, The Academy of Management Review, Vol. 10, No. 3 (Jul., 1985),
pp. 435-454
Kwok Leung, Rabi S. Bhagat, Nancy R. Buchan, Miriam Erez, Cristina B. Gibson: Culture
and International Business: Recent Advances and Their Implications for Future
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http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/EXTMNAREG
TOPGOVERNANCE/0,,contentMDK:21554297~menuPK:4406853~pagePK:34004173~piP
K:34003707~theSitePK:497024,00.html

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CHINA

960

INTRODUCTION
There's nothing like a good example to motivate and inspire one. Having knowledge of
business is an essence of conducting it proficiently, but it takes time and requires money as
well. Therefore, the best option is to learn from the flourished and successful Multinational
Corporation (MNC) to perform a business. This study is conducted in order to get insight and
to learn in order to conduct business in China.

OBJECTIVE
The objectives of this study are as follows:

To highlight the importance and significance of the culture, social, political and
technological differences in China and adopt a management style accordingly.

To analyze the management style, organizational structure, internal and external


environment, entry barriers and opportunities of working in China.

To learn and adapt the most suitable working style for conducting business in China

METHODOLOGY
The information on the business environment of china and working conditions is gathered
through magazines, website and articles.

BUSINESS ENVIRONMENT
PEST ANALYSIS
Political Environment
Political scenario in china is quite favorable; the government has directed its efforts in
promoting growth and created jobs, so as to achieve higher standards of living for all. It is
assigned with anticipating problems ahead, identifying opportunities for growth, rationalizing
existing policies and giving extensive directions for the economy. It is characterized with
economies where the enforce ment units are very efficient and with very low corruption rate.
Minimized Entry Barriers
Government is constantly trying to minimize the entry barriers and other trade restrictions in
order to foster the business growth. Government has tried to ease tax laws; extremely low tax
961

which has allowed SMEs to flourish and has encouraged would -be entrepreneurs to throw
their hat into the business ring.
China and Established Market Economy
China is moving towards a fully established market economy. But it is the state that is
responsible for guiding the transition. As a result, economic decision making in China can
look to the outsider like a confusing patchwork of competing geographical and sectorial
authorities, each claiming "stakeholder" status in different business activities, imposing taxes,
rents and regulations or requiring consultation before or during the life of a project.
Key Trends in Economic Decision Making
Broadly speaking there are two key trends in economic decision-making. At central
government level, the main tendency is a gradual withdrawal by the state from direct control
of business and a greater willingness to free business activity from wider policy objectives.
This is combined with an increasingly laissez faire approach to foreign involvement in the
economy.
Additionally, there is a growing willingness by central government to devolve executive
powers down the administrative chain, granting ever-greater powers to local authorities.

Economical Environment
Since the beginning of its economical opening, when the first 5-year plans were devised in
1979 China has being growing at an incredible speed, with its GNP numbers jumping
from 44 billion dollars to 1.6 trillion dollars in just 20 years. Such growth has pushed the
Chinese manufacturing industry into devouring huge amounts of natural resources in a
alarming way: in 2004, China the 8th largest economy in GNP scale consumed 8% of
all the oil, 31% of all the coal, 10% of all the electricity, 30% of all ore, 30% of all steel, 19%
of all aluminum, 20% of all the copper and 40% of all cement produced in the world.
The opportunities have grown still more abundant following China's accession to the WTO in
2001. China's trade surplus rose nearly 50% to a record US$ 262 billion in 2007 (World Bank
statistics). Highest demand was for Chinese textiles, footwear and metals. Despite this trade
surplus, there is a growing trend of imports exceeding exports, a development that started in
October 2007. Some other points are discussed as below:
The past two decades reform in China injects huge vigor to the economy.
962

Domestic consumption demand is going up.


Overseas direct investments keep on rising.
Private sector is playing a more and more important role in the economy.
2008 Olympic Games and 2010 World Expo are keeping forces driving forward
China's economy.
"Great Development in the Western Areas of China and Reinvigorating the Old
Industrial Base.
The rising farmers' income will be favorable to spur the domestic demand as a whole.
Stressing the need to develop science and technology will spur innovation and
growth.
As a more important participant, China will be a more positive player in the growth of
the world economy.
Focus on the improvement of corporate governance, the promotion of the non-state
sector and the protection of property rights.
Building up further a market oriented behavior and credit system by regulation and
law.
Private ownership will be or is becoming a fundamental building block of the
economy.
China's current leadership has intensively embarked on reforms that aim to structurally allow
for the development of socially and environmentally clean products and quality-focused
production. Moreover, it is dedicated to generating greater economic development
domestically and providing more services to the population in the more inner regions of
mainland China. These goals, providing the country and (foreign) investors with a new set of
opportunities, form the core of President Hu's concepts of a "harmonious society" and a
"spiritual civilization", laid out in its latest 5-Year Plan (2006-2010). In addition, China will
host the Summer Olympics in 2008 and views this as an opportunity to showcase China's
develo pment gains of the past two decades to the world.

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Social Environment
Regional Imbalances

Income and wealth distribution is extremely uneven both in inter and intra urban and
rural areas.

No structural or institutional framework for political reform.

Changes have come about more on the basis of experiential measures. This lead to a
decline in central power.

Regional disparities in rural income and consumption have remained intact over 20
years (1985-2005) and have in fact worsened, but increase in per -capita income and
consumption in all regions has been so rapid that disparities are of secondary
importance.

Population

As the world's population is approximately 6.7 billion, China represents a full 20% of
the world's population so one in every five people on the planet is a resident of China.

Male-female ratio disparity from sex-selective abortion and other problems associated
from the One-child policy.

China's population is expected to grow over the next few decades.

This can be attributed to immigration and a decrease in infant mortality and a decrease
in death rate as national health improves.

Around 2030, China's population is anticipated to peak and then slowly start
dropping.

Social Safety

Lack of pension system; Social insurance virtually non-existent.

No extended health care coverage

Unemployment and no proper retirement benefits.

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Social Unrest

Peoples Republic of China (PRC) has experienced rising social unrest, including
protests, demonstrations, picketing, and group petitioning.

Political observers ha ve also described social unrest among farmers and workers since
the early 1990s.

Social unrest in China includes human rights issues.

Growing disparities of income, official corruption, and the lack of democratic


institutions are likely to continue to fuelsocial unrest.

According to Chinese Communist Party sources, social unrest has grown by nearly
50% in the past few years.

Health Care Issues

The lack of access to affordable healthcare.

Inefficient use of healthcare resources.

A lack of high-quality patient care.

Lack of modern equipment in rural areas.

Technological environment
China represents an immense market that has by far not been fully tapped yet. Often dubbed
"the factory of the world", it provides a low-cost base for export-oriented production. Science
and technology in the People's Republic of China has been growing rapidly. As China
develops and becomes more connected to the global economy, the government has placed a
stronger emphasis on science and technology as an integral part of the socio-economic
development of the country. This has led to increases in investment, improved scientific
structures, and more funding for research. These factors have led to much advancement,
including in the fie lds of agriculture, medicine , genetics, global change and science.
In 1900, China had no modern science and technology at all. Now, in the early 21st century,
the gap in high-technology research and development between China and the world's
advanced countries has shrunk; 60 percent of technologies, including atomic energy, space,
high-energy physics, biology, computer and information technology, have reached or are
close to the world advanced level.. Local regulations have been issued for attracting talented
965

people, ensuring investment in science and technology, and developing high technology. In
2004 there were 55.75 million scientific and technological personnel in state -owned
enterprises and institutions, and the number of scientific and technological personnel out of
every ten thousand employees had increased from 870 in 1985 to 3,900. Over half the
academicians of the Chinese Academy of Engineering are scholars who have returned during
the past two decades after finishing their studies abroad.
Barriers to Entry
Anything that hinders competitors from entering the market is a barrier to entry. In reality
barriers to entry are always present to a new entrant in the very nature of things: some
investment is always required, however minimal it may be. If the market already exists, some
unusual effort to convince existing customers to buy, and channels to carry the goods will be
required. The China cluster has some obstacles that make it more difficult for a firm to enter
this market.
Government Issues
It may make entry more difficult or impossible. In the extreme case, a government may make
competition illegal and establish a statutory monopoly. Requirements for licenses and permits
may raise the investment needed to enter a market, creating an effective barrier to entry. Issue
of red tape is also significant in China. The Chinese government makes no secret of its
support for state owned enterprises (SOEs). Foreign companies should not expect a level
playing field. Rather, the field is downward sloping for SOEs. It is level for private Chinese
companies. The field is upward sloping for all foreign firms
Competitive Pressure
Recent economic analysis suggests that over 80 percent of Chinas industrial markets are in
oversupply. There are terrible competitive pressures. Chinese brands are strong and getting
stronger in many sectors. In many Chinese markets there is a constant downward trend on
prices. Chinese competitors, particularly those from the state -owned sector, often enjoy a
very low cost of capital. Thus, they can enter markets quickly and they can expect to receive
strong encouragement from the government for their efforts.
Capital Requirement
Being a firm with home country other than China, one of the obstacles can be the capital
requirement, the investors would need huge funds to setup a business in China.
966

Customer Loyalty
The element of customer loyalty counts a lot. The Chinese are extremely patriotic people and
always prefer local and national products. The probability that customers are readily going to
accept the new brand even if they had been loyal to established products is an obstacle. The
presence of established strong brands within a market can be a barrier to entry in this case.
Intellectual Rights and Protection Issues
It has been said that, in China, if a product or service can profitably be copied; it will be.
Also, foreign IPR holders (whether they are in the China market or not) suffer enormous
losses to Chinese pirates in the China market and, increasingly, in third country markets.
Usually entrant requires access to equally efficient production technology as the competitive
monopolist in order to freely enter a market. So patents and trademarks can serve as entry
barriers to particular good/services; if there are only one or few names in the market.
Foreign Ownership Ceiling
One of the biggest hurdles facing the new entrants in China cluster is the foreign ownership
ceiling. A percentage of companys shares have to be owned by the local people so finding a
strong partner is quite troublesome.
Cultural Barriers
A very crucial issue that most of the new entrants have to face is the cultural barriers when
they conduct business in China, example would be obstacles in translation, images or
symbols, which have special meanings in different nations, and colors, which have different
connotations in Chinese Culture.
Economy of Scale
There are already many Large, experienced firms which can generally produce goods at
lower costs than small, inexperienced and new firms in China. Cost advantages can
sometimes be quickly reversed by advances in technology. For example, the development of
personal computers has allowed small companies to make use of database and
communications technology which was once extremely expensive and only available to large
corporations.

967

CULTURE
In almost more than in any other business environment, it is vital to know exactly which type
of organization you will be dealing with - because attitudes to such things as management
style, decision-making and attitudes to long-term relationship-building could vary
enormously.

CHARACTERISTICS OF CULTURE
The culture of China is very much important and has been showing it in every aspects of life.
They believe that their culture should pass to traditional to traditional and systematically so
characteristics of culture is transgenerational which means their culture is passing by
generation to generation. Countries are in a patterne d way to do business.

MODEL
Outer
Ring
Middle
Ring

Inner
Ring

As far eastern region is very much close to their traditional culture and show their values,
festivals, language culture in every aspects of life. So this region lies in outer ring of the
model of culture.

CULTURAL DIVERSITY
Punctuality is important, as is dress and body language. Gift Giving: As in other Chinese
cultures gift giving is endemic. The giving and receiving of gifts is viewed as an element in
the ritual of business relationship development. Much benefit can accrue from cultivating the
right people. It is not necessary to give expensive gifts - it is the gift-giving which is
important. Gifts should be wrapped and are often refused two or three times before being

968

accepted. They are rarely opened in front of the giver. Ensure a compatibility of levels within
meetings.

STRATEGIC PREDISPOSITION
If someone has to introduce MNCs its business in China they have to follow the policies,
procedures and strategic predisposition i.e. regiocentric predisposition. Regiocentric
predisposition is basically the blender of the interests of management oh MNC with those of
its secondary on a regional basis. It is both profitable and public acceptance strategy.
Mutually negotiated between region and its subsidiaries governance is involve d. Regional
people developed for key positions anywhere in the region.

GENERAL CHARACTERISTICS OF CULTURE


Characteristics

China

Characteristics of Culture

Transgenerational

Model Of Culture

Outer ring

Collectivism

Long term orientation

Less power distance

Low

Hofstedes Cultural Dimensions:

uncertainty

avoidance

Neutral

Ascription

Strategic Predispositions

Regiocentric

Typology

Family

Trompenars Cultural Dimensions

969

HOFSTEDES CULTURAL DIMENSIONS


Long Term Orientation
By studying Hofstede model of Cultural dimension we concluded that China has Long-term
Orientation. This Dimension indicates a societies' time perspective and an attitude of
persevering

Uncertainty Avoidance
In China Uncertainty Avoidance is high, as they are not risk taker.

Collectivism
Far eastern region has a collectivism concept. This is manifest in a close long-term
commitment to the member 'group', be that a family, extended family, or extended
relationships. Loyalty in Chinese culture is paramount, and over-rides most other societal
rules and regulations. The society fosters strong relationships where everyone takes
responsibility for fellow members of their group.

Power Distance
In China power Distance is high. This is indicative of inequality of power and wealth within
the society. This condition is not necessarily subverted upon the population, but rather
accepted by the society as their cultural heritage.

Femininity
It is the culture in which the dominant social values are caring for others and quality of life.

TROMPENARS CULTURAL DIMENSIONS


Particularism
According to Chinese region the ideas and practices cannot be applied anywhere anytime as it
is the uncertainty avoidance.

Neutral relationship
China is neutral culture in which emotions are held in check and they dont take decisions
emotionally and also dont involve in harsh decisions.

970

Diffuse culture
Chinese usually dont quickly invited into a persons open, public space because once they
are in, there is easy entry into the private space as well. They are usually indirect and
introverted and work and private life often are closely linked.

Ascription
Ascription is a culture in which status is attributed based on who or what a person is like they
give promotions or benefits to the employees on the basis of age , gender or social
connections.

TYPOLOGY
EQUITY

Incubator

Guided missile

PERSON EMPHASIS
Family

TASK
Eiffel

EMPHASIS
tower

CHINA
HIERARCHY

FAMILY CULTURE
In China the Chinese believe that a person has more worth than the task thats why they focus
on customer care and health services in their strategies. They well structured and hierarchical
regions and fond of doing work under some authority. Family culture is characterized by a
strong emphasis on hierarchy and orientation to the person. The result is a family type
971

environment that is power oriented and headed by a leader who is regarded as a caring parent
and one who knows what is best for the personnel. As the culture is predominately
characterized by traditions, customs and associations.

Communication
Communication is the process of creating and sharing information with one another. Rapid
changes in technology, transportation and immigration is making the world into a small
intersected community, where understanding how different cultures communicate is
extremely important. In order to achieve effective intercultural communication we have to
understand how different cultures communicate. There are two main types of communication,
verbal and non-verbal communication.
Collectivistic cultures, like China are usually high-context cultures. These cultures emphasize
nonverbal communication and subtleness in communication rather than being frank. Highcontext cultures are extremely polite, which fits with the indirect, subtle nature of
interpersonal communication. Ambiguity and obscurity characterized conversations in a highcontext culture. One purpose of this style of communication is to avoid threatening the face
of ones conversation partner, thus bringing shame upon oneself. What is not said may be
more important than what is said. In high-context communication, the listener or interpreter
of the message is expected to read between the lines, to accurately infer the implicit intent
of the verbal message, and to observe the nonverbal nuances and subtleties that encircle or
wrap the verbal message.

STRATEGIC MANAGEMENT
Global Vs. Regional Strategies
All the four strategies which are shown in the following table have been used in both the far
eastern region and Pakistan.

National Responsiveness
Low

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High

High

Global Integration

Global strategy

Transnational strategy

International strategy

Multi-domestic strategy

Low

The extent to which these strategies are applied in China depends on various factors which
are discussed above in the report like culture of the areas, political, environmental and
technological environment. In China we look at the technological, political and
environmental factors. Chinese companies mostly follow the global strategy and transnational
strategy.

MOST SUITABLE ENTRY STRATEGIES


There are different strategies through which a company can enter in a country and all the
strategies have certain pros and cons. Company chooses a strategy according to its capability
and capacity. It also includes the resources of the company. And before entering in any
country or region a company first does the environmental analysis and the analysis of the
company itself. Moreover it also studies the various trends that are already been followed in
the targeted region or country. The various entry strategies are listed below:

Exports
Export to China can help you to, minimize the upfront investment, overcome the need for
high additional fixed costs and develop a market entry strategy that will enable you to avoid
making costly or even dangerous overseas mistakes Perhaps the easiest and quickest way to
export your products to China is via a Hong Kong (or possibly Taiwan) distributor. By
utilizing a Hong Kong distributor that is active in China, a firm can ship its products to Hong
Kong; subsequently, the Hong Kong distributor can identify appropriate end-users,

973

import/export corporations and distributors in China. Some Hong Kong distributors also have
liaison offices in china that provide some maintenance, service and repair assistance. A wellestablished Hong Kong distributor will have familiarit y with doing business in China,
(including language skills, currency issues and shipping considerations).

License
License arrangements can be an effective method to enter the Chinese market with little
investment and limited risk. Disclosure fees, royalty remittances, engineering fees, and sales
of components often help licensors quickly recover initial investments. It is worth noting that
royalty payments are currently subject to a 10% withholding tax.

Franchise
Food service chains were among the first foreign companies to enter the Chinese market
using a franchise model. Since then, franchise operations have expanded in a number of
different areas, including apparel, cosmetics, education, beauty salons, real estate and fitness
centers. Keys to successful franchising in Chinese include a thorough understanding of the
market and flexible franchising arrangements, including the ability for partners to localize
some product offerings
As described in this report, there a number of market entry strategies to pursue in China; each
strategy has its own advantages and disadvantages. The specific strategy a firm chooses will
depend on how the Chinese "view" the foreign firms entering their market, the demand for
the firms product in China, the rate of growth of demand for that product, a firms resources
to enter the marketplace, and the time horizon to enter. While the Chinese may never open
their markets completely, because many feel that they would lose more than they would gain,
it is still possible to penetrate the China market in a significant way.

Joint Venture
A locally -incorporated equity or cooperative joint venture with one or more Chinese partners,
or a wholly foreign-owned enterprise may be the final step in developing markets for a
company's products. In-country production avoids import restrictions - including relatively
high tariffs - and provides foreign firms with greater control over both intellectual property
and marketing. The establishment of a joint venture in China has gained in popularity among

974

many firms as a result of an easing of restrictions, directly attributed to Chinas accession to


the WTO.
The role of the Chinese partner in the success or failure of a joint venture cannot be overemphasized. A good Chinese partner will have the connections to help smooth over red tape
and obstructive bureaucrats; a bad partner, on the other hand, can make even the most
promising venture fail. Common investor complaints concern conflicts of interest (e.g., the
partner setting up competing businesses), bureaucracy and violations of confidentiality). The
protection of intellectual property, no matter the form of cooperation, is one of the most
pressing matters for U.S. firms doing business in China. American companies should bear in
mind that joint ventures are time-consuming and resource demanding, and will involve
constant and prudent monitoring of critical areas such as finance, personnel and basic
operations in order for them to be a success.
There are many different regions in China at various levels of sophistication. Similarly, just
as there is not only one market entry strategy in China, there is more than one type of buyer
in China. Experienced and successful companies know that China is not one market, and they
have learned to analyze and segment the various areas. To be successful, companies will need
multiple point of entry and may need to combine various market entry strategies to fully
penetrate the market.

BASIC ORGANIZATIONAL STRUCTURE


According to the four strategies that are mentioned below in the table, four types of
organizational structures are followed by the companies that are adopting these strategies.

National responsiveness
Low
Global strategy
(global

product

functional division)

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High
Transnational strategy
or (mixed

or

transnational

network structures)

International strategy
(international

High

Global integration

Multi-domestic strategy

division (global area division)

structure)

Low

In China the basic organizational structures are global product or functional division and
mixed or transnational network structures.

MANAGING POLITICAL RISKS


Political risk is defined as governmental or societal actions and policies, originating either
within or outside the host country, and negatively affecting either a select group of, or the
majority of, foreign business operations and investments. Political risk is also seen as the
possibility of political decisions or political and social events in a country will affect the
business climate in such a way that investors will lose money or not make as much money as
they expected.
Transfer Risks: is quite low in such countries. As china is not only politically stable but also
economically, thus their government policy does limit the transfer of capital. It is
technologically strong and thus policies apply on transfer of production, people and
technology in and out of the country. All this positively affect the business environment.
Operational Risk: can notably be observed in China. The government has a control over
price, financing decisions, exports and local operations.
Ownership -control risks : government policies hold back the ownership or control of local
operations. These countries are devoted and self sufficient to control their local operations.

MANAGEMENT STYLES APPROPRIATE FOR CHINA


In the early years china was epitomized by the iron-tight grip of the Communist Party during
the reign of Mao Zedong. At the beginning of the 21st century the scenario changed. This
lead to the old policies being replaced by more liberal but unclear policies instituted by
976

Maos great reforming successor Deng Xiaoping, which are also currently continued by the
present regime. Hence, the People's Republic of China finds itself in the midst of social,
economic and cultural transition. The pursuit of profit is no longer 'counter-revolutionary' and
business people have long since ceased being viewed as enemies of the general public.
Although the Communist Party is still in power and shows little esteem for any of the
political reforms that are highly valued by the west. China is therefore in a seemingly
paradoxical situation since it has rampant capitalism in the midst of a communist country.

Confucian Approach
To fully understand the management style that would apply best to China, one has to fall
back on its traditional cultural drivers The Confucian values. Modern business systems
and approaches are still not fully applied and in fact, are given a Confucian twist to enable
them to lie happily alongside the mainstream Chinese world view. According to the
Confucian philosophy, all relationships are deemed to be unequal. Ethical behavior demands
that these inequalities be respected. Therefore the elders should automatically receive respect
from the younger in other words the senior from the subordinate. This Confucian approach is
the cornerstone of all management thinking and issues such as empowerment and open access
to all information. Therefore, it is imminent that any new business man understands this
manger-subordinate relationship that is prevalent in Chinese business environment.

DIRECTIVE APPROACH
Expectations from Employees
In lieu of the Confucian values prevalent in China, management style that is most popular in
Chinese businesses is Directive and humanistic (people centric). The senior managers give
instructions to their direct reports who in turn pass on the instructions down the line. Chinese
management practices educate workers to be obedient and to follow instructions. It is
considered highly inappropriate for the subordinates to ever question the decisions of their
superiors since that is considered as a show of disrespect, and therefore becomes the direct
cause of loss of face (mianzi) for all concerned. Workers therefore have the tendency to do
exactly as they are told, no more and no less. Chinese employees are also often afraid to do
more or even to express personal opinions, because they do not know how it will be received
by their superiors.

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Expectations from Managers


As for the managers, they are usually seen as a father figure who expects and receives loyalty
and obedience from all his subordinates. In turn, the manager is expected to take on a holistic
interest in the well-being of those subordinates. It is basically a mutually beneficial two-way
relationship.

Decision Making
Decision making in Chinese management is mostly decentralized as the manager is expected
to make decisions on behalf of the group. The manager is in authority and there is no
questions asked by lower ranked people whether they agree on the decision or not. This
concept of decision making process is based on the Confucian values of respect,
evasiveness, hierarchy and discipline. This decentralized decision making is both expected
and desired by the workers and manager. However, it can also be very time consuming at
times, when the decision making power is in the hands of the wrong person as it has to go up
the hierarchy till it reaches the right person and then the answer goes back again the same
way. Thus, the managers are responsible for the workers actions in China in a more
pronounced.

CONCLUSIONS
China is doing a lot when it comes to technological development and economical growth.
Many foreign companies prefer to conduct business there, as there are many opportunities
and the market over there is quite big .In this report we have conducted a thorough study of
the factors affecting the conduction of business in The Peoples Republic of China. We have
done an in detail analysis of entry barriers and cultural differences which an entrepreneur
must be aware of before starting business there, otherwise he will suffer from cultural shock
and will face hurdles in the smooth flow of business.
Chinese culture is not very expressive when it comes to organizational culture. Their
management style is directive and they have more family culture, they give a lot of respect to
the authority and decision making is decentralized. They want to maintain face and they give
immense importance to relationships. New Entrants cannot understand the organizational
culture of China easily. For this purpose we have presented few recommendations.

978

RECOMMENDATIONS
Recommendations: For Foreign Companies
Proper cultural understanding should be undertaken in order to avoid confusions
and problems, the entrepreneur should conduct a thorough study and collect relevant
knowledge about the Culture of China. .
Give face which is 'good reputation', 'respect' or 'honour,' one must learn the
subtleties of the concept and understand the possible impact it could have on your
doing bus iness in China. It is critical that you give face, save face and show face when
doing business in China.
Try to have Chinese partners, or joint ventures this would help to have better
understanding about the country and would be beneficial in dealing with the
governments rules and regulations and legal process. A good Chinese partner will
have the connections to help smooth over red tape and obstructive bureaucrats.
Do not attempt to enter into an agreement without sound legal advice . Have your
own legal counsel. Pay your lawyer a little to ensure a clear contract; or pay your
lawyer a lot more lately when you have a dispute. In your contracts, specify exact
terms of payment, and performance standards
Thorough Risk Analysis should be done, be realistic about how much risk you are
willing to accept in your business venture. Make sure you use reliable sources for this
assessment.
Watch intellectual property rights for trademarks, one must file with the State
Administration of Industry and Commerce to receive protection. You should also
notify Customs. For patents, you must file with the State Intellectual Property
Organization (SIPO) to receive protection. At a minimum, it is advisable to register
copyrights in China

REFERENCES
International Management: Culture, Strategy and Behavior, 6th Edition
Richard M Hodgetts (Author), Fred Luthans (Author), Jonathan Doh (Author)

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