Role of total quality management IT BPO industry

Role of total quality management IT BPO industry About Services and Quality: Services lie at the hub of economic activity. They touch the lives of each individual in this world. Today firms differentiate themselves in the market place by offering their customers a service guarantee. Every organisation has their operations and they would involve in outsourcing the business function operations to a third party service provider. In turn every organisation would have a business process outsourcing unit. In this competitive world, service providers are having different strategies to sustain in marketplace. Every organisation would appeal to their customers to distinguish themselves from their competitors maintaining the important characteristics called as Quality. It must be the key goal in the operations functions as well as all other parts of the company. Quality is vital in determining the economic success of companies (Curkovic et al., 2000; Garvin, 1988) every world-class company gains competitive edge and has greater market share through extraordinary levels of performance by providing quality services with competitive prices as required by demanding customers. However according to Sila (2003) the definition of quality have been debated for many years by quality management researchers and a number of definitions have emerged. However, there is still no universal agreement on these definitions. As far as the definitions of quality are concerned, some of the quality pioneers coined the following terms: Feigenbaum (1951) and Abbott (1955) defined quality as value, Levitt (1972) as conformance to specifications, Juran et al. (1974) as fitness for use, Crosby (1979) as conformance to requirements, Taguchi (1981) as the losses a product imparts to the society from the time the product is shipped, and Gronroos (1983) and Parasuraman ct al. (1985) as meeting and/or exceeding customers expectations. Today, the most widespread definition of quality is the extent to which a product or service meets and/or exceeds a customers expectations (Reeves and Bednar 1994), which rellects a shift in focus to customer satisfaction. Companies implement various management, controlling as well as planning tools and management insists that these would have a greater effect on the company performance (Tanninen, 2010). It is very essential for any industry to sustain their competitive advantage. To achieve this, companies have to maintain their quality in service delivery. There exists some quality tools used by various organisation are ISO 9001, TQM, Sig sigma, CMMI. Global firms are exploiting the nation specific returns with the help of sourcing the important services from various different vendors across the globe that are capable of delivering good quality or cost advantage over the local domestic suppliers (Friedman 2005). Most of the basic outsourcing services would be listed in the experience services or goods (Nelson, 1974). In case of services or goods the judgement on the quality can be made only once it is consumed or purchased. However the companies would face a challenge in setting target in case of quality and productivity and particularly in case of vendor selection, manager faces information asymmetry problem. Quality is considered as everybodys responsibility and prerogative whether it is a service line of the staff function in any organisation. Various authors have defined quality in different ways. The highest priority is given to the product quality that satisfy customer. The customer would have the win-to-win situation and has value for money. Customer satisfaction is considered as the main objective along with maximum profitability to an organization and including the service and everything in an organization that contributes to making a service requires quality (GROVERY et al., 2006). Total Quality Management (TQM) Total Quality Management(TQM) means achieving quality in terms of all functions of the enterprise. This includes interaction between all the components of the organisation as well as the components themselves. TQM aims to achieve an overall effectiveness higher than the individual outputs from the sub-systems, such as design, planning, production, distribution, customer focus strategy, quality tools and employee involvement (HAFEEZ,2009).The introduction of total quality management (TQM) has played an important role in development of contemporary management. Quality, considered a key strategic factor in achieving business success, is more than ever required for competing successfully in todays global market place (Dean Evans, 1994), and it has become the key slogan as organisations strive for a competitive advantage in markets characterised by liberalisation, globalisation and knowledgeable customers . aims and Objectives The aim of this research is to focus on the implementation and challenges of Total Quality Management (TQM) in IT Business Process Outsourcing (BPO) industry and also recommends how to improve the TQM process. To explain about why the organizations implement and do not implement TQM as their quality improvement tool. To understand how TQM can be implemented in an organisation To identify what are the different gaps/barriers in the implementation process of TQM and would provide the possible solutions to overcome the gaps. Outline of the Research The research is on implementation of TQM in a BPO service industry and the methods how it can be carried out in a service life cycle is discussed. The research is carried out in several chapters. The initial first chapter gives insight about the TQM basic concepts and its various functionalities that are currently followed by the industry. In addition to that it also discusses about the key aims and objectives that are initially proposed based on the questions that are meant for the research in the literature. Next chapter, literature review discusses about views and arguments of various authors form different academic articles and books. It is focused on the implementation of TQM in the service industry and particularly in case of life cycle of projects in BPO industry. In addition to that it talks about the changes the company would get in case of implementation and the methods for prioritizing the projects. It also discusses about the advantages of the implememntation of TQM and t he challenges faced by the management during implementation. Finally it concludes with the ways to overcome with the challenges. The chapter three of the research highlights about the research questions and the method of research carried out to conduct the research and also the structure of the research.It also introduces the study of methods that needs to be followed will be identified namely questionnaires for emails or interviews are sorted. Later, based on the initial findings of my personal observation has identified to use the qualitative research methodology in this chapter. Then it also talks about the data collection from primary means from respondents and validating the literature review to support or contradict based on the findings of the data analysis chapter. The later chapter would finalize the research with the help of valid arguments resulting from analysis and literature review with would rise to further recommendations in the same industry and also different indus tries as well. It also discusses about the further research that can be carried out from this research. The research finally gives the limitations of the study and research with valid references at the end of the research and supportive documents in the appendix which covers the questionnaire that is designed targeting the real time experts actively working on TQM projects and also includes the responses that were sent in the email. Research questions Why and how should organisations implement TQM? What are the factors for successful implementation of TQM in organisations? What are the challenges or barriers occur during implementation of TQM? How can the challenges be resolved and what are the alternatives for TQM that are being used in various organisations? LITERATURE REVIEW introduction This chapter discusses about the research questions that were outlined in the introduction to fulfil the aim and objectives of the research. Initially the first section in this chapter discusses about the origin of TQM and the different ways that TQM had provided to various problems using the traditional quality management. The next section focuses on the evolution of TQM and how TQM has changed the world. Later section deals with the reasons for companies implement TQM over other alternative quality management tools. The next section deals with the TQM methodologies and introduces various models followed by the service industry and also using this models how can the companies improve their quality standards. Then the success factors, benefits and challenges faced during the implementation of TQM are discussed. Origin of TQM The TQM started in 1920s which focused on statistical process control(SPC) (Juran,1997; Godfrey,1986). It is based on the philosophical, statistical and scientific foundation where it makes use of the knowledge to continuously improve the variations in the systems and later became major elements(SHAMS-UR RAHMAN). Process control charts was developed by Shewart to develop different strategies for continuous improvement and to understand the variation (Shewhart,1931; Juran,1997). This chart later called as Shewhart/Deming/ PDCA cycle (Deming, 1951). Shewhart had identified and succinctly defined a central quality management problem,f ormulated a mathematical model for it,and created a tool for its Solution (Kolesar, 1993:320). Later in 1950s SPC methods, behavioural concepts and also various technical methods were together termed as TQM. TQM is an approach to management that has evolved from a narrow focus on statistical process control (SPC) to encompass a variety of technical and beh avioural methods for improving organisational performance. (Dean Bowen, 1994:396). Evolution of TQM Changing from detection to prevention required not only the use of a set of quality management tools and techniques, but also the development of a new operating philosophy that required a change in the way companies were managed ( HAFEEZ et al., 2006).TQM is achieving the quality in every department and functions of an organisation, which includes the communication and interaction between all the departments and components of an organisation and also the interaction between components themselves. The overall effectiveness is more profitable and effective than the individual outputs from the sub departments or systems, which includes design, planning, production distribution employee involvement, focus strategy and finally quality tools. (ibid). TQM aims to achieve the overall effectiveness. Customer satisfaction and continuous improvement are the key essential beliefs of the TQM philosophy as mentioned in the figure 1. Initially the inspection-based system focused on sorting the proc ess and then would take corrective action in case of error. Then it moved to quality control where the processing of performance data with full time inspection is carried out. Later moved to Quality assurance where the design of system audits and also quality planning is carried out with the process control as a target. Finally it reached TQM where involves human values and shared vision and culture. This uses a system approach to solve problems with renewed focus on the internal and external customer and also generates employee involvement. The main aim of TQM is continuous improvement of tangible work process. Figure1: Evolution of TQM Source: (HAFEEZ et al., 2006) Oakland (1989) defined TQM as an approach for improving the competitiveness effectiveness, and flexibility of an organisation. Essentially it is a way of planning organising and understanding activities and individuals at each level. However it is argued, quality management is characterised by the strategic goals that are focussed towards customers preferences, likes, tastes, and applications. Ishikawa is known for developing various statistical tools for quality problem solving and he emphasised the idea of the internal customer, the next person in the process (Ishikawa, 1990:50). According to author the basic idea of quality circles that is a small group of employees who deal with quality problems. In addition to this the companies has to focus on the quality standards on the service design stage where this happens before development stage and the changes would be easier and cost effective compared to development stage (Taguchi, 1999). The service companies have to focus on the qua lity at the earlier stages to reduce cost. Changes at the later stages would result in huge cost. To achieve this, a benchmarking tool for quality is used by the top managers to build a quality culture with in an organisation involving all the employees with an active leadership role (Kanji,1997).Zairi (1998) provided a comprehensive tool for organisations to undergo a two-stage external and internal benchmarking exercise, and stressed the role of leadership for implementing continuous improvement. Importance of TQM It has been observed that the importance of quality has been drastically increased over past two decades. Organizations are considering measures in terms of improving the quality standards across the organization and the industry that would result in increase in business and hence profits (RAHMAN, 2004). Among the quality tools TQM has growing interest over the period and also it the effective strategy for most of the companies that would result in competitive advantage (MartÄ ±Ã‚ ´nez-Lorente et al., 1998). TQM is considered as the management approach for continuous improving organizational performance that consists of both technical and behavioral aspects (RAHMAN, 2004). Moreover this is also mentioned that fact that the only quality initiatives are not possible to increase market share and profitability however, it is argued that the TQM programs lead to improved financial performance but fails to recognize other elements (Kannan et al., 1999). It is also argued that there i s no assurance that TQM would yield profits to business since it is dependent on various other factors (Montes et al., 2003). However, it is evident that the TQM has various beneficial effects on organizational performance (Terziovski et al., 1999). TQM is flexible to implement hence every organization considers TQM in different way. Firms top management has the full authority in implementing the TQM. It totally depends on the top management to implement based on their expertise and knowledge that has an effect on organizational performance and haence increase in the business. However as per Brah et al., (2002) the benefits like cost effective, increase in productivity and impact on profitability would increase the firms competitive advantage. In addition to that it is also mentioned that there exists a positive relationship between TQM and the financial performance (Handfield et al., 1998). Two processes carry this out: firstly, effective improved internal performance by the employees in the organisation would lead to reduction in waste, increase in efficiency and productivity and increase in return on assets. Secondly, increasing in customer satisfaction would result in the increase in word of mouth, loyalty and brand value. These are most effective marketing techniques and would result in increase in market share and yields high profits (ibid). Lakhal et al. (2006) reveals that there is a positive relationship between quality management practices and organisational performance.In case of human resource management along with TQM it is found that the quality performance gets affected particularly regarding the customer and employee satisfaction(Yang, 2006). To avoid this, the customer and employee satisfaction and streaml ined process would produce effecive and positive operational and financial results that would lead to improvements in business and yield profits( Vora, 2002). In addition to that the TQM is also concerned with productivity, timeliness and flexibility as well as profitability along with quality (Pegels, 1994). It is observed that adopting the TQM philosophy and practices would result in positive growth in any organization or industry (Hides et al., 2000). However according to Ford Evans (2006), there exist many conflicting results and also opinions on the effects of TQM. Additionally the random effect Meta analysis is used to study effects of TQM (Shenawy et al., 2007). He also suggested a model for TQM that has five components: top managemnt commitment and leadership, teamwork, organization and work culture, training and education and finally the process. Each of these components would result firms in competitive advantage (ibid). In the present competitive world the where customers have various choice of services and hence they become automatic focus for success in business. The potential of just in time or total quality control in developing nations laid the foundation for future quality and productivity (Ebrahimpour and Schonberger, 1984). TQM is viewed as an organization-wide philosophy requiring all employees at every level of an organization to focus his or her efforts to help improve each business activity of the organization (Mehra et al. 2001). The aim and objective of TQM is customer satisfaction and achieves incremental improvements and that involves full participation of all the stakeholders and employees in the organization (Tigineh 1997).In addition to that Saad and Siha (2000) have viewed TQM as a revolutionary concept in different phases of quality evolution from inspection to quality control to quality assurance to TQM. Every author has their own definition for TQM, over many years the TQM is redefined as Managing the attributes that affect the subsystems quality in any organization that helps in achieving planned and desired goals and fulfilling the challenges in terms of time and cost. The desired benefits of TQM are unarguable. Organizations adopt TQM not only for the stated reasons but also for the offshoots of the benefits, which are referred to here as implied reasons. However, preparation for realizing the fruits of TQM is challenging. Referring again to the proposed definition of TQM, to achieve the above goals, quality in each subsystem of an organization is required. TQM methodologies in Service Industry: According to Zairi et al. (1994), TQM is only a license to practice. According to Hoogervorst et al. (2005), successful implementation of TQM and the benefits obtained by using the approach and would depend upon various factors such as organization structure as well as culture and also management practices particularly involving human resources. This approach should align with the corporate strategy (Fuentes et al., 2006). One of the most important dimensions of TQM and a critical success factor of TQM implementation is a proper performance measurement system (Bititci et al., 1997; Brah et al., 2002; Mehra et al., 2001; Neely et al., 1995). It is mentioned that the existing traditional performance measurement systems that are developed from accounting and costing systems and these are not considered in TQM environment and are not suited (McAdam Bannister, 2001). Any organisation could be placed on a continuum of sustainability as implied by the sustainability model shown in Figure 2, which links the goals, drives, and strategies and performance of TQM initiatives. Figure 2: Model of sustainable TQM and performance Soure: (Zairi, 2006) The model is based on the following assumptions: TQM is an integrative and holistic approach for analysing the current status of continuous improvement within an organisation. TQM is not a quick fix, and thus has to be approached from a long-term perspective. Prajogo and Sohal (2003a) investigated the relationship between TQM and organizational performance by exploring six TQM practices proposed by Samson and Terziovski (1999). These practices are divided into two groups: mechanistic elements and organic elements. Mechanistic elements include customer focus, process management, strategic and planning, information and analysis, while the organic elements are leadership and people management. This categorisation was based on Krugers (1998, 2001) proposition that TQM should include a combination of both people (soft element) and technical systems (hard element). The mechanistic elements (customer focus, process management, and so forth) could be considered the hard aspect and the organic elements (that is, leadership and people management) represent the soft aspect. Kruger (1998) emphasised the human aspect of TQM, because only the humanistic orientation of TQM towards organizational analysis will allow successful TQM in actual practice. Acc ording to Prajogo and Sohal (2003a), justification for using Samson and Terziovskis model (1999) is that this model constitutes the criteria of the Malcolm Baldrige National Quality Award (MBNQA) that has been accepted to represent TQM strategy by several scholars such as Evans and Lindsay (1993), Juran (1995) and Ahire, Landeros, and Golhar (1995). The relationship between TQM and organisational characteristics in Service Industry The relation between TQM and organizational characteristics is considered to be important. Many previous studies have been publishes that directly examined the relationship. The organizational characteristics would include the organization size, ownership, industry type and TQM practices that result in innovation of new ideas. It has been identified by many studies that the organizational characteristics are considered as variables that moderate the relationship between TQM practices and organization performance (Choong, 2004). 2.6.1 Organization size and TQM The organizational size is considered as the important factor for TQM. According to Terziovski and Samson (1999) the significant differences between TQM and the performance of the organization, considering the company size in case of a new service delivered. The larger organization is benefitted more compared to the smaller organizations in terms of TQM. It is also considered that there are no operational differences in terms of organizational size in the process of TQM implementation and is applicable and also firms delivering high quality services either large or small companies implement TQM equally (Ahire and Golhar 2001 cited in Hoang, 2010). However according to Haar and Spell (2008) the importance of organizational size in identifying the TQM adoption rates and to predict this rates there exists some factors such as workplace autonomy, performance standards, usage of the work teams and collective problem solving and in all these factors company size is considered as a moderati ng variable. The authors also mentioned the factors are applicable to larger companies than smaller companies. Moreover it is also demonstrated that the smaller firms have challenges such as limited access to market and have low market share, and inadequate resources and lock of expertise in management. However they have advantages as well such as flexibility due to les constraints and would have full freedom for generating innovative ideas that lead to successful implementation of TQM as effectively compared to larger organizations. 2.6.2 TQM and ownership In an organization, the successful factor responsible for growth is culture. The relation between employees and the nature of work and the working environment are considered as crucial. The organization culture is influenced by the nature of corporate ownership (Yavas Rezayat, 2003; Hui, Au, Fock, 2004). In this case the management should have the thorough understanding of implementation of TQM strategy. This would result in implementing effectively. The cultural differences have to be balanced by he management. Implementation of TQM varies as per the culture in many countries. There exist many cultural differences between countries. The organizations having global footprint formulates a TQM strategy where it is common to all the countries. All the teams follow it across the globe in those firms. This would result in successful implementation of TQM. For instance, it is found no evidence that involvement of employees influences culture in Chinese based firms and considered to be th e TQM practice (Pun, 2001 cited in Hoang, 2010). IT is also found that the values in Chinese firms are abasement, addictiveness and harmony with people and with universe, interdependence and respect for authority are the main factors that influence the dimensions for TQM (Noronha, 2002).Regarding the culture , the experience of firms in Australia and Singapore is compared with respect to the TQM multidimensionality and the relationship of TQM with the quality performance and innovation (Feng et.al., 2006). It is very important to link cultural values that are influenced by the ownership to TQM practices and also business results. This would result in successfully implementation of TQM. 2.6.3 TQM and Industry type TQM is started with the manufacturing industry and was applied to many firms. The successful implementation of TQM in manufacturing resulted the practitioners in exploring the possibilities of applying the TQM to the service industry (Hoang et.al., 2010). Even though the industries are different and the development of TQM is different in service literature compared to manufacturing the core TQM concepts or principles are related or relavent to the service sector (Silvestro, 1998). In addition to that the there are the principles of TQM are also called as soft side. The investigation of soft side of TQM resulted in nine principles namely Total Employee Involvement, Continuous Improvement, Continuous Training, Teamwork, Empowerment, Top-management Commitment and Support, Democratic Management Style, Customer/Citizen Satisfaction, Culture Change ( Psychogios, 2007). Additionally, it is also stated that the service sectors that are also called as mass service has a similar process to man ufacturing industry that is applicable for TQM practices (Woon, 2000). The author also found that there was no significant difference between manufacturing and service companies in the implementation of soft TQM elements. Prajogo (2005) suggested that, with the exception of people management, there is no significant difference between manufacturing and service firms in terms of TQM practices and quality performance. He even identified the service sector has having higher scores in people management than the manufacturing sector. According to (ibid), the plausible reason is that manufacturing firms essentially rely on advanced manufacturing technology to achieve high level of quality (precision) and other operational performance aspects. In service organisations, human resources play a critical role in determining the product/service quality, specifically on non-physical dimensions such as customer responsiveness, courtesy, and empathy. In addition, beyond tools and techniques, TQM now has developed into a management philosophy that comprises a set of generic core principles applied in different industries (Dean Bowen, 1994; Grant, Shani Krishnan, 1994, Sitkin, Sutcliffe, Schroeder, 1994). This argument shows a fundamental base to support the applicability of TQM in service firms that can benefit from implementing this management philosophy (Prajogo, 2005). However, it has been noted differences between manufacturing and service organisations that could limit applying TQM in services (Silvestro, 1998; Sureshchandar et al., 2001; Prajogo, 2005). Firstly, compared to the measurable, standardised characteristics of manufacturing products, the intangibility and heterogeneity of the service output makes a remarkable di fference. Secondly, the concept of service quality is dominated by non-physical components (courtesy, responsiveness, and accessibility) (Zeithaml, Parasuraman, Berry, 1990) that are more difficult to define and, therefore, more difficult to measure. Thirdly, the consumption and delivery processes in the service organisations usually take place at the same time, making it difficult to control the quality of services provided. Compared to manufacturing firms, service organisations generally use fewer quality tools and show a lower level of TQM implementation, particularly in hard TQM elements such as statistical process control, information analysis, process management (Badri, Davis, Davis, 1995; Beaumont, Sohal, Terziovski, 1997; Woon, 2000). 2.6.4 TQM and degree of innovation Innovation is the key part in any success. The organization generating innovative ideas would grow faster. In terms of TQM innovation plays a major role. Considering the relation between TQM and innovation there exists two basic concepts. Firstly, TQM supports innovation i.e., that organisations that implement TQM will be successful in innovation. Secondly, It is argued that TQM impedes innovation. The main debatable issue is whether or not the nature of TQM practices fosters innovation. The supporting perspective is based on the argument that the TQM practices, in both its human and technology dimensions, help to create an environment and culture that support innovation. One of the core components of TQM is customer satisfaction. Companies that implement TQM have to explore and find ways to serve customer needs and expectations at the best. This creates the impetus for companies to be innovative in developing and launching new products or services to match the customers needs. Several studies also identified a positive relationship between TQM and innovation in terms of the speed to market (Flynn et al., 1994), and the level of innovation in organisations (Baldwin Johnson, 1996). Terziovski and Samson (2000) tested the strength of the relationship between TQM practices (independent variables) and organisational performance (dependent variables) in a large random sample of man ufacturing companies in Australia and New Zealand. They considered innovation as a dependent variable that represents organisational performance measured by the number of new products produced, but could not confirm a significantly positive effect on innovation across the whole sample. However, when co-varied for industry type, the strength of the relationship between TQM and innovation changed from insignificantly positive to significantly positive, suggesting that the relationship between TQM and innovation is strengthened when investigated for a specific industry type. Specifically, potential clients need information on a vendors ability to deliver quality services, and vendors need to provide potential clients with some indication of their capabilities. Success Factors of TQM in Service industry: TQM is mainly related to customer satisfaction and company profitability. It also includes the intellectual property rights, services and overall quality of the product. To improve these elements, planning, structuring and following or controlling the application tools, techniques, human factors agents that are influencing and support system with ideas are some factors responsible in the improvement of TQM (Grover et al., 2004). The positive impact on customer satisfaction in case of implementation of TQM is observed in many industries. It is also mentioned that positive effect of the TQM on fast food, gaming, investment banking industries (Yasin et al., 2004). TQM is not considered as a static activity since it is flexible and adaptable according to the dynamic management activities. These activities can uide the companies to gain huge market share and become more competitive and fast growth successfully facing all the challenges and opportunities provided b

California Budget

California Budget Crisis Rozlyn Brown Comm/215 BSDC0TEBB5 Michele Watson ? Poor money management of the State of California has caused people to suffer. The global recession has caused California and many other states to plummet. In the Los Angeles Times California deficit is said to be $25. 4 billion according to the states chief analyst. The state of California has taken drastic measure to fix this problem. Fixing the problem includes layoffs of 4,500 state/government employees, furlough, minimum wage, and cutting of many state funded programs.Fifty days into this fiscal year, there still not a budget signed and in place. At this time they are not able to come up with an agreement. This has been a very difficult time for all Californians. California needs to balance the budget correctly. The answer to fixing the budget is not hurting the agencies that have help the state rather than hurt them. On December19, 2008 the Department of Personnel Administration was ordered to start layof fs for civil service employees. That would take effect January 1, 2009 through June 1, 2009.They were also ordered to implement a furlough program. A furlough is unpaid time off given to government employees for the purpose of reducing the state’s budget. Arnold Schwarzenegger adopted a furlough program that would affect 200,000 civil service employees starting February 2009. This program would make all state employees work two days a month free. When the results were still the same the two days a month quickly went to three days. The three days became effective July 1, 2009 that would continue until June 30, 2009.Those three days caused a 14% pay cut for employees. That caused a problem within itself. Everyone suffered due to the furloughs. Homes, cars, businesses, were lost. The state believes that furloughs would help save the state a great deal of money. According to the IVN furloughs has been costing the state $465 million in lost tax revenue. The state has reported to h ave saved three billion dollars due to the furlough program. State employees dispute the states claims. This rogram has caused government operations to close the second, third, and fourth, Friday of each month to save money beginning August 10, 2010. Everyone is not affected by this program. California Highway Patrol, California Department of Fire, and Forestry Protection, Franchise Tax Board, Board of Equalization, Employment Development Department, state Insurance Fund, California Housing Finance, and California Earthquake Authority are departments that are exempt from the furlough program. Bargaining units 12, 16, 18, and 19 have all came to agreements with proposal that have been made.Those not exempt or in bargaining unit that are pending contract the state controller stated he would have to reduce civil service employees’ wages to federal minimum wage which, is $7. 25 per hour. As a state employee working at Patton State Hospital as a Psychiatric Technician, I am part o f bargaining unit 18. Bargaining unit 18 is one of the few units pending the government contract proposal. Although the proposal is in place the government still has the authority and still continuing with the furlough program.To this day state employees have been furloughed a total of 46 days. In a 24 hour facility it is impossible to take any furlough days off. Due to that reason alone a number of unions have sued to have the furlough program stopped. The Supreme Court has upheld governor Schwarzenegger’s furlough program to stay in place. Legislation are pushing the unions to accept the contract proposal that member would accept contributions more of their salaries toward pension benefits and to take a day of unpaid personal leave a month which, will equal a 10% pay cut.Fifty days into this fiscal year the State Controller John Chang stated he would issue IOU’s if the budget is not signed soon. At this time money state workers are suffering due to the governmentâ₠¬â„¢s poor money management. California will not be on track until the people managing the money figures out a way to manage the money properly.References Los Angeles Times, November 10, 2010 Retrieved from www. latimes. com Christopher A. Guzman, IVN, February 16, 2010 Retrieved from www. caivn. org Wake County Budget Finance, Retrieved from www. wakegov. com/economy/glossary

Amazon.Com Case Studies

Name: PRASHANTH BALAKRISHNAN Student ID: 071090070 Course: BIS 541/03 –MANAGING INFORMATION SYSTEMS Program: CEMBA Commonwealth Executive Master of Business and Administration TMA 1: â€Å"Amazon. com†- A Business History Tutor: Prasanan P. T. Kannan Submission Date: 07. March. 2009 [pic] TABLE OF CONTENTS ChapterTitlePage 1. 0Executive Summary 2. 0Problem Statement1 3. 0Analysis of Causes 3. 1 Amazon’s Debt 2-3 3. 2 Competition3-4 3. 3 Expansion4-6 4. 0Decision Criteria and Alternative Solutions 4. 1 Reduce expenditure in inventories and better management7 in supply chain 4. Presenting a competitive edge to competitors7 4. 3 Expansionto Asia8 5. Recommended Solutions 5. 1 Technology Integration and R&D9 5. 2 Strategic Cost Analysis9 5. 3 Differentiation9 5. 4 Inventory10 5. 5 Visionary & Informative10-11 5. 6 Keep customers in the loop on everything11 5. 7 Shipping & Delivery11 5. 8 Expansion to Asia Region11-12 5. 9 Word-of mouth advertisement12 6. 0 Expand the product lines13 6. 0Appendices14-16 7. 0References17 Executive Summary The study comprises of Amazon. om which started its history by selling books and now one of the online market leaders globally not only for books but products from various categories. Company started with a mission to be Earth’s most customer centric company. In order to become the largest and convenience online store for all, there are major problems or threat being faced by Amazon. com in succeeding its mission. The major problems are Amazon facing high amount of debt, it’s less initiative in not expanding to other developed countries, and also competition from other online retailers and one tough opponent is Barnes & Nobles. Many plans of actions can be taken and some of it is; Amazon. com should decrease long–term debt by increasing expenditure on research and development, increasing word-to-mouth advertisement and good customer service. Amazon. com should also expand the five most common languages in Asian region. Focus marketing strategies on customer feedback to find out what Asian customers tend to buy and willing to spend on. Strategize new plan on improving sites to be informative and attractive as much as possible so Amazon. com should also adapt to the best technology where it can sustain as a strong innovator in ever increasing retailer market. Amazon. com also must strive to give customers the best service in shipping and delivery as it’s an important aspect in online business to out beat its entire competitors on this online industry. Problem Statement The main problem faced by Amazon. com now being an online retailer can be divided to three in overall. Amazon. com is in confronting huge debt behind their successful screen. Amazon. com is lack of expansion to other regions or Asia which be said as another big market for a huge online bookseller as Amazon. com. Another problem is the competition being faced by them with one of the tough opponent as Barnes&Nobles. Analysis of the Problem Amazon. com’s in Debt 3. 1 Amazon’s Debt One of major causes of Amazon’s huge debt is its large expenditure. In order to keep its advantageous position, Amazon has no choice but to continue to spend astronomical amounts of money on sales & marketing, research & development and general & administrative costs. (Table 1 & Table 2) â€Å"One misstep, and its love affair withy investors and sources of capital could be over. (Kimberly Weisul, 1999) †¢ Competitors Although Amazon won the battle soon after entering the online cd and music market, there are some competitions in other product lines that may be too immensely strong to beat. For example, in March of 1999, Amazon introduced an auction service. After a few months effort, its auction business performed slightly, indicating how difficult it is to challenge the giant’s eBay and Yahoo! Auctions. |Auction Sites |27-Sep-99 |Multiplier needed to equal eBay listings | |Amazon Auctions |4. 0% |15. 3 | |eBay |73. 60% |   | |Yahoo! Auctions |21. 60% |3. 4 | Source: Auction Web sites and C. E Unterberg Towbin †¢ Consumer Behavior Amazon. com is widely regarded as having one of the best management team of any internet company. However, there are some outside forces that are not easy to manipulate. Security; as the number of Internet crimes increases, customers are becoming aware of the possible danger involved in the process of on-line shopping. This security problem may not be difficult to improve since security technology is innovated quickly, but to convince customer of this is not as easy ? Etailers vs. retailers Another factor is hard to manage customer purchasing habits. Most consumers still prefer the capability of seeing a product before buying it. Additionally, the number of people buying personal computers and that of the Internet population wil l directly affect Amazon’s sale. . 2 Competition †¢ Michael Porter’s Model ? Supplier ; Amazon started to build its own distribution centers in different locations and moving the products directly form the factory rather than from other distributors such that Amazon can lower its marginal costs. (Chao Janice C. Rice, Brandi S. Dec 8, 1999) ? Consumers ; Amazon. com continues to spend a lot of money in advertisement to reach customers as well as to increase customer awareness of eCommerce in general and brand name in particular. (Chao Janice C. Rice, Brandi S. Dec 8, 1999) ? Substitutes; The Substitute of eCommerce, the traditional retailers, is still more attractive than the Etailers. For example, we as consumers more than likely would rather go to the bookstore and browse through a book before we buy it. (Chao Janice C. Rice, Brandi S. Dec 8, 1999 ) 3. 3 Expansion †¢ Lack of Spanish website version (Latino and Hispanic Americans are the fastest-growing online ethnic group) †¢ Amazon. com is very less popular or it can said there are people without knowing the existence of Amazon. om †¢ Website is not more expanded with more languages options where currently there are options only for Canada, United Kingdom, Germany, Japan, France and China (www. amazon. com) Competition with Barnes& Nobles Amazon. com Weakness ? Difficulties of handling large number of customers ? Limited operating history ? Security awareness ? Low margins in the sector ? Risk of introduction of wrong new categories which could damage company’s bra nd ? Company’s offered free shipping might affect future financial outcome ? Certain products (high volume/weight) have high shipping costs which could confront with local offline retailers Threats ? eBay, Barnes & Nobles, and Wal-Mart ? Population segment not targeted to on-line sales due to their lack of internet access ? Weak economic performance of Germany and France in the last year ? Competition will increase due to the low barriers to entry in the market: offline companies are coming online ? Heavy investments in Partnerships (Dustin Nadeau & Donatas Sumyla. April 2006) Barnes and Nobles and Amazon. com are competing, but both stores and other online stores recognize what works and are studying one another – often duplicating one another’s business strategies. This has resulted in them having more similarities than differences and it helps the consumers find similarities across the Web such as; †¢ When a description of an item is given, Amazon and Barnes and Nobles both place the shopping cart option prominently displayed to the upper, right portion of the screen. This makes it very efficient and useable for the viewer and they do not have to search around the page for this button. (Clementina Imobhio May 5, 2001) †¢ In pricing, both Amazon. com and Barnesandnobles. com display the average price or their items above their own discounted rates so that the users feel as though they are saving money. (Clementina Imobhio May 5, 2001) †¢ Both sites are â€Å"Flexible†, there is an option of buying things at a later date and placing them in the shopping cart temporarily. This option is called the wish list and it is displayed just beneath the â€Å"Add to Cart† button. Users can access this saved information and acce ss it on their next visit. (Clementina Imobhio May 5, 2001) †¢ Both sites offer â€Å"Security† that provides safe shopping, privacy and efficiency by requiring customers to join as members at a certain point during a transaction. Membership is free and requires an email address, full name, home address and phone number. It allowing customers to maintain an order status and helps provide a history of what they bought. (Clementina Imobhio May 5, 2001) †¢   Both sites are very â€Å"Scalable†, allowing for a huge selection of items to be added to the product catalog or taken away. A Field size is accommodated in the database. (Clementina Imobhio May 5, 2001) 4. 0 Alternative Solutions 4. 1 Reduce expenditure in inventories and better management in supply chain ? Use increased income to pay down long-term debt ? Keep operating costs low (efficiencies of scales) ? Increase expenditure on Research & Development arena ? Strategic cost analysis ( WOU , MIS notes) ? Determining Differentiation ( WOU , MIS notes) 4. 2 Presenting a competitive edge to competitors †¢ Create more expertise in marketing and more product launches compared to competitors; †¢ Do a more through research on the customers needs and come up with something new that has its own brand and establishes as only Amazon. om could have the product. (Sujan Sarkar. April 23, 2007) †¢ A new Strategy on only books should be brought up in order to outcome one tough opponent as Barnes & Nobles. For example, Amazon. com’s booth’s can be set up in country sides where there is no access for Internet and give knowledge to country people that there also business through online. This is because; giving more exposure and awareness to people might be a business opportun ity as well. †¢ Product review information; Customers would have n a clear description, synopsis and other customer’s review on the book as it gives a clear rating of the book and there won’t be any sort of disappointments for them after purchase. 4. 3 Expansion to Asia †¢ Create different website versions based on the five most common language in Asian region †¢ Focus marketing strategies on customer feedback to find out what Asian customers tend to buy. †¢ Word of mouth advertisement (Onder Savas Devrim Dirik. January 9, 2003) †¢ Continue expanding its product lines 5. 0 Recommended Solution & Implementation 5. Technology Integration and R&D Amazon. com should increase expenditure in the research and development arena. We believe that Amazon should prepare itself for additional telecommunications implementations such as high speed internet and network security. These types of implementation, though representative of considerable R&D costs, ar e probably most significant factors that etailers must prepare for near future. As users, connections increase in speed, any delays on the part of the etailer they are connecting to will become obvious and less tolerable. Amazon can stay ahead of the pack by preparing a unique and comfortable interface for the users. 5. 2 Strategic Cost Analysis Amazon. com should also use Strategic cost analysis process where identify the firm’s value chain, diagnose the key elements that drive the costs of each value activity, identify competitors value chains, develop a strategy to lower relative costs by controlling cost drivers, ensure that any cost reduction does not erode differentiation in service and test the cost reductions if its sustainable in the end of the analysis. . 3 Differentiation They should also consider by costs by determining Differentiation where the process goes as determine who the real buyer is, identify buyer’s value chain and put in rank order the buyer’s reason to purchase, asses the current potential sources of diffentiation, identify the cost of these resources, design a value chain to maximize value relative costs, test for sustainiablity and reduce costs in activi ties that do not affect the chosen forms of differentiation. 5. Inventory; There are programs built to be extremely user-friendly, and most offer great support along the way of usage for online businesses to maintain the book database. Amazon should invest in software to best highlight and maintain the data on the site and importantly back up systems. Keep inventory accurate and up to date; This is also an important aspect that Amazon can out beat its competitors with as this is first step towards building a long-term relationship with that customer. Inventory of the books stock-out and sold out will be kept up to date on the site. 5. 5 Visionary & Informative A picture is worth a thousand words; Uploading pictures by decreasing explanations or descriptions could attract customer’s attraction and curiosity in exploring the book. Somehow it boosts up sales compared to other online booksellers who give attention in words. Product Review Information; In case of books, editorial reviews are provided by the company and it applies for all books. Customers can also rate each other’s review. A rating is placed against each review so that customers can decide whether to read or not based on that. Most online booksellers do not include this but they display the customer’s satisfaction on the delivery service provided by them which is less important to boost up sales. People out there want to pay you for your books; Amazon should use own merchant service account or a service offered by a listing site, make sure that customers can buy books quickly and painlessly with a credit card while you have them on the brink of finalizing said purchase. Don’t judge a book by its cover; First impressions are lasting impressions. When a customer receives the book they’ve ordered, make sure the first thing they see is a product and package that you are proud to have supplied by using use clean, new boxes without writing (or envelopes for low-cost paperbacks) for shipments. Customers will be expecting an excellent service but if its vice versa then they are chances for them to switch to other online retailers. 5. 6 Keep customers in the loop on everything; Amazon should update the status of order to customers on the order made and also keep them in loop by e-mail the listing service directly with questions about their orders and keep updating the latest events and new stocks of books through emails. 5. 7 Shipping & Delivery Follow-up; After shipping out an item to the customer, Amazon should send them an e-mail a day or two after expecting that they’ll receive their package, asking them if they’ve received it and are satisfied, and reminding them that there customer rep are there to help should they have any questions about their order. This is also a great time to remind them that you have similar items in stock or to offer them a coupon towards future purchases. 5. 8 Expansion to Asia Region Amazon should strive to expand its expertise to Asia region as well as high potentials are there which huge population. Education is becoming one important aspect in Asia and lack of important reference books are always a problem in many parts of Asia. It should diversify its marketing capability in Asia too to capture the market. Amazon is very less popular in Asia regions. Amazon. om should take Asia to consider for its business expansion. Amazon could also diversify its marketing and research ability to expand mostly to the developed countries of other territory. In order to grow big and always sustain in the market and competition, Amazon should takes this sort of steps to expand. International Sites; Amazon. com has got an added advantage of international sites on Canada, United Kingdom, Germany, Japan, France and China. All about what the customers have to do to browse the site with their language is by clicking to their national site. For example, if you clink Japan, immediately the whole website will change its descriptions and instructions into Japanese language. This is not at all applicable for a customer in Malaysia or any other regions of Asia. It should expand and add more languages options in its site to accumulate its customers. Giving customers what they want is also one strategy not all online business can do but if this can be proven in Amazon’s case then it have all the potential to be the one. 5. 9 Word-of mouth advertisement Amazon also should increase its word-of mouth advertisement. This might seem odd for an industry leader to rely upon such a quaint tactics as this, but we truly believe that in the world of Internet this is a powerful tool. We are quick to visit sites that our friends identify as being fabulous, and Amazon might capitalize on this by rewarding its customers who can reel in a new prospects. 6. 0 Expand the product lines Amazon should expand its product lines. Given’s Amazon’s vision and its unique position in the etailer industry, the cost associated with entering new markets is significantly lower than that of its competitors. There is no reasons to let this advantage slip away unused. Conclusion In order to stay focus on business Amazon. com has various ways and strategies that can be implemented with proper organizations communication networks. Financial reports should be reviewed annually and quarterly if necessary to come up with decisions whether to boost up sales or to maintain on a certain criteria for the wellness of business. Amazon. com also should have a frequent customer feedback program where they could exchange view on the services and products most desired to be acquired online by customers. Top level management meetings should be initiated to assure goals are achieved. A proper corrective action should be determined after the first year if annual objectives weren’t accomplished. However there are difficulties and competitions to overcome, and how companies attack these difficulties will separate the winners form the losers. Appendix |AMAZON. COM, INC. HISTORICAL INCOME STATEMENTS | |(in millions, except per share data)(quarterly information unaudited) | |Amazon. com Investor Relations | | | | | | | |Calendar Years Ended – December 31, | | |2008 |2007 |2006 |2005 |2004 |2003 |2002 | |Media |   | $ 5,350 | $ 4,630 | $ 3,582 | $ 3,046 | $ 2,589 | $ | | | | | | | | |2,270 | |Other |   | 448 | 326 | 263 | 222 | 130 | | | | | | | | | |110 | |International |   |   |   |   |   |   |   | |Media |   | 5,734 | 4,612 | 3,485 | 2,885 | 2,513 | | | | | | | | | |1,780 | |Other |   | 94| 57| 20| | | | | | | | | |8 |2 |- | |Consolidated |   |   |   |   |   |   |   | |Media |   | 11,084 | 9,242 | 7,067 | 5,931 | 5,102 | | | | | | | | | |4,050 | |Other |   | 542 | 383 | 283 | 230 | 132 | | | | | | | | | |110 | Table 2- Source; www. amazon. com (Investors Relations) |Total U. S. Home, Work and University Locations, Unique Visitors (000) | |Source: comScore Media Metrix | |Rank |Property |Unique Visitors |Rank |Property |Unique Visitors | | | |(000) | | |  (000) | |   |Total Internet : Total Audience |191,863 |   |   |   | |1 |Google Sites |151,010 |26 |Target Corporation |28,628 | |2 |Yahoo! Sites |146,131 |27 |Time Warner – Excluding AOL |27,209 | |3 |Microsoft Sites |125,568 |28 |Weatherbug Property |26,944 | |4 |AOL LLC |108,441 |29 |Bank of America |26,322 | |5 |Fox Interactive Media |90,510 |30 |United Online, Inc |26,048 | |6 |Ask Network |74,742 |31 |Gorilla Nation |25,585 | |7 |eBay |72,160 |32 |AT&T, Inc. 25,574 | |8 |Amazon Sites |64,768 |33 |Answers. com Sites |25,563 | |9 |Wikipedia Foundation Sites |62,737 |34 |Demand Media |25,447 | |10 |FACEBOOK. COM |57,232 |35 |CareerBuilder LLC |24,750 | |11 |Glam Media |55,293 |36 |Everyday Health |24,717 | |12 |Turner Network |54,877 |37 |Shopzilla. com Sites |24,097 | |13 |Apple Inc. 54,194 |38 |Photobucket. com LLC |23,928 | |14 |CBS Corporation |53,539 |39 |WordPress |23,730 | |15 |New York Times Digital |49,110 |40 |Real. com Network |23,359 | |16 |Viacom Digital |46,510 |41 |Expedia Inc |22,703 | |17 |Weather Channel, The |40,056 |42 |JPMorgan Chase Property |22,399 | |18 |craigslist, inc. 39,437 |43 |Mons ter Worldwide |22,244 | |19 |AT&T Interactive Network |38,184 |44 |Gannett Sites |21,829 | |20 |Adobe Sites |35,315 |45 |WorldNow – ABC Owned Sites |21,586 | |21 |Comcast Corporation |33,940 |46 |WebMD Health |21,185 | |22 |Wal-Mart |33,513 |47 |iVillage. com: The Womens Network |21,002 | |23 |Superpages. com Network |32,558 |48 |NBC Universal |20,974 | |24 |Verizon Communications Corporation |32,412 |49 |WhitePages |19,351 | |25 |Disney Online |30,345 |50 |ESPN |19,266 | Table 3; Media Matrix; http://www. comscore. com References 1] Chao Janice C. Rice, Brandi S. Dec 8, 1999 http://www. rhsmith. umd. du/faculty/jbailey/ents630/amazon. pdf 2] Dustin Nadeau & Donatas Sumyla. April 2006- Amazon. Com Inc 2004. (Accessed Feb 20, 2009) 3] Clementina Imobhio May 5, 2001 – E-Transaction: Shopping Carts Comparison (Accessed Feb 20, 2009) 4] Paul Larson. February 14, Amazon. com – Motley Fool Research, Stock Report http://www. fool. com/search/index. aspx? go=1&site=USMF &q=amazon. com (Accessed Feb 16, 2009) 5] Onder Savas Devrim Dirik. January 9, 2003 – Informat? on Management (Accessed Feb 16, 2009) 6] Strategic Analysis of Amazon. com (Accessed Feb 19, 2009) 7] www. wikinvest. com/wiki/E-Commerce, (Accessed Feb 20, 2009) 8] www. ikinvest. com/stock/Amazon. com_(AMZN), (Accessed Feb 20, 2009) 9] www. wikinvest. com/stock/Barnes_%26_Noble_(BKS), (Accessed Feb 20, 2009) 10] Sujan Sarkar. April 23, 2007 – Amazon vs. Barnes & Noble: www. santarosa. edu/~ssarkar/cs66sp07/fprj/abn. htm (Accessed Feb 16, 2009) 11] Table 1- Source; www. amazon. com (Investors Relations) (Accessed Feb 17, 2009) 12] Table 2- Source; www. amazon. com (Investors Relations) (Accessed Feb 17, 2009) 13] Table 3; Media Matrix; http://www. comscore. com (Accessed Feb 17, 2009) ———————– AMAZON Supplier New Entrance Substitute Consumers

The Success Rate Of Your Business - 1414 Words

In a world full of business there are many opportunities, some that could bring you lots of success. The success rate of your business depends on the profits or losses of your business. Every business wants to satisfy their customers and gain profit but sometimes that s not always what the turnout is. The satisfaction of your customers is dependent on the products or services they have obtained. However there are nonprofit organizations that are not seeking profit, an example would be an animal rescue shelter. When it comes to a profitable business, for example a salon, the difference between the costs and the prices the clients pay is extremely important. A salon is a business with goals. A salon would be business that s looking for†¦show more content†¦Businesses are based on the people and the activities going on inside the business. Inside any successful business there are owners, employees and customers. Then there are the activities that occur inside which would be man agement, marketing and finance. Think of a business as a bunch of classes where there are different groups and roles for each. The employees and management are actually in the same class because the management is coordinating with the employees to achieve the satisfaction of the customers. For example the managers of a salon would be there coordinating with their stylists to make sure that they are performing the services on their clients with good quality and that they are being efficiently. Then another class group would contain marketing and consumers. They would be in the same class because the focus of all marketing activities is to satisfy the customers. For example the marketers of a salon would be collecting information about the services they provide. They also would figure out changes that should be made to the salon to make sure the customers are satisfied. Another part of marketing is advertising which for a salon could be deals on services and creating an email group to notify the clients. Marketing can be a great thing when it comes to expanding your business. The third and last class would be owners and finance. This is because it s the owner s responsibility to provide financial resources for the business. For example