The Competition Commission on Wal-Mart

I was reading an article by an Associate Professor from UCT about the Wal-Mart/Merger (Financial Mail Dec. 2011) to be referred to the trade authorities for resolution as it is a trade and not a competition issue.  He supported this argument stating that Wal-Mart’s price competitive strategy has more to do with its import business strategy that cripples the domestic supply networks more than anything therefore he instead proposed for import tariffs to increase thereby penalizing Wal-Mart’s favoritism in supplying the middle-to-low income consumers (LSM 1 – 4) affordable goods.  Firstly, whilst this suggestion appears reasonable it discourages local companies to be innovative and competitive in the FMCG industry.  Secondly, why should Wal-Mart be penalized by looking out for the interest of the consumer; thereby, increasing the social welfare/rate of investment and not just the private rate of investment. Thirdly, now that South Africa passed the Consumer Protection Bill earlier this year isn’t it high time South African companies start revisiting their current business model to ensure that they incorporate the safety and security of the consumer.  After all, this is truly both a competition issue as well as a trade issue. 

So far, the government, the competition tribunal has allowed Wal-Mart/Massmart merger, it is still seeking additional conditions that may come as a result of the deal, according to the Financial Mail (Dec., 2011) as follows:

1. Impose a domestic content requirement on Wal-Mart’s sales and/or
2. Increase in the R100m Wal-Mart offered to boost local supply networks

Much like what Edward suggested in his article, these remedies assume that Wal-Mart deal will harm the local economy and the problem and solution has been identified correctly.  Firstly, when Wal-Mart entered the South African market it employed approximately 3,000 people.  How is that harming the local economy?  Secondly, it correctly identified an opportunity in the middle-to-low-income consumer (LSM 1-4) category via a blue ocean strategy; thereby supplying to a ‘new’ market that the local businesses value-propositions either ignored, were indifferent or had not noticed.  How is that harming the local economy?  Local business should stop pointing fingers to new foreign entrants in the market with the balance sheet and the social entrepreneurship skills to deliver more than just dumping their imported products in the growing SA economy but also ensuring the needs of ALL SA consumers are taken care of.  Thus, local business’ such as potential and existing SMEs should see this as an opportunity to enter the market by developing innovative local supply networks for both local companies and big companies like Wal-Mart in the FMCG industry to make the industry more competitive domestically, and in turn internationally via export prospects offered by Wal-Mart’s global reach.  In the end the consumer always benefits as new innovative strategies lead to cost-savings passed on to the consumer.  In addition, recent events show that the South African government has insisted that 75% of goods sold in the domestic market to be locally produced.  So, it appears to me that the Local producers and suppliers already have the upper-hand in this macroeconomic model.  Thus, the way I see it as long as the fiscal, labour policies and the agricultural output continue to affect South Africa’s manufacturing sector, no matter which way you look at it, the real problem here are the current governance structures that may not necessarily support the domestic firms.  Therefore, neither imposing import duties as prescribed by Edwards Financial Mail (Dec., 2011); nor insisting on the two presuppositions outlined above will cure the apparent disharmony in the FMCG industry.  Local companies should seek to see this as an opportunity to formulate private sector policies that have long been needed to regulate and support the FMCG industry in SA.  After all, we don’t want to see another Tiger Brands’ price collusion facilitated and reincarnated in the likes of Wal-Mart as a result of current governance structures that actually give life to such white-collar crimes. 

Copyright @ 1 November 2011.  BlogSpot by Tambudzai Ndoro, Principal Director of Ndoro Resources (PVT) Ltd, (2011)

Emerging Scientists and Researchers need to be multidisciplinary

The 21^st century is a global village in which the environments we dwell in are slowly and most times already complex adaptive systems politically, socially and economically.   From an organizational theorist point of view changes in an organization during the industrial revolution shows an increasing trend of division of labour at work, which was admired by the Scottish economist Adam Smith, in his book , Wealth of Nations (1776). This led to highly specialized roles in many sectors from manufacturing to scientific research.  However, such organizational systems have had such a negative impact on social systems.  We see that in today’s big firms and banks.  For example, as the major banks in Southern Africa business’ practices have not been lenient to the middle and low-income consumer.  Hence, middle and low-income consumers are subjected to an average of ZAR200 bank charges per month.  In addition, banks in Zimbabwe have not provided ‘convenience’ as an innovative product offering to consumers.  Consumers are still required to carry cash as opposed to using their bank cards everywhere they choose to do shopping.  When one finds themselves paying with a visa, master card or credit card in an establishment, consider it a rare privilege bestowed upon you.  This shows that organizational systems like the Banks that are highly specialized, mechanistic structured organizations generate spillovers into the social systems they reside by propagating severe limitations of inflexibility and lack of innovative ability as the organizational system is designed to achieve predetermined goals.  In addition, employees, scientists or researchers can develop ‘tunnel vision’ approaches in addressing problem in organizational performance which has direct social impact on the market they seek to serve.  Thus, it becomes imperative to integrate the needs of the consumer with that of the organization via multidisciplinary market research that seeks to create value through social innovations with a positive social impact. 

It has been shown that work in many parts of the globe have shown that in designing any kind of social system, such as an organization the interdependence of technological and human needs must form part of the business model.  This perspective is in line with the open-system framework of Tom Burns and G.M. Stalker (1950).  To put this more practically let’s look at the Renewable Energy sector in advanced economies compared to developing and emerging market economies.  The Renewable Energy sector has been in business for the last 3 decades or more in countries like Denmark, Germany & Netherlands.  They have managed to benefit from the insights of industrial revolutionists like Adam Smith in the specialization of skills.  This may be due to the fact that the environment in which these organizations conduct Research & Development where at most times stable and NOT complex systems. Rather systematic and mechanic.  This means the organizational culture most times adopted the national culture of prescriptive strategies.  Hence, one would find that in such society the degree of standardization and the degree of specialization of a Researcher/Scientist in the energy sector is fairly high and in response and in line with the embedded social system of the country.  Whereas, in countries like South Africa, Zimbabwe and Kenya, Renewable Energy, (in my professional opinion), research in this part of the world is more of an Art than a Science.  This is due to the fact that the social systems, in which these countries seek to change are constantly changing politically and economically.  Thus, it requires researchers and scientists with a multidisciplinary approach in understanding ALL of the social systems at play in one country and not just the renewable energy technological implications on the consumer.  Hence, the prescribed socio-economic terms ‘developing’ or ‘emerging markets’ is indicative of a constantly growing economy.  Thus, emerging young researchers/scientists need to be multidisciplinary when they seek answers or solutions to Africa’s development requirements.  This means open and flexible styles of research methodology with a high degree of standardization and medium-to-low degree of formalization are required in the African markets.  

Copyright @ 1 November 2011.  BlogSpot by Tambudzai Ndoro, Principal Director of Ndoro Resources (PVT) Ltd., (2011)

The 'Customer is King' Only in Theory!

I walked into Spar at Borrowdale Brooke yesterday and was delighted to see the latest O Magazine on their newspaper and magazine stands.  I did not care to notice the price because I consider myself a loyal and profitable customer for Oprah’s news and information business.  In addition, the standard price one obtains it for the magazine is always around ZAR27,95 in South Africa or approximately US$3.50.  After finishing placing all my desirables in my basket I went to check out at the Till.  To my astonishment the O Magazine was going for US$28,75, or ZAR230 equivalent and even more surprising the attendee did not realize the strange and very material amount for a magazine especially when the average price of a magazine in Zimbabwe is approximately US$2.  I requested that she removed the magazine from my basket of desirables and advised the attendee to consult management about this abnormal price.  Surely, it must be a mistake.  Even Americans don’t pay as much for the magazine.  It seemed so surreal.  However, what I found strikingly amazing however was that the nonchalant attitude the attendee had.  I realized they may lack a deep rooted understanding of the value of the US dollar.  That means in theory a US dollar circulating in a US economy should be of the same US dollar in the Zimbabwe economy, with all being considered equal (e.g. the classical economist instruments of GDP per capita and inflated linked consumer-price-index (CPI) have a correlation on  the appreciation and the devalue of a currency).  Nevertheless, it continued to boggle my mind that if I had taken the last O Magazine on the stand how many consumers in Harare purchased this product without as so much, to blink at the high value placed on the product.  This is retail un-therapeutic indeed! I surmised, the Customer is NOT King, here L.

                                                                            *******

Just as I was getting over my disappointment with O Magazine saga, today my cousin and some a few of a her friends decided to go for a few well-deserved cocktails for a couple of hours at a place by  Sam Levys, Borrowdale, called Mekka.  I unfortunately, was put on a heavy prescription plan by the doctor from antibiotics to asthma pumps so I decided to order a ‘virgin’ strawberry daiquiri.  Now, one would think that because there is no alcohol in the cocktail that should partially, if not significantly drop the price of the cocktail.  The current average price of a cocktail at Mekka is US$5.  So, at best-case-scenario price should be reduced by 50% to US$2.50 and worst-case-scenario price should be reduced by 25% to US$3.75. So, to my surprise, when we received the Bill the Waiter serving us just rang the non-alcoholic beverages as alcoholic beverage.  I felt cheated.  Surely, one can’t charge a customer for the same price for a product that specific (known-to-be expensive ingredients in Food and Beverage industry) ingredients are deliberately omitted.  So, I decided to inquire with a smiley face, desperately suppressing my potential wrath toward the Waiter, particularly for his lack of intuitiveness on the job.  The Waiter, replied stating something along the lines of ‘it’s the way the Till System is designed to capture the orders, so we have no choice but to ring the options that are available.’  I could instantly hear, the siren ringing in my head.  I then retorted, ‘Please may you speak to your manager about that because I am not comfortable paying for a drink that does not have the same taste as the standard drinks.  So, the manager came and told me the same thing like they are all reading from the same manual that came with the Cash Register.  By then, I had once again, silently resigned to just paying the bill for the sake of terminating what appeared to be a monologue with management. This made it the second incident this week I witnessed of the customer is really NOT the King and came to the general conclusion that inefficient, day-light-robbery of the management information systems (MIS) in the city of Harare retail business’, seems to be the order of the day, more often than one cares to admit.  How many times is the customer’s ‘safety and security’ being taken care of in this country?  Just recently South Africa just passed the South African Consumers Act 2011 that serves to protect the rights of its citizen after 17 years of democracy.  Zimbabwe has almost twice the years of independence however, where are the laws that govern and protect the rights of Consumers in this country?  Over the years the Consumer Council of Zimbabwe (CCZ) has been recording feedback from consumers’ discontent and frustrations brought about by retailers’ reluctance to compensate or replace faulty goods and lack of guarantees among other problems, (www.ccz.org.zw – accessed 12 November 2011).  This highlights one of the fundamentals problems in our socio-economic structures of this country.  Where is the national system’s ability to demonstrate the social aspect of its contribution, thus far?  If the system had a high rate of social return, this would increase the social welfare of the country, not just the purely private rate of investment.  Can’t our country see that we are now in The Age of Customer Capitalism, Martin et al., 2010.  That means business’ more than ever have a corporate social responsibility (CSR) and a duty to their customers.

The ways businesses continue to operate in this economic climate, showing blatant disregard to the consumer further heighten and adds to the continuous degradation and decay of our socio-economic structure of Zimbabwe.  Though business’ in this country strive to fight in building and contributing to the economy by creating employment and restoring confidence in the market; business’ also seem to have inherited a national culture of indifference and authoritarianism.  Therefore, how can the new marketing adage of Customer is King live, breathe and thrive in this society that claims to exist in a democratic way?    I will tell you why - because the theory of Customer is King is what it is – just a theory!

Copyright @ 12 November 2011.  BlogSpot by Tambudzai Ndoro, Principal Director of Ndoro Resources PVT LTD and Non-Executive Director of Global Business Assignments Inc.,

What is the difference between a National Culture and an Organizational Culture?

Based on the research of Dr. Geert Hofstede, there are differences between national and organizational cultures.  For global companies, it is important to understand both in order to impact organizational performance.[1]

Morgan offers his insights from a sociologist perspective.  He aptly describes organizations as cultures to the extent to which he illustrates that the history of the collective group in a country affects how they run their organizations.  He conveys this by providing comparisons between the United States (U.S.) organizational culture of individualism to that of the Japan’s organizational culture of collectivism and depending on each nation’s economic framework it is built on their organizational behaviour contributes favourably to the success and viability of the organizations in that environment.

Geert Hofstede, from an anthropologist perspective describes a national culture by offering insights into four dimensions that influence cultural humanity:

1.       Power Distance – Coping with discrimination/inequity

2.       Uncertainty avoidance – Coping with ambiguity

3.       Individualism – Association  of the individual with the principal group

4.       Masculinity – The emotional repercussions of being born either as a male or female.

Based on a survey conducted 1990 – 2002 by IBM with 116,000 employees in 50 countries different countries where placed in different categories.  A fifth dimension called Long versus Short-term Orientation, was added by Michael Bond when he conducted a research among students in 23 countries.  The study identified how long-term orientated societies fostered pragmatic virtues, e.g., saving, persistence and adaptation to changing environments versus short-term orientated societies that focused on patriotism, respect for tradition, fulfilling social obligations and keep up appearances.  A sixth dimension called Indulgence versus Restraint, was added based on Minkov’s World Values Survey data done on 93 countries.  The study looked at how society allowed relatively free gratification related to enjoying life and having fun versus a society that suppresses gratification of needs by means of strict social norms.

When one looks at the sociologist and the anthropologists varying degrees of the way they look at culture it appears that they only have one common thread which runs through both models – Individualism/Collectivism.  Both agree to the degree to which individuals are assimilated to their groups both at a national level and organizational level.  Hofstede study conveyed this by illustrating that Anglo-european/American countries are dominated by individualistic values, versus Asian and Latin-European countries are governed by collectivism.   Hoefstede continues to say, “ My research has shown that organizational cultures differ mainly at the levels of symbols, heroes and rituals, together labelled 'practices'; national cultures differ mostly at the deeper level, the level of values.”[2]

The important question to ask is, is there a difference in national culture and organizational culture? Hofstede’s assessment is that the national culture is associated with our traditional values, for example, ethical versus unethical, moral versus immorality.  As a result, national cultural traditional values are taught through the individual’s surrounding environment at an early stage.  Therefore, become deeply ingrained and change gradually over the period. 

Morgan’s assessment of Organizational culture, in comparison, looks at the fundamentally rooted organizational practices learned during employment, which also to an extent can change over a length of time.  It is important to understand these differences in today’s world because of increasing trend in globalization.  This means companies such as Barclays, JP Morgan, GoldmanSachs to name a few who have branch/satellite firms in each continent can no longer underestimate the impact of an employee’s personal values in the foreign country and its impact on how they perceive the organizational culture of that entity versus that organization’s national culture – its origin.  For example, working for JP Morgan South Africa is different to working in JP Morgan U.S.  Whilst JP Morgan an originally U.S. based company has specific national culture and organizational culture that are specific to the U.S. for business to operate successfully in South Africa, JP Morgan SA will have to adopt some characteristics of local employee’s national culture and combine it with the U.S. organizational culture that exists in the U.S. based firms.  However, whilst in some cases local employee’s may be persuaded to adopt U.S. national culture, the challenge arises when 1) local employees ratio to foreign employees is higher 2) local employee’s national culture values are deeply rooted 3) U.S. organizational culture goes against the deeply held national cultural values of the local employees.  What is acceptable in a national context is not acceptable in another.  It is evident that organizational culture eventually does not dominate over national culture.  This in essence is what Morgan refers to as subculture.

Overview Table comparing Hofstede and Morgan’s metaphor of Brains

Hofstede – National Culture	Organizational Framework	Morgan’s metaphor of Brains
Power Distance	Hierarchical/Beaurecratic Systems in place
Uncertainty avoidance	Access to company information & company resources
Individualism	Open plan office versus demarcated offices/single unit offices
Masculinity	Glass-ceiling Effect

Table above looks at how Hofstede view of national culture is simulated into an Organizational culture as we see it today.

How does power-distance relate to the brain metaphor?  Power distance is the degree to which members of a culture accept and expect that power in society is unequally distributed (Hofstede, 1980).[3]  This contrast Morgan’s brain metaphor in the sense that the brain functionality are not decentralized into hierarchical structure.  Each nerve cell of the brain share the same level of exercising control in how it process and stores the information in the brain.  In addition, power-distance is formed to create a center or point of control.  In contrast, ‘the brain seems to store and process data in many parts simultaneously.  Pattern and order emerge from the process; it is not imposed.’[4] This helps us understand that unlike national culture, organizational culture hierarchical structure is a natural formation determined by the individual roles.  This is illustrated in the results, of “split brain” research…there is undoubtedly a high-degree of specialization on the part of each hemisphere (left and right), but both are always involved in any given activity.  It is just that one hemisphere seems to be more active or dominant than the other as different functions are brought into play.’[5]

How does uncertainty avoidance link to the brain metaphor?    Uncertainty avoidance the degree to which a society tolerates ambiguity (Jorgensen, F., PhD 2010).  This is similar to how the brain functions within an organizational context.  Based on the decision-making approach pioneered in the 1940s and 1950s by Nobel Prize Winner Herbert Simon, organizations act on incomplete information because ‘the members have limited information processing abilities.’  Therefore, organizations act as ‘kinds of institutionalized brains that fragment, routinize, and bound the decision-making process to make it manageable.’[6]  This echoes the degree to which organizations are willing to take risks in, for example, selling a new product to a new market in a foreign geographic location.  How open are they to attach accurate values to non-specific outcomes of that project.  To mitigate this risk organizations have since 1) invested in in management information systems (MIS) and decision-analytic tools to aid to make more rational decisions.[7] 2) By setting goals and targets rather than rely on controlling behaviour through rules and programs and 3) dependent on continuous feedback as a means of control.[8]

How does individualism link to the brain metaphor?  Individualism is defined as the degree of social connectedness among individuals (Hofstede, 1980)[9]  This is similar to the brain metaphor in the sense that whilst there are two hemispheres of the brain were one does to some extent dominate the other, ‘the complementary is illustrated in the evidence that although different people may bring a right- or left-brain dominance to a specific task, both hemispheres are necessary for effective action or problem solving to occur.’[10]  This highlights two level of thinking 1) Individualism is encouraged to some extent 2) Collectivism – combined efforts of individuals is also encouraged in an organizational culture.

How does masculinity link to the brain metaphor? Masculinity is the degree to which society allocate particular importance values to a specific gender – male or female.  We see such distinct similarity when we describe the functions of the left-right hemispheres of the brain.  ‘The right hemisphere plays a dominant role in creative, intuitive, emotional acoustic, and pattern recognition functions and controls the left-side of the body[11] as known as ‘soft values’ (Jorgensen, F., PhD 2010).  The left hemisphere is more involved with rational, analytic, reductive, linguistic, visual, and verbal functions while controlling the right side of the body,’[12]associated with ‘hard values’(Jorgensen, F., PhD 2010).  This supports Morgan’s metaphor of the brain.

In conclusion, Hoefstede’s views of national culture excluding (Michael Bond’s fifth dimension and Milkov’s sixth dimension (added as are result of Milkov’s World Survey) helps us understand Morgan’s metaphor of Organization’s as a brain at an 1) Organizational Framework level (Overview table above) 2) two-Hemispheres of the brain 3) as Decision-analytical tools and 4) Information Systems that store and process information. 

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[1] ITAP International - http://www.itapintl.com/whoweare/news/146-organizational-culture-and-national-culture-whats-the-difference-and-why-does-it-matter-.html

[2] Dimensions of National Culture - http://www.geerthofstede.nl/culture/dimensions-of-national-cultures.aspx

[3] BNet - http://findarticles.com/p/articles/mi_m4035/is_2_46/ai_79829823/pg_4/

[4] Morgan, G., Images of Organization, Pg 73

[5] Morgan, G., Image of Organizations, Pg 74

[6] Morgan, G., Image of Organizations, Pg 76-77

[7] Morgan, G., Image of Organizations, Pg 77

[8] Morgan, G., Image of Organizations, Pg 77

[9] BNet - http://findarticles.com/p/articles/mi_m4035/is_2_46/ai_79829823/pg_4/

[10] Morgan, G., Image of Organizations, Pg 74

[11] Morgan, G., Image of Organizations, Pg 74

[12] Morgan, G., Image of Organizations, Pg 74

Copyright @ 31 October 2011.  BlogSpot by Tambudzai Ndoro, Non-Executive Director of Global Business Assignments Inc.,

The New Consciousness: How does Morgan's organizational view of 'Machines...

The New Consciousness: How does Morgan's organizational view of 'Machines...: Morgan’s overall analysis of industrial organizations looks at the more external and structural development of them. Organization behaviou...

How does Morgan's organizational view of 'Machines' and 'Organisms' relate with personality, values and perception concepts?

Morgan’s overall analysis of industrial organizations looks at the more external and structural development of them.  Organization behaviour looks at the internal make-up of this organization and how they contribute to a sustainable and stable organizational development.   Lets look at how Morgan’s organizational view of theories and models specifically machines and organisms relates with  personality, values, and perception theory and models and how those individual’s perceptions, values and attitudes relate to how we experience organizations.  

Morgan uses eight (8) metaphors to describe the different ways of how an organization can either be thought of, seen and how it functions or supposedly functions.  The identified metaphors are:  machines, organisms, brains, culture, political systems, psychic prisons, flux and transformation, instruments of documentation.   However, for purposes of this blog I will just focus on machines and organisms.  Organizational behaviour focuses on the human element of the organizational structure.  It is the people who are the biological organisms who make-up and drive organizational development.   According to several studies conducted after 1980 an individual’s performance in a work place can affect how well they performance, and in turn translates to the organization’s overall performance non-financially and financially.  As a result, since then, organizations have come up with personality pre-testing which predicts how an individual performs their job.  These tests includes, Myer-Briggs Types Indicator (MBTI), Jung’s Personality Types, the Five-Factor model and Cattell’s sixteen (16) personality factor to name a few.

Table 1.1.- Correlation between Organization Developments and Organizational Behaviour below, breaks down  Morgan’s metaphors  into their appropriate formal functions and how it translates with the organization’s today.  In addition, the table also shows how  individual(s) personality, values, and perceptions, become/are a thread that runs continuously throughout the entire organizational structure.  This is because no single metaphor can exist without the other metaphor in its description of the organization.  An indication of this is highlighted by Morgan when he compares an organization to a machine, “…the metaphor is incomplete…it ignores the human aspects,” which is resonated in the other metaphor that describes organizations, “biological organism.”  This in essence highlights the fact that there is a relationship between organizational development and organizational behaviour which is intertwined and perhaps detrimental to the existence and sustainability of any organization.  However, according to Morgan the “machine” metaphor encourages other ways of looking at the organization at management/bureaucratic  system(s).  When we look at it at that level we begin to interrogate the roles and functionality of such systems and how an individual placed at the level can meaningfully contribute to the mechanistic nature of the system.   It is now at these levels of management that an individual’s personality, values and perceptions plays a catalytic role.  It is at these levels that an individual is required to be methodological  and almost mechanical. There by shaping and influencing organizational behaviour in a top-down effect.

The “biological organism” metaphor that Morgan mentions implies that an organization is made up of many organ-parts, heterogeneous by sight, but all co-ordinating and working towards a common goal of being a functional whole and in the process , growing, changing and adapting to its environment.  This is highlighted when Morgan states “we come to see different types of organizations as belonging to different species.” It is at this level of organizational development that Human Resources Management Systems are put in place to plan, co-ordinate and facilitate the ever-changing and growing organization.  It is at this level that again an individual’s perception, values and perceptions plays a catalytic role in identifying and assessing skilful and sometimes highly specialized human resources to meet the organization’s needs for growth and sustainability.

Table 1.1. Correlation between Organization Developments and Organizational Behaviour

Key words	Metaphors for Organizations[1]	Formal Functions in Organizations	Personality, Values & Perceptions
Machines	As a goal-seeking machine with interchangeable parts	Bureaucratic Systems/Management Levels
Organisms	As a biological organism that continually adapts to change	Human Resources Management Systems

Personality

Personality is defined as “The totality of qualities and traits, as of character or behaviour, which are peculiar to a specific person.”[2]  It is important for organization’s to measure an individual personality and/or preference profile to ensure that the individual fits within organization and its existing members, and  is suited to the role that they have applied for and are now have been recruited for.  This level of identification is closely associated with the Morgan’s theory of “goal-seeking machine with interchangeable parts”.  People are used as a resource to support the already existing bureaucratic system/management levels in the organization.  The process recruiting these “interchangeable parts” is starts at company’s talent management and selection process.  They are various interviewing processes in today’s world that enable to assess the person’s personality.  According to a study by Barrick & Mount, 1991, “conscientiousness and emotional stability are the best personality predictors of job performance across nearly all jobs.” How you assess conscientiousness and emotional stability is highly dependent on the interviewing process and tests the individual undergo.  For example, “Brad Smart, PhD, originated the CIDS Interview and first described it in his book: Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People. As its name states, it’s a chronological in-depth STRUCTURED survey. You're surveying a candidate's background, school and work, in structured, systematic manner to note not only skills and talents, but also patterns of responses he'll bring to your day.”[3] Other organizational testing used are to ascertain personality which in turn affects job performance where identified by Borman & Motowildo in 1993.  They states that testing an individual’s incremental validity helps predict that individual future performance as opposed to what they can currently do at the moment.  This highlights Morgan’s other metaphorical statement that describes organizations “a biological organism that continually adapts to change.” This is infers that because the organization itself is in a constant state of change and transformation the individual needs to be evaluated on their level of commitment to achieving that organizational need also referred to by Borman & Motowildo 1993 as “Organizational Citizenship Behaviours”.  This means that the individual has the ability to do more the required from their job functions that they were required to do.  It was further proofed that unlike selection tools, there has been no evidence to proof otherwise of different selection ratios between demographic groups.  Other methods of testing that have been used have been competency-based test.  This also assesses the individual management and leadership skills/styles, interpersonal and personal skills, technical knowledge, and commercial effectiveness.  Commercial Effectiveness in the Topgrading methodology above follows the Honey & Mumford Learning Styles questionnaire (LSQ).  The difference is instead of the candidate’s filling a checklist form, interviewers ask a series of work-related questions indirectly asking managers how they learn, how effective how they on learning commercial aspects of the industry related to the job they will be employed. 

Based the above-mentioned studies it is evident that personality is an important aspect in identifying the right fit or ‘part’ for the organisation.

Values

Values are defined as individual beliefs in our external environment, for example, work, family, etc.  If an individual’s value is systematic and follows their bureaucratic system then that individual will be able to fit with an organization defined as mechanic.  In addition, according to research findings cited, values of power, achievement usually lead to imply the individual is not a team player.  That individual is perhaps suited in a mechanical environment where human contact is limited.  However, values of conformity lead to an individual being more cooperative.  This may suggest that the individual is more suited to Morgan’s metaphor as a “biological organism” as they would be part of something bigger.  The study further proves that there is a relationship between values, personality and cognitive styles, which we discussed early affects how the individual will be placed or declined on the basis of their ability to fit with the organization’s description.

Perceptions

Perception is how the individual reacts or responds to the organizational environment that they have been placed: “a process of receiving information about and making sense of the

world around us; how we view and interpret what happens around us.”[4] Irrespective of their reaction this influences an individual’s attitude and behaviour in that environment.  Studies have shown that regular  employee-attitude surveys can be conducted by an organization to assess the importance of information on employers’ ideas and changes. Depending on the what environment the individual is placed in either machine-like or biological-like, aspects such as organisational commitment , job involvement, and job satisfaction that contribute to how that individual perceives that environment.   In addition, research finding have indicated that there is a statistical relationship between organizational commitment and job satisfaction that can either positively or negatively correlate with absenteeism and recruitment and retention turnover as well as ethical behaviour.  Mihaly Csikszentmihalyi (1994) stated that there are three (3) possibilities for managers who want to build an organization that will last and in which people are motivated to contribute and to stay: "First, make the objective conditions of the workplace as attractive as possible. Second, find ways to imbue the job with meaning and value. Third, select and reward individuals who find satisfaction in their work.”[5]

In summary, Morgan’s view of theories and models specifically “machines” and “organisms” relates with  personality, values, and perception theories outlined above.  This in turn will affect how the individual perceives that organization in the future.

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[1] COMMENTS ON ORGANIZATIONAL METAPHORS - http://www.dooy.salford.ac.uk/ext/org.metaphors.html

[2] http://www.answers.com/topic/personality

[3] Small Business Resource of the Week: CIDS Interview July 10, 2008 Article - http://zanesafrit.typepad.com/zane_safrit/2008/06/small-busines-1.html

[4] Jorgensen, Frances PhD., Presentation 16 September 2010

[5] Jorgensen, Frances PhD., Presentation 16 September 2010

Copyright @ 31 October 2011. BlogSpot by Tambudzai Ndoro, Non-Executive Director of Global Business Assignments Inc.,

Børsen Newspaper Profiling

Copyright @ September, 2011 on BlogSpot by Tambudzai Ndoro, Non-Executive Director of Global Business Assignments Inc,

What is Innovation?

What is Innovation?  ‘…innovation as the invention and implementation of a management practice, process, structure, or technique that is new to the state of the art and is intended to further organizational goals.’ – Birkshaw, Hammel & Mol (2001.)

‘Innovation is a specific function of entrepreneurship, whether in an existing business, a public service institution, or a new venture started by a lone individual in the family kitchen.  It is the means by which the entrepreneur either creates new wealth-producing resources with enhanced potential for creating wealth.’ – Peter Drucker (1985).

‘innovation—often defined as something that is new from the perspective of the party under consideration’- Jonathan D. Linton (2009.)

‘A fundamental innovation is an enabler for many other minor innovations and these minor innovations either improve upon the fundamental innovation or the innovations are a derivative of the fundamental innovation’ - Kondratieff (1984).

As highlighted above, innovation means many things from various disciplinarians, of which most if not all share the central theme that innovation is a process that renews something that exists and/or is commonly an introduction of something new,(Birkinshaw, Hamel, Gary & Mol, Michael J. 2008, Drucker (2002)).

Figure 1: Depiction of effect of electronics -Phase IV.

Therefore, to provide a structure to the study of innovation, the paper will identify two key main areas of innovation: technology innovation and social innovation, (Linton 2009).  By using the unit and level analysis approach, (Linton 2009), both  areas can be further divided as follows: technology innovation à product innovation, an approach introduced to automobile industry by Japanese firms, (Linton 2009); service innovation introduced by the telecommunication industry, (Mansell 1994) and supply-chain innovation in manufacturing processes, (Linton 2009).  Social innovation can be broken-down into the following sub-areas à marketing innovation brought about by demonstration packages, for example, ‘demo’ software, trial periods  of use within the Retail sector, (Miles 1994); management innovation that looks at the aspect of organizational change, (Birkinshaw, Hamel, Gary & Mol, Michael J. 2008), and operations innovation, (Graves 1994).  Though, Linton, (Linton 2009) uses different terms to describe innovation and examples of their usage, the summary, will be limited to discussing technology innovation from the perspective of product, services and process’ innovation; and social innovation from the perspective of the industry.  Thus, the automobile industry case study will be used as an example and illustration, (Graves 1994) from the perspective of - social innovation,(Linton 2009)  and as a new product design implemented - technology innovation, (Linton 2009). 

When studying innovation it is important to clearly define the perspective to which we analyze what innovation is and the positive impact it has/will have on society, (Linton 2009).  For example, the development of infrastructure such as telecommunications would have been difficult to build and implement without the development of research scientists, (Mansell 1994).  Therefore, Linton proposes a graph, (Linton 2009), to describe the social impact that innovation has, see Figure 1 above.   In a nutshell, the graph aims to explain that depending on which quadrant the innovative solution falls under, innovation can be both positive and negative if viewed from different lenses, (Linton 2009), in addition, the degree to which the innovation is adopted and the degree to which it yields ROI, (Martin 1981) and social returns, (Linton 2009) affects its level of positioning on the graph.  Therefore, it becomes critical to highlight the importance of the organizational structure, as it has a strong correlation, on the implementation success, Burns & Stalker (1961); (Morgan 2006).  Having said that, let’s consider innovation with the automobile industry as an example and illustration of innovation in a globalizing industry, (Graves 1994). 

When we look at automobiles as a product or the automobile industry, (Linton 2009),  innovation has discontinued i.e., transformed the industry in 3 distinct phases, (Graves 1994); refer to Table 1: Industrial transformation below, phase I – standardization of product, mass production systems; phase II – product differentiation, emphasis on product technology; and phase III – lean production, JIT high quality and management groups as a new system of production in organizations, (Graves 1994); however, we also now see a phase IV – of the introduction of electronic components and fuel efficiency regulations – social innovation, (Linton 2009) over the last decade.    This form of continuous innovation is driven by the external environment – customers and markets, (Graves 1994).  When we look at this timeline the adoption, (Kotler, Armstrong 2001)of these innovations, from the perspective of the automotive firms in the countries that have adopted the innovations, it has been reported that the overall effect of  the industry has been an increase in product quality and a decline in overall production costs, (Linton 2009).  However, it’s important to highlight that there have been challenges in phase III and IV in the industry as European producers work to close the productivity and quality gap with the Japanese JIT/lean production system; whilst Japanese producers appear to be driving the industry further forward through radical technological innovation, and further management innovation, (Graves 1994).  Phase IV innovation can been seen as building on current skills – the innovation has contributed both positively and negatively in technology innovation, (Linton 2009) as this change has resulted in shifts in the supply-chain as it both encourages opportunities in electronics production who were in the business already and radical change to members in the supply-chain who did not have the electronics background.  However, there is a positive social innovation associated with this change as the change shifts customer preferences in the form of performance, style, fuel efficiency, government policies on safety and environmental emissions, (Graves 1994).  This is highlighted in Figure 1: Depiction of effect of Phase IV, (Linton 2009). 

Table 1: Industrial Discontinuous & Continuous innovation in Automotive Industry History[1]

Discontinuous Innovation,(Graves 1994)	Date	Production or product innovation	Geographic area of rapid market growth	National & Regional industry responsible for shaping
I	1902 – 1920s	Standardized product, mass production systems	US	US
II	1950s – 1960s	Product differentiation	Europe	Europe
III	Late 1960s	Lean production JIT and SPC[2]	Japan	Japan
Continuous Innovation,(Linton 2009)
IV	2000s	Electronic components and fuel efficiency regulations (CAFE´).	Japan	Japan

In conclusion, it is important to have a perspective when discussing innovation.  In addition, identifying the unit and level of analysis, is essential when looking at innovation, as it provides a specific framework from which to identify, analyze and implement.

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[1] Source: Graves, A. 1994, "Innovation in a Globalizing Industry: The Case of Automobiles" in The handbook of Industrial Innovation, eds. M. Dodgson & R. Rothwell, First Ed; edn, Edward Elgar Publishing Limited, England, pp. pp.213 - 228

[2] JIT – Just-in-Time; SPC – Statistical Process Control

Copyright @ 1 March 2011.  Re-posted on 27 October 2011, BlogSpot by Tambudzai Ndoro, Non-Executive Director of Global Business Assignments Inc,