Different people have different views on this and the most common one is better salary and company. But it is a fact that people leave Managers and not company.
Friends, I have tried this and it works believe me. If you want to retain your team have all local team members in your tem. Means if your office is in Pune have team members who are from Pune and not members who have migrated from other states or cities. The reason of not having local team members is the real reason why most people leave the company.
Believe me friends people leave not because they are not happy with job, profile or salary but because the Managers make comments about the in time and out time of member, taking holiday or half day for birthday, marriage/death of relative even neighbors etc. Local people have to do because he has a social life. Migrated people are mostly without family and are staying alone or with friends. They do not have any social life; since they are miles away from their hometown they have excuses of distance for every social obligation. Also since they do not have any thing to do at home they sit till later nights and also come to office on weekdays and holidays as being at home they will get bored and at office they get free phone/ internet to chat with their families back in their hometown, free tea coffee , Air condition etc. This helps them save their money. Also when they go on leave it is for months and local employee have to do overtime to do his part of work.
The problem starts when Manager gives examples of the migrated members to others local members like he sits late, doesn’t take holidays/ half days frequently, come even on holidays and weekends etc. Which hurts the local member has even if he wants to he cannot give excuse to escape from his social obligation as he is present in the city. This spoils his relation with friends, wife, parents, family etc. So an employee tries to move to a company were he will considered human and not machine. An excuse is given of better pay, company etc. Everyone knows that how much pathetic and might be the Manager the company will never listen against the manger. So the members leaves the company without ant comments about the manager.
Friend the other side is migrated members should be put in one team. This team should be only of migrated team members only, no local members.
Let them prove to company and management that they are loyal and dedicated which in reality is not true. As 90 % late sitting members are not local and they are doining their personal work more than companies work.Let the locals have a peaceful environment to work for.
This way the point you wish to raised is the reason why people migrate to cities will be solved and also we can have a stable and dedicated team, with less members leaving the team.
At the end of Day having a team to support the company and save our job is more important than having feelings and sympathy towards the people who are migrating to cities.
Showing posts with label management. Show all posts
Showing posts with label management. Show all posts
Thursday, October 11, 2007
Tuesday, October 2, 2007
Art Of Correspondence
Art Of Correspondence
Letter writing is one of the oldest arts of communication. And even though it is used most often in business or official dealings, many of us fail to get even basic letter writing right. Here re a few tips.
With rare exceptions and regardless of the subject, the goal in all letter writing should be to keep it short, factual, and to the point. Don’t write more than one page in length, unless necessary.
Detailed information can be relegated to attachment that can be referred to by name in the body of the letter. Stick to the absolute essential facts in the main letter.
Prepare a rough draft before the final. Then carefully review and revise it. Put yourself in the place of addressee. Imagine yourself receiving the letter. How would you react to it? Would it answer all of your questions?
Does it deal with all of the key issues? Are the language and tone appropriate? Read it aloud to check whether the words used sound right.
Check for spelling and grammar mistakes. A letter is a direct reflection of the person sending it, and the organization that person works for. Once you have decided on the final content, run it through a spelling and grammar check. A letter with obvious spelling and grammar mistakes looks unprofessional.
In such cases, the recipient can’t really be blamed for seeing this as an indication as to how you and your organization probably do most other things. Follow these rules to make sure that your letter doesn’t end up in the "read later" pile or a waste paper basket.
Do not use technical terms and acronyms without explaining them, unless you are certain that the addressee is familiar with them. Now-a-days most business communication is through internet and the same rules can apply. The draft stage can be checked before the final 'send' click.
Letter writing is one of the oldest arts of communication. And even though it is used most often in business or official dealings, many of us fail to get even basic letter writing right. Here re a few tips.
With rare exceptions and regardless of the subject, the goal in all letter writing should be to keep it short, factual, and to the point. Don’t write more than one page in length, unless necessary.
Detailed information can be relegated to attachment that can be referred to by name in the body of the letter. Stick to the absolute essential facts in the main letter.
Prepare a rough draft before the final. Then carefully review and revise it. Put yourself in the place of addressee. Imagine yourself receiving the letter. How would you react to it? Would it answer all of your questions?
Does it deal with all of the key issues? Are the language and tone appropriate? Read it aloud to check whether the words used sound right.
Check for spelling and grammar mistakes. A letter is a direct reflection of the person sending it, and the organization that person works for. Once you have decided on the final content, run it through a spelling and grammar check. A letter with obvious spelling and grammar mistakes looks unprofessional.
In such cases, the recipient can’t really be blamed for seeing this as an indication as to how you and your organization probably do most other things. Follow these rules to make sure that your letter doesn’t end up in the "read later" pile or a waste paper basket.
- Use simple and appropriate language.
- Use simple straightforward language for clarity and precision.
- Use short sentences.
- Each paragraph should contain not more than three or four sentences.
- Use language and terminology familiar to the intended recipient.
Do not use technical terms and acronyms without explaining them, unless you are certain that the addressee is familiar with them. Now-a-days most business communication is through internet and the same rules can apply. The draft stage can be checked before the final 'send' click.
Honesty Goes A Long Way
The Seed
A successful business man was growing old and knew it was time to chose a successor to take over the business. Instead of choosing one of his directors or his children, he decided to do something different.
He called all the young executives in his company together.
"It is time for me to step down and choose the next CEO," he said. "I have decided to choose one of you."
The young executives were shocked, but the boss continued. "I am going to give each one of you a seed today - a very special seed. I want you to plant the seed, water it, and come back here one year from today with what you have grown from the seed I have given you. I will then judge the plants that you bring, and the one I choose will be the next CEO."
One man, named Jim, was there that day and he, like the others, received a seed.
He went home and excitedly, told his wife the story. She helped him get a pot, soil and compost and he planted the seed.
Every day, he would water it and watch to see if it had grown. After about three weeks, some of the other executives began to talk about their seeds and the plants that were beginning to grow. Jim kept checking his seed, but nothing ever grew.
Three weeks, four weeks, five weeks went by, still nothing. By now, others were talking about their plants, but Jim didn't have a plant and he felt like a failure.
Six months went by - still nothing in Jim's pot. He just knew he had killed his seed. Everyone else had trees and tall plants, but he had nothing. Jim didn't say anything to his colleagues, however. He just kept watering and fertilizing the soil - he so wanted the seed to grow.
A year finally went by and all the young executives of the company brought their plants to the CEO for inspection. Jim told his wife that he wasn't going to take an empty pot. But she asked him to be honest about what happened.
Jim felt sick at his stomach. It was going to be the most embarrassing moment of his life, but he knew his wife was right.
He took his empty pot to the board room. When Jim arrived, he was amazed at the variety of plants grown by the other executives. They were beautiful in all shapes and sizes. Jim put his empty pot on the floor and many of his colleagues laughed. A few felt sorry for him!
When the CEO arrived, he surveyed the room and greeted his young executives.
Jim just tried to hide in the back.
"My, what great plants, trees, and flowers you have grown," said the CEO.
"Today one of you will be appointed the next CEO!"
All of a sudden, the CEO spotted Jim at the back of the room with his empty pot. He ordered the financial director to bring him to the front.
Jim was terrified. He thought, "The CEO knows I'm a failure! Maybe he will have me fired!"
When Jim got to the front, the CEO asked him what had happened to his seed. Jim told him the story.
The CEO asked everyone to sit down except Jim. He looked at Jim, and then announced to the young executives, "Here is your next Chief Executive! His name is Jim!"
Jim couldn't believe it. Jim couldn't even grow his seed. How could he be the new CEO the others said?
Then the CEO said, "One year ago today, I gave everyone in this room a seed.
I told you to take the seed, plant it, water it, and bring it back to me today. But I gave you all boiled seeds; they were dead - it was not possible for them to grow.
All of you, except Jim, have brought me trees and plants and flowers.
"When you found that the seed would not grow, you substituted another seed for the one I gave you. Jim was the only one with the courage and honesty to bring me a pot with my seed in it. Therefore, he is the one who will be the new Chief Executive!"
If you plant honesty, you will reap trust
If you plant goodness, you will reap friends.
If you plant humility, you will reap greatness.
If you plant perseverance, you will reap contentment
If you plant consideration, you will reap perspective.
If you plant hard work, you will reap success.
If you plant forgiveness, you will reap reconciliation.
A successful business man was growing old and knew it was time to chose a successor to take over the business. Instead of choosing one of his directors or his children, he decided to do something different.
He called all the young executives in his company together.
"It is time for me to step down and choose the next CEO," he said. "I have decided to choose one of you."
The young executives were shocked, but the boss continued. "I am going to give each one of you a seed today - a very special seed. I want you to plant the seed, water it, and come back here one year from today with what you have grown from the seed I have given you. I will then judge the plants that you bring, and the one I choose will be the next CEO."
One man, named Jim, was there that day and he, like the others, received a seed.
He went home and excitedly, told his wife the story. She helped him get a pot, soil and compost and he planted the seed.
Every day, he would water it and watch to see if it had grown. After about three weeks, some of the other executives began to talk about their seeds and the plants that were beginning to grow. Jim kept checking his seed, but nothing ever grew.
Three weeks, four weeks, five weeks went by, still nothing. By now, others were talking about their plants, but Jim didn't have a plant and he felt like a failure.
Six months went by - still nothing in Jim's pot. He just knew he had killed his seed. Everyone else had trees and tall plants, but he had nothing. Jim didn't say anything to his colleagues, however. He just kept watering and fertilizing the soil - he so wanted the seed to grow.
A year finally went by and all the young executives of the company brought their plants to the CEO for inspection. Jim told his wife that he wasn't going to take an empty pot. But she asked him to be honest about what happened.
Jim felt sick at his stomach. It was going to be the most embarrassing moment of his life, but he knew his wife was right.
He took his empty pot to the board room. When Jim arrived, he was amazed at the variety of plants grown by the other executives. They were beautiful in all shapes and sizes. Jim put his empty pot on the floor and many of his colleagues laughed. A few felt sorry for him!
When the CEO arrived, he surveyed the room and greeted his young executives.
Jim just tried to hide in the back.
"My, what great plants, trees, and flowers you have grown," said the CEO.
"Today one of you will be appointed the next CEO!"
All of a sudden, the CEO spotted Jim at the back of the room with his empty pot. He ordered the financial director to bring him to the front.
Jim was terrified. He thought, "The CEO knows I'm a failure! Maybe he will have me fired!"
When Jim got to the front, the CEO asked him what had happened to his seed. Jim told him the story.
The CEO asked everyone to sit down except Jim. He looked at Jim, and then announced to the young executives, "Here is your next Chief Executive! His name is Jim!"
Jim couldn't believe it. Jim couldn't even grow his seed. How could he be the new CEO the others said?
Then the CEO said, "One year ago today, I gave everyone in this room a seed.
I told you to take the seed, plant it, water it, and bring it back to me today. But I gave you all boiled seeds; they were dead - it was not possible for them to grow.
All of you, except Jim, have brought me trees and plants and flowers.
"When you found that the seed would not grow, you substituted another seed for the one I gave you. Jim was the only one with the courage and honesty to bring me a pot with my seed in it. Therefore, he is the one who will be the new Chief Executive!"
If you plant honesty, you will reap trust
If you plant goodness, you will reap friends.
If you plant humility, you will reap greatness.
If you plant perseverance, you will reap contentment
If you plant consideration, you will reap perspective.
If you plant hard work, you will reap success.
If you plant forgiveness, you will reap reconciliation.
Branding Decisions
Branding Decisions
Branding is an important strategy to differentiate the product from its competitors. Its a name ,logo ,trade mark, even patent number or package design, intended to identify the firm’s products or services from others. It represents to the customer the source of the product which leads him to associate with the brand. In taking brand decisions, the firm has to consider the target market, cultural influences on the market and the role the brand will play in its business strategy. Foe example, a brand name which is culturally alien will find difficulty in getting accepted in the market, like in the case of Kiss and Tell brand of cosmetics that failed in the Indian market. Besides, a firm has to ensure that a brand name is not banned because it represents either a national leader or the country.
The brand decisions a firm has to take are:
1.Manufacturer’s name ,i.e whether to have its own name on all products ,or
2.Marketing organization/Distributions brand name ;or
3.Adopt a combination of the two.
Manufacturer’s Brand Policy or National Brand Policy
This policy is based on the assumption that the manufacturer had built a reputation in the market, has strength in distribution and the firm had adequate financial resources to establish a new product in the market. Customer confidence in the firm is the prime factor in the manufacturer deciding to brand the production his own name. When the firm markets this product in its own name ,nationally, this may also be called the national brand policy Common examples are all leading national brands of all well known firms in India.
The options available to a firm here are :
1.Family brand name ;or
2.Independent brand name.
The strategy of family brand name works when its name brings positive associations in the mind of the consumer. To the customer ,it represents quality, reliability and assurance of meeting specific standards.
The strategy of an independent brand name is therefore advisable. This can also help to penetrate different markets segments which may buy the firm’s product for different reasons. This strategy can also ensure that the firm doesn’t lose its original position. For example ,if Hindustan Lever would have introduce different detergent powders under the name of Surf for different market segments and differentiated them only on the basis of price it could have run the risk of losing even the original positioning of an economical detergent powder to an economy conscious middle-class housewife
Even in the same market segment ,a firm may offer different brands of the same product but with different benefits and appeal. Consider for example ,Hindustan Levers’ Liril and Lux brand of toilet soaps in the premium market .Lux has traditionally been positioned as a beauty soap while Liril offers benefits of lemon. Thus, an independent brand offers extensive benefits without endangering the corporate image.
Mixed Brand Policy
The two options is for the firm to enter into a strategic alliance with a well-known marketing firm and let it market the product under its brand name in a defined geographical area .The manufacturer also continues to market the product under his own name nationally. This is done to fight regional competition .Consider Kelvinator’s strategy of marketing refrigerators in its own name and also that of others like Blue Star, Leonard and Spencer ,Whirlpool also lets Mirc Electronics market its washing machines under the name ONIDA.
This strategy allows the firm to take benefits of both the options spelt out earlier.
Brand decisions are central to new product launches and have to be carefully taken. These represent investments in future and also the degree of control the manufacturing firm wants over its marketing operation.
Positioning
Another decision in commercialization of a new product is how to differentiate it in the midst of an already over-communicated society of ours, where an average consumer screens out most of the messages .The strategy to differentiate the brand or product is to place it in an appropriate cell of the human mind so that whenever the customer recalls the product, the firm’s brand id the first to be recalled. This strategy is called Positioning .Positioning is the act of communicating company’s offer so that it occupies a distinct and valued place in the customers mind.
The concept of positioning was first advocated by Al Ries and Jack Trout ,two advertising executives in their articles titled The Positioning Era: A View Ten Years Later in Advertising Age in 1972 and later in their book Positioning :The Battle For Your Mind in 1982. According to them :
Ries and Trout believe that marketing is like a war which is fought in the mind of consumers. They advocate that the marketer should perceive each consumer to mentally have a product ladder. The customer often knows brands in the form of this ladder. There is a brand on the top of the ladder (brand leader) and there are others that occupy the second and the third step in this ladder .Sometimes the top slot may be vacant and at other times there may be two or three brands vying for this pr4estigious slot in the customer’s mind .The rush for the top slot is understandable as people remember number one.
Branding is an important strategy to differentiate the product from its competitors. Its a name ,logo ,trade mark, even patent number or package design, intended to identify the firm’s products or services from others. It represents to the customer the source of the product which leads him to associate with the brand. In taking brand decisions, the firm has to consider the target market, cultural influences on the market and the role the brand will play in its business strategy. Foe example, a brand name which is culturally alien will find difficulty in getting accepted in the market, like in the case of Kiss and Tell brand of cosmetics that failed in the Indian market. Besides, a firm has to ensure that a brand name is not banned because it represents either a national leader or the country.
The brand decisions a firm has to take are:
1.Manufacturer’s name ,i.e whether to have its own name on all products ,or
2.Marketing organization/Distributions brand name ;or
3.Adopt a combination of the two.
Manufacturer’s Brand Policy or National Brand Policy
This policy is based on the assumption that the manufacturer had built a reputation in the market, has strength in distribution and the firm had adequate financial resources to establish a new product in the market. Customer confidence in the firm is the prime factor in the manufacturer deciding to brand the production his own name. When the firm markets this product in its own name ,nationally, this may also be called the national brand policy Common examples are all leading national brands of all well known firms in India.
The options available to a firm here are :
1.Family brand name ;or
2.Independent brand name.
The strategy of family brand name works when its name brings positive associations in the mind of the consumer. To the customer ,it represents quality, reliability and assurance of meeting specific standards.
The strategy of an independent brand name is therefore advisable. This can also help to penetrate different markets segments which may buy the firm’s product for different reasons. This strategy can also ensure that the firm doesn’t lose its original position. For example ,if Hindustan Lever would have introduce different detergent powders under the name of Surf for different market segments and differentiated them only on the basis of price it could have run the risk of losing even the original positioning of an economical detergent powder to an economy conscious middle-class housewife
Even in the same market segment ,a firm may offer different brands of the same product but with different benefits and appeal. Consider for example ,Hindustan Levers’ Liril and Lux brand of toilet soaps in the premium market .Lux has traditionally been positioned as a beauty soap while Liril offers benefits of lemon. Thus, an independent brand offers extensive benefits without endangering the corporate image.
Mixed Brand Policy
The two options is for the firm to enter into a strategic alliance with a well-known marketing firm and let it market the product under its brand name in a defined geographical area .The manufacturer also continues to market the product under his own name nationally. This is done to fight regional competition .Consider Kelvinator’s strategy of marketing refrigerators in its own name and also that of others like Blue Star, Leonard and Spencer ,Whirlpool also lets Mirc Electronics market its washing machines under the name ONIDA.
This strategy allows the firm to take benefits of both the options spelt out earlier.
Brand decisions are central to new product launches and have to be carefully taken. These represent investments in future and also the degree of control the manufacturing firm wants over its marketing operation.
Positioning
Another decision in commercialization of a new product is how to differentiate it in the midst of an already over-communicated society of ours, where an average consumer screens out most of the messages .The strategy to differentiate the brand or product is to place it in an appropriate cell of the human mind so that whenever the customer recalls the product, the firm’s brand id the first to be recalled. This strategy is called Positioning .Positioning is the act of communicating company’s offer so that it occupies a distinct and valued place in the customers mind.
The concept of positioning was first advocated by Al Ries and Jack Trout ,two advertising executives in their articles titled The Positioning Era: A View Ten Years Later in Advertising Age in 1972 and later in their book Positioning :The Battle For Your Mind in 1982. According to them :
Positioning is not what you do to a product. But what you do to the mind of the prospect .That is, you position the product in the mind of the prospect.
Ries and Trout believe that marketing is like a war which is fought in the mind of consumers. They advocate that the marketer should perceive each consumer to mentally have a product ladder. The customer often knows brands in the form of this ladder. There is a brand on the top of the ladder (brand leader) and there are others that occupy the second and the third step in this ladder .Sometimes the top slot may be vacant and at other times there may be two or three brands vying for this pr4estigious slot in the customer’s mind .The rush for the top slot is understandable as people remember number one.
Advertising Decisions
Advertising Decisions
Advertising objectives
The starting point in any planning exercise is one of setting the goals or objectives .In evolving an advertising plan, objectives have to be set as they help in measuring the performance of an advertising campaign .It is important for the strategist, to know how the strategy fared and the only way to know is how far did it go to achieve the objectives. Objectives or goals are also necessary to justify financial resources that are required for an advertisement campaign. The only way to counter skeptics s to state what it would cost to achieve a specific objective ,say a 20% increase in awareness in the target audience.
Objectives are also required for coordination purposes .As we have mentioned earlier ,advertising is just one of the communication tools and to achieve desired marketing objective of sale or market share all elements of communication mix must be coordinated .Each element should have both, a short term and a long term goal.
So ,to be meaningful, advertising objectives have to be measurable and communicated .Measurability is important or else performance cannot be evaluated.
Let us consider a few objectives for advertising.
Sales objectives
Marketing’s prime objective is to increase the firm or brand’s sales, market share and profits .Hence marketing activities have to be directed this goal. By the same logic, the advertising goal should also be to increase sales. This goal gives credibility to advertising expenditures and may even subdue the complaints that 50% of advertising expenditure is a waste of money .But this goal for advertising has a problem. As we mentioned, sales is a function of a firm’s marketing mix, competition activity and consumer behavior Hence ,to attribute increase or decrease in sales to advertising alone is like attributing success or failure in a game of football to just one single player, when it is really a team game. Besides, the effect of advertising on sales is lagged one ,in the sense that an advertisement may continue to have a demand pull even after it has been withdrawn. It is never that sales start and end immediately after the campaign has got off the ground or comes to an end. In other words, the impact of an advertising campaign may not be known for certain until considerable time has passed. According to one of the researches for frequently purchased consumer non-durable products like soft dinks, tea ,coffee toiletries, etc, the effect of an advertising exposure can take upto nine months to get dissipated.
Typically, an advertising campaign mat attract new customers to the brand, or it might help develop more positive attitudes in the target market towards the brand or may even generate trial purchases. All these together will lead to an increase in the brands; sales. Isolating these effects and conclusively show that the advertising campaign has led to an increase in sales is a difficult proposition.
In case of financial instruments advertising or the direct marketing campaign or even individual classified advertisements—the kind one often sees in the print media ,the results are more tangible.
Thus ,but for the above situations ,it is perhaps incorrect to define advertising goals in terms of sales.
Advertising objectives
The starting point in any planning exercise is one of setting the goals or objectives .In evolving an advertising plan, objectives have to be set as they help in measuring the performance of an advertising campaign .It is important for the strategist, to know how the strategy fared and the only way to know is how far did it go to achieve the objectives. Objectives or goals are also necessary to justify financial resources that are required for an advertisement campaign. The only way to counter skeptics s to state what it would cost to achieve a specific objective ,say a 20% increase in awareness in the target audience.
Objectives are also required for coordination purposes .As we have mentioned earlier ,advertising is just one of the communication tools and to achieve desired marketing objective of sale or market share all elements of communication mix must be coordinated .Each element should have both, a short term and a long term goal.
So ,to be meaningful, advertising objectives have to be measurable and communicated .Measurability is important or else performance cannot be evaluated.
Let us consider a few objectives for advertising.
Sales objectives
Marketing’s prime objective is to increase the firm or brand’s sales, market share and profits .Hence marketing activities have to be directed this goal. By the same logic, the advertising goal should also be to increase sales. This goal gives credibility to advertising expenditures and may even subdue the complaints that 50% of advertising expenditure is a waste of money .But this goal for advertising has a problem. As we mentioned, sales is a function of a firm’s marketing mix, competition activity and consumer behavior Hence ,to attribute increase or decrease in sales to advertising alone is like attributing success or failure in a game of football to just one single player, when it is really a team game. Besides, the effect of advertising on sales is lagged one ,in the sense that an advertisement may continue to have a demand pull even after it has been withdrawn. It is never that sales start and end immediately after the campaign has got off the ground or comes to an end. In other words, the impact of an advertising campaign may not be known for certain until considerable time has passed. According to one of the researches for frequently purchased consumer non-durable products like soft dinks, tea ,coffee toiletries, etc, the effect of an advertising exposure can take upto nine months to get dissipated.
Typically, an advertising campaign mat attract new customers to the brand, or it might help develop more positive attitudes in the target market towards the brand or may even generate trial purchases. All these together will lead to an increase in the brands; sales. Isolating these effects and conclusively show that the advertising campaign has led to an increase in sales is a difficult proposition.
In case of financial instruments advertising or the direct marketing campaign or even individual classified advertisements—the kind one often sees in the print media ,the results are more tangible.
Thus ,but for the above situations ,it is perhaps incorrect to define advertising goals in terms of sales.
Monday, October 1, 2007
Developed vs Developing Markets
Developed vs Developing Markets
The needs of the emerging or developing world represent huge potential markets for food, clothing, shelter, consumer electronics, appliances and other goods. Many market leaders are rushing into Eastern Europe, China, and India. Colgate now draws more personal and household products business from Latin America than North America
The developed nations and the prosperous parts of developing parts of developing nations account for less than 15% of the world’s population. Is there a way for marketers to serve the other 85%, which has much less purchasing power? Successfully entering developing markets requires a special set of skills and plans. Consider how the following companies are pioneering ways to serve these invisible consumers:
Grameen Phone markets cell phones to 35,000 villages in Bangladesh by hiring village women as agents who lease phone time to other villagers, one call at a time.
Colgate Palmolive rolls into Indian villages with video vans that show the benefits of tooth-brushing; it expects to earn over half of its Indian revenue from rural areas.
An Indian-Australian car manufacturer created an affordable rural transport vehicle to compete with bullock carts rather than cars. The vehicle functions well at low speeds and carries up to two tons.
Fiat developed a "third-world car," the Palio, that far outsells the Ford Fiesta in Brazil and that will be launched in other developing nations.
Corporacion GEO builds low income housing in Mexico. The two-bedroom homes are modular and can be expanded. The company is now moving into Chile and southern U.S. communities.
A Latin American building supply retailer offers bags of cement in smaller sizes to customers building their own homes.
These marketers are able to capitalize on the potential of developing markets by changing their conventional marketing practices to sell their products and services more effectively. It cannot be business as usual when selling in developing markets. Economic and cultural differences abound; a marketing infrastructure may barely exist; and local competition can be surprisingly stiff. In China, PC maker Legend and mobile phone provider TCL have thrived despite strong foreign competition. Besides their close grasp on Chinese tastes, they also have their vast distribution networks especially in rural areas.
Smaller packaging and lower sales prices are often critical in markets where incomes are limited. Hindustan Unilever’s 4-cent sachets of detergent and shampoo have been a big hit in rural India, where 70% of the country’s population still lives. When Coke moved to a smaller 200ml bottle in India, selling for 10 to 12 cents in small shops, bus-stop stalls, and roadside eateries sales jumped. A western image can also be helpful as Coke discovered in China. Part of its success against local cola brand Jianlibao was due to its symbolic values of modernity and affluence.
Recognizing that its cost structure made it difficult to compete effectively in developing markets, Procter & gamble devised cheaper, clever ways to make the right kinds of products to suit consumer demand. It now uses contract manufacturers in certain markets and gained eight points in Russia for Always feminine protection pads by responding to consumer wishes for a thicker pad. Due to a boom in consumer spending, Russia has been the fastest growing market for many major multinationals including Nestle, L’Oreal, and IKEA.
The challenge is to think creatively about how marketing can fulfill the dreams of most of the world’s population for a better standard of living. Many companies are betting that they can do that.
After launching Buick in China in 1999, GM poured more than $2 billion into the region over the next five years, expanding the lineup to 14 models, ranging from the $8,000 Chevrolet Spark mini car to high-end Cadillacs. Although competition in the third largest car market is fierce, GM was able to secure 11% market share in 2004 and reap sizable profits. But initial gains in the Chinese market do not necessarily spell long term success. After investing to establish the markets, foreign pioneers in television sets and motorcycles saw domestic Chinese firms emerge as rivals. In 1995, virtually all mobile phones in China were made by global giants Nokia, Motorola, and Ericsson. Within 10 years, their market share had dropped to 60%. To secure and build on its gains, General Motors pledged to invest another $3 billion in the region to boost capacity and build its reputation.
The needs of the emerging or developing world represent huge potential markets for food, clothing, shelter, consumer electronics, appliances and other goods. Many market leaders are rushing into Eastern Europe, China, and India. Colgate now draws more personal and household products business from Latin America than North America
The developed nations and the prosperous parts of developing parts of developing nations account for less than 15% of the world’s population. Is there a way for marketers to serve the other 85%, which has much less purchasing power? Successfully entering developing markets requires a special set of skills and plans. Consider how the following companies are pioneering ways to serve these invisible consumers:
Grameen Phone markets cell phones to 35,000 villages in Bangladesh by hiring village women as agents who lease phone time to other villagers, one call at a time.
Colgate Palmolive rolls into Indian villages with video vans that show the benefits of tooth-brushing; it expects to earn over half of its Indian revenue from rural areas.
An Indian-Australian car manufacturer created an affordable rural transport vehicle to compete with bullock carts rather than cars. The vehicle functions well at low speeds and carries up to two tons.
Fiat developed a "third-world car," the Palio, that far outsells the Ford Fiesta in Brazil and that will be launched in other developing nations.
Corporacion GEO builds low income housing in Mexico. The two-bedroom homes are modular and can be expanded. The company is now moving into Chile and southern U.S. communities.
A Latin American building supply retailer offers bags of cement in smaller sizes to customers building their own homes.
These marketers are able to capitalize on the potential of developing markets by changing their conventional marketing practices to sell their products and services more effectively. It cannot be business as usual when selling in developing markets. Economic and cultural differences abound; a marketing infrastructure may barely exist; and local competition can be surprisingly stiff. In China, PC maker Legend and mobile phone provider TCL have thrived despite strong foreign competition. Besides their close grasp on Chinese tastes, they also have their vast distribution networks especially in rural areas.
Smaller packaging and lower sales prices are often critical in markets where incomes are limited. Hindustan Unilever’s 4-cent sachets of detergent and shampoo have been a big hit in rural India, where 70% of the country’s population still lives. When Coke moved to a smaller 200ml bottle in India, selling for 10 to 12 cents in small shops, bus-stop stalls, and roadside eateries sales jumped. A western image can also be helpful as Coke discovered in China. Part of its success against local cola brand Jianlibao was due to its symbolic values of modernity and affluence.
Recognizing that its cost structure made it difficult to compete effectively in developing markets, Procter & gamble devised cheaper, clever ways to make the right kinds of products to suit consumer demand. It now uses contract manufacturers in certain markets and gained eight points in Russia for Always feminine protection pads by responding to consumer wishes for a thicker pad. Due to a boom in consumer spending, Russia has been the fastest growing market for many major multinationals including Nestle, L’Oreal, and IKEA.
The challenge is to think creatively about how marketing can fulfill the dreams of most of the world’s population for a better standard of living. Many companies are betting that they can do that.
After launching Buick in China in 1999, GM poured more than $2 billion into the region over the next five years, expanding the lineup to 14 models, ranging from the $8,000 Chevrolet Spark mini car to high-end Cadillacs. Although competition in the third largest car market is fierce, GM was able to secure 11% market share in 2004 and reap sizable profits. But initial gains in the Chinese market do not necessarily spell long term success. After investing to establish the markets, foreign pioneers in television sets and motorcycles saw domestic Chinese firms emerge as rivals. In 1995, virtually all mobile phones in China were made by global giants Nokia, Motorola, and Ericsson. Within 10 years, their market share had dropped to 60%. To secure and build on its gains, General Motors pledged to invest another $3 billion in the region to boost capacity and build its reputation.
Thursday, September 27, 2007
Organizations must be family friendly
Organizations must be family friendly
Employees today are asking for a workplace that helps them balance the demands of their work and family lives, rather than forcing them to choose one over the other. Organizations have also accepted that among the many other aspirations of employees, the most important is one that seeks to be able to ‘provide well’ for their families Amongst the many schemes that organizations have introduced for their employees, having special schemes for their children is the latest addition. While some are offering various schemes like scholarships, medical benefits, and training some young kids to accompany their mothers to work. Many organizations boast of instances where they have gone out of their way to extend special help to the child of a particular employee.
At NIIT, one would witness various examples of how these commitments have been actually put into practice. Little NIITian is a special name given to the kids of NIITians (read: employees), who are a special part of NIIT. The company’s ‘calendar’ is dotted with many fun activities which encourage active participation from these little ones. No matter what the occasion, if it touches and concerns a NIITians or his / her family, the company tries to be a part of it. Amongst the many schemes which the company offers towards employee welfare, the one which was found most special was the one wherein on the birth of a little NIITian, the company contributes a sum as investment in the name of the new born. NIIT also has schemes like ‘Little NIITian Care Leave (LNCL)’ under which, the NIITians can avail half time working hours on half pay, to take care of a child at home. The leave can be utilized for a maximum of six months period for half days till the child is one year old.
High expectation levels, increasing attrition rates and increasing demand for work life balance has forced organizations to look beyond run of the mill HR interventions. Objective is to create ‘Home away from Home’, an atmosphere where the basic needs of employees are met and they don’t have to be bothered about the daily routine tasks. Under the ‘Child Care Support’ scheme that the company offers, crèches, workplace nurseries, out-of-school care, holiday play schemes and after school clubs are included Similarly, Cellebrum proposes to have scholarship programs, wherein the child of a meritorious and tenured employee with good academic records will be given scholarship fees based on the company’s policy. “Cellebrum has already initiated tie ups with various schools / institutes to take care of the child’s admission at the time of relocation. There is also a ‘Career Counseling Cell’ which provides in-house career counseling options for children of employees.
Amongst the various schemes that 24/7 Customer has initiated for the families of its employees, some of the most prominent ones include ‘Family insurance Scheme’, ‘Employee Welfare Fund’,’ Family Oriented Reward Program’, ‘Reward & Recognition,’ ‘Parents Day’ and ‘Daycare Centre’. 24/7 Customer is the only BPO in India to provide extended insurance to the employee and their families (employee plus four dependents). Under the ‘Employee Welfare Fund’, employees in any kind of medical emergency or need can avail it as a loan. There are instances when one of the family members of an employee had to undergo a major surgery and the amount from this scheme proved to be very helpful. Every month, on Parents Day, the family members of employees are invited to spend a day with their children/spouse/sibling.
Employees today are asking for a workplace that helps them balance the demands of their work and family lives, rather than forcing them to choose one over the other. Organizations have also accepted that among the many other aspirations of employees, the most important is one that seeks to be able to ‘provide well’ for their families Amongst the many schemes that organizations have introduced for their employees, having special schemes for their children is the latest addition. While some are offering various schemes like scholarships, medical benefits, and training some young kids to accompany their mothers to work. Many organizations boast of instances where they have gone out of their way to extend special help to the child of a particular employee.
At NIIT, one would witness various examples of how these commitments have been actually put into practice. Little NIITian is a special name given to the kids of NIITians (read: employees), who are a special part of NIIT. The company’s ‘calendar’ is dotted with many fun activities which encourage active participation from these little ones. No matter what the occasion, if it touches and concerns a NIITians or his / her family, the company tries to be a part of it. Amongst the many schemes which the company offers towards employee welfare, the one which was found most special was the one wherein on the birth of a little NIITian, the company contributes a sum as investment in the name of the new born. NIIT also has schemes like ‘Little NIITian Care Leave (LNCL)’ under which, the NIITians can avail half time working hours on half pay, to take care of a child at home. The leave can be utilized for a maximum of six months period for half days till the child is one year old.
High expectation levels, increasing attrition rates and increasing demand for work life balance has forced organizations to look beyond run of the mill HR interventions. Objective is to create ‘Home away from Home’, an atmosphere where the basic needs of employees are met and they don’t have to be bothered about the daily routine tasks. Under the ‘Child Care Support’ scheme that the company offers, crèches, workplace nurseries, out-of-school care, holiday play schemes and after school clubs are included Similarly, Cellebrum proposes to have scholarship programs, wherein the child of a meritorious and tenured employee with good academic records will be given scholarship fees based on the company’s policy. “Cellebrum has already initiated tie ups with various schools / institutes to take care of the child’s admission at the time of relocation. There is also a ‘Career Counseling Cell’ which provides in-house career counseling options for children of employees.
Amongst the various schemes that 24/7 Customer has initiated for the families of its employees, some of the most prominent ones include ‘Family insurance Scheme’, ‘Employee Welfare Fund’,’ Family Oriented Reward Program’, ‘Reward & Recognition,’ ‘Parents Day’ and ‘Daycare Centre’. 24/7 Customer is the only BPO in India to provide extended insurance to the employee and their families (employee plus four dependents). Under the ‘Employee Welfare Fund’, employees in any kind of medical emergency or need can avail it as a loan. There are instances when one of the family members of an employee had to undergo a major surgery and the amount from this scheme proved to be very helpful. Every month, on Parents Day, the family members of employees are invited to spend a day with their children/spouse/sibling.
Multinational Corporations
Multinational Corporations
Multinational corporations (MNCs) have their headquarters in one country but their operations are in many countries. Of the ten largest multinational industrial corporations, ranked by 1985 sales, eight are American. The ten are (1) General Motors, (2) Exxon, (3) Royal Dutch / Shell Group (Dutch-English), (4) Mobil, (5) British Petroleum (English), (6) Ford Motor Company, (7) International Business Machines (IBM), (8) Texaco (9) Chevron, and (10) American Telephone and Telegraph.
In its early stages, international business was conducted with an ethnocentric outlook; that is, the orientation and type of operation was based on that of the parent company. The polycentric attitude, on the other hand, is based on the notion that it is best to give foreign subsidiaries, staffed by local nationals, a great deal of managerial freedom. It is assumed that nationals have the best understanding of the local environment. Region-centric orientation favors the staffing of foreign operations on a regional basis. Thus, a European view may be composed of British, French, German, and Italian influences. The modern multinational corporation has a geocentric orientation. This means that the total organization is viewed as an interdependent system operating in many countries. The relationships between headquarters and subsidiaries are collaborative, with communication flowing in both directions. Further more key positions are filled by managers of different nationalities. In short, the orientation of the multi-national corporation is truly and goes beyond a narrow nationalistic view point.
Multinational corporations have several advantages over firms that have a domestic orientation. Obviously, the MNC can take advantage of business opportunities in many different countries. It can also raise money for its operations throughout the world. Moreover, multinational firms benefit by being able to establish production facilities in countries where their products can be produced most effectively and efficiently. Companies with worldwide sometimes have access to natural resources and material that may not be available to domestic firms. Finally, the large MNCs can recruit management and personnel from a world wide labor pool.
Despite the increasing competition and the cost advantages of some foreign corporations, a number of US companies have done very well in the international environment.
Fortune studied a number of large companies that earn more than 20% of their revenues from overseas operations. The reasons for the success of these firms differ greatly. IBM’s size makes it possible to dominate the market. Coca-Cola is very adept at opening up new markets rather rapidly. McDonald’s on the other hand, does not rush into the market but carefully assesses the potential for success. Hewlett Packard and Boeing bring foreign managers to the United States to expose them to their organizational culture.
The MNCs that were studied structure their organization very carefully to suit the needs of each individual country. In addition, these firms are flexible in their product design and marketing. It should also be noted that the operations abroad were largely managed by foreign nationals.
Managerial Functions in International Business:
Evidence shows that management fundamentals may be applicable in different countries. However, the practice of carrying out the managerial functions of planning, organizing, staffing, leading, and controlling differs considerably in domestic and international enterprises.
Planning requires setting objectives and then selecting strategies, policies, programs, and procedures for achieving them. A critically important activity for the MNC is the assessment of opportunities and threats in the external environment. This is a complex task even for a domestic enterprise, but it becomes much intricate when many different, ever changing world markets must be scanned.
External threats and opportunities must be matched with the internal strengths and weakness of the firm. For example, a poor educational system makes it difficult to find qualified personnel. Similarly, cultural orientation towards time will affect planning. Specifically, cultural attitudes that emphasize a short time perspective will not be conducive to long range planning. Finally, political and economic instability in a country makes it difficult to forecast and will discourage long term commitment of resources.
Multinational corporations (MNCs) have their headquarters in one country but their operations are in many countries. Of the ten largest multinational industrial corporations, ranked by 1985 sales, eight are American. The ten are (1) General Motors, (2) Exxon, (3) Royal Dutch / Shell Group (Dutch-English), (4) Mobil, (5) British Petroleum (English), (6) Ford Motor Company, (7) International Business Machines (IBM), (8) Texaco (9) Chevron, and (10) American Telephone and Telegraph.
In its early stages, international business was conducted with an ethnocentric outlook; that is, the orientation and type of operation was based on that of the parent company. The polycentric attitude, on the other hand, is based on the notion that it is best to give foreign subsidiaries, staffed by local nationals, a great deal of managerial freedom. It is assumed that nationals have the best understanding of the local environment. Region-centric orientation favors the staffing of foreign operations on a regional basis. Thus, a European view may be composed of British, French, German, and Italian influences. The modern multinational corporation has a geocentric orientation. This means that the total organization is viewed as an interdependent system operating in many countries. The relationships between headquarters and subsidiaries are collaborative, with communication flowing in both directions. Further more key positions are filled by managers of different nationalities. In short, the orientation of the multi-national corporation is truly and goes beyond a narrow nationalistic view point.
Multinational corporations have several advantages over firms that have a domestic orientation. Obviously, the MNC can take advantage of business opportunities in many different countries. It can also raise money for its operations throughout the world. Moreover, multinational firms benefit by being able to establish production facilities in countries where their products can be produced most effectively and efficiently. Companies with worldwide sometimes have access to natural resources and material that may not be available to domestic firms. Finally, the large MNCs can recruit management and personnel from a world wide labor pool.
Despite the increasing competition and the cost advantages of some foreign corporations, a number of US companies have done very well in the international environment.
Fortune studied a number of large companies that earn more than 20% of their revenues from overseas operations. The reasons for the success of these firms differ greatly. IBM’s size makes it possible to dominate the market. Coca-Cola is very adept at opening up new markets rather rapidly. McDonald’s on the other hand, does not rush into the market but carefully assesses the potential for success. Hewlett Packard and Boeing bring foreign managers to the United States to expose them to their organizational culture.
The MNCs that were studied structure their organization very carefully to suit the needs of each individual country. In addition, these firms are flexible in their product design and marketing. It should also be noted that the operations abroad were largely managed by foreign nationals.
Managerial Functions in International Business:
Evidence shows that management fundamentals may be applicable in different countries. However, the practice of carrying out the managerial functions of planning, organizing, staffing, leading, and controlling differs considerably in domestic and international enterprises.
Planning requires setting objectives and then selecting strategies, policies, programs, and procedures for achieving them. A critically important activity for the MNC is the assessment of opportunities and threats in the external environment. This is a complex task even for a domestic enterprise, but it becomes much intricate when many different, ever changing world markets must be scanned.
External threats and opportunities must be matched with the internal strengths and weakness of the firm. For example, a poor educational system makes it difficult to find qualified personnel. Similarly, cultural orientation towards time will affect planning. Specifically, cultural attitudes that emphasize a short time perspective will not be conducive to long range planning. Finally, political and economic instability in a country makes it difficult to forecast and will discourage long term commitment of resources.
Interviews can reveal candidates’ market value
Interviews can reveal candidates’ market value
Interviewing for a new job can reveal the true market value of an individual’s skills and experience—if he is well prepared to negotiate his salary
Everybody loves a good pay hike. Since he is highly unlikely to get as many increments in a year as he may like, he might consider switching jobs. He may figure that a new employer would value him more, and send off a resume. How well prepared will he be when it’s time to talk about money?
The interview is going the individual’s way, and he is able to impress everyone. Then the human resource (HR) manager shoots the big question: how much remuneration he is expecting? Usually, money is discussed only when the interview reaches the negotiation stage.
The candidate’s answer to that question can make or break the deal. HR managers believe it’s a loaded question. During the negotiation stage, managers rate him for individual personal qualities on the basis of the remuneration he demands. While the individual is justifying his demand, the managers are assessing his mindset towards money, as well as rating his knowledge, self-assurance and understanding of the current demand-supply scenario for jobs in the industry.
How much to ask for? In most people-oriented industries where retaining employees is tough, a hike of 25-30% above an individual previous salary is acceptable. Yet HR managers are not necessarily put off by interviewees who ask for more than the industry norm.
It is expected the interviewee to have given good thought about how much his paycheck should be. People should be asking for remuneration according to their abilities, liabilities and future goals. Their salaries should help them move forward in life.
Their demand will not always be in tandem with industry standards, but that should not deter them from asking what they think they deserve. Lying about an individual’s previous salary is not at all recommended in fact prohibited. Many people resort to this, since the higher salary at the new job would be based on the previous salary. Not only is lying legally and morally unacceptable, but it is also unlikely to work if he is seeking to switch to a reputed company. For most companies, it is now the norm to ask for an individual previous salary slip, Form 16, and reference letters from people in the individual’s field of work.
Some multinationals in fields like real estate, where salaries are sky-high, even hiring a third party investigator to check on the credentials of new recruits. In such a scenario, an individual’s best option and one that is legally unimpeachable is to switch jobs after getting an increment at his old job. Salary structure today is decided on a “cost to company” basis. This means companies look at the total expenses they would incur on an employee which include medical expenses, leave travel allowance, and sometimes even office space.
Trying to decipher exactly how much cash will actually flow into an individual hands may seem confusing at first glance, as he run down the list of sub-heads like car fuel, entertainment, attire, and other allowances. It is, of course, a good idea to make the effort to understand the salary structure. But if he really wants to save all the fretting, let the new employer know the “take home” that he would like each month.
Leave the fine tuning to the accounts department. Tax benefits Interaction with the accounts department, however, is inevitable, because a candidate needs to know the tax implications of his salary. Employees are often so engrossed in their jobs that they forget to inform the accounts department about their investments, home loans, and so on. Then they get a surprise when they see the tax deductions in their first paycheck.
When a individual joins a new company, he needs to declare the tax benefits he is eligible for. Proof of those investments can come later, so long as it is before the end of the financial year. Cash in hand depends on ones ever growing needs— a house, a car, a better lifestyle. Having more cash in hand is becoming an imperative, leading to a new trend among employees to prefer cash in hand, rather than gratuity and provident fund (PF) contributions by the employer.
Employee stock ownership plans have lost some of their allure, because of the fringe benefit tax on the profit, starting from this year. This is paving the way for higher take-home salaries.
There is more good than bad in going for interviews. Interviews that reach the monetary negotiations stage enable one to know his market value. Some interviewees may go ahead and accept the offer for a new job. And others will use their new-found market value to get that elusive pay hike from their existing company.
Interviewing for a new job can reveal the true market value of an individual’s skills and experience—if he is well prepared to negotiate his salary
Everybody loves a good pay hike. Since he is highly unlikely to get as many increments in a year as he may like, he might consider switching jobs. He may figure that a new employer would value him more, and send off a resume. How well prepared will he be when it’s time to talk about money?
The interview is going the individual’s way, and he is able to impress everyone. Then the human resource (HR) manager shoots the big question: how much remuneration he is expecting? Usually, money is discussed only when the interview reaches the negotiation stage.
The candidate’s answer to that question can make or break the deal. HR managers believe it’s a loaded question. During the negotiation stage, managers rate him for individual personal qualities on the basis of the remuneration he demands. While the individual is justifying his demand, the managers are assessing his mindset towards money, as well as rating his knowledge, self-assurance and understanding of the current demand-supply scenario for jobs in the industry.
How much to ask for? In most people-oriented industries where retaining employees is tough, a hike of 25-30% above an individual previous salary is acceptable. Yet HR managers are not necessarily put off by interviewees who ask for more than the industry norm.
It is expected the interviewee to have given good thought about how much his paycheck should be. People should be asking for remuneration according to their abilities, liabilities and future goals. Their salaries should help them move forward in life.
Their demand will not always be in tandem with industry standards, but that should not deter them from asking what they think they deserve. Lying about an individual’s previous salary is not at all recommended in fact prohibited. Many people resort to this, since the higher salary at the new job would be based on the previous salary. Not only is lying legally and morally unacceptable, but it is also unlikely to work if he is seeking to switch to a reputed company. For most companies, it is now the norm to ask for an individual previous salary slip, Form 16, and reference letters from people in the individual’s field of work.
Some multinationals in fields like real estate, where salaries are sky-high, even hiring a third party investigator to check on the credentials of new recruits. In such a scenario, an individual’s best option and one that is legally unimpeachable is to switch jobs after getting an increment at his old job. Salary structure today is decided on a “cost to company” basis. This means companies look at the total expenses they would incur on an employee which include medical expenses, leave travel allowance, and sometimes even office space.
Trying to decipher exactly how much cash will actually flow into an individual hands may seem confusing at first glance, as he run down the list of sub-heads like car fuel, entertainment, attire, and other allowances. It is, of course, a good idea to make the effort to understand the salary structure. But if he really wants to save all the fretting, let the new employer know the “take home” that he would like each month.
Leave the fine tuning to the accounts department. Tax benefits Interaction with the accounts department, however, is inevitable, because a candidate needs to know the tax implications of his salary. Employees are often so engrossed in their jobs that they forget to inform the accounts department about their investments, home loans, and so on. Then they get a surprise when they see the tax deductions in their first paycheck.
When a individual joins a new company, he needs to declare the tax benefits he is eligible for. Proof of those investments can come later, so long as it is before the end of the financial year. Cash in hand depends on ones ever growing needs— a house, a car, a better lifestyle. Having more cash in hand is becoming an imperative, leading to a new trend among employees to prefer cash in hand, rather than gratuity and provident fund (PF) contributions by the employer.
Employee stock ownership plans have lost some of their allure, because of the fringe benefit tax on the profit, starting from this year. This is paving the way for higher take-home salaries.
There is more good than bad in going for interviews. Interviews that reach the monetary negotiations stage enable one to know his market value. Some interviewees may go ahead and accept the offer for a new job. And others will use their new-found market value to get that elusive pay hike from their existing company.
BPO policies- what works
BPO policies- what works
The biggest challenge that HR managers working for BPO companies face is that of attrition. How to tackle attrition? Which HR policies work best? To start with, there are no easy answers. Nor should we expect any standard policy package to work for all companies. Each company needs to work out the HR policy package that would work best given the company’s specific character. A few general guidelines can, however, be suggested.
It is first necessary to point out that in the Indian BPO industry, attrition is more of a problem in voice operations and not so much in non-voice operations. Second, most Indian BPO companies operate in the low-end of the information food chain or the low end of the knowledge spectrum and rates of attrition are highest in these firms and, therefore, they pose a problem for HR managers. Attrition is not really a problem in high-end BPOs. Thus, the problem of attrition is most acute in call centres and, therefore, what we really need is a policy package to tackle attrition in these firms.
Many HR managers in such firms believe that high rates of attrition in Indian call centres are a phenomenon peculiar to India. It is not so. Various studies have shown that if the average rate of attrition in Indian call centres is in the region of 30-35 per cent, it is around 25-30 per cent in the US or UK. Moreover, in call centres in other countries competing with India (for example Philippines) the attrition rate is again at least as high as it is in India. Thus, high rates of attrition is a kind of given in the call centre industry around the world.
Studies show that Indian BPO firms which have been able to tackle the problem of attrition successfully adopt policies which can be grouped into two basic categories:
(a) policies that are based on the basic strategy of “learning to live with it”, and
(b) policies that are based on the basic strategy of “learning to tackle it”.
The emphasis in the first group of policies is on constant recruitment and training and not on retention while in the second group of policies the emphasis is on retention rather than on constant recruitment and training.
Studies also show that in call centres, the basic strategy of “Learning to live with it” works best while the basic strategy of “Learning to tackle it” works best for non-voice operations and in firms engaged in high end processes. In call centres, adopting a basic strategy that emphasizes retention can be suicidal because however much HR managers may try, call centres will have high attrition rates. Hence, spending too much on retention will only result in hiking costs and thereby eroding the very cost arbitrage that is the basis of the call centre business while it will not help in reducing the attrition rate appreciably. On the other hand, if the emphasis is on constant recruitment and training, costs can be kept down without affecting operations even if the attrition rate is in the region of 30-35 per cent.
Studies also show that one third of all attrition in call centres are because of high stress levels and the desire to pursue higher education or alternative occupations while two thirds can be attributed to better job opportunities in the industry. In short, a large majority of people quitting go to another call centre. This is the reason why many call centre HR managers fall into the trap of putting emphasis on retention thinking that if they can implement good retention policies then the two thirds of the people going to other call centres for better job prospects would not do so. These HR managers fail to realize that irrespective of the retention policies, two thirds of the people will still leave for better job prospects and that beyond a point spending more on retention would only eat into margins and erode the basic profitability of the business.
In this context some facts are worth noting:
(a) most Indian call centres need no more than graduates and there is no dearth of graduates in India so that there is no basic shortage of manpower as long as the call centre company does not make the mistake of recruiting over qualified people for their operations. Such over qualified people will leave anyway after a few days or weeks once they realize that their expectations do not match with the reality.
(b) Most Indian call centres need to train people for no more than three months to get them to become fully productive as long as the raw recruit had basic English language skills, especially verbal communication skills. Moreover, in many low-end processes where the script is given by the client and agents have almost no discretion, even basic skills of communication in English is not required since almost anybody can be trained to read a prepared script with a certain specific accent and diction. Hence constant recruitment and training is cost-effective even with attrition rates of around 30-35 per cent.
(c) In most Indian call centres, the majority of the agents are in the age group 18-26 and their focus is on the here and now. Such employees prefer to get their entire compensation in cash and not through such rubrics as provident fund, medical cover, superannuation benefits etc. Hence, call centres need to structure their compensation package in a way that most of the benefits go to the employee in the form of cash or through such things as company credit cards, easy car/housing/consumer durable loans, club membership etc. For this reason, proprietory firms have an edge over corporates as it is easier for proprietory firms to structure a pay package with a larger “here and now” cash component.
(d) Since most employees are young they are emotionally less stable than older employees and are prone to switch jobs for the most trivial reasons. Instead of spending a lot through higher pay packages in a bid to retain talent, call centres would do well to concentrate on constant counseling at the workplace to help young employees realize the virtues of patience and the fact that even a call centre job can lead to a long term career.
(e) Again instead of continually increasing the pay package, call centres would do well to try and create opportunities for upward mobility not just through scaling up of operations but also through moving up the value chain in terms of processes handled (this should anyway be a strategic goal for any BPO unit irrespective of whether it is facing a problem of attrition or not).
(f) The usual stress busting mechanisms should be in place – work should be fun – partying, get togethers, sporting events, facilities for yoga and aerobics exercises, good food and cafeteria facilities, etc help in a big way to retain younger people.
Space limitations do not permit a fuller discussion, but some of the basic issues have been covered above. From what has been said so far it should be obvious that what kind of policies a firm must choose to tackle attrition depends a great deal on the kind of processes it is handling. The problem of attrition is highest in the firms engaged in low end processes while those engaged in high end processes do not have so much of a problem. Also, while firms engaged in low-end processes would do well to adopt the basic strategy of “learning to live with it”, firms engaged in high-end processes would do better by adopting the basic strategy of “Learning to tackle it”. For those adopting the second strategy, talent retention policies would tend to be similar to standard policies adopted by most companies such as a fast track promotion policy, frequent hikes in the compensation package etc. For firms engaged in low end processes, the key to success is to realize that emphasis on retention will not work and, therefore, it is better to concentrate on constant recruitment and training.
The biggest challenge that HR managers working for BPO companies face is that of attrition. How to tackle attrition? Which HR policies work best? To start with, there are no easy answers. Nor should we expect any standard policy package to work for all companies. Each company needs to work out the HR policy package that would work best given the company’s specific character. A few general guidelines can, however, be suggested.
It is first necessary to point out that in the Indian BPO industry, attrition is more of a problem in voice operations and not so much in non-voice operations. Second, most Indian BPO companies operate in the low-end of the information food chain or the low end of the knowledge spectrum and rates of attrition are highest in these firms and, therefore, they pose a problem for HR managers. Attrition is not really a problem in high-end BPOs. Thus, the problem of attrition is most acute in call centres and, therefore, what we really need is a policy package to tackle attrition in these firms.
Many HR managers in such firms believe that high rates of attrition in Indian call centres are a phenomenon peculiar to India. It is not so. Various studies have shown that if the average rate of attrition in Indian call centres is in the region of 30-35 per cent, it is around 25-30 per cent in the US or UK. Moreover, in call centres in other countries competing with India (for example Philippines) the attrition rate is again at least as high as it is in India. Thus, high rates of attrition is a kind of given in the call centre industry around the world.
Studies show that Indian BPO firms which have been able to tackle the problem of attrition successfully adopt policies which can be grouped into two basic categories:
(a) policies that are based on the basic strategy of “learning to live with it”, and
(b) policies that are based on the basic strategy of “learning to tackle it”.
The emphasis in the first group of policies is on constant recruitment and training and not on retention while in the second group of policies the emphasis is on retention rather than on constant recruitment and training.
Studies also show that in call centres, the basic strategy of “Learning to live with it” works best while the basic strategy of “Learning to tackle it” works best for non-voice operations and in firms engaged in high end processes. In call centres, adopting a basic strategy that emphasizes retention can be suicidal because however much HR managers may try, call centres will have high attrition rates. Hence, spending too much on retention will only result in hiking costs and thereby eroding the very cost arbitrage that is the basis of the call centre business while it will not help in reducing the attrition rate appreciably. On the other hand, if the emphasis is on constant recruitment and training, costs can be kept down without affecting operations even if the attrition rate is in the region of 30-35 per cent.
Studies also show that one third of all attrition in call centres are because of high stress levels and the desire to pursue higher education or alternative occupations while two thirds can be attributed to better job opportunities in the industry. In short, a large majority of people quitting go to another call centre. This is the reason why many call centre HR managers fall into the trap of putting emphasis on retention thinking that if they can implement good retention policies then the two thirds of the people going to other call centres for better job prospects would not do so. These HR managers fail to realize that irrespective of the retention policies, two thirds of the people will still leave for better job prospects and that beyond a point spending more on retention would only eat into margins and erode the basic profitability of the business.
In this context some facts are worth noting:
(a) most Indian call centres need no more than graduates and there is no dearth of graduates in India so that there is no basic shortage of manpower as long as the call centre company does not make the mistake of recruiting over qualified people for their operations. Such over qualified people will leave anyway after a few days or weeks once they realize that their expectations do not match with the reality.
(b) Most Indian call centres need to train people for no more than three months to get them to become fully productive as long as the raw recruit had basic English language skills, especially verbal communication skills. Moreover, in many low-end processes where the script is given by the client and agents have almost no discretion, even basic skills of communication in English is not required since almost anybody can be trained to read a prepared script with a certain specific accent and diction. Hence constant recruitment and training is cost-effective even with attrition rates of around 30-35 per cent.
(c) In most Indian call centres, the majority of the agents are in the age group 18-26 and their focus is on the here and now. Such employees prefer to get their entire compensation in cash and not through such rubrics as provident fund, medical cover, superannuation benefits etc. Hence, call centres need to structure their compensation package in a way that most of the benefits go to the employee in the form of cash or through such things as company credit cards, easy car/housing/consumer durable loans, club membership etc. For this reason, proprietory firms have an edge over corporates as it is easier for proprietory firms to structure a pay package with a larger “here and now” cash component.
(d) Since most employees are young they are emotionally less stable than older employees and are prone to switch jobs for the most trivial reasons. Instead of spending a lot through higher pay packages in a bid to retain talent, call centres would do well to concentrate on constant counseling at the workplace to help young employees realize the virtues of patience and the fact that even a call centre job can lead to a long term career.
(e) Again instead of continually increasing the pay package, call centres would do well to try and create opportunities for upward mobility not just through scaling up of operations but also through moving up the value chain in terms of processes handled (this should anyway be a strategic goal for any BPO unit irrespective of whether it is facing a problem of attrition or not).
(f) The usual stress busting mechanisms should be in place – work should be fun – partying, get togethers, sporting events, facilities for yoga and aerobics exercises, good food and cafeteria facilities, etc help in a big way to retain younger people.
Space limitations do not permit a fuller discussion, but some of the basic issues have been covered above. From what has been said so far it should be obvious that what kind of policies a firm must choose to tackle attrition depends a great deal on the kind of processes it is handling. The problem of attrition is highest in the firms engaged in low end processes while those engaged in high end processes do not have so much of a problem. Also, while firms engaged in low-end processes would do well to adopt the basic strategy of “learning to live with it”, firms engaged in high-end processes would do better by adopting the basic strategy of “Learning to tackle it”. For those adopting the second strategy, talent retention policies would tend to be similar to standard policies adopted by most companies such as a fast track promotion policy, frequent hikes in the compensation package etc. For firms engaged in low end processes, the key to success is to realize that emphasis on retention will not work and, therefore, it is better to concentrate on constant recruitment and training.
Wednesday, September 26, 2007
Interview questionnaires
Interview questionnaires
When a wide geographical coverage is required and a large number of people have to be contacted, the most efficient and convenient method is to collect data through mail/web questionnaires. The Researcher or Surveyor (RS) can send thousands of questionnaires at a comparatively low cost. Since RS cannot seek further clarification as in the case of interviews, RS should take utmost pains in preparing the questionnaire.
The following hints will be of help:
When a wide geographical coverage is required and a large number of people have to be contacted, the most efficient and convenient method is to collect data through mail/web questionnaires. The Researcher or Surveyor (RS) can send thousands of questionnaires at a comparatively low cost. Since RS cannot seek further clarification as in the case of interviews, RS should take utmost pains in preparing the questionnaire.
The following hints will be of help:
- Each question should be clearly framed and should seek to elicit the information related to the topic of RS report.
- It should be precise and not vague. For example, if RS askS, “Do you see films regularly,” RS’s respondent will not understand what RS means by ‘regularly’. And suppose he says ‘yes’ how will this answer help RS? But if RS says, “How often in a month do you see a movie?” he will understand what RS wants to know and his answer will be precise and useful.
- Avoid leading questions – questions which suggest or anticipate answers and thus conditions or prejudice the respondent’s mind. For example. “Do you read The Hindustan Times?” is an attempt to lead the respondent. A better question to ask would be, “Which daily newspaper do you read?
- As in the case of interviews, do not ask any questions which may embarrass the respondent. Questions about sex habits, religious beliefs, personal income etc are better avoided. When RS have to write a report touching on such matters, obtain the consent of the respondent beforehand if possible and keep the information secure and confidential. In all situations avoid asking questions which may hurt the respondent’s self respect pride or ego.
- Since RS are making a demand on the time of strangers, ensure that questions are easy to answer and the questionnaire is brief and convenient to handle. Leave plenty of space in it for answers. It would be irritating for the respondent to find that he cannot write what he wants. Often questionnaires remain unanswered because of this defect.
- Arrange RS’s questions in a logical order and get them cyclostyled or printed neatly. Mail the questionnaire in an attractive envelope along with a covering letter, courteously seeking the respondent’s cooperation and help. In many respects this letter should be similar to a sales letter. It should be able to attract the respondent’s attention, make him feel important and induce him to fill in the questionnaire and return it to RS promptly. Courtesy demands that RS should enclose a postage paid envelope for reply.
BPO Policies: 5 Emerging Trends
BPO Policies: 5 Emerging Trends
Watch out for the next three years! A turbulent phase of global consolidation and aggregation should see Indian BPOs and KPOs emerge bigger and stronger. Some may even become MNCs and global industry leaders. Human resources will, however, be the key challenge at the industry level as well as for the individual HR professional. Successful HR managers will have to be prepared for five emerging trends.
Deepak Wadhwan, consulting advisor, KPMG, points out in an article in The Economic Times a few key trends which he claims may get overlooked. The top five are:
HR managers who are better prepared to handle these trends are more likely to perform rather than perish. That means, they must be prepared for:
Not that all factors will be applicable to all organisations in BPO/KPO space. Each business will have its own strengths and opportunities and weaknesses and threats. The individual HR manager too has to asses what his/her organization specifically needs. A proactive manager will try to outguess the board and keep some plans ready even before they are actually asked for.
An M&A human resource impact study keeping in mind any one/several possible victims/predators in mind is a good example. M&As are complex and traumatic affairs from a HR point of view. In case one’s organization has any chance of becoming a participant in any M&A event in the near future, a little early planning can prove to be a big help.
Similarly, being all ready to ramp up overnight, as it were, due to some early preparation on your part, can only earn you kudos from the guys who matter. The same can be said about each of the other big trends such as the possibility of talent war or multicultural and multinational operations. The key issue is to correctly asses which way your own organization is headed and then to be specifically prepared for it.
Some companies will not bother much about brand building – either because they don’t need it or care for it, for some reason or the other – but most others would do so. That would mean an additional set of headaches for HR professionals. Apart from the many intangible values that add up to create robust brand equities, some very necessary and tangible aspects are getting certifications of various kinds, following industry best practices and maintaining/improving delivery standards. Achieving these goals will require constant development of HR systems and processes. In plain English that simply means more work for the HR professionals.
Managing human resources in an HR and knowledge intensive BPO/KPO industry was never easy, but with a period of turbulence about to set in, its just going to get tougher! But then being forewarned is being forearmed – just ride out the storm.
Watch out for the next three years! A turbulent phase of global consolidation and aggregation should see Indian BPOs and KPOs emerge bigger and stronger. Some may even become MNCs and global industry leaders. Human resources will, however, be the key challenge at the industry level as well as for the individual HR professional. Successful HR managers will have to be prepared for five emerging trends.
Deepak Wadhwan, consulting advisor, KPMG, points out in an article in The Economic Times a few key trends which he claims may get overlooked. The top five are:
- The next three years will see a lot of mergers and acquisitions in BPO space worldwide.
- Most new voice/data BPOs will be at least 1000 seaters while KPOs serving any specific domain, 100 seaters.
- Attrition will rise in the middle and top levels leading to a talent war.
- Most top Indian BPO/KPO companies would have multicultural/multinational operations/workforce.
- Bottomline: Those who focus on brand building will perform, others will perish.
HR managers who are better prepared to handle these trends are more likely to perform rather than perish. That means, they must be prepared for:
- M&As
- Scalability
- Talent War
- Multicultural Ops
- Brand Building
Not that all factors will be applicable to all organisations in BPO/KPO space. Each business will have its own strengths and opportunities and weaknesses and threats. The individual HR manager too has to asses what his/her organization specifically needs. A proactive manager will try to outguess the board and keep some plans ready even before they are actually asked for.
An M&A human resource impact study keeping in mind any one/several possible victims/predators in mind is a good example. M&As are complex and traumatic affairs from a HR point of view. In case one’s organization has any chance of becoming a participant in any M&A event in the near future, a little early planning can prove to be a big help.
Similarly, being all ready to ramp up overnight, as it were, due to some early preparation on your part, can only earn you kudos from the guys who matter. The same can be said about each of the other big trends such as the possibility of talent war or multicultural and multinational operations. The key issue is to correctly asses which way your own organization is headed and then to be specifically prepared for it.
Some companies will not bother much about brand building – either because they don’t need it or care for it, for some reason or the other – but most others would do so. That would mean an additional set of headaches for HR professionals. Apart from the many intangible values that add up to create robust brand equities, some very necessary and tangible aspects are getting certifications of various kinds, following industry best practices and maintaining/improving delivery standards. Achieving these goals will require constant development of HR systems and processes. In plain English that simply means more work for the HR professionals.
Managing human resources in an HR and knowledge intensive BPO/KPO industry was never easy, but with a period of turbulence about to set in, its just going to get tougher! But then being forewarned is being forearmed – just ride out the storm.
Tuesday, September 25, 2007
HR managers need to be better performers
HR managers need to be better performers
It may sound a bit ironic. Indian managers may be high performers in their area of expertise but the performances of the people who manage them leave much to be desired for. That in short is the synopsis of a recent survey conducted by global management consultancy firm.
In the firm’s High Performance Work Force study 2007, conducted by interviewing 40 Indian CEO and Human Relation (HR) department heads, the majority of the executives cited that HR is their most critical workforce (Globally, HR is ranked No. 7 in the pecking order of importance).
However, there was deep dissatisfaction with HR’s performance. In an adequacy vs expectations survey across different workforce like sales, manufacturing, R&D, HR, etc HR performed the worst. The study pointed out that CEOs believed that there is a huge gap between the potential and actual achievement by their HR function.
The survey sought executive insights in three broad areas – most important factors in achieving high performances and how their companies are addressing these factors, the importance of various workforces to company’s success and their performances and the extent to which the HR function is supporting the company’s key workforces and positioning them for success.
The executives in the study came from diverse industries like steel, construction, engineering to finance and entertainment.
In India, both old and new economy companies are trying to fish in the same pond, creating severe talent crunch.
As new economy companies continue to attract talented people in droves, old economy companies such as those in steel, power generation and manufacturing appeared to be better prepared to deal with talent issues. These companies are more willing to use “appropriate metrics” to track HR and over workforce performance.
In what could be particularly worrisome, the middle management level was found to be unhappy with how organizations treat them. The amount of effort in retention and leadership development at this level is just not good enough.
As companies often get their next generation of leaders from this level, the study found that the HR department needed to do much more as executives in this level are at a critical point of their career. The study found that it is a situation that should be troubling not only for HR leaders themselves, but for the executives as a whole.
Advertising as entertainment
Advertising as entertainment
The advertiser’s role is to determine the communication objectives. These have to be in line with the overall organizational goals and strategy.
The advertiser’s goals and strategy are influenced by the government policy. It may even sponsor news or films made by the corporate sector on television. Hence government rules and regulations and electronic media (T.V., Video, Cable T.V. Radio etc.) policies play a dominant role in advertiser’s decision-making.
The advertiser is facilitated by advertising agencies and media in translating its goals into action. Marketing research in turn assists all these institution, i.e. the advertiser agencies and the media. Within the advertiser’s organization, it’s the product managers, or the brand managers (as in soft drinks and personal products) whose task is to coordinate between the advertising agencies and the organization. In fact, in many of the multinational and large Indian firms, a product manager or brand manager is a strategist and it’s his or her responsibility to develop communication goals for the product or brand and evolve a marketing plan and strategy for it. The advertising campaign, which is a part of this overall marketing strategy, is often decided by the product managers.
While all large advertisers depend on advertising agencies to develop the campaign, smaller advertisers, has to depend on its own internal resources or take the services of freelance advertising personnel.
For generations, advertising interrupted the entertainment that one wanted to read, hear or watch. Now, in a turnabout, advertising is in increasingly being presented as entertainment and surprisingly the idea of all ads all the time is gaining some favor.
One reason is proliferation of broadband internet connections, which make it easier for computer users to watch or downloads clips. That is enabling media companies, agencies and advertisers to create sites devoted to commercials and other forms of advertising for amusements, rather than hard core huckstering.
Oddly, the trend runs counter to another powerful impulse among consumers: the growing desire to avoid advertising. TV viewers, for instance are spending billions of dollars a year for TiVo and other digital video recorders that help them zip through or zap commercials, and click through rates for banner web ads are declining.
The difference between ‘watching a commercial’ on a website and in ones living room is that online is “an opt-in audience” and he/she is choosing to be there. It’s the nature of the web to offer a destination one can go to and know what he is going to see.
There’s certainly an audience for entertainment as part of the offering. The numbers seem to support it. For example, veryfunnyads.com, a broadband website operated by the TBS cable network has delivered over 63 million video since its introduction a few months ago.
It’s a very straightforward premise: The viewer is going to have a funny experience, and going to have it every 30 seconds. The funny-ad website is part of a re-branding campaign for the TBS network, which carries the theme “Very funny”. The goal is to cultivate an identity for TBS as a home for sitcoms and humorous movies.
A lot of people talk about zipping through commercials because the average break doesn’t hold the promise of being entertaining.
Putting choice on the table, changes the whole game. Everything is about control. If an ad is interesting the viewer will have the conversation with the brand. If it’s not, it’s a waste of time.
The concept as MTV meets QVC, offering consumers in the intended audience of ages 18-30 product information in the form of entertaining video clips rather than traditional commercials. The clips are to run 2-3 minutes apiece and be presented by hosts considered authorities like cars, clothing or computers.
The only reason of any chance of being successful is transparency. If people know they’re being sold to, you can celebrate the sell. The USA Network unit of NBC Universal, part of General Electric also intends to climb aboard the pitch wagon celebrating advertising as entertainment with an online effort centered on brand centric content. Plans calls for a website next year that will include commercials and movie trailers as well as features like social networking and tools to let visitors make ads of their own. Consumers want to be entertained on their own time, on their own terms.Value to the customer
Value to the customer
There is the most difficult question: “what does the customer consider value / what does he look for when he buys the product?”
There is the most difficult question: “what does the customer consider value / what does he look for when he buys the product?”
Traditional economic theory has answered this question with the one word: price. But this is misleading to be sure there are few products in which prices are not one of the major considerations. But first ‘price’ is not a simple concept.
For a fuse box and switch box manufacturer; his customers, the contractors, are extremely price conscious. Since all the boxes they buy carry a quality guarantee accepted by the trade as well as by building inspectors and consumers, they make few quality distinctions between brands, but shop around for the cheapest product. But to read “cheap” as meaning lowest manufacturer’s price would be a serious mistake. On the contrary, “cheap” for the contractor means a product that has a fairly high manufacturer’s price: a product that (a) cost the least money finally installed in the home(b) achieves this low ultimate cost by requiring a minimum of time and skill for installation, and© has a high manufacturer’s cost to give the contractor a good profit. Wages for skilled electrical labor being very high, low installation costs go a very long way to offset high manufacturer’s price. Furthermore under the billing tradition of the trade, the contractor makes a little money out of the labor required for installation. If he is not his own skilled worker, he bills his customer for little more than his actual wage costs. He makes his profit traditionally by charging double the manufacturers price for the product he installs. That product that will give him the lowest cost to the home owner with the lowest installation cost and the highest mark-up on the product that is, the highest manufacturer’s price is therefore the cheapest to him. And if price is value, then high manufacturer’s price is better value for the electrical contractor.
This may appear to be a complicated price structure. In the American automobile industry, where most new cars are sold in trade against a used car, the “price” is actually a constantly shifting configuration of differentials between the manufacturer’s price for a new car, a second hand and third hand used car, a third hand and fourth hand used car, and so on. And the whole is complicated on the one hand by constantly changing differentials between the amount a dealer will allow on a used car and the price he will ask for it, and on the other hand by the differences in running costs between various makes and sizes. Only advanced mathematics can actually calculate the real automobile “price.”
And, secondly, price is only a part of value. There is the whole range of quality considerations: durability, freedom from break down, the maker’s standing, purity, and etc. high price may actually be value- as in expensive perfumes, expensive furs or exclusive gowns. Finally, what about such concepts of value on the part of the customer as the service he receives? There is little doubt, for instance, that the American housewife today buys appliances largely on the basis of the service experience she or her friends and neighbors have had with other appliances sold under the same brand name. The speed with which she can obtain service, if something goes wrong, the quality of the service and its cost have become major determinations in the buyer decision.
Indeed, what the customer considers value is so complicated that it can only be answered by the customer himself. Management should not even try to guess at it. It should always go to the customer in a systematic quest for the answer.
Flow of communications in an organization
Flow of communications in an organization
Three types of communications in an organization can be classified by their flow: vertical, horizontal and informal. In directing activities of subordinates, the manager issues orders to others further down in the hierarchy. Organization charts show the flow of authority and the channels through which this downward, vertical communication flows. Authority lines are important channels of communication but they comprise only one type of channel. Control reports and memoranda flow back up through the levels of the hierarchy as subordinates are made accountable for their actions. This upward vertical flow of communications is the heart of a control system.
Three types of communications in an organization can be classified by their flow: vertical, horizontal and informal. In directing activities of subordinates, the manager issues orders to others further down in the hierarchy. Organization charts show the flow of authority and the channels through which this downward, vertical communication flows. Authority lines are important channels of communication but they comprise only one type of channel. Control reports and memoranda flow back up through the levels of the hierarchy as subordinates are made accountable for their actions. This upward vertical flow of communications is the heart of a control system.
Horizontal channels provide means by which managers on the same level of an organization coordinate their activities without referring all matters to their superior. Such communication is sarcastically named as a “gang plank”. Because many matters can be handled at the same level of an organization by direct mutual interaction instead of a formal communication thereby speeding action while at the same time relieving superiors of unnecessary problems. Multiple copies of memoranda that flow to all positions needing the information increase coordination of effort.
Formal communications are planned to meet the specific needs of the organization; however, many communication are informal. The grapevine may be helpful for the attainment of organizational goals, but it also serves the social needs of the individuals in the organization. A manager can utilize the grapevine as a positive aid, but may also face problems of rumors, gossip, and other negative outlets of expressions by people in the organization. The grapevine cannot be destroyed; therefore, it should receive conscious attention. Informal channels may be superior for some organizational purposes. A “word” can be dropped at the proper time and may remedy a disciplinary problem without resort to a formal reprimand. Because the speed at which information flows through a grapevine is often astounding, management must seriously consider this third type of communication.
Communication may be viewed as a pattern of interconnecting lines, referred to as networks. Researchers have experimented with various structural patterns of communications in small groups.
Overloading of communication channels can cause the network to be jammed with irrelevant messages. Newer methods of processing and transmitting data have increased the number of communications which flow to executives. Managers can literally be buried in memoranda and reports with no hope of digging themselves out. The answer to this problem lies in monitoring the channels to clear messages in order of priority and importance. More messages do not necessarily mean more information. The communication system should provide for editing devices, or persons, to regulate the quality and quantity of communication with regard to sufficiency of information for decision centers.
Timing of communications can result in problems for management. Some types of messages need to be released so that everyone will receive them simultaneously. Other types of messages being transmitted should be timed sequentially so that receivers will not be confused by issues that are not important to them at the moment.
Routing of communications should provide sufficient information for a decision to be made by the proper persons. The route may determine the content of the message and the language in which it is stated. If official information is first received by the grapevine, or from persons outside the organization, the employee may be placed in an insecure position. If a supervisor receives information from subordinates, it signifies a short circuit in the line of communication from top management, and thus threatens the supervisor’s status and authority. The answers to the problem are in the proper planning of a communication system and in the recognition of its human elements.
Determination of the flow of communication and recognition of the many barriers to good communication is basic to the communicating function. Communication networks, communication channels, and barriers to communication must continually receive attention.Friday, September 21, 2007
Right Business or change required
Right Business or change required
The analysis of “the business” is not yet complete and Management still has to ask: “Are we in the right business or should we change our business?
Of course, many companies get into a new business by accident; they stumble into it rather than steer into it. But the decision to shift major energies and resources to new products and away from old ones, the decisions, in other words, to make a business out of an accident always based on the analysis: What is our business and what should it be?
A successful Midwestern insurance company analyzing the needs of their customers came up with the conclusion that traditional life insurance leaves unsatisfied a major want of the customer: a guarantee of the purchasing power of his dollars. Life insurance and annuities, in other words, need to be supplemented by equity investment by means of a “package” containing both standard life insurance, or pension in dollars, and an equity investment. To fulfill this want the life insurance company bought a small but well managed investment trust and now offers its certificates to the holders of its insurance policies and pension contracts as well as to new customers. The company has not only gone into the business of managing equity investments; it has gone into the business of merchandising investment trust certificates.
Another example is the shift from sales focus to service focus recently made by a business publisher. This company, which publishes reports for businessmen on economic conditions, taxes, labor relations and government regulation, underwent tremendous expansion during World War II; and the expansion continued at first in the postwar period. But while new sales continued to rise year after, total business volume began to stagnate around 1949; and profits began actually to go down. Analysis showed that low renewal rate was to blame. Not only did the sales force have to sell ever harder to keep total volume from slipping; the high cost of selling renewals threatened to eat up the profits from new sales. What was needed was actually a complete shift in management’s concept of the nature of the business from one of selling new customers to one of keeping old customers. This required a change in objectives; where new sales quotas had formerly been dramatized, emphasis is now on renewal quotas. It required a shift in major from selling the customer to servicing him. It required a change in organization structure; the regional sales managers were converted into managers primarily charged with renewal responsibility and with both a sales and a service manager reporting to them. It required a complete change in salesman compensation, in the criteria of selection and in the methods of training salesman. It required changes in the editorial content of the publications with more space given to long range economic trends and long range business planning.
Changes in the nature of the business arising out of innovation are too well known to require much documentation. All major enterprises in the engineering and chemical fields have largely grown by projecting innovation into new businesses. The same is true of insurance companies; the growth of the successful ones is largely traceable to their ability to develop new business on the basis of innovations in insurance coverage. The recent almost explosive growth of health, hospitalization and medical expense insurance is an example. Productivity considerations, too, may demand a change in the nature of the business.
A small wholesaler of Christmas toys added an entirely different business, the wholesaling of beachwear, to employ all year round his major economic resource: his trained sales force. Here utilization of time demanded adding a new business.
To improve the productive utilization of his resources another small manufacturer decided to give up making machine tool parts entirely and instead confined himself to being a consultant on welding problems and techniques. His manufacturing, while profitable, was no more so than that of hundreds of other small companies.
The analysis of “the business” is not yet complete and Management still has to ask: “Are we in the right business or should we change our business?
Of course, many companies get into a new business by accident; they stumble into it rather than steer into it. But the decision to shift major energies and resources to new products and away from old ones, the decisions, in other words, to make a business out of an accident always based on the analysis: What is our business and what should it be?
A successful Midwestern insurance company analyzing the needs of their customers came up with the conclusion that traditional life insurance leaves unsatisfied a major want of the customer: a guarantee of the purchasing power of his dollars. Life insurance and annuities, in other words, need to be supplemented by equity investment by means of a “package” containing both standard life insurance, or pension in dollars, and an equity investment. To fulfill this want the life insurance company bought a small but well managed investment trust and now offers its certificates to the holders of its insurance policies and pension contracts as well as to new customers. The company has not only gone into the business of managing equity investments; it has gone into the business of merchandising investment trust certificates.
Another example is the shift from sales focus to service focus recently made by a business publisher. This company, which publishes reports for businessmen on economic conditions, taxes, labor relations and government regulation, underwent tremendous expansion during World War II; and the expansion continued at first in the postwar period. But while new sales continued to rise year after, total business volume began to stagnate around 1949; and profits began actually to go down. Analysis showed that low renewal rate was to blame. Not only did the sales force have to sell ever harder to keep total volume from slipping; the high cost of selling renewals threatened to eat up the profits from new sales. What was needed was actually a complete shift in management’s concept of the nature of the business from one of selling new customers to one of keeping old customers. This required a change in objectives; where new sales quotas had formerly been dramatized, emphasis is now on renewal quotas. It required a shift in major from selling the customer to servicing him. It required a change in organization structure; the regional sales managers were converted into managers primarily charged with renewal responsibility and with both a sales and a service manager reporting to them. It required a complete change in salesman compensation, in the criteria of selection and in the methods of training salesman. It required changes in the editorial content of the publications with more space given to long range economic trends and long range business planning.
Changes in the nature of the business arising out of innovation are too well known to require much documentation. All major enterprises in the engineering and chemical fields have largely grown by projecting innovation into new businesses. The same is true of insurance companies; the growth of the successful ones is largely traceable to their ability to develop new business on the basis of innovations in insurance coverage. The recent almost explosive growth of health, hospitalization and medical expense insurance is an example. Productivity considerations, too, may demand a change in the nature of the business.
A small wholesaler of Christmas toys added an entirely different business, the wholesaling of beachwear, to employ all year round his major economic resource: his trained sales force. Here utilization of time demanded adding a new business.
To improve the productive utilization of his resources another small manufacturer decided to give up making machine tool parts entirely and instead confined himself to being a consultant on welding problems and techniques. His manufacturing, while profitable, was no more so than that of hundreds of other small companies.
Criteria of performance for the operations management System
Criteria of performance for the operations management System
Three objectives or criteria of performance of the production and operations management system are:
The case for ‘efficiency’ or ‘productive’ utilization of resources is clear. Whether, the organization is in the private sector or in the public sector, is a ‘manufacturing’ or a ‘service’ organization, or a ‘profit making’ or a ‘non-profit’ organization, the productive or optimal utilization of resource inputs is always a desired objective. However, effectiveness has more dimensions to it. It involves optimality in the fulfillment of multiple objectives, with a possible prioritization within the objectives. This is not difficult to imagine because modern production and operations management has to serve the so-called target customers, the people working within, as also the region, country or society at large. In order to survive the production/operations management system, has not only to be ‘profitable’ and/or ‘efficient’, but, must necessarily satisfy many more ‘customers’. This effectiveness has to be again viewed in terms of the short and long time horizons (depending upon the operations system’s need to remain active for short or long time horizons) – because , what may seem now like an ‘effective’ solution may not be ‘all that effective in the future. In fact, the effectiveness of the operations systems may depend not only upon a multi-objectives satisfaction but also on its flexibility or adaptability to change situations in the future so that it continues to fulfill the desirable objectives set while maintaining optimal efficiency.
Typically, what are the different decisions taken in production and operations management? As a discipline of ‘management’ which involves basically planning, implementation, monitoring, and control, some of the jobs/decisions are involved in the production and operations management.
The production and operations management function can be broadly divided into the following four areas:
This is primarily an aspect pertaining to the long term decision with some spillover into the intermediate region. Although it is not immediately connected with the day-to-day short term decisions handled in the plant, it is an important problem to be addressed in an age of spectacular technological advances, so that an appropriate choice is made by a particular organization to suit its objectives, organizational preparedness and its micro economic perspectives. It is a decision that will have a significant bearing on the management of manpower, machinery, and materials capacity of the operations system and also on the type of disturbances it can create within and outside the system by generating (i) undesirable effects of deterioration, (ii) potentially harmful waste by-products, and (iii) potential risk, to the users and non-users alike, due to a variety of reasons. A technology decision is closely linked with the capacity and system maintenance areas.
The capacity management aspect once framed in a long term perspective revolves around matching of available capacity to demand or making certain capacity available to meet the demand variation. This is done on both the intermediate and short time horizons. Capacity management is very important for achieving the organizational objectives of efficiency, customer service and overall effectiveness. While lower than needed capacity results in non-fulfillment of some of the customer services and other objectives of the production/operations system, a higher than necessary capacity results in lowered utilization of the resources or, in other words, lower efficiency of the conversion operations. There could be a ‘flexibility’ built into the capacity availability, but this depends upon the ‘technology’ decision to some extent and also on the nature of the production/operations system. While some operations systems can ‘flex’ significantly, some have to use inventories as the flexible joint between the rigidities of a system. The degree of flexibility required depends upon the customers demand fluctuations and thus the demand characteristics of the operations system.
As the product variety increases, the systems of production/operations change. In a system characterized by large volume low variety, one have capacities of machinery and men which are inflexible while taking advantage of the repetitive nature of activities involved in the system; whereas in a high variety (and low volume) demand situation, the need is for a flexible manufacturing system even at some cost to the efficiency. It may be noted that the relationship between the flexibility, capacity and the desired system-type holds good even for the ‘service’ industry.
Scheduling is another decision area of operations management which deals with the timing of various activities – time phasing of the filling of the demands or rather, the time phasing of the capacities to meet the demand as it keeps fluctuating.
System Maintenance: The fourth area of operation management is regarding safeguards – that only desired outputs will be produced in the ‘normal’ condition of the physical resources, and that the condition will be maintained normal. This is an important area whereby ‘vigilance’ is maintained so that all the good work of capacity creation, scheduling, etc is not negated.
Three objectives or criteria of performance of the production and operations management system are:
- Customer satisfaction
- Effectiveness
- Efficiency
The case for ‘efficiency’ or ‘productive’ utilization of resources is clear. Whether, the organization is in the private sector or in the public sector, is a ‘manufacturing’ or a ‘service’ organization, or a ‘profit making’ or a ‘non-profit’ organization, the productive or optimal utilization of resource inputs is always a desired objective. However, effectiveness has more dimensions to it. It involves optimality in the fulfillment of multiple objectives, with a possible prioritization within the objectives. This is not difficult to imagine because modern production and operations management has to serve the so-called target customers, the people working within, as also the region, country or society at large. In order to survive the production/operations management system, has not only to be ‘profitable’ and/or ‘efficient’, but, must necessarily satisfy many more ‘customers’. This effectiveness has to be again viewed in terms of the short and long time horizons (depending upon the operations system’s need to remain active for short or long time horizons) – because , what may seem now like an ‘effective’ solution may not be ‘all that effective in the future. In fact, the effectiveness of the operations systems may depend not only upon a multi-objectives satisfaction but also on its flexibility or adaptability to change situations in the future so that it continues to fulfill the desirable objectives set while maintaining optimal efficiency.
Typically, what are the different decisions taken in production and operations management? As a discipline of ‘management’ which involves basically planning, implementation, monitoring, and control, some of the jobs/decisions are involved in the production and operations management.
The production and operations management function can be broadly divided into the following four areas:
- Technology selection and management
- Capacity management
- Scheduling /Timing,Time allocation
- System maintenance
This is primarily an aspect pertaining to the long term decision with some spillover into the intermediate region. Although it is not immediately connected with the day-to-day short term decisions handled in the plant, it is an important problem to be addressed in an age of spectacular technological advances, so that an appropriate choice is made by a particular organization to suit its objectives, organizational preparedness and its micro economic perspectives. It is a decision that will have a significant bearing on the management of manpower, machinery, and materials capacity of the operations system and also on the type of disturbances it can create within and outside the system by generating (i) undesirable effects of deterioration, (ii) potentially harmful waste by-products, and (iii) potential risk, to the users and non-users alike, due to a variety of reasons. A technology decision is closely linked with the capacity and system maintenance areas.
The capacity management aspect once framed in a long term perspective revolves around matching of available capacity to demand or making certain capacity available to meet the demand variation. This is done on both the intermediate and short time horizons. Capacity management is very important for achieving the organizational objectives of efficiency, customer service and overall effectiveness. While lower than needed capacity results in non-fulfillment of some of the customer services and other objectives of the production/operations system, a higher than necessary capacity results in lowered utilization of the resources or, in other words, lower efficiency of the conversion operations. There could be a ‘flexibility’ built into the capacity availability, but this depends upon the ‘technology’ decision to some extent and also on the nature of the production/operations system. While some operations systems can ‘flex’ significantly, some have to use inventories as the flexible joint between the rigidities of a system. The degree of flexibility required depends upon the customers demand fluctuations and thus the demand characteristics of the operations system.
As the product variety increases, the systems of production/operations change. In a system characterized by large volume low variety, one have capacities of machinery and men which are inflexible while taking advantage of the repetitive nature of activities involved in the system; whereas in a high variety (and low volume) demand situation, the need is for a flexible manufacturing system even at some cost to the efficiency. It may be noted that the relationship between the flexibility, capacity and the desired system-type holds good even for the ‘service’ industry.
Scheduling is another decision area of operations management which deals with the timing of various activities – time phasing of the filling of the demands or rather, the time phasing of the capacities to meet the demand as it keeps fluctuating.
System Maintenance: The fourth area of operation management is regarding safeguards – that only desired outputs will be produced in the ‘normal’ condition of the physical resources, and that the condition will be maintained normal. This is an important area whereby ‘vigilance’ is maintained so that all the good work of capacity creation, scheduling, etc is not negated.
Employees or customers
Employees or customers
Paucity of talent coupled with high rate of attrition has forced corporate companies in India to give higher priority to employees than the customers sometimes to ensure their top and bottom lines continue to improve.
Cutting across sectors, employees both in new age and brick and mortar companies are today in the enviable position of choosing their employers, contrary to the dictum of chasing a job. With this reversal in trend companies are thriving to become “employer of choice”.
Finding the right talent has become much harder in today’s world and the employers need to create brand value for themselves among the job seekers. Employers are now working in a small field with very few quality candidates and finding right person is three times harder than it was ten years ago. Employer branding comes as a rescuer in such a scenario.
Waking up to the need, a number of companies, from IT firm HCL to tires to pharmaceutical group Apollo International, are projecting themselves as employer of choice, while valuing their workers more than customers.
At HCL a strong message is conveyed to employees that customers come second to the employees. This imbibes a feeling in the mindsets of employees that they are the priority for their organization. This creates a sense of belongingness and employees on their part feel a sense of responsibility for the organization.
Apollo wants to be known as the most preferred employer of choice mentions a top HR director of the company. The branding is the need for the day, be it for a product, a person or a company. An “inside-out method” is followed, as per which internal branding compels value proposition for external people as well as current employees.
The industry players believe the new focus is helping the companies not just for hiring new as well as right talent, but for also retaining their existing employees. With the companies having a better brand value than others, the existing employees stay on for longer recognizing the brand promise and new candidates are also attracted. In addition, the exercise also saves on hiring and related costs.
The tool has helped up in significantly cutting cost per hire. High reputation in marketplace helps in attracting specialist talent in the present difficult market. This tool fosters employee productivity and helps to retain and attract employees.
However, the rule is not the same for each and every company. To create a brand value, the company first needs to be good at its original business.
Firstly a company has to be successful at its business. Also, they should walk their talk by running an organization which has a sense of purpose and which treats employees fairly based on the current market value.
The dividends reaped, however, are significant for the companies that have successfully implemented this model.
A fastest growing IT corporate company in India is projecting itself as a young dynamic company with a workforce that could pay a leading role in the information technology sector, and this projection has helped with the company becoming the fastest growing IT company in India, managing to be in the top five slots for the last few years.
Here we would like to clarify that customers are not neglected for the sake of employees. It is while customers are given certain privileges the same benefits are also passed on to the employees subject to feasibility and practical possibility. For example in case of 5 star hotels the facilities given to their guests is even extended to the employee and his family members subject to the rules even guests may have to follow. In case of a IT company a club facility meant for top management and their high value customers is noe being extended to employees beyond a certain grade. Another IT company provided a chauffeur driven car to an employee of Assistant manager and above category on his or her marriage anniversary day at company’s expense.
Paucity of talent coupled with high rate of attrition has forced corporate companies in India to give higher priority to employees than the customers sometimes to ensure their top and bottom lines continue to improve.
Cutting across sectors, employees both in new age and brick and mortar companies are today in the enviable position of choosing their employers, contrary to the dictum of chasing a job. With this reversal in trend companies are thriving to become “employer of choice”.
Finding the right talent has become much harder in today’s world and the employers need to create brand value for themselves among the job seekers. Employers are now working in a small field with very few quality candidates and finding right person is three times harder than it was ten years ago. Employer branding comes as a rescuer in such a scenario.
Waking up to the need, a number of companies, from IT firm HCL to tires to pharmaceutical group Apollo International, are projecting themselves as employer of choice, while valuing their workers more than customers.
At HCL a strong message is conveyed to employees that customers come second to the employees. This imbibes a feeling in the mindsets of employees that they are the priority for their organization. This creates a sense of belongingness and employees on their part feel a sense of responsibility for the organization.
Apollo wants to be known as the most preferred employer of choice mentions a top HR director of the company. The branding is the need for the day, be it for a product, a person or a company. An “inside-out method” is followed, as per which internal branding compels value proposition for external people as well as current employees.
The industry players believe the new focus is helping the companies not just for hiring new as well as right talent, but for also retaining their existing employees. With the companies having a better brand value than others, the existing employees stay on for longer recognizing the brand promise and new candidates are also attracted. In addition, the exercise also saves on hiring and related costs.
The tool has helped up in significantly cutting cost per hire. High reputation in marketplace helps in attracting specialist talent in the present difficult market. This tool fosters employee productivity and helps to retain and attract employees.
However, the rule is not the same for each and every company. To create a brand value, the company first needs to be good at its original business.
Firstly a company has to be successful at its business. Also, they should walk their talk by running an organization which has a sense of purpose and which treats employees fairly based on the current market value.
The dividends reaped, however, are significant for the companies that have successfully implemented this model.
A fastest growing IT corporate company in India is projecting itself as a young dynamic company with a workforce that could pay a leading role in the information technology sector, and this projection has helped with the company becoming the fastest growing IT company in India, managing to be in the top five slots for the last few years.
Here we would like to clarify that customers are not neglected for the sake of employees. It is while customers are given certain privileges the same benefits are also passed on to the employees subject to feasibility and practical possibility. For example in case of 5 star hotels the facilities given to their guests is even extended to the employee and his family members subject to the rules even guests may have to follow. In case of a IT company a club facility meant for top management and their high value customers is noe being extended to employees beyond a certain grade. Another IT company provided a chauffeur driven car to an employee of Assistant manager and above category on his or her marriage anniversary day at company’s expense.
Examples of Items You Can Use for Employee Recognition
Examples of Items You Can Use for Employee Recognition
Employee recognition is best approached creatively. While money is an important form of employee recognition, ideas for employee recognition are limited only by your imagination. Use the following ideas as you approach the provision of employee recognition.
Money
Base salary
Bonuses
Gift certificates
Cash awards
Written Words
Handwritten thank you notes
A letter of appreciation in the employee file
Handwritten cards to mark celebratory occasions
Recognition posted on the employee bulletin board
Contribution noted in the company newsletter
Positive Attention From Supervisory Staff
Stop by an individual’s workstation or office to talk informally
Provide frequent positive performance feedback – at least weekly
Provide public praise at a staff meeting
Take the employee out to lunch.
Encourage Employee Development
Send people to conferences and seminars
Ask people to present a summary of what they learned at a conference or seminar at a department meeting
Work out a written employee development plan
Make career development commitments and a schedule
The Work Itself
Provide cross training opportunities
Provide more of the kinds of work the employee likes and less of the work they do not like
Provide opportunities for empowerment and self-management
Ask the employee to represent the department at an important, external meeting
Have the employee represent the department on an inter-departmental committee
Provide opportunities for the employee to determine their own goals and direction
Participation in idea-generation and decision making
Gifts
Company logo merchandise such as shirts, hats, mugs, and jackets
Gift certificates to local stores
The opportunity to select items from a catalog
The ability to exchange "positive points" for merchandise or entry into a drawing for merchandise
Symbols and Honors
Framed or unframed certificates to hang on the wall or file
Engraved plaques
Larger work area or office
More and better equipment
Provide status symbols, whatever they are in your organization
Employee recognition is best approached creatively. While money is an important form of employee recognition, ideas for employee recognition are limited only by your imagination. Use the following ideas as you approach the provision of employee recognition.
Money
Base salary
Bonuses
Gift certificates
Cash awards
Written Words
Handwritten thank you notes
A letter of appreciation in the employee file
Handwritten cards to mark celebratory occasions
Recognition posted on the employee bulletin board
Contribution noted in the company newsletter
Positive Attention From Supervisory Staff
Stop by an individual’s workstation or office to talk informally
Provide frequent positive performance feedback – at least weekly
Provide public praise at a staff meeting
Take the employee out to lunch.
Encourage Employee Development
Send people to conferences and seminars
Ask people to present a summary of what they learned at a conference or seminar at a department meeting
Work out a written employee development plan
Make career development commitments and a schedule
The Work Itself
Provide cross training opportunities
Provide more of the kinds of work the employee likes and less of the work they do not like
Provide opportunities for empowerment and self-management
Ask the employee to represent the department at an important, external meeting
Have the employee represent the department on an inter-departmental committee
Provide opportunities for the employee to determine their own goals and direction
Participation in idea-generation and decision making
Gifts
Company logo merchandise such as shirts, hats, mugs, and jackets
Gift certificates to local stores
The opportunity to select items from a catalog
The ability to exchange "positive points" for merchandise or entry into a drawing for merchandise
Symbols and Honors
Framed or unframed certificates to hang on the wall or file
Engraved plaques
Larger work area or office
More and better equipment
Provide status symbols, whatever they are in your organization
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