2. Learning Activity 1
The evident forces that affect organizations include the regulations, economic and political factors, socio-cultural, demographics, technology, and environment. An interview with a Project Manager of an IT company stated aside from economic factors, competition with rival companies, and the bargaining power of the clients for projects affect the organization (A. Genota, Personal Communication, January 15, 2016).
The Project Manager explained that a good economy drives the growth of clients’ orders that consequently benefit the company as services provider. The competition with the rivals and the bargaining power of the clients can significantly cut the company’s revenue and increase employees’ turnover as other entities may be able to offer lower cost of services and/or higher salary to employees (A. Genota, Personal Communication, January 15, 2016).
Such forces provide opportunity for the company to find ways to provide better services and achieve operational efficiency maintain and gain clients. Losing clients and employees are the threats of stiff competition and clients’ bargaining power.
2. Learning Activity 2
Michael Porter (2016) stated that there are five forces affecting the organizations competitiveness and these include barriers to entry, threat of substitute, bargaining power of suppliers, and rivalry among the existing players.
One of the most challenging forces of nowadays is the rivalry among the existing players. The growing number of players due to free trade and less strict regulations makes competition stiff as there are more entities that can provide similar products and services and gain market share in the industry. The several numbers of players also makes competition for excellent human resources more challenging.
Rivalry among the existing players is highly related to threats for substitute and bargaining of buyers. Numerous players often provide threats of the alternative products and services and stimulate price competition. If an organization is unable to manage and beat competition, it often results to overall slow and even decline in revenues.
3. Learning Activity 1
Erica Olsen (2016) stated that internal analysis is the evaluation of the organization’s strength and weaknesses while the external analysis is the assessment of opportunities and threats It also evaluates the market, the competition, and the macro-economy (Olsen, 2016).
Internal and external analysis affects business operation as it helps the company strategize according to profitability targets, trends, regulations, socio-economic conditions, technology, resources, and capabilities. The company should surpass any external and internal challenges.
The practical example of external analysis is the evaluation of the trends on customer purchasing behavior based on the emerging trends and socio-economic capacities. An example of internal analysis is the assessment of the products’ strengths and needed innovation and improvements.
3. Learning Activity 2
Financial ratios play a key role in the evaluation of the fiscal and operational health of an organization. Sam Miller (2011) stated in his article that the financial ratios helps the organization review and monitor its strengths and weaknesses of in various aspects.
The most common financial ratios and their respective measures are current ratio for solvency, quick ratio for liquidity, debt ratio for payment capability, average inventory turnover for sales, average collection for receivables, and total assets in ratio of net sales for cash flow assessment (Miller, 2011)
A concrete example of the financial ratio is the Procter and Gamble’s (2014) USD 4.19 earnings per share in 2014, an increase from the USD 4.04 in the previous year. Such means that each share owned earns USD 4.19. Increasing earnings per share suggests better business condition, increasing revenue and/or operational efficiency, and competitiveness in the market.
4. Learning Activity 1
The Mind Tool’s website (2014) identified the four Porter’s Generic Strategies and these include cost leadership, differentiation, focus, and integration of differentiation and focus. Among the four strategies, cost leadership is the most prevalent strategy nowadays mainly because of the recent economic recession and political turmoil and incidents the created demand for cost efficient products and services.
The company also observes fast services making average cost per employee lower due to higher productivity and use renewable materials for its menu resulting to lower food service material cost. Mc. Donald’s cost leadership strategy makes its gain revenues twice of its competitors.
4. Learning Activity 2
The Boston Consulting Group created a matrix that will help corporation analyze their products, business performances, management strategies, and marketing. The matrix was called Boston Consulting Matrix which has several advantages, but has limitations as well.
Boston Consulting Matrix’s advantages include ability to evaluate companies’ current portfolio, provides volume and experience effects to large companies, and helps the management decide for future actions (BCG Matrix, 2016). The matrix also provides cost leadership strategies to gain market share (BCG Matrix, 2016).
It limitations, however, include non-consideration of business unit synergies, diversified focus aside from market growth, difficulties in obtaining market share and growth data, uses only two dimensions, market share and market growth, and neglects small players with fast growth (BCG Matrix, 2016).
5. Learning Activity 1
Jeremy Bradley (2016) listed the advantage of competing internationally, and these include market expansion, boosting of brand reputation, gaining new business partners and global networks, and probable future expansion opportunities.
Apple Inc. was also able to grow its partners across the world through joint-ventures and programs, and is constantly eyeing for future expansion opportunities in the different regions of the world.
5. Learning Activity 2
Unilever USA is among the companies that can best exemplify the concept of market penetration and development. Unilever USA established branch offices in several states of the country to better distribute the products across the country, and tap the underserve areas of its brands. In such way, the company achieved higher market presence and was able to expand its target markets.
The company, like the operation of its parent company and affiliates, diversified portfolio from a mere producer of personal care products to manufacturer and distributor of food and beverage products as well.
Unilever USA (2016) is among the leading personal care products manufacturers, but it eventually engaged in diversification of food and beverages, some of it are success while other diversifications continue to struggle. Although its Lipton Ice Tea brand and Knorr seasoning are among its oldest food products, its new ice cream and food brands in the United States, Selecta and Fruttare, continue lag in market share against the well-known similar products of Nestle.
6. Learning Activity 1
Our previous company had horizontal linkages when it acquired another business process outsourcing company, and it had vertical linkage when it acquired an IT company that can increase accounts and profit and, at the same time, serves its IT needs as a huge BPO company.
The advantage of it having horizontal linkages is that it eliminated another competitor and enlarged the company. The advantage of vertical linkage is that the IT company acquisition increased its revenues through its accounts and decreased its IT services costs. Ronald Kimmons (2016) has also discusses and identified the same benefits in its Chron article.
Informal linkages are linkages to non-taxed entities. Such could be foundations and church organizations, and even low income vendors. Nestles had a system of informal linkage as it provide distribution system for its ice cream and seasoning products through small scale sellers/ vendors in the emerging markets.
6. Learning Activity 2
Output organizational control is a type of control from the management that is performance based (Maguire and Ouchi, 1975). It is the type of control that was best practice in our organization as it helps increased professionalism and productivity.
The output control also made the incentives awarding and punishments more acceptable among the employees as there are clear records of performance that can show evidence that one is due or deserves. Hence, it resulted to smooth relationship between the employees and the management.
The management of our organization has always motivated the employees to perform well, and they do not miss to provide appropriate incentives, recognition, awards, and promotions to show appreciation for everyone’s efforts. Such show the employees that they have room for growth in the company.
7. Learning Activity 1
Sarbanes-Oxley Law of 2002 mandates the publicly listed companies to undergo government internal audit of their annual reports and make Board of Directors accountable for accounting malpractices in a thrust to prevent fraud and restore confidence (Hanna, 2014). The law was enacted after the financial scandals of Enron Corp and WorldCom (Hanna, 2014).
The other entities that could have drove such legislation is the New Jersey-based company, Tyco, as its CEO and CFO stole USD 150 million in the company and increased the company income to USD 500 million in its records in 2002 (Accounting Degree.Org, 2016).
The Security and Exchange Commission and the Manhattan government investigated the accounting malpractices and imprisoned its involved key principals for 8-25 years, and the court ordered Tyco to pay USD 2.92 billion to its investors (Accounting Degree.Org, 2016).
7. Learning Activity 2
There are several entities that can be considered notorious or with lack of social concern due to the numerous compliance issues and violations that may have. There are entities that, however, can be considered to fall short on social concern. Among them is the retail company, Wal- Mart.
Gina Roos (2016) reported that Wal- Mart paid USD 27.4 million as a penalty for its environmental violation in California as it improperly handled, storing, and disposed hazardous chemical and oil products. The settlement was made after the five years litigation.
A Reuters report in 2014 revealed that the US Labor Board alleged the company for violating labor rights in 14 states by threatening the employees of retaliation they will do a massive labor protest (Becker, 2014).
8. Learning Activity 1
My professional experience has taught me to apply how to delegate work, listen to group mates, and communicate well. I also applied the characteristics of being organized in the administrative related tasks in our group projects, and systematically accomplish tasks one step at a time.
I also applied the principle of good and harmonious relationship with the group mates in the project as it is another proven method of enabling to accomplish tasks smoothly and successfully. The output control in our organization has helped to inculcate the values of dong excellent job in group projects.
Furthermore, the management and finance lessons from the schools have helped us accomplish projects on time and allocate resources properly for the production and implementation of the project. Our critical thinking has helped us decide on the best topics to discuss that will best benefit and accomplish in our professional life. John Portman said that man can give his greatest contribution in the world through accomplishments.
Genota, A. 2016. Personal Communication
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Olsen, Erica. 2010. Internal & External Analysis. On Strategy. Retrieved from http://onstrategyhq.com/resources/internal-and-external-analysis/
Miller, Sam. 2011. The Seven Key Ratios Used in Key Ratio Analysis. Ezine Articles. Retrieved from http://ezinearticles.com/?The-Seven-Key-Ratios-Used-in-Key-Ratio-Analysis&id=5873597
Procter and Gamble. 2014. Procter & Gamble. Retrieved from http://www.pginvestor.com/interactive/lookandfeel/4004124/PG_Annual_Report_2014.pdf
Mind Tools. 2014. Porter's Generic Strategies. Retrieved from https://www.mindtools.com/pages/article/newSTR_82.htm
Jones, Adams. 2014. Why KFC lost its position as a leader in the US. Retrieved from http://finance.yahoo.com/news/why-kfc-lost-position-leader-170006278.html
New Building Institute. 2016. McDonald’s Study Explores Idea of a Net Zero Energy Quick Service Restaurant. Retrieved from http://newbuildings.org/news/mcdonalds-study-explores-idea-net-zero-energy-quick-service-restaurant
BCG Matrix. 2016. Benefits and Limitations of the BCG-Matrix. Retrieved from http://www.bcg-matrix.com/benefits-limitations-bcg-matrix/
Bradley, Jeremy. 2016. The Advantages of Marketing Internationally. Chron. Retrieved from http://smallbusiness.chron.com/advantages-marketing-internationally-61158.html
Unilever USA. 2016. Our Brands. Retrieved from https://www.unileverusa.com/brands/
Kimmons, Ronald. 2016. What Are the Differences Between Vertical & Horizontal in Strategic Management? Retrieved from http://smallbusiness.chron.com/differences-between-vertical-horizontal-strategic-management-24460.html
Maguire, M. and Ouchi, G. 1975. Organizational Control: Two Functions. Retrieved from http://www.jstor.org/stable/2392023?seq=1#page_scan_tab_contents
Portman, John. 2016. Accomplishment Quotes. Brain Quotes. Retrieved from http://www.brainyquote.com/quotes/keywords/accomplishment.html
Hanna, Julia. 2014. The Costs and Benefits of Sarbanes-Oxley. Forbes. Retrieved from http://www.forbes.com/sites/hbsworkingknowledge/2014/03/10/the-costs-and-benefits-of-sarbanes-oxley/#2715e4857a0b3bf0d0f32776
Accounting Degree.Org. 2016. The 10 Worst Corporate Accounting Scandals of All Time. Retrieved from http://www.accounting-degree.org/scandals/
Roos, Gina. 2010. Wal-Mart to Pay $27.6 Million for Environmental Violations in California. Environmental Leader. Retrieved from http://www.environmentalleader.com/2010/05/04/wal-mart-to-pay-27-6-million-for-environmental-violations-in-california/
Becker, Amanda. 2014. U.S. labor board alleges Wal-Mart violated labor law in 14 states. Reuters. Retrieved from http://www.reuters.com/article/us-walmart-labor-idUSBREA0E1PY20140115