Articles

In a study of lean production in a global computer company, Levy determined that the necessary flow of goods and information was costly and difficult to achieve. Managers frequently underestimated the associated costs because they did not plan for a complex, dynamic supply chain. However, some aspects of lean production such as reduction of defects and engineering change orders may facilitate globalization. In the case of CCT, a PC company, Levy compared various aspects of domestic and international sourcing. Distance was often responsible for severe delays, and the company frequently used air rather than sea freight to expedite deliveries. The expense wiped out the location's cost advantages. Managers often did not plan for the extra inventory needed to cope with fluctuating demand when the source of supply was one month away. Distance affected the accuracy of sales forecasts and impaired communications. Design-for-manufacture issues, which relied on face-to-face communication, also suffered. And production problems, which normally took a day or two to resolve with local suppliers, took almost a week with foreign suppliers. Quality control was also hampered. Levy warns companies to plan for the additional costs of operating an international supply chain. He suggests locating value chain activities close to each other, for example, in Mexico and the United States. Managers need to anticipatefrequent disruptions and see the chain as a dynamic system, with some links more critical than others.

Will the Japanese business system survive the current recession?

Why do so many IT change management projects result in failure? According to Markus and Benjamin, people stay in their prescribed roles as line executives, IS specialists, and so on, with little cross-functional cooperation. People see IT as magic that can prevent them from working in old, unproductive ways. In the "magic bullet theory," there is no assigned change agent; people assume that the gun fires itself. Well-built IT makes it easier for users to work more effectively, according to the authors, but it cannot ensure that users will use it as intended. A change agent must bring together all the conditions necessary for change. Markus and Benjamin suggest that, because agents must change people's minds about IT, they frequently distance themselves from helping people to change by focusing on the power of IT rather than the reason for the change. This leads to a lack of discussion in the organization. Real issues are never confronted or resolved, which also allows users to blame the technology itself for failure rather than the change idea. And with a lack of cross-functional cooperation, line executives and IT specialists may join in resisting IT change that seems to serve different stakeholders. Markus and Benjamin examine two alternative roles for the change agent. They base the IT change facilitator model on that of an organizational development practitioner. Facilitators believe that people, not technologies, create change. They seek to bring together sound ideas, well-built IT, and organizational conditions to enable change. They seek to ensure that all people -- technologists, entrepreneurs, and users -- are empowered about IT. They remain neutral and create trust and mutual respect among functions. Companies may need to hire outside consultants to play this role, but executives and IT specialists may also be able to act as facilitators. IT change advocates focus less on empowerment and more on inspiring people to adopt a change. Rather than remaining neutral, they use any tactic to convert people -- persuasion, manipulation, communication, even "water torture" (constant but varied repetition). They know clearly what their organizations must do to use IT effectively and show people what kinds of IT they want and need. According to the authors, there are effective change advocates anywhere in an organization; they are not necessarily top managers but may be line managers or IT specialists. As a substitute for the magic bullet theory, the authors offer the metaphor of the Trojan horse, a highly coordinated effort by Greek warriors to breach the walls of Troy. Every warrior, no matter what his role, had to plan, execute, improvise, and share responsibility for the horse. In IT-enabled transformation, change is everyone's first priority; line managers, IT specialists, and other organizational members must all practice the change agent role.

As a tool for business process reengineering, "the matrix" can help managers determine how to approach change and change management.

Managers must adopt training and recruiting policies that compensate for institutional barriers to HR investment.

While few of us can miss the evidence of company sponsorship at sports events like the Olympics or World Cup Soccer, how many can recognize which were the legitimate sponsors and which were competitors "ambushing" the effectiveness of the sponsor's message? Meenaghan traces the recent growth in corporate sponsorship of various sporting events as a marketing tool and elaborates on some of the complexities of gaining sponsorship rights. He reflects on some of the benefits that accrue to the sponsor, such as audience perceptions of patriotism, adventure, and quality. Those benefits may be diluted, however, by ambush marketers that associate with major events without securing rights. For example, in the 1984 Olympics, Fuji was the worldwide sponsor, but Kodak became a sponsor of the ABC television broadcasts and the official film of the U.S. track team, thereby directing attention away from Fuji. Other examples abound, as ambushers create confusion in consumers' minds about who the "official" sponsor really is. Meenaghan addresses the legality and ethics of ambushing. Frequently, ambushers do nothing illegal and do not use official logos or trademarks, but merely imply association with an event. Sponsors' only recourse may be to purchase all the rights to an event, including broadcast rights. Ethical issues are harder to define; does using an image of downhill skiing, for instance, imply sponsorship of the Winter Olympics? Meenaghan offers strategies for protecting against ambushers, particularly on the part of event owners. The International Olympic Committee's anti-ambush program protects all emblems, marks, and symbols and enjoins any city sponsoring the event to protect those symbols as well. In the end, awareness of the possibilities of ambushing is probably the sponsor's best protection.

The move from standardization to customization may not be toward pure customization, but what the authors call "customized standardization." Lampel and Mintzberg recount the development of standardized product design, sales, and delivery, starting in 1916. Management thinkers at the time warned against the proliferation of products and against efforts to satisfy customers' needs. Now that new technologies have created more possibilities for custom-tailored products, industries may have gone too far. No one wants to choose among eighty-seven varieties of steering wheels, for instance. The result, according to the authors, is a continuum of strategies, depending on which functions lean to standardization and which to customization. A manufacturing firm, for example, may standardize production but customize delivery or financing. The authors see five categories along their continuum. In pure standardization, there is a dominant design, such as Ford's black Model T, targeted to a broad group of customers. In segmented standardization, products are standardized within a narrow range of features, e.g., cereal brands. Customized standardization implies customized assembly but standardized fabrication, such as a hamburger chain that allows customers to specify preferred condiments. In tailored customization, a product prototype is adapted to a customer's wishes, as a suit is tailored to a customer, but customization does not enter the design process. In pure customization, however, customization reaches all the way to the design, as custom jewelry is made to customer specifications. The authors go on to classify certain industries along the continuum to show how companies adopt the five strategies in practice. Mass industries, like gasoline, tend to lean toward the pure standardization end of the continuum, while agent industries, such as health care, may combine standardized financial transactions with customized medical procedures. Lampel and Mintzberg point out that a dominant trend is toward the middle - customized standardization. They suggest that as firms settle midway between standardization and customization, we will all lose choice as we settle for a package of standardized components.

How can firms enhance their competitiveness through information technology? After studying IT management practices in various companies, the authors identify three assets that they see as most important to becoming and staying competitive. The human asset is an IT staff that consistently solves business problems and addresses business opportunities through information technology. IT professionals need up-to-date technical skills; an understanding of the business, which comes from client interaction; and the ability to solve problems. The technology asset -- sharable technical platforms and databases -- is essential to integrating systems and making IT applications cost effective. Firms must specify what kinds of data to share, how to store them, where to locate servers, and how to support applications and technologies. They must also establish standards that limit the range of technologies that the IT staff must support. The relationship asset implies the risk and responsibility for effectively applying IT that business and IT must share. Top management must be involved in establishing IT priorities and forming steering committees that set the tone for a cooperative IT-business relationship. Ross et al. discuss the interdependencies among the three assets, using many examples from their study. They suggest that IT and business executives should constantly assess the status of the IT assets in their firms by using the questionnaire provided. Next they should identify an action plan based on their position -- sinking, drifting, luffing, and cruising -- in relation to the competition. A firm's asset base needs to be carefully balanced; building and leveraging IT assets, according to the authors, is an organizationwide responsibility.

In an overview of the future role of the IT organization, the authors examine the business and technological changes that are effecting change in many IT units. There are four major process changes in the way firms operate -- reengineering operational processes, reengineering support processes, rethinking managerial information flows, and redesigning network processes -- that all have a major impact on the IT unit. A distributed computing environment, new development software methods, capabilities like the Internet and other networks, new entrants in the computer industry, and outsourcing are the technological changes affecting the IT organization. The authors cite eight imperatives in which IT organizations must excel in order to succeed: -- Achieve two-way strategic alignment. Management and IT must work together to ensure that their initiatives are aligned. -- Develop effective relationships with line management. Communication between IT and line personnel will ensure integration of business and technology capabilities. -- Deliver and implement new systems. Systems delivery will include not only development but also procurement and integration. -- Build and manage infrastructure. IT units must develop an architecture, establish standards, communicate the value of the infrastructure, and operate the increasingly complex infrastructure. -- Reskill the IT organization. New skills -- not just technical skills but business skills -- will be needed. -- Manage vendor partnerships. IT managers must be informed buyers and negotiators. -- Build high performance. The IT unit must meet increasingly demanding performance goals. -- Redesign and manage the federal IT organization. Firms must establish the placement of IT decision-making power and the distribution of managerial responsibilities. Rockart et al. also examine the new role of IT management in ensuring that all line managers understand the potential of IT and how to use it effectively and that business strategies are effectively implemented. Success is dependent on line managers' response in planning and implementing new IT-based processes.

When individual improvement methods such as TQM or concurrent engineering fail to achieve the desired results, managers can merge techniques to better their chances of success. Each method has a particular perspective, special language, analytical tools, and change tools. By understanding each element, a manager can choose among a plethora of methods and link one technique with others. Having several perspectives instead of just one can eliminate the possibility of focusing on one technique as a cure-all. Language or jargon may be identified with a particular group or function; for instance, operational managers will probably prefer just-in-time methods, because the terminology is familiar, while accountants prefer activity-based costing methods. Euske and Player offer a framework of "family trees" to help managers understand the commonality of different methods. In each tree, the methods are more closely related to each other than to methods in other trees. For example, in the process-based tree, business process reengineering, benchmarking, hoshin planning, process mapping, and story- boarding are all linked. Certain tools can be used in several different families. Flowcharts are used in activity-, process-, quality-, and time-based methods. By also understanding these relationships, managers can gain a more complete view of the improvement process. The authors use the example of customer-order handling to illustrate how one manager initially used process mapping to evaluate order processing. She eventually combined it with time compression management, activity-based costing, and a quality-based improvement method to leverage the results of her initial effort.