Category: Business 11471

Origin

Diamond is an important mineral resource. Diamond is one of the hardest minerals and enjoys the application in a variety of fields. The nature and value of a diamond make it a luxurious mineral. It is used in the making of jewelry and rings. Moreover, diamond is used in the manufacture of bits for drills.

Diamond is a rare resource, but it is mined in several countries. South Arica is a major supplier of the commodity.¹ Diamond is considered as an important mineral due to its high thermal conductivity and hardness in comparison to other minerals.

Relationship between producers and traders

Diamond producers and traders have a unique relationship. De Beers is the main company that deals with a large percentage of diamond that arrives in the US. The risks that are associated with diamond mining and trading makes the diamond business a complex process, as barons are involved. Specifically, diamond has been a controversial mineral as it has been used in the funding of the war, thereby causing the mineral to be referred to as blood diamonds.

The World Federation of Diamond Bourses (WFDB) is an organization that deals with diamond exchange on wholesale. It is a global body that deals with both rough and polished diamonds. The organization has branches in vital cities like Johannesburg, Antwerp, and various cities in the US.

The organization also seeks to prevent the trade in blood diamonds, which are minerals that are used in the financial support of wars.² The WFDB has established the International Diamond Council (IDC), which is involved in the grading of diamonds.

Producers and suppliers have close relations. Specifically, De Beers is a mining company that has established subsidiaries as traders of the commodity.³ In this case, De Beers has established the Diamond Trading Company (DTC), which markets diamonds mined from the facilities run by De Beers. DeBeers and its subsidiaries control over 39% of the diamond industry.

Working conditions

The mineral is extracted through a variety of means. In South Africa, diamond deposits are mined from kimberlite volcanic pipe mines. There is a single large pit where miners access the mineral. Initially, diamond mining was characterized by the underpayment of labor. Many laborers traveled for long distances to look for work in diamond mines.

This changed after the South African government placed tighter controls on the mining industry. The change has led to an increase in wages as the rights of minors are protected by the state. Initially, miners lived in informal settlements next to the mines.⁴ The intention of the mine owners was to keep costs low while ensuring that workers were paid well. The situation changed with the increase in improved living conditions.

Diamond mining has extensive environmental risks. For instance, the mining pits create a risk to the surrounding living things. The damage to the environment is extensive. The pits produce waste in the form of rocks and dust, leading to pollution of the environment. Workers face health hazards like asbestos that comes from mines. The asbestos can lead to the development of asbestosis among miners.

Price determination

The diamond industry is divided into two. One sector of the industry deals with industrial-grade diamonds while the other deals with gem-grade diamonds. Essentially, the two sectors value diamonds differently. The price of the commodity is determined by bourses or diamond exchanges.⁵ Currently, there are about 28 bourses worldwide. Other suppliers can then purchase the diamonds from the bourses for supply to the final consumers. Additionally, diamonds are sold as either unset or set in jewelry.

The international corporations that dominate the trade include De Beers Corporation. The diamond market is characterized as an oligopoly. De Beers is the dominant diamond miner in the world and has a sizeable portion of rough diamond mines. It also controls distribution channels for the mineral. Despite this, the companys control has been decreasing over the years, which is attributed to tighter controls by the South African government in the mining industry.⁶

Distribution channels

The mineral is first transported to several locations that cut and trade-in diamond. For instance, over 90% of the diamond is transported to India for cutting and polishing. Other locations that deal with cutting diamond include Amsterdam, London, Belgium, and New York.

Specifically, the distribution of 80% of the worlds diamonds occurs in Antwerp. Essentially, a large amount of the minerals that arrive in the U.S. will have to go through this location.⁷ Antwerp deals with about half of all the rough diamonds, cut diamonds, and unstained diamonds. On the other hand, over half of the worlds diamonds are sold in New York.

The diamond, after mining, goes through the cutting process in India and other locations. It is graded by the IDC and finally transported to the consumer markets by traders. The IDC deals with determining diamond prices, depending on the grade of the diamonds. The diamonds are then cut and polished as per the final usage.

Diamonds with smaller karats are mainly handled in India. They are in larger quantities.⁸ Smaller quantities of diamonds with a higher karat are handled in North America. After that, the diamond is distributed to traders. Diamonds are often bought at jewelry shops. Additionally, there is a market for diamonds that have been polished. The market is comprised of sales from the bourses, pawnshops, and second-hand jewelry stores.

Usage

Diamond is a luxurious commodity; it is an expensive product and a preserve of a few. A large proportion of the population uses it on special occasions, such as jewelry for wedding rings and necklaces. Diamonds have a cultural significance, as they are a sign of love for couples who want to marry.

Diamond is incorporated into the daily lives, as the individual with a diamond ring will wear it at all times as a symbolic representation of love and having a companion.⁹ Moreover, diamond jewelry is worn for parties and other special occasions like dinners.

The producers compensation for diamonds is, on average, about $221 per carat. On the other hand, store owners make about 6% profit for every karat of diamonds sold.¹⁰ Essentially, a diamond as a luxury commodity is a profitable venture. De Beers is listed on the stock exchange as De Beers Centenary and De Beers Consolidated Mines Limited (DBR: SJ). The earning per share is about $28.88.¹¹

To conclude, diamond is a luxurious commodity. It is mainly mined in South Africa, and De Beers is one of the largest producers and traders of the diamond through its subsidiaries. Diamond follows a complex distribution channel that has a few players only. It also enjoys extensive use, such as jewelry for wedding rings and the industrial application for drilling machinery.

Bibliography

De Beers Consolidated Mines Ltd. Bloomberg.com. Web.

Falls, Susan. Clarity, Cut and Culture: The Many Meanings of Diamonds. New York: NYU Press, 2014.

Williams, Gardner. The Diamond Mines of South Africa: Some Account of their Rise and Development. New York: New York Macmillan, 2011.

Footnotes

1. Susan Falls, Clarity, Cut, and Culture: The Many Meanings of Diamonds (New York: NYU Press, 2014), 37.
2. Gardner Williams, The Diamond Mines of South Africa: Some Account of their Rise and Development (New York: New York Macmillan, 2011), 89.
3. Susan Falls, Clarity, Cut, and Culture: The Many Meanings of Diamonds (New York: NYU Press, 2014), 45.
4. Gardner Williams, The Diamond Mines of South Africa: Some Account of their Rise and Development (New York: New York Macmillan, 2011), 102.
5. Susan Falls, Clarity, Cut, and Culture: The Many Meanings of Diamonds (New York: NYU Press, 2014), 45.
6. Ibid, 54.
7. Gardner Williams, The Diamond Mines of South Africa: Some Account of their Rise and Development (New York: New York Macmillan, 2011), 119.
8. Susan Falls, Clarity, Cut, and Culture: The Many Meanings of Diamonds (New York: NYU Press, 2014), 61.
9. Ibid, 64.
10. Susan Falls, Clarity, Cut, and Culture: The Many Meanings of Diamonds (New York: NYU Press, 2014), 71.
11. De Beers Consolidated Mines Ltd, Bloomberg.com, last modified 2015, Web.

Introduction

Skills have a huge impact on the way an individual carries him or herself. This involves both personal and organizational lives. According to sociologists, there are a number of factors that influence the ability of an individual to acquire and develop various skills that influence their personality (Dowd, Dejanasz, & Schneider, 2014).

Some of these factors include the kind of upbringing, the environment, social factors such as friendships, and to some degree, biological factors through inherited traits. They involve the outcome of the conscious and unconscious choices that someone makes regarding various elements in life. Human beings have the ability to choose between good or bad, right or wrong, as well as valuable or not valuable, an element that influences the development of individual skills (Dowd et al., 2014).

One of the greatest human desires is achieving success by achieving both personal and career goals. In order to fulfill this objective, sociologists argue that there is a need for better alignment between individual values and corporate goals of the organization that someone works for. Choosing the kind of workplace that suits one personality is also a very important decision that depends a lot on individual skills (Dowd et al., 2014).

The value of this decision reflects on the way employees ought to behave in various organizations depending on their corporate goals. Some of the skills that an individual can incorporate into their organizational life include self-awareness, self-disclosure, conflict management, teamwork, effective communication, and diversity management (Dowd et al., 2014).

Self-awareness

Self-awareness refers to the ability of an individual to understand their own individuality. This involves an individual knowing their wants, feelings, strengths, shortcomings, habits, and dislikes, among others. According to experts, one of the most important aspects of human development is self-awareness (Dowd et al., 2014).

In order to develop and advance in life, someone needs to identify the problematic areas in his or her life, accept them, and start working towards making the necessary changes. This means that it is impossible to make any improvements in life without understanding and accepting ones individuality (Dowd et al., 2014). This skill can be effectively aligned with the values of an individuals workplace in order to achieve collective success.

This skill enables people to adapt well to various environments, work with people from diverse backgrounds, and handle conflicts in an effective manner. Workplace environments are very dynamic and experience numerous changes regularly (Dowd et al., 2014). Therefore, employees ought to have good self-awareness in order to adapt to the numerous changes in a manner that does not compromise their output.

In order to achieve organizational success, self-awareness by the employees is inevitable. One of the most important elements of this skill is emotional intelligence. This involves the ability of an individual to understand his or her emotions and the way they can affect others (Dowd et al., 2014).

The fact that workplaces are environments characterized by high levels of diversity, challenges such as conflicts is inevitable. Emotionally competent individuals have a greater awareness of the best way to deal with conflicts depending on the way they understand themselves. In addition, this kind of awareness helps one to improve on the elements of their habits and emotions that attract negative reviews from their colleagues.

However, experts advise that people should not mistake their ability to understand their individuality as a license to believe that they can deal with all manner of challenges (Dowd et al., 2014). It only serves as a good basis for initiating changes because all the flaws are easily identified and dealt with according to ones values.

Self-awareness makes organizations very successful and stable because employees have a better understanding of each other. Organizational leaders have a responsibility to ensure that the workplace environment is inclusive enough and supportive of various personalities exhibited by their employees (Dowd et al., 2014). Self-awareness can be used as a collective organizational skill to create a strong and reliable benchmark for development.

Communication barriers

Communication is an important element of both individual and organizational lives. Information is very important, thus the need to ensure that its conveyed using the best possible means. According to sociologists, certain individual skills such as communication develop through socialization, which in turn depends a lot on the same skill. Interpersonal relationships are very important within organizations, thus the need to ensure that the communication platforms available support the development of this skill among employees (Dowd et al., 2014).

There are a number of factors that affect the ability of individuals to acquire and develop this skill. These factors exist in the form of barriers, whose effects also extend to the organizations in which an individual works. There are several categories of barriers, such as linguistic differences, psychological factors, physical limitations, systematic barriers, and attitudinal impediments (Dowd et al., 2014).

Linguistic differences entail the inability of an individual to pass the message in a clear manner, as well as the receivers comprehension ability. According to experts, the psychological condition of both the sender and receiver impacts the perception developed about a message (Dowd et al., 2014). These conditions include anger, stress, and personal issues, among others.

Physical limitations entail some of the bodily challenges such as hearing problems that have the ability to impact on the way people pass, receive and comprehend information (Dowd et al., 2014). In addition, elements such as long-distance can, at times, qualify as a physical barrier to communication. Communication experts argue that people tend to pass information more accurately through physical contact or over short distances that do not require the use of complex technology.

Systemic barriers are very common in organizational settings and involve the lack of reliable communication channels. The reliable and constant flow of information between different departments within an organization is very important. Thus the need to ensure that the information systems used are effective. In addition, the employees should have knowledge of the various models of communication adopted by their organization (Dowd et al., 2014).

Attitudinal barriers entail the habits, beliefs, and perceptions by people that inhibit their ability to pass, receive, or comprehend information in an effective manner. Some of the factors that contribute to these kinds of communication barriers in interpersonal relationships and within organizations include poor handling of conflicts, lack of effective leadership, unwanted change, as well as lack of incentives for motivation (Dowd et al., 2014).

Some of the notable barriers that affect the development of this interpersonal skill include the use of jargon, low concentration spans, the difference in viewpoints, and cultural diversity. Effective communication is very crucial for the development of interpersonal relationships, as well as the achievement of organizational success (Dowd et al., 2014).

Conflict management

Conflicts are a common element in both interpersonal relationships and organizational cultures. The main reason for the development of conflicts is the diverse opinions, experiences, interests, and personalities. Good conflict management skills are a highly desirable competency, especially in the contemporary workplace environment that is characterized by high cultural diversity (Dowd et al., 2014).

Culture has a huge impact on the way people perceive various things, thus the need to ensure a high degree of cultural competency within the workforce. The initial step of dealing effectively with conflicts is developing a sense of self-awareness. This mainly involves interpersonal relationships, whereby one individual ought to learn every element that influences his or her personality in order to communicate with others well (Dowd et al., 2014).

Self-awareness is the form of employees getting to know each other is also a good step towards managing conflicts effectively within an organization. According to conflict management experts, lack of understanding and mutual respect is some of the main causes of conflicts in the workplace. They argue that it is important for people to share their feelings because it creates an opportunity for others to know them and understand their reason for behaving in a certain way (Dowd et al., 2014).

Poor listening skills also contribute to the development of conflicts in interpersonal relationships and within the workplace. In most cases, someone tends to feel ignored or disrespected when communicating with a passive listener. Active listening can be a solution to this challenge and eventually help in reducing the number of conflicts.

In some cases, people have issues managing conflicts because they do not give the other party involved in the scuffle the opportunity to explain themselves. Giving each other turns to talk is an effective interpersonal skill that applies very effectively in avoiding conflicts and addressing them whenever they arise (Dowd et al., 2014).

According to experts, it is also very important to avoid developing any forms of defensive mechanisms whenever there is a conflict to be solved. Compromising is an important element in conflict management. It involves the ability to conflict parties to exercise their flexibility by willingly making concessions with regard to their opinions. Research has established that a lack of commonly agreeable solutions to issues within the workplace can lead to conflicts (Dowd et al., 2014).

However, investing in healthy interpersonal relationships can be an effective strategy for addressing such challenges. The essential interpersonal skills for this challenge include effective communication, cultural competency, emotional intelligence, careful evaluation of issues, and a positive attitude (Dowd et al., 2014). In addition, employees should ensure that organizational interests are prioritized over theirs whenever they are in the workplace.

Diversity management

According to research, one of the most attractive skills among employees in the contemporary workplace is cultural competency. Modern workplaces are characterized by employees from diverse cultural and religious backgrounds who also serve a client base with the same features (Dowd et al., 2014).

This has made it hard for some organizations to remain competitive, especially if its workforce does not have a good balance with regard to ethnicity, work experience, religious beliefs, and educational background. Experts argue that people have had very different experiences growing up that end up shaping their personality traits and perceptions about various things.

It is very important for individuals to understand people from other cultural backgrounds and develop effective mechanisms of working with them (Dowd et al., 2014). This is necessary within an organizational setting because employees often work in teams. It is important to note that diversity is a key element for success in every organization.

This relates a lot to multinational corporations that have operations across the world (Dowd et al., 2014). Crucial elements such as the business etiquette vary a lot from one culture to another, thus the need to have a good comprehension of the major cultures across the world.

The best way of exploiting this element is by encouraging employees to develop a deeper sense of self-awareness and establishing all the things they are capable of achieving. When the employees have good knowledge of their strengths and weaknesses, it becomes easier for the organizational leaders to organize them in teams that can deliver maximum output (Dowd et al., 2014).

Research has established that due to factors such as globalization, the rate of immigration across the world has increased a lot over the last couple of decades. This has made it imperative for organizations to build a highly diverse workforce capable of meeting the needs of their large customer base (Dowd et al., 2014).

This phenomenon has also be necessitated by the fact that people are moving to various parts of the world in search of better jobs than those available in their natives land. This means that for such individuals to easily fit into their new working environments, they ought to have the right attitude, skills, and a passion for learning about the value system of the people they will be serving (Dowd et al., 2014).

Teamwork

Everyone needs a little help with something at a certain point in life. Most interpersonal relationships develop a lot because of the ability of the involved parties to play together as a team. According to sociologists, interpersonal relationships play an important role in helping individuals learn the skills and values of working with others. Once these skills are passed to the organization through the workforce, it becomes easier to achieve all the corporate goals (Dowd et al., 2014).

There are a number of strategies that can apply effectively in enhancing this skill among individuals. They include capacity building, encouraging increased personal awareness, developing group tasks, and creating an employee welfare program. According to experts, these strategies help to increase cohesion among the employees because they tend to work together for a long period of time (Dowd et al., 2014).

Development within an organization often banks a lot on the ability of its teams to remain strong and united through the course of various projects. All employees have an ethical responsibility to ensure that whenever there is a team project within the workplace, they give their best output by prioritizing the organizations needs before theirs. The concept of teamwork is closely associated with interpersonal skills because a good team comprises of different individuals, who put together their various skills and abilities to achieve a common goal (Dowd et al., 2014).

Conclusion

Interpersonal skills play a pivotal role in regard to organizational success. Some of the most notable individual skills that easily align with most organizational cultures include good communication, conflict management, self-awareness, cultural diversity, and the ability to work in a team.

Some people can have two or more of these skills, thus putting them in a highly competitive ranking within an organization that allows one to be a boss or a leader. Research has established that in order to achieve prolonged success, as well as development, there is an urgent need to increase the alignment of interpersonal skills with organizational cultures.

Reference

Dowd, K., Dejanasz, S., & Schneider, B. (2014). Interpersonal Skills in Organizations. New York: McGraw-Hill Education.

Introduction

The workforce, the workplace, and the conditions of the market in the 21st century are very different from what they were in the past. The modern market is driven by innovation, meaning that skills, knowledge, technologies, and practices are quick to become obsolete (Watson 2016). With the planets population continuing to grow, the competition between different generations is likely to intensify. This is not a grim prediction of the future but an objective reality. Businesses, workers, and social institutions are expected to adapt to these changing environments in order to mitigate the potential side effects brought by the sudden changes perpetrated by innovation, automation, and digitalization of information (Silvestrov et al. 2016).

The article titled Navigating the Future of Work, written by John Hagel, Jeff Schwartz, and Josh Bersin, published in Deloitte Reviews in July 2017, highlights some of the issues pertaining to innovation. These include the necessity for businesses to adapt and compete, the stress on the workers forced to adopt the life-long learning doctrine as a condition of simply maintaining their jobs, and the inevitable eventuality of the governments having to deal with a large number of unemployed or underemployed individuals (Hagel et al. 2017). Despite correctly pointing out some of the issues, the authors made wrong conclusions regarding the bargaining power of customers, demographics, and the changes conditions for workers, seriously underplaying the scope of change and its potential consequences. The purpose of this paper is to critically analyze the article, highlight and elaborate on its deficiencies, and offer an evidence-based outlook on the situation.

Summary

The article begins by outlining the three major forces of change that would shape the future of work in various ways. These factors are demographics, technology, and the so-called power of the pull (Hagel et al. 2017). According to the authors, demographics will have a strong influence because the number of able workers will increase. Competition between generations is likely, as the gradual increase of lifespan will mean that the elderly will be more inclined to progress their careers beyond the age of 60. The second factor, technology, implied that the improvements in automation and digitalization of processes would render even more jobs obsolete. Employment, according to the authors, would shift towards jobs and skills that machines could not replicate, revolving around empathy, decision-making, and human intellect (Hagel et al. 2017). In addition, access to high-output production technology would improve the standing of smaller businesses, giving them the tools to produce quality products without necessarily having large factories and production values. Lastly, the authors cite the so-called power of the pull, which stands for customer empowerment and the rise of global talent markets. It is stated that competition and progress would be motivated by these forces, dragging the prices down (Hagel et al. 2017).

After outlining these factors, the article explores how changes would affect the three main components that make up modern society  businesses, workers, and governments. It is stated that change will provide many distinct advantages and disadvantages that society as a whole will need to adapt and cope with. The vision of future businesses is positive  it is stated that the workplaces of the future would be geared towards creativity, problem-solving, designing and providing new services, and offering customization options to the clients. The workers are suggested to learn to adapt to the changing realities of the market and adopt the concept of lifelong learning, which suggests a necessity for learning and updating skills on a daily basis in order to keep up with the changing demands of the employers.

The authors state, optimistically, that changes would enable people to plan their own career paths, and pursue their passions best (Hagel et al. 2017). The rise of the gig economy is implied. Lastly, the governments are suggested to prepare to deal with difficulties when obtaining jobs and provide government-sponsored retraining courses as well as temporary bailouts for people without jobs. One of the challenges seen before the legislative branch of the government is ensuring legal support for freelancers, providing them the advantages of government protection while also enabling them to pay their taxes. The article is concluded with a statement that without businesses, workers, and governments working together, the road to change will be bumpy at best (Hagel et al. 2017).

Purpose

The purpose of the article is to provide several frameworks for change and to prepare the readers (who would represent either businesses, workers, or governments) about the coming changes and the future of the workplace. One of the implied purposes is to generate a discussion between the representatives of various spheres, prepare a united response to the challenges faced in front of the society, and provide an impulse for further research into the subject.

As a whole, the article serves as a cursory overview of the situation developing right now, supported by academic evidence. It also provides interesting information regarding case studies, such as the event at Volkswagen, where people are replacing robots. The machines at their current technological level cannot replicate some of the complex customizations offered by the automobile concern to its customers.

Knowledge management is of paramount importance in outlining the new business landscape. The speed and accuracy of information transfer rely on technology, which continues to advance on a progressive scale. Thus, employees are expected to achieve greater degrees of autonomy. Menial tasks with little to no decision-making are likely to be replaced by machines, leaving the more intellectually challenging tasks to humans. Knowledge management and decision-making are intertwined, as advances in technology would provide quicker, more accurate, and variable information to be accessible at the managers fingertips (Mao et al. 2016).

The authors advocate for increased prospects for adult education in order to enable individuals to learn new skills as they progress through their careers. Lastly, the article is aimed at current and future workers, stating that the concept of lifelong learning will be required to maintain stable employment. Another implication is that menial jobs relying solely on mechanical skills (factory workers, box carriers, janitors, and others) would be replaced. Building careers in humanitarian spheres that rely on human interaction and empathy are proposed as a more viable option.

Industry

The article outlines the potential obstacles, challenges, and threats to the industry with frightening accuracy. Indeed, most of the symptoms predicted to happen in the next ten years are already here, shaping the realities of the working environment. Businesses, workers, and governments will have to face these obstacles and react accordingly. The general idea is clear  if the three forces fail to cooperate in order to soften the turbulence of adaptation, the consequences would likely be less than savory for the society as a whole. Although it is unlikely that the end result of these adaptations will be like the authors predict  a result focused on diversification, innovation, and education, some sort of answer is sure to follow.

The industry will react first. A business success or failure resides on how quickly it reacts to changes in the environment. Therefore, companies are expected to increase their demands towards the qualifications of their workers-turned-managers, with an emphasis on knowledge management and information technology. Employees would be expected to be fluent in the use of advanced programs and tools available for information management. This process is already in motion, as modern employees are required to be skilled in various computer applications as well as the software used in project management, scheduling, cost control, budgeting, and others (Stone et al. 2015).

The government is likely to react only when the public demands it. This would happen through political institutions and street action (Flora 2017). However, changes to employment and transformations into a gig economy would not come overnight. This would give governments time to prepare. Workers, on the other hand, would feel the changes as soon as they occur. Alterations to the employment market would result in political, social, and economic activity from various stakeholders affected by the situation. Industries most affected by automation of labor processes would be the electronics industry, automobile industry, and digital industry (Atkinson and Storey 2016). The Healthcare industry will see a gradual increase in demand due to being one of the humanitarian industries that cannot be fully automatized. The farming sector is likely to remain unchanged.

Criticism of the Article

Although the majority of recommendations and predictions in the article make common sense and are supported by empiric data cited throughout the paper, some predictions and conclusions are less than likely. My criticism of this paper will be pointed at several statements, which I perceive as false based on my research of the topic areas. These statements are as follows:

• The power of the pull. According to the authors, the bargaining power of the customers will increase as the result of globalization as well as emerging small businesses competing with large corporations (Hagel et al. 2017). While this prediction may well be true, there are numerous other factors that influence the bargaining power of the customers. One of these major factors is wealth. If customers have less wealth, their bargaining power diminishes (Fabbri and Clapper 2016). The authors allude to a potential job crisis as a result of technological innovations and demographics. In a job crisis, companies have greater power, whereas workers (customers) are forced to compete with one another over jobs. As a result, the bargaining power of the customers should fall, not increase.
• Demographics. The authors seem to confuse the increase of the elderly workforce with the desire to continue to work. The introduction of the older generation into the workforce is never done out of a desire to be productive, but other due to necessity (Means 2015). In countries such as Russia, the elderly often work after reaching the age of 60 due to small pensions (Horemans et al. 2016). In the USA, many elderly patients cannot afford quality healthcare and would be forced to work just to be able to cover it. In addition, general population growth is barely taken into account. Overall, the number of jobs is expected to drop, while the number of people eligible for work is expected to grow (Watson 2016). In addition, globalization trends and technological connectivity will enable workers from low-wage regions to compete for labor with domestic laborers (Katz et al. 2015). This trend is already happening, as many international corporations are building their factories in countries like India, China, and Vietnam.
• Lifelong learning and the pursuit of passion. The article states that the changes to the nature of work will enable people to become lifelong learners and help them pursue their passions (Hagel et al. 2017). This statement is just plain wrong. According to recent surveys, the majority of employees around the world are not working their dream job or even the job they studied for, meaning that the scores for professional displacement are high (Somers et al. 2018). In the event of a labor crisis caused by advances in technology coupled with demographic growth and transnational talent competition, the numbers of professionally displaced would grow even higher (Somers et al. 2018). Instead of pursuing their dreams, people would be forced to perform whatever work they could get their hands on, fear of losing it to someone else. The perspectives of lifelong learning mean that workers would need to spend their free time constantly upgrading their skills in order to keep their jobs in an increasingly competitive environment.
• Relationship between the industry, technology, and work. Although the paper does state that the increased demands for information management would make skilled managers invaluable, it does not take into account its effect on the knowledge management industry. Christensen et al. (2015) state that the advances in technology may remove some of the middle-manager class while simultaneously increasing the demands and workloads of the people still left in the organizational chain. Multitasking would become one of the most marketable skills in addition to technical acumen and knowledge management. The fact that most industries would have to rely on information technology in management and leadership even more so than before is also supported by Donate and Pablo (2015).

Overall, these three points are either misinterpreted or underrepresented in the article, meaning that the final predictions for the future of the workforce are inaccurate. The situation, from where I am standing, would be drastically worse than described.

Conclusions

Although the article is well-supported by facts and the narrative flow is smooth, the authors seem to try and mitigate the actual state of events promised by advances in technology and the subsequent transformation of the workplace. In truth, the world is at the doorstep of yet another industrial revolution, which could only be compared to the introduction of first factories and machines, which ruined individual manufacturers and paved the way for mass production. That historical time period was characterized by mass riots, destruction of the means of production, and attacks on business owners (Silvestrov et al. 2016). Unemployment among workers was on the rise.

As it stands, a gradual increase in unemployment will pose a heavy burden on the government and cause tensions within society. The article offers several solutions, among which are government-funded facilities for adult learning. However, a bloated education sector will not solve the problem of mass unemployment. Increased spending in the healthcare sector will be a formidable substitute. The situation begets the question of whether or not another technological revolution is worth it. From where I stand, the trend of destructive innovation is ultimately self-defeating, as the decreased bargaining power of buyers would result in decreased purchasing power, meaning fewer profits for businesses and corporations to extract.

References

Atkinson, J., and Storey, D. J. 2016. Employment, the Small Firm, and the Labour Market, New York, NY: Routledge.

Christensen, C. M, Raynor, M., and McDonald, R. 2015. What is Disruptive Innovation? Web.

Donate, M. J., and de Pablo, S. J. D. 2015. The Role of Knowledge-Oriented Leadership In Knowledge Management Practices and Innovation, Journal of Business Research (68:2), 360-370.

Fabbri, D., and Clapper, F. K. 2016. Bargaining Power and Trade Credit, Journal of Corporate Finance (41:2016), pp. 66-80.

Flora, P. 2017. Development of Welfare States in Europe and America, New York, NY: Routledge.

Hagel, J., Schwartz, J., and Bersin, J. 2017. Navigating the Future of Work: Can We Point Businesses, Workers, and Social Institutions in the Same Direction? Deloitte Reviews (2017:21), pp. 26-45.

Horemans, J., Marx, I., and Nolan, B. 2016. Hanging In, But Only Just: Part-Time Employment and In-Work Poverty Throughout the Crisis, IZA Journal of European Labour Studies (5:5), pp. 1-19.

Katz, H. C., Kochan, T. A., and Colvin, A. J. S. 2015. Labor Relations in a Globalizing World, New York, NY: Cornell University Press.

Mao, H., Liu, S., Zhang, Z., and Deng, Z. 2016. Information Technology Resource, Knowledge Management Capability, and Competitive Advantage: The Moderating Role of Resource Commitment, International Journal of Information Management (36:6), pp. 1062-1074.

Means, A. J. 2015. Generational Precarity, Education, and the Crisis of Capitalism: Conventional, Neo-Keynesian, and Marxian Perspectives, Critical Sociology (43:3), pp. 339-354.

Silvestrov, S., Zeldner, A., and Osipov, V. 2016. Introduction to the Theory of Economic Dysfunction, Mediterranean Journal of Social Sciences (6:3), pp. 394-399.

Somers, M. A., Cabus, S. J., Groot, W., and van den Brink, H. M. 2018. Horizontal Mismatch Between Employment and Field of Education: Evidence from a Systematic Literature Review, Journal of Economic Surveys (0:0), pp. 1-37.

Stone, D. L., Deadrick, D. L., Lukaszewski, K. M., and Johnson, R. (2015). The Influence of Technology on the Future of Human Resource Management, Human Resource Management Review (25:2), pp. 216-231.

Watson, S. A. 2016. Challenges Faced by Old Job-Seekers in a Technology-Driven Age, Career Planning and Adult Development Journal (32:3), pp. 38-45.

Explain the business opportunity in India

Business opportunities in India are good considering the fact that India has a population of about 1.2 billion people. The luxurious living among Indians and their capital abilities provides a good domestic market for the companies and other businesses operating in the country. However, there are challenges involved in starting up a business in India which range from political, level of competition, education, as well as preference and taste.

Politically, there are lacks of political goodwill among the Indians in welcoming international investors. This is based on the need to promote local industries and give them a space to escape vast competition from the giant and already established corporations. However, due to the need to secure employment for their populations, it tends to give in to the demands of those international companies. Indians also have a culture in which they tend to shun away from products that are not homegrown hence failing to provide a market for the products of those companies. (Lockheed, 1993).

The Indian language is an issue to the investors operating in India because their English is not easily understood and, hence, causing a language barrier. Indians are also known to be good business people, this provides stiff competition to their competitors and, hence, before a business can succeed in India, it has to have a proven record of good competition. However, once a business gains momentum in the country and with good management, it automatically leaps good returns since the population tends to consider it as one of their own. Motor vehicle business has a record of thriving in this country as characterized by presence of companies like Fiat Autos, Tata Motors, Premier Auto, Honda, Toyota, Nissan and others, most of which deal with smaller cars, which is the favorite for Indians.

Based on your understanding of the case, explain if fiat can benefit from a partner and provide your rationale

Maximizing the benefits from an alliance seems to involve building trust between partners and learning from partners (Hill et al 2012). FIAT had engaged itself in a series of joint venture but, in most cases, throughout its operation in those ventures, it was making losses. A perfect example is when the company enters into a joint venture with premier automobiles limited. In the 1997 venture, the group recorded losses as it was not quick in embracing the changed economic environment in Italy and Europe.

There was also a massive loss recorded in its market in India at the same period. Their managerial strategies also do not help in curbing the heightened losses and an example is when they decide to do mass production and of low quality, this resulting in complaints from their customers. Its combined venture with GM did not either do it any justice as it also recorded losses amounting to 1.3 billion us dollars. Hence, the company does not stand to benefit from a joint venture.

Discuss whether FIAT and TATA can make good partners and provide at least two examples supporting your position

FIAT and TATA have been in the business for a long time dating from early 1880s and, therefore, are well aware of the dynamics and challenges involved in the market. The firms, therefore, can make good partners considering that they both have their weaknesses and can use their strong areas to neutralize the effects of weaknesses in their partners as well as strengthening their roots. On entering into an agreement in , TATA motors targeted to get technology to help them develop smaller cars that were economical and also be marketed in Latin America and Europe where it almost had no presence, while FIAT wants to maintain presence in India without massive investment.

TM helped in marketing some models of FIAT cars in regions of its stronghold and also sold spare parts for FIAT cars and improve their image in India. It is noted that TM had no sufficient technology on diesel engines while Fiat had expertise on it, hence, this would benefit TM. Since both parties are leaping good benefits from their joint venture, they, therefore, stand a chance of making good partners for prosperity of their firms (Triantis, 1999).

Discuss possible challenges that could affect the partnership long term long term

It is apparent that acquisition and joint ventures are complex transactions and a large number of these projects fail with amazing regularity (Triantis, 1999). FIAT has a record of not doing well in a joint venture and its continued trend on the same direction may see TATA pulling out of the venture as GM did and concentrate on developing its own venture. The distorted image of FIAT in India may affect the sales of TATA goods contrary to improving its image if proper measures to market both parties is not put into place.

The massive competition among other automotive firms such as Hyundai, Renault, Nissan and Suzuki may impact the venture negatively. The aggressiveness of TATA is also another challenge where TATA has a clean record of rebranding itself and also entering into new ventures like it did with Daimler Benz and M.G Rover, hence, reducing its commitments with the joint venture between it and FIAT.

Evaluate the business case for a joint venture strategy and support your rationale

A joint business venture is rewarding and, if well taken care of, with the involved parties having maximum cooperation and commitment to discovering success in their venture and also living to fulfill their visions. This is because the involved parties stand to make positive gains if the opportunity is well utilized. They milk benefits from each other ranging from managerial principles, technology, and market to financial stability.

TATA and FIAT demonstrate this better when on entering into joint venture, TATA was to gain technologically as far as diesel technology was concerned and also has its market radius widened. FIAT, on the other hand, was to have its image rebranded and its operation costs reduced and also was to benefit by using the cost effective production system in India. Though FIAT had a series of joint ventures that it did not fully succeed, it benefited positively and a good example is its joint venture with PAL where they were successful in introducing UNO, a new product into the market. Therefore, joint venture is good when well utilized to benefit all the parties (Mathews 2001).

Make recommendations to be successful

A successful joint venture needs to be assembled as part of a strategy and then well organized (Matthews, 2001). Joint ventures are known to pose paramount challenges to the managing authorities and can suck life out of these officials if proper measures to provide smooth running of the firms is not set in place. In various cases, the organizations are totally crippled to a point of getting to the death bed. To avoid such an occurrence several measures are put in place as outlined below.

Utmost good faith is a priority ingredient for a successful joint venture. The need to have every stake holder on board matters most in success of a firm and, hence, agreeable terms to the satisfaction of the involved parties must be set in place. Smart objectives should act as a lead if success is to be realized. Good managerial tactics should be put in place and this call for the involved parties to provide intelligent officers to run the firm. Transparency and integrity must as well be taken into consideration as this always acts as the litmus to the existence of the firm.

References

Hill, et al. (2012). Strategic management theory an integrated approach. USA: South Western Publishers.

Lockheed, M. (1993). Joint ventures management and contracts. Khrunichev: RSC.

Mathews, C. (2001). Managing international joint ventures, the route to globalizing your business. London: Kogan Page.

Triantis, J. E. (1999).creating successful acquisition and joint venture, a process and team approach. West Port: Conn Quorum.

Abstract

This paper attempts to analyze the case study of Lockheed Martin, a large weapon and aircraft manufacturing company that was involved in a series of unethical behaviors throughout the 1950s and 1980s. The paper follows the companys development into a powerful domestic and international competitor forced to function in a corrupt environment where bribery was the primary way to ensure business success and gain new customers. The essay also reviews the companys need to establish the code of ethics under and enforce it during the 1980s.

Company Description and Background

Before turning into a huge corporation with global reach, Lockheed Martin went through multiple stages of development, most of which faced periods of failure and fallback. Lockheed Martin has nearly a century long history and is one of the worlds leading manufacturers and sellers of weapon, aircraft, surveillance devices, and detection systems. Its story began during the World War I when the Loughead brothers first began to build airplanes and sell them to hobbyists (Terris, 2013).

They operated within an emerging niche of the military weaponry market, but their airplanes were not created in time to become involved in the war (Terris, 2013). Over the decades, the company perfected its models to eventually build the Lockheed Vega, one of the first legendary airplanes of the time and the leading machine in the market. Before the start of the Second World War, the company has experienced several ups and downs; however the need for its products grew rapidly as the United States became the partakers in the global conflict, and as a result, the company expanded very fast increasing its productive capacity and the number of employees by approximately 500% (Terris, 2013).

During the post-war years, as the demand for the companys production dropped, the company has focused on its new mission to lead the domestic weaponry market through the Cold War and withstand the global competition. Unfortunately, the latter task was not easy to fulfill, and the company found itself facing a new challenge of finding clients and buyers willing to purchase their product that was not the best in the global market.

Unorthodox Practices

Attempting to approach potential clients, the marketers of Lockheed failed to promote their aircraft and turned to the so-called unorthodox practices. Unable to take over the stronger and larger competitors, Lockheed had to find alternative ways to push their production. Since the Lockheed airplanes were rejected in the domestic market, the company addressed the foreign buyers in such countries as Indonesia, Japan, The Netherlands, Italy, and Saudi Arabia.

The companys marketers approached the customers through the series of illegal connections and activities selling the Starfighter airplanes. Besides, some of the contracts with the foreign government were facilitated through bribes that were not recognized as illegal practices in the 1950s and 1960s (Terris, 2013). That way, while the native buyers purchased only a few hundreds of the airplanes, the clients from abroad bought several thousands of Starfighters. In other words, the shady strategy of the Lockheed marketers paid off and benefited the company saving it from a major disaster and possible bankruptcy.

A similar situation occurred when the company decided to enter the jumbo jet market. Forced to compete with two powerful manufacturers and their much more superior models, the DC-10 and Boeing 747, Lockheed lost the battle for the domestic market that was not big enough to support too many competitors. As a result, the company, once again, found itself fishing for the clients in the overseas markets. Lockheed was highly motivated to sell their jumbo jet model called L-1011 as its development took a lot of investment and needed to pay off (Terris, 2013).

The Japanese market became one of the main targets of Lockheed and its vice-chairman Carl Kotchian. This leader managed to change the mind of the leaders of the largest Japanese airlines and make them switch from the DC model they were inclined to purchase. The tool that helped Kotchian to push his aircraft in Japan was active bribery (Terris, 2013). All in all, he managed to sell 20 jets which made him a hero of marketing at Lockheed.

Corrupt Environment and Unconscious Unethical Behaviors

The illegal activities surfaced later and became a cause of a massive scandal. In fact, the similar behaviors of the other aircraft manufacturers were revealed as well; however, the case of Lockheed became the illustration of unethical competition and the synonym of bribery and corruption (Terris, 2013). Two senior executives of the company were forced to resign to their surprise. The leaders did not feel as if they breached any serious rules and did that much damage.

In the case study, Terris (2013) asks a question whether or not it is unethical to rely on bribery in the field that is already corrupt and where this kind of behavior is the only way to compete for all the participants. Overall, the author notes that the parties that were hurt by the unethical behavior of Lockheed were their competitors who were involved in the same corrupt activities all along. Any other style of behavior would not have been productive in the complicated system with tight entanglements between the corporations, the governments, and the middlemen who facilitated the transactions (Terris, 2013).

Discussing the activities and choices of Lockheed throughout the 1950s and 1970s, one is to keep in mind that their character should be evaluated from the point of view of general ethics and morals, but not from the perspective of any particular field or market and the habits common within it. That way, bribery might have been a norm and the only way to achieve a positive result for a business at that time, but bribery as a concept is unethical.

Another example of unethical behavior was the scandal that recently occurred at Volkswagen when the car manufacturer decided to install software that would cheat during emission tests of the vehicles and generate the false data showing that the cars were less harmful to the environment. The reason for this action was the companys pursuit of a higher position in the market. Overall, this practice did not endanger the lives of the drivers and passengers in the cars. It simply made them purchase vehicles that produce more NOx than they were thought to.

Just like in the Lockheed case, no one was hurt but the competing manufacturers, yet, the behavior is still considered highly unethical because it is based on lies and cheating. Moreover, Bazerman and Tenbrunsel (2011) note that committing unethical deeds business executives often do not think of their behavior as a breach of morals simply because they view it as purely a business decision rather than an ethical one (para. 3). As a result, unethical behaviors occur unconsciously as they are not outlined as such in any business codes.

The DII

Struggling to recover from too many corrupt projects that endangered the future of the company, Lockheed, along with the other leaders of the competing businesses within the defense industry decided to create a pact called Defense Industry Initiative (DII). This initiative concerned the principles of conduct and ethics and was accepted in 1986. Its main objective was to remove the ethical tension from the industry uniting all the competitors under a promise to play fairly (Terris, 2013). The new policy increased the accountability of the companies and obliged them to enforce ethical management from within and share their most successful practices with one another.

The DII made Lockheed to develop and put into practice its own organizational code of ethics as a necessity to identify the wrongdoings and prevent the association of the whole company with the misdeeds of particular rule breakers (Terris, 2013). Naturally, the new standards were disobeyed almost right away as after the Lockheed Martin merger, the company became involved in another overseas bribery scandal which forced it to reevaluate its code of conduct and become especially thorough in order to win back the clients from the Pentagon.

Dilbert to the Rescue

The leadership of Lockheed Martin faced the urgent need to strengthen the ethical behaviors of the employees as lectures had not proved effective. As a result, the CEO Augustine encouraged the people in charge of the companys ethics program to think outside the box and apply new practices to defeat the cynical attitude of the workers. As a result, the managers came up with the comic strip about Dilbert and Dogbert that addressed the most common workplace issues using the beloved characters and humor to appeal to the workers. Further, to make the ethics standards even more acceptable and accessible, the company launched a tabletop game specifically developed to help the players address various ethical challenges. This interactive approach also involved the characters from Dilbert comics strip turning the game into a fun-based learning activity.

Reference List

Bazerman, M. H., & Tenbrusel, A. E. (2011). Ethical Breakdowns. Web.

Terris, D. (2013). Ethics at Work: Creating Virtue at an American Corporation. Brandeis University Press. Lebanon, NH.

Personal Mastery

Definition

In the contemporary world of business, leadership is growing more complex and flexible. The skills of a successful leader are linked to a broad scope of factors some of which people can inherit as aspects of their personalities and characters, and some can be learned and developed over time. The modern leaders build themselves, as most of the leadership abilities and skills can be obtained via practice and learning. As a result, such practices and lifelong learning, ongoing self-improvement, and self-reflection are known as extremely valuable for a good leader.

One of the practices that have been gaining popularity among the contemporary leaders is personal mastery that is defined as a leaders ability allowing them look deeply into their own level of self-development, professionalism, and reflect on the qualities that are used on a daily basis, as well as the ones required for the individual and professional growth (Senge, 2006). What defines the concept of personal mastery is the approach that all the key features, skills, and abilities, as well as the factors that define ones performance and success as a leader, lie within their individual personality (Senge, Kleiner, Roberts, Ross, & Smith, 1994).

Importance

It can be noted that personal mastery is tightly connected to emotional maturity and intelligence of an individual because its major objective is to enable this person to look inwards with the highest degree of objectivity and be self-reflective and focused enough to acknowledge and recognize self-deception, fear, laziness, projection, and other factors that we sometimes use unconsciously to distract ourselves from the personal challenges we do not wish to handle (Senge et al., 1994).

Self-awareness fostered by personal mastery allows people who have developed the latter skill to be more successful at achieving their goals because they have a better understanding why these goals are the priorities and what has to be done for their accomplishment (Phillips & Baker, n.d.).

Plan Elements

Personal mastery can be achieved via several different pathways (Cropper, 2014). In particular, these elements can be organized in a plan and work as separate elements contributing to ones self-improvement as a leader.

Values

When it comes to my top individual values, I think I must name self-awareness (or emotional intelligence) and intelligence as the primary ones. Also, in regard to interpersonal relations, I value integrity (or faithfulness) and compassion. Finally, as a value of a more global nature, I should name taking care of the world and people around. I chose to name values of different levels (personal, interpersonal, and global) because I believe that an individual (especially a leader) with a high level of personal mastery must always take into consideration the effects he or she can produce on multiple levels. In fact, I think that the repercussions of every action can go far beyond their personal space and make an effect on other individuals, groups, or even the society in general.

Purpose

On a large scale, the point of my life (and I believe, it to be the pint of most peoples being in this world)  is the improvement of self that goes along the improvement of the world around. In particular, I noticed that happy people gravitate to healthy and nurturing choices whereas unhealthy and destructive behaviors are usually the indicators of peoples struggles in life. Accordingly, healthier choices always lead to the creation a happier world around oneself  such a person begins to desire to help others, spread happy environment, and include more people.

Vision

In that way, I envision it as my purpose to transform myself into that nourishing and approving individual free from destructive intentions and thoughts and building a more beautiful environment around. Specifically, I want to start with my closest ones (family and friends) and better myself to be able to affect them positively  become a source of help and understanding practically and emotionally. In the future, I see myself as a guide, a tutor, or a coach of a larger group of people, a motivational speaker, and a leader who has answers. I would like to improve my ability to see deep within people and situations and thus analyze them better for the successful decision-making.

Practice

In order to bring myself closer to the goal of becoming a guide and a wise advisor to the people around on multiple levels, I believe I should focus on the development of such skills as critical thinking and emotional intelligence.

In my understanding, one of the most effective ways to stimulate the development of these skills is practice of thinking about and reflecting on the situations and phenomena that I usually struggle to understand or accept fully. The contemporary globalizing world is a place full of controversies and social norms or ideologies that I find significantly different from my views. I think it could be a great exercise to research some of these ideas and phenomena, learn about them with the intention to understand the perspectives of people that support and share them. It could help to participate in a debate or face people talking with whom I usually find difficult. These activities could be done for the purpose of strengthening my ability to control personal emotional reactions and let my logical mind be in change and not my feelings.

Summary/ Next Steps

Developing personal mastery is a lifelong process that requires constant attention and focus. However, the benefit is that it can be stimulated in a variety of ways and, along the way, helps boost the skills and abilities that are applied on a regular basis in the communication with friends, family, and colleagues.

The role of a leader does not end in the workplace but continues in personal life. A leader is not solely a person who stands at the head of a group and points to the right direction. A leader is a deep thinking person with a unique set of traits and skills allowing him or her generate more complex ideas based on a clearer vision of situations and people. A leader is someone on whom many people could rely not because he or she was the only one who agreed to take charge but because he or she is equipped to be in charge.

I see my next steps in the development of emotional intelligence and maturity with the help of critical thinking and analysis. I also believe that it would boost my confidence if I deliberately put myself in non-habitual situations and attempted to handle them applying my values, leadership strengths, and objectivity. I also plan to better myself at understanding peoples emotions and thought processes, which means I should think of taking courses in psychology and sociology.

References

Cropper, B. (2014). Personal Mastery  putting the me in leadership.

Phillips, S. & Baker, H. (n.d.). From terrorism response to software project management: The importance of personal mastery. Web.

Senge, P. (2006). The fifth discipline: The art and science of a learning organization. New York, NY: Currency/ Doubleday.

Senge, P., Kleiner, A., Roberts, C., Ross, R. & Smith, B. (1994). The fifth discipline fieldbook: Strategies and tools for building a learning organization. New York, NY: Currency/ Doubleday.

Organizational reward systems serve as the motivational basis of work processes. Benefits and rewards play a significant role in attraction, stimulation, and retention of human resources and the level of compensation can influence employees motivation in both a negative and positive way. An ineffective compensation strategy may provoke job dissatisfaction that leads to a decrease in work productivity and quality, violation of discipline, and the occurrence of organizational conflicts.

On the contrary, an effective pay system stimulates productivity growth and leads to a more efficient implementation of human capital which helps to develop competitive advantages (Martocchio, 2011). Based on this, strategic compensation is meant to assist organizational leaders to manage human resources in a way that will motivate them for the achievement of organizational goals. Through the merge of employee interests with organizational strategic objectives, leaders may increase morale and attain greater organizational efficiency.

In traditional management models, organizational strategy and HR strategy are usually separated. The major goals of corporate strategies are growth, sustainability, and cost-efficiency while HR strategies are primarily aimed to control HR flow, workflow, and reward flow (Rao & Krishna, 2015, p. 671). Strategic compensation unites both of these approaches and strives to fulfill the mentioned goals through the realization of one strategic plan.

The central question of compensation management is the estimation of salaries. In the traditional compensation system, this problem can be solved through a comparison of internal subjective organizational values of each workplace and its absolute market values (Nazari & Niknejad, 2014). The traditional algorithm in compensation strategy includes a job description, job classification, analysis of labor market, determination of workplace rates, and establishment of salary size (Nazari & Niknejad, 2014).

Evaluation of internal and external labor values may be regarded as the initial phase of the compensation strategy, and data accumulated through the environmental analysis may serve as the basis for the development of the compensation system.

However, there is no universal recipe for organizations to follow in the identification of benefits and reward factors, and managers need to identify the important compensable factors according to contexts, purposes, and missions of their companies. Along with the analysis of external environmental factors (situations in the market, social expectations of job evaluation, etc.), it is important to consider the internal factors such as the amount of organizational human capital, employees interests and needs, organizational structure, short-term and long-term objectives, corporate culture, etc.

Salary may be regarded as the basis of traditional compensation strategy while different flexible pays and material benefits are extra complements to the organizational pay system. Benefits add value to the work environment and conditions as they aim to increase employee life quality. Benefits may include medical and life insurance, extra vacation, free meals, reimbursements, etc. But during the planning benefit system, management needs to consider such factors as national policy, situation in the labor market, and cultural peculiarities (Martocchio, 2011). The external factors may significantly influence corporate system of benefits.

For example, the introduction of basic benefits is a legal requirement imposed on employer by national government. In this way, organizational benefit systems tend to become more complex in order to maintain a competitive position in the labor market.

Identification of employees motivational factors is essential to the design of an appropriate compensation strategy. Thus, managers can refer to some of the relevant motivation theories. For example, Herzbergs Hygiene Theory is focused on two main factors influencing individuals performance: hygiene factors (working conditions, the level of supervision, organizational policies, etc.) and motivational factors (success, responsibility, career, etc.) (Sachau, 2007).

The hygienic factors define the level of work satisfaction in the context of the surrounding conditions. And the second group of factors serves as stimuli for works effectiveness and productivity increase. Based on this, along with high salaries, managers may provide employees with benefits of comfortable and safe working conditions. Moreover, by emphasizing employees autonomy and independence and relating compensation strategies to employees competencies and performance, it is possible to fulfill individual need for self-realization and, in this way, achieve productivity increase (Richards, 2006).

Compensation strategy design highly depends on management philosophy, corporate culture, values, and mission. The alignment of compensation strategy with organizational objectives implies adjustment of employee interests and needs with organizational priorities (Richards, 2006). It means that corporate culture needs to integrate multiple social, professional, and ethical values which emphasize the significance of employee efforts and demonstrate their importance.

When employees comprehend the significance and value of their work, they become more stimulated for the achievement of better and sooner high-quality results. The organizational philosophy thus may affect the introduction of compensation strategies, and people-oriented companies often implement such reward programs as skill-based pay or person-based pay which help to support employee commitment to work (Richards, 2006).

Managers and high-level corporate leaders recognize the importance of alignment between organizational strategic goals and employee compensation plans. However, the success of adjustment between goals and compensation strategy largely depends on the organizational characteristics, and especially corporate culture, values, structure, and management style. Efficient organizational management requires significant intellectual and financial investments for the evaluation of internal environment and selection of methods aimed to achieve corporate objectives.

The efficiency of such investments largely depends on the level of staff motivation for the achievement of the formulated goals, especially when it implies the contribution of extra efforts. An appropriate compensation strategy thus can help to motivate employees by aligning their personal interests with the corporate interests. And based on this, it is possible to say that strategic compensation is an effective method of organizational motivation and activation of goal-oriented corporate behavior.

References

Martocchio, J.J. (2011) Strategic compensation: A human resource management approach (6th Edition). Upper Saddle River, NJ: Prentice Hall.

Nazari, B., & Niknejad, S. (2014). Compensation strategies: A critical overview. Modern Journal of Language Teaching Methods, 4(4), 252-265. Web.

Rao, G. V., & Krishna, D. J. (2015). Alignment of HR practices with organizational strategies. Indian Journal Of Industrial Relations, 50(4), 666-679.

Richards, D. A. (2006). High-involvement firms: Compensation strategies and underlying values. Compensation and Benefits Review, 38(3), 36-49,4-5.

Sachau, D. A. (2007). Resurrecting the motivation-hygiene theory: Herzberg and the positive psychology movement. Human Resource Development Review, 6(4), 377-393.

Corporate governance is the management of organizational and legal registration of the business, optimization of organizational structures, and the construction of intra- and interfirm relations of the company by the objectives (Larcker & Tayan, 2015). The main function of corporate governance is to ensure the work of the company for the benefit of its owners (shareholders) providing corporate financial resources. The essence of corporate governance is the implementation of the company cycle to maximize the efficiency of the firm, which is the main criterion of the notion.

Product Launching Issues

The purpose of the firms product launching is to maximize the property (wealth) of its shareholders, which comes down to maximizing the companys share price. The managers, however, may have other objectives that compete with the wealth maximization of shareholders. The situation when the owner of the firm provides managers with decision-making authority may create potential agency conflicts (Mallin, 2013). The primary agency relationships for the company will be the relationship between the shareholder and managers, as well as between lenders and the shareholder. It should be noted that the agency conflict is not essential. If there is no ambiguity, meaning no freedom to choose solutions by the agent and the principal can evaluate the actions of the agent, the conflict will not arise. For poor performance, the agent will be dismissed. In the situation of uncertainty, if the agent is not against taking the risk, his or her performance will be paid for (Mallin, 2013). In this case, there will also be no conflict of interest. However, given the specificity of the product launch, the two factors may determine the agency conflicts, which are incomplete information and risk aversion (Simpson & Taylor, 2013).

One solution to the possible disputes may be the creation of contractual arrangements providing for the interests of all the participants in the agency relationship (Mallin, 2013). The following solutions to debates are also applicable, for instance, stimulating the interest in the stability of the companys employees and their jobs; motivating them to get proper wages; and the perspective interaction with the employer on certain aspects (equal opportunities, protection of health at the workplace, financial security, privacy, and ensuring adequate standards of living).

Finance

The outside investors will be entitled to a part of the companys revenues as well as to the companys assets in case of bankruptcy. However, the stockholders executing supervision through the companys managers will conduct the monitoring of the decisions that manipulate the efficiency and riskiness of the organizations assets (Moore, 2013). In general, the investors give the money at interest rates, which, among other things, depending on the riskiness of both the available and expected assets; the current composition of the capital; and the anticipated prospective decisions influencing the firms capital structure (Moore, 2013). These prime agents define the riskiness of money streams of the firm and therefore, the durability of its debt. It should be noted that most of these actions are aimed at maximizing the total cost and boosting the price of the companys shares. However, if managers prefer bondholders to shareholders, the problems may arise. Creditors may assign high rates of interest on loans and other constraints, and this prospect is fraught with damage to shareholders.

When seeking for financial managers, the main professional competencies to consider will include financial and management skills. For instance, the knowledge of financial planning methods and techniques of financial analysis is essential. It is also necessary that the manager is knowledgeable about the methods of assessment and cost management of the company and can generate financial strategy and accounting policies; he or she must be skilled at shaping the fiscal policy and optimizing taxation (Pacces, 2013). Regarding the management competencies, the employee should be able to implement effective communication, be able to build a team, and work with it; he or she should possess strategic thinking and know-how to monitor and optimize business processes.

To maintain the ethical standards in the firm, it is necessary to organize accountability about the shareholders and the public (evaluating the internal and external liability). Also, it is necessary to protect the legitimate rights and interests of shareholders and to ensure the equal treatment of all shareholders based on mutual trust and respect. It is crucial to ensure the transparency in corporate decision-making and in providing information to all the interested parties on the development strategy and current activities. Also, the audited financial statements will determine whether the statements are prepared, in all material respects, by the established principles of financial reporting (Simpson & Taylor, 2013).

It should be noted that the debt ratio is the opposite factor within the meaning of autonomy, but it also characterizes the ratio of debt to equity. In the absence of reasonable standards, this indicator is estimated to be dynamic. The decrease in the number indicates an increase in the risk reduction and lower financial stability, which also increases the interest expense and the companys strengthened dependence on possible changes in the rates (Rasheed & Yoshikawa, 2012). The lender may structure the financing in such a way that it would be possible to recover the costs from the paying participants in the project if the project does not meet the minimum volume. Also, the lender may mitigate the costs by securing a predictable revenue stream that can be used to service the debt.

Governance

The possible managerial threats related to the Board may be linked with the position of interest rate risk, interest rate risk with the portfolio, as well as the impact of interest rate changes on the economic situation of the company as a whole. Also, the dangers may be associated with the uneven distribution of risks among the direct participants in the business; with a lack of proper organization risks insurance; and failure to comply with the regulations in working with partners and the external conditions (Larcker & Tayan, 2015).

As mentioned above, corporate governance is the management of organizational and legal registration of businesses, optimization of organizational structures, and the construction of intra- and interfirm relations of the company by the objectives (Larcker & Tayan, 2015). There are five major areas of corporate governance that include the rights of shareholders, equal treatment of shareholders, their roles; the disclosure of information and transparency; and responsibilities of the Board (Bloomfield, 2013).

The effective performance of the Board can be defined by the definition of strategies, investment, and budget planning, the establishment of motivation and evaluation of management systems, as well as oversight of the companys assets and the reliability and efficiency of risk management, internal control, internal audit, and systems of corporate governance. However, the unfair and unreasonable actions (inaction) of directors assumed, in particular, in cases where the directors acted in the presence of a conflict between personal interests and the interests of a legal person, shall be considered ineffective (Simpson & Taylor, 2013).

Also, the Board should be considered problematic when it decides to execute power without obtaining the information necessary for decision-making. One of the measures to affect such occurrences is the application of the legislation by the governing bodies such as the law on deposit insurance (Keay, 2012). However, the deposit insurance system enables depositors to pay less attention to monitoring the activities of banks, which reduces the level of corporate governance. Also, the owners get an increasing temptation to invest in riskier assets, which could provide them with greater profits. Nevertheless, the requirement of supervisory authorities to provide regularly detailed financial statements increases the transparency of the Boards activities.

Block ownership involves the ability to block any decision in principle. In cases when the controlling interest is not consolidated in the hands of one person, the owner of the blocking package can carry out his or her solutions (Bloomfield, 2013). The possession of such a shareholding provides the possibility to block the decision of the general meeting, make changes and additions to the Charter. It enables the reorganization of the company or its liquidation, determining the number, the par value, and type of shares. Also, it grants the opportunity to define the rights given by the shares and the access to all the accounting documents and minutes of board meetings and so on. However, this package gives the holder the right to sue the companys transactions and compensate for the damages by the sole executive body.

References

Bloomfield, S. (2013). Theory and practice of corporate governance. Cambridge, UK: Cambridge University Press.

Keay, A. (2012). The enlightened shareholder value principle and corporate governance. New York, NY: Routledge.

Larcker, D., & Tayan, B. (2015). Corporate governance matters. Upper Saddle River, NJ: Pearson Education.

Mallin, C. (2013). Corporate governance. New York, NY: OUP Oxford.

Moore, M. (2013). Corporate governance in the shadow of the state. New York, NY: Bloomsbury Publishing.

Pacces, A. (2013). Rethinking corporate governance. New York, NY: Routledge.

Rasheed, A., & Yoshikawa, T. (2012). The convergence of corporate governance. New York, NY: Palgrave Macmillan.

Simpson, J., & Taylor, J. (2013). Corporate governance ethics and CSR. London, UK: Kogan Page Publishers.

The WRSX group is an international integrated agency. The company has subsidiary agencies in New York, London, Paris, and Singapore (WRSX 2011). The main goal of the company is to make effective advertisement contents for customers and establish sustainable marketing relations. The company renders services in media, public relations, research, branding, film production, and sports marketing. During my three-year period as a director in WRSX, the company has experienced a successful business performance. Prior to my turn as a director, the company was facing increased competition from other advertising firms (Mitcham 2013). To address on the above issues, the board of directors met severally to come up with the strategic decisions. Notably, after the company implemented the decisions the company has progressively gained its prominence in the international market. The report below focuses on a group of related decisions responsible for the above outcomes.

Related decisions taken

As indicated above, the present performance of the company is comparatively successful. The company is progressively gaining competitiveness in the advertising fraternity (WRSX 2011). A successful business performance was witnessed after the company implemented drastic and strategic decisions. The decisions implemented are getting additional mergers, acquiring rival firms, and expanding into new markets. For instance, during the second board meetings the directors agreed to acquire a company called RMJ. At the time of the acquisition, the company recognized that the purchase of the rival company was a risky adventure. Another strategic decision that has propelled the growth was the acquisition of West Coast. With the acquisition of the firm, the company realized a growth in its market share (Barney & Hesterly 2008). Because of this, the companys rate of growth increased leading to more prospects.

With the acquisition of the above companies, the size and reputation of the company increased. The acquired companies experiences in their regional markets have been a benefit to WRSX (WRSX 2011). As such, each company had different skill sets in different units and regions, which the company has exploited to the best of its ability. Owing to this, the customer needs and service delivery have been enhanced. Equally, the acquisitions enabled the company to expand its operations into new geographical regions. Through this, the company gained a competitive advantage against its rivals leading to an increased market share. Through the acquisition, the company has gained new opportunities in the market to fill prospective niches in the future (Lynch 2012). The opportunities will be realized even if the company has to change what they offer their customers just to fill this niche in the market.

In addition, the company has experienced a successful business performance because of the decision to expand their operations into the Asian markets. Taking into account fast emerging economy of Asia, especially in countries like China, Japan, and India, the company in the last three years has devoted more efforts towards the development of strong links with these countries. Similarly, The Company has identified Africa as the continent of opportunity. The above initiatives represent significant changes in the companys position. Through this, the company has been able to increase its market share in the global market.

PESTEL and Porters five forces frameworks were utilized during the decision-making processes. In the board of directors meetings, it was noted that the models for analysing business performance were essential in determining the effectiveness of the choices. In this respect, the Posters five forces model came in handy. The model is a detailed analysis of the five forces in the industry, which determines the intensity of competition and the profitability of the company (Quinn & Mintzberg 1999).

The five forces were very vital since the combination of the five forces determined whether the strategic choice was attractive or unattractive. Unattractive choice implied that the five forces reduced the overall profit of the organization. Just like any other business organizations, the company encounters the five forces in their day-to-day activities (Wit & Meyer 2010). The forces are threat of new entrants, threat of substitute products, bargaining power of buyers, bargaining power of suppliers, and intensity of competitive rivalry. The above theory supported the decision because through it the company was able to identify its major rivals and acquire some of them in a bid to tame competition.

Another framework that was utilized during the decision making process was the PESTEL model. The model aided in market evaluation and assessment of external factors that have an impact on the profitability of an organization. Its acronyms in order stand for political, economic, social, technological, environmental, and legal factors. The above factors are crucial in the determination of the companys success. Currently, the company enjoys a number of positive macro-environmental factors in the countries it operates. The factors are good government policies, favourable legal policies, low interest rates, and minimal inflation levels.

With the help of PESTEL model, the company was able to come up with a decision to make WRSX the agency of choice for Asian brands. The model made it possible for the analysis of a number of social factors such as family set ups, social classes, and lifestyles in Asia (Grant 2010). The above factors offer a good environment for the growth of the WRSX. The economic factors in the Asian countries analysed favour the growth and profitability of the company positively. As such, Asian economy has improved significantly in the last few decades. Thus, most of the families in the selected countries have decent salaries hence can purchase products and services from the company (Mintzberg & Ahlstrand 2009).

The theory supported the decision because the companys expansion into Asian countries has enhanced its growth in the international market. Similarly, the theory has been helpful in the implementation of the decision. Failure by the company to monitor the changing social trends and patterns may lead to reduced profitability (Johnson & Scholes 2011). By predicting the changes in macro-environmental factors, the organization has been able to develop policies and structures strategically to address the situation. Therefore, the success of WRSX can be attributed to management actions with respect to PESTLE factors.

To what extent did your assessment of the strategic position and strategic choices change or evolve over the three-year period?

At the beginning of my three-year period at WRSX, it was apparent that the company was facing a number of challenges (Mitcham 2013). As such, the company was facing increased competition from other advertising firms. Similarly, the company was faced with huge operational cost. According to my assessment of the companys past position, it is evident that the management had to implement various strategies to increase its international growth. The strategies selected by the directors illustrated pertinent ways through which the company could enhance its international market share.

For the last three years, the companys strategic position and strategic changes have evolved progressively. As illustrated below, new ideas have been emerging forcing the company to amend its strategies. Faced with increased competition, the companys strategic position has been to be among the top 20 advertising firms in the world. The company acknowledges that the position can be achieved with the help of different agencies situated in different countries. To achieve this, the company has been trying to woo new customers and sources of income. The first step that was taken towards the realization of the initiative has been evidenced through the gradual change of emphasis of the company.

Taking into account fast emerging economy of Asia, especially in countries like China, Japan, and India, the company in the last three years has devoted more efforts towards the development of strong links with these countries. The above initiatives represent significant changes in the companys position. In the past, the company showed interest in European and American markets. The changes are very important for the company as they guarantee further development and presence of customers at difficult times of world crisis.

My original analysis had identified two strategic choices that the company had to undertake to be competitive in the international market. The choices were to acquire additional mergers and purchase of rival firms and elimination of all loss making ventures from the company. Earlier, the company had an option of venturing into the Chinese market. The option was later dropped after it was realized that the company would encounter too much competition from the Chinese firms. After the above option was dropped, the company had to search for other means of expanding their market share through acquisition. Thereafter, the company acquired one of the UKs competitors called RMJ. Another change that occurred was witnessed during the acquisition of West Coast. With the acquisition of the firm, the company realized a growth in its market share. Because of this, the companys rate of growth increased leading to more prospects.

Equally, to decrease the cost of operations the company implemented key changes. To reduce the operational costs, the company had intended to outsource some of its core services. After deliberation with the board of directors, the intention was dropped because the act could lead to a reduced control on the workforce. Later the company implemented backward integration into reprographics. Through this, the company enhanced its competitive advantage in the industry cutting back on operating cost.

References

Barney, J., & Hesterly, W 2008, Strategic management and competitive advantage: Concepts and cases, 4th ed, Pearson/Prentice Hall, Upper Saddle River. Web.

Grant, R 2010, Contemporary strategy analysis, 6th ed, Blackwell Pub, Malden, MA. Web.

Johnson, G., & Scholes, K 2011, Exploring corporate strategy, 9th ed, Prentice Hall, London Web.

Lynch, R 2012, Strategic management, 6th ed, Financial Times Prentice Hall, Harlow. Web.

Mintzberg, H., & Ahlstrand, B 2009, Strategy safari: The complete guide through the wilds of strategic management, 2nd ed, FT Prentice Hall, Harlow, UK. Web.

Mitcham, C 2013. Advertising Industry Overview. Web.

Quinn, B., & Mintzberg, H 1999, The strategy process. Prentice Hall. London. Web.

WRSX, 2011, Global Advertising & Marketing Communications. Web.

Wit, B., & Meyer, R 2010, Strategy: Process, content, context, 4th ed, Cengage Learning, Andover. Web.

Introduction

The system of healthcare in the United States is characterized by complexity and diversity. Private and public medical institutions offer medical services to individuals covered by individual-based, government-financed, and employment-based insurance. More recently, however, the discussions started on the issue of rising healthcare costs, which prompted many individuals to skip on paying for individual health coverage.

The government initiated a health care reform and introduced such laws as the Affordable Care Act (ACA) to improve the accessibility of health care by expanding the reach of government-financed insurance. However, with many working individuals not eligible for Medicare and Medicaid programs, the two options available to them are expensive individual insurance or employment-based insurance.

The latter option implies insurance coverage offered by a business to its employees as a part of its benefits package. Due to the rising healthcare costs, more job-seekers are likely to look for employers offering health insurance benefits to help reduce the applicants financial burden. Although medical insurance included in the benefits package can be an effective recruitment and retention tool, it also adds to the employee benefit costs (Kwon, Hewitt, & Hein, 2013, p. 32).

This fact highlights the need for the businesses to consider health insurance benefits in their overall strategic goal-setting process and find ways to control benefits costs. This paper seeks to address the issue of health insurance benefit costs in real-life business settings. The impact of employee benefits costs on strategic goal setting and options to control costs are presented, along with practical examples, informed by literature review.

Impact to Strategic Goal Setting

Health insurance offered as a part of the benefits package impacts the strategic goal setting of the company in several ways.

Businesses add health insurance coverage as a part of their overall employee compensation strategy (Christianson & Trude, 2003, p. 358). Health insurance coverage is used as a tool that can help employers attract valuable candidates and retain their best employees. As such, health insurance benefits should be regarded as a reward and be aligned to business objectives (Kwon et al., 2013, p. 33). Reward systems affect organizational performance and individual behavior largely through the impact they have on peoples beliefs and expectations about how they are and will be rewarded (Hewitt, 2012, p. 68).

For a company to add health insurance as part of its benefits package, the companys management has to decide what type of coverage will be offered to the employees, what ancillary benefits will be included, and whether health insurance will be provided to all employees, or individuals in specific positions or departments.

The type of coverage implies general insurance, medical insurance, dental insurance, etc. The management is in a position to choose what types of expenses will be covered and when the coverage will begin. As a part of the companys strategic goal setting, the health insurance coverage will impact the companys compensation strategy by introducing health coverage as a tool to attract employees and as a part of the strategy to maintain high employee motivation and engagement. Also, due to the significant costs of health benefits, they will impact the financial strategy of the organization.

For the business to stay profitable and competitive, business owners will have to adjust their financial strategy to accommodate additional expenses, and develop cost-controlling mechanisms (Christianson & Trude, 2003, p. 359). Business owners are in a position to decide, what ancillary benefits, such as eye care or dental insurance will be included. Offering ancillary benefits may allow the company to gain a competitive advantage in the job market and attract employees with the highest market value.

On the goal-setting stage, businesses will have to decide what employees will be eligible for health benefits. Businesses may decide to offer health insurance to all of the employees or keep it as a bonus for top-performing or most valuable workers. Health insurance can be offered to top-performing employees in recognition of their contribution to the companys performance.

A holistic approach to assessing the level of contribution and therefore possible rewards suggested by Armstrong requires the company not only to evaluate what employees are vital to the companys operations but also to recognize current human resources shortcomings (2010, p. 177). Since a benefits package is not only a retaining tool but also a means to attract new, valuable employees, the companys strategic goals may include the goal to attract top-performing professionals employing a comprehensive health insurance benefits package.

All of these nuances have to be considered in the wider context of the companys payroll costs.

Controlling Costs

It is general knowledge that healthcare costs have been rising for the past decade, and offering health insurance can lead to a significant increase in the companys payroll expenses (Danis, Goold, Parise, & Ginsburg, 2007, p. 236). Business owners have to calculate the appropriate amount of financing allocated to health benefits and implement cost-reduction strategies to improve profitability.

There are various ways businesses can control health insurance benefits package while being able to use it as a recruitment and retention tool:

• Adjusting employees wages to accommodate higher benefits costs. Successful implementation of the health insurance benefits package requires business owners to consider the profitability of such an effort. Businesses can keep total compensation unchanged by reducing wages and increasing compensation through health benefits. If such an adjustment process occurs relatively quickly, increases in health care costs have only a minor, short-term negative impact on firm profits. (Christianson & Trude, 2003, p. 359).
• Cost shifting from employers to employees (Danis et. al., 2007, p. 236). This cost-control strategy implies reducing benefits and offering high deductible plans. By shifting costs to the employees, employers may minimize the effect of rising healthcare costs.
• Employee wellness programs. Such programs may include setting up a companys gym or developing a smoke-free environment (Shope, 2004). If the employees are healthier, they are more likely to have lower medical expenses.

Practical Examples

Top-performing companies successfully implement health insurance benefits to attract new talent and retain their employees. One such company is Microsoft, which offers one of the most comprehensive health and wellness programs for its employees. Their health insurance benefits include not only general medical coverage, but also vision and dental care, physician house calls, free on-campus screenings and flu-shots, and 24-hour health line (Benefits and perks, n.d.).

While such health benefits provide great value to the employees, they also allow the company to control costs by educating its employees through health line and offering medical services directly at the campus. PricewaterhouseCoopers identified rising physician and hospital costs as one of the factors which contribute to high health benefits costs (Shope, 2004). Offering physician services on-campus allows the company to directly control the number of medical services offered to the employees.

References

Armstong, M. (2010). Armstrongs Handbook of Reward Management Practice: Improving Performance Through Reward. London: Kogan Page Publishers.

Benefits and perks. (n.d.).

Christianson, J., & Trude, S. (2003). Managing Costs, Managing Benefits: Employer Decisions in Local Health Care Markets. Health Services Research, 38(1), 357-373.

Danis, M., Goold, S., Parise, C., & Ginsburg, M. (2007). Enhancing Employee Capacity to Prioritize Health Insurance Benefits. Health Expectations, 10(3), 209-305. doi: 10.1111/j.1369-7625.2007.00442.x

Hewitt, A. (2012). Total Rewards Survey.

Kwon, J., Hewitt, A., & Hein, P. (2013). Employee benefits in a total rewards framework. Benefits Quarterly, 29(1), 32-38. Web.

Shope, D. (2004). Area Employers Get Advice on Lowering Health Care Costs.