MANAGING in the

NEW WORLD

The financial sector has made deep inroads into the overall makeup of the economy across the world over the past three decades. This financialization has happened due to the combined effects of technological change and deregulation. As a result, contractual arrangements have now become common place, having trickled down to other levels in the economy. Supporters of this development point out that it leads to an improved allocation of resources to people or firms that deserve it. The failure and success of firms already going down that direction accelerates as a result of intervention by banks. More turbulence is generated within the economy, where the churn leads to only a handful surviving. Thus, funds get reallocated to the better firm from the next-best one. Especially taking the case of France but also extending to other industrial economies, one notices that family-run firms tend to do better in the long-run. This is because family firms’ corporate strategy is geared towards parsimony. They control finances tightly, ending up paying lower wages, but also investing conservatively. Such firms avoided the market meltdown of 2008.

Source:http://news.mit.edu/2018/does-flow-capital-make-economy-efficient-0927

Uploaded Date:10 November 2018

For logistics or manufacturing companies, a trend emerging is the inefficiencies in its transportation and distribution, leading to spiraling up of costs. As per a report submitted by management consulting giant Bain and Company, at leading companies the distribution and transportation costs make up a little over 6% of the total revenues. This figure increased up to 8% at most average performing companies. At the others, it rises to about a tenth of the total. A world-class distribution network needs to be designed as it can reduce these costs by anywhere between 10 and 25% of the total. It will even impact on the timeliness of the deliveries by a final tally of up to 95%. Once a company reaches the top, it has to balance the costs and remain there. Tracking devices, digital tools and RFID technology needs to be made use of.

Source:https://www.bain.com/insights/are-your-distribution-and-transportation-costs-out-of-control/

Uploaded Date:09 November 2018

There is a popular business mantra now popularly accepted known as “Disrupt or be Disrupted”. This refers to business models of players such as Netflix which disrupted the hegemonies of the traditional industry leaders, or even killed competition as happened with Blockbuster in this case. There may however be cause for concern as some business innovations may not have the transformative effect sought. So, a cause-benefit analysis needs to be considered. A matrix could be created to highlight these costs and resultant benefits. The axis could be divided into high or competitive intensity and high or low asset requirement to the traditional business. To discuss specifics, in the retail industry for those with high asset worth across multiple stores such as Sears or JC Penney, this may not be a very valuable proposition. Instead, such self- disruptions will be beneficial to luxury retailers like Gucci or Louis Vuitton. Sometimes alliances can work wonders which is why GM is tapping in to the potential of Lyft. Microsoft meanwhile has already leapfrogged to the next stage thanks to its already substantial data warehousing capabilities. This gets leveraged using cloud-based software for software development and customer relationships.

Source:https://hbr.org/2018/11/research-self-disruption-can-hurt-the-companies-that-need-it-the-most

Uploaded Date:08 November 2018

There have been calls at various times for machines and numbers to totally control the business world at the expense of the humanities. But each time such movements have surfaced, opposite pulls have called for a greater focus on talent management. Prime example of this would be the 1930s when Elton Mayo introduced the concept of human resources, where workers were treated with dignity and care. This was in stark contrast to the earlier principles of scientific management introduced by Frederick Taylor. Similarly, after the 2008 economic crisis, there were calls for humanizing businesses. Underprepared overachievers in much contrast to the insecure overachievers, do not have patience. So, they try to derive business solutions for everything. For more holistic solutions, such people need to make use of literature, philosophy and the social sciences.

Source:https://hbr.org/2018/11/business-does-not-need-the-humanities-but-humans-do?utm_medium=email&utm_source=newsletter_daily&utm_campaign=dailyalert_activesubs&utm_content=signinnudge&referral=00563&deliveryName=DM17944

Uploaded Date:08 November 2018

The global economic scenario will be markedly different in 2030 from what it is now. The prime difference will be the rise in spending power of the present emerging nations. According to a study conducted by management consulting giant McKinsey, such countries will make up more than three-fifths of global consumption growth up till that period. Among 70 such countries evaluated, seven have been categorized as the overachievers. This list includes- China, Hong Kong, South Korea, Thailand, Indonesia, Malaysia and Singapore. They all averaged a real growth of 3.5% or more consistently for the past fifty years. Another eleven deserve honourable mentions to this list. These are- India, Azerbaijan, Kazakhstan, Cambodia, Belarus, Turkmenistan, Myanmar, Laos, Uzbekistan, Vietnam and Ethiopia.

Source:http://amp.timeinc.net/fortune/2018/10/17/fastest-growing-emerging-economies?__twitter_impression=true

Uploaded Date:08 November 2018

There is no single one-size-fits-all principle to foster business innovation in a company. But one way to do so is to ensure that the creative spark remains intact among the employees. Several ideas have been generated to ensure this, such as reworking the design of the office complex or having frequent brainstorming sessions. Encouraging a thirst for knowledge can prove to be mighty beneficial. The 2018 Workforce Learning Report by LinkedIn clearly proves how career development plans can go a long way in helping companies retain talent as 94% stated that way. Companies must also build resilience among the employees. For this specific management training workshops may be conducted. Even retraining activities can help fuel an innovation zeal among the employees.

Source:https://www.forbes.com/sites/forbestechcouncil/2018/10/16/why-the-corporate-world-needs-lifetime-learners/#6003fcc76691

Uploaded Date:06 November 2018

While newer products keep getting developed, they will not be scalable or business-worthy unless they fall into the hands of the right product managers. Thus, product managers are high in demand now, at a time when business innovation and the subsequent product development is high. A few skills have been identified which they must possess in order to succeed. The first thing that product managers need to realize is that the skills that took them to the position in the first place, need not be enough to succeed here. Interpersonal relationships, team management, impacting transitions and talent management have been seen as some skills they must possess now at this stage. A challenge they often face is they aren’t always empowered with any formal authority. This is why they need to lead through sheer dint of influence. Product managers also need good negotiation skills. For navigating through such diverse challenges, they need to possess a flexible outlook to work. Critical relationships will need to be forged at the right place andused at opportune moments.

Source:https://knowledge.insead.edu/career/the-three-skills-product-managers-need-to-succeed-8271

Uploaded Date:05 November 2018

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