My Decision Making Style

After taking the McGraw-Hill Decision Making Style assessment I discovered that my decision making style is Analytical (Management Decision Making Self Assessment). This means that when making decisions I do so based off of fact; I think rationally and can tolerate a high level of ambiguity (Management Decision Making Self Assessment). In an article in the Academy of Management Proceedings, the authors state that analytical decision making, “is usually portrayed as effortful, slow, abstract system operating by means of language, conscious, explicit, computational, rule-governed, and with a very brief evolutionary history,” (Lejarraga & Martinez-Ros, 2008).

Although a bit dry, this could be considered a mediocre way to express this. The authors of the article continue on to also explain that the elements of both intuitive and analytical styles of thinking are involved in almost all decision making and that both methods lie on the opposite, extreme ends of a continuum (Lejarraga & Martinez-Ros, 2008). I find this to be a bit more reasonable. When making decisions, I use all available information and facts to develop the most efficient and effective solution to the problem at hand. More often than not this involves coming up with a new, creative way to incorporate all the facts available, which some may consider to be an intuitive use of the analytical information. I try to let my analytical and technical know how drive my creative problem solving.

The primary strengths of an analytical decision maker are of course that all decisions are based off of factual information thereby making the decision less risky. The downfall would be that sometimes all of the facts are not immediately available and must be collected which leads to a lengthier decision making process. This of course does not have to be the case because I believe that one who truly excels at analytical decision making draws on past knowledge and experience to help fill in on the situations in which the immediate facts are not present.

The McGraw-Hill Decision Making Style assessment states that legendary investor Warren Buffet is also an analytical decision maker and they use a great quote from him that I think sums up all of the strengths of the analytical decision making style:

“And the truth is, you’re neither right nor wrong because people agree with you. You’re right because your facts and your reasoning are right. In the end that’s all that counts,” Warren Buffett (Management Decision Making Self Assessment)

Works Cited

Lejarraga, J., & Martinez-Ros, E. (2008). Comparing Small Vs. Large Firms' R&D Productivity Through a Dual Process Perspective. Academy of Managemnt Proceedings , 1(6).

Management Decision Making Self Assessment. (n.d.). Retrieved 01 28, 2010, from McGraw-Hill Irwin: http://www.mhhe.com/business/management/buildyourmanagementskills/updated_flash/topic10a/quiz.html

CVS Case Study: Beauty 360

In Mike Bloom’s video explanation of the “Beauty 360” product differentiation strategy, Mr. Bloom talks about how CVS has decided to expand on their marketing of beauty products to include premium products and premium quality service. The concept for CVS’s “Beauty 360” campaign was the labor of over ten years extensive planning and research to deliver high quality beauty products to women in convenient locations (Bloom, 2009).

Without actually saying the words, Mike Bloom touches on several ideas that would have been identified in a S.W.O.T. (Strengths, Weaknesses, Opportunities, and Threats) analysis. He talks about CVS’s core strength being their real estate assets. With a multitude of already placed convenient locations CVS has the ability to offer these products in the manor the organization would like. Bloom mentions that their main weakness in regards to their “Beauty 360” initiative is the current brands they carry and the marketing plan they use to sell those products. The current marketing strategy wouldn’t be able to translate into the premium market (Bloom, 2009). Bloom states that, “We needed to create a space that would allow each individual brand to maintain its own integrity and we knew that we couldn’t make this work within the current four walls of our current store” (Bloom, 2009). Bloom doesn’t go on to elaborate on how they decided to make this work yet states they are currently testing out ideas at two different California based locations (Bloom, 2009).

Bloom talks about opportunity in the current recessionary market for beauty products being quite good. He references several typical high dollar cut backs that women will tend to make during recessionary times and makes a point that cosmetics tend to at least retain their overall level of sales. Due to their relatively low cost, according to Bloom, women are more likely to spend more money on beauty products as sort of a cost effective way to treat themselves (Bloom, 2009). The major threat Bloom cites is the state of the economy. He mentions that essentially all retail locations are hurting for business yet he feels the premium beauty products will help bolster CVS’s image and overall business.

In relation to Porter’s Five Forces Model, CVS could stand to do well or get completely burned with this push for high quality cosmetics. Porter’s Five Forces Model talks about potential competitive threats to potential product profitability. These five forces are; new competitors, substitute products, bargaining power of buyers, bargaining power of suppliers, and degree of rivalry between existing competitors (Strategy - analysing competitive industry structure). CVS shouldn’t have to worry about a slew of new competitors all of a sudden flying into the market of the premium priced products they want to carry. These items are expensive making endeavors into the market more difficult for the average entrepreneur. This leads into the buying power of CVS. As a large corporation, CVS should be able to easily leverage their suppliers into giving them their required merchandise at a discount, especially with the amount of capital they’re putting into their own retail sales efforts. Substitute products could be a concern. There may not be an actual substitute on the market for the premium items but there are plenty of cheap, generic versions that are widely sold at all of CVS’s competitors, as well as many middle of the road products. This all comes down to what is defined as a “substitute” in the eyes of the consumer. Many customers would easily forgo the premium prices and purchase the cheaper products. There are also many consumers who would not. As far as competitors and substitutes go, there are a large number of business that sell cheap to moderately priced cosmetics, several are in fierce competition with CVS, but few sell the premium product. CVS will almost certainly find themselves competing with the non-premium brands.

Clearly this is CVS’s attempt at product differentiation. CVS is trying to offer a high quality product to women in a location that is perceived as more convenient than the traditional department store. In an older article found in the Marketing News titled “Product Differentiation is not for everyone,” the author discusses several reasons why a business would not want to differentiate their products from their competitors. Among the reasons are unruly cost, homogenous products, and products where consumers are not readily involved in the purchasing decisions (Peterson, 1985). I would add to the authors list by stating that a company should not spend the effort differentiating a product that does not fall into its primary focus of existence. CVS, like its main competitor Walgreens, has carried convenience items for as long as it has been in business. CVS as an organization is a pharmacy. Spending efforts that attract from their primary mission seems to be an extraneous waste of the company’s funds. CVS has done some wonderful things with the medical side of their business by adding the Minute Clinic service to many of their locations. If I had to do a S.W.O.T. analysis for CVS I would suggest that their biggest strengths are their locations, the brand recognition they’ve achieved for their pharmacies, and their large selection of low cost convenience items.

The idea that a consumer is going to go out of their way to visit a pharmacy to by premium cosmetics seems about as likely as a consumer paying them a visit for designer shoes. It’s not what they do. They are not a premium fashion boutique and despite their best efforts, without taking the company back to the drawing board, they will never be. Mike Bloom says it best himself in the quote I used above. In order to market these products they would have to do it outside the realm of CVS. All you have to do is pay a visit to beauty360.com. It’s a fancy, high fashion, flash based webpage filled with glamorous models and music, but when you click on the “shop now” link, you are very slowly redirected to CVS’s clunky red pharmacy site. Once on the CVS site you are instantly ripped out of the world of high fashion and glamour and thrown back into the world of corner store convenience. Yes, the products are top shelf, but if you were to visit the CVS site as an uneducated consumer, you’d probably just be turned off by the prices.
It is of my opinion that CVS should not pursue this project despite their already hearty investments. I find it hard to believe that anybody would be convinced by Mike Bloom’s passionless attempt to integrate what seems to a be hip shot marketing gimmick to try and persuade the demographic women that shop at his stores to spend a little more of their hard earned money.

Works Cited:

Bloom, M. (2009, 02 13). The Issue: CVS Goes Upmarket. Retrieved 01 25, 2010, from Business Week: http://www.businessweek.com/managing/content/feb2009/ca20090213_670826.htm

Lewis, P. S., Goodman, S. H., Fandt, P. M., & Michlitsch, J. F. (2007). Management: Challenges for Tomorrow's Leaders. Mason: Thomson South-Western.

Peterson, R. T. (1985). Product Differentiation Is Not For Everyone. Marketing News , 19 (3), 1.

Strategy - analysing competitive industry structure. (n.d.). Retrieved 01 25, 2010, from Tutor2u.net: http://www.tutor2u.net/business/strategy/porter_five_forces.htm

On Google: Missions and Visions

Over the duration of the past few months I’ve become a bit of a Googlephile. About six months ago I purchased a smart phone that runs off of Google’s Android operating system and it changed my entire perspective on the future of information. The capabilities they put in the palm of your hand seem almost limitless. Any bit of information you need can be retrieved at a moment’s notice. After seeing how Google has integrated the different areas of its information business into a mobile powerhouse, I thought I would see how all this related back to their mission and vision statements. As it turns out, Google’s mission and vision statement is a well phrased sentence that encompasses everything they do.

“To organize the world's information and make it universally accessible and useful,” (Google, 2010).

It doesn’t get any more straight forward than that and Google has proven that it has no intention of straying from its pre-prescribed path. According to the book Management; Challenges for Tomorrow’s Leaders, the organization’s mission, “reflects its fundamental reasons for existence,” and Google has delivered, and continues to deliver information that is accessible and useful (Lewis, Goodman, Fandt, & Michlitsch, 2007). In an article called All Google, All the Time, Everywhere, the author states in regards to Google’s new real-time search capabilities that, “the new functionality was that beyond just helping you find out where you could get an H1N1 flu shot, it could also show you how long the lines were,” (Vaughan-Nichols, 12/21/2009).

A vision statement as defined by the book is, “intended to guide the organization into the future” (Lewis, Goodman, Fandt, & Michlitsch, 2007). Whereas Google tends to talk about its mission and vision as though they are the same thing, I found another paragraph on Google’s corporate webpage that spells out where they see themselves going in the future:

“Search is how Google began, and it's at the heart of what we do today. We devote more engineering time to search than to any other product at Google, because we believe that search can always be improved. We are constantly working to provide you with more relevant results so that you find what you're looking for faster” (Google, 2010).

One might be inclined to ask if an information giant such as Google really requires a separate vision or if the single mission statement sums it all up. It is important for a company to designate what it is they do just as Google has done, but they should also set forth an idea as to how they’ll continue getting there in the future. Google has clearly expressed that it wishes to continue on its core search function as it enhances the very heart of their mission. In essence, this is what Google is about. It’s what they’ve been about, and it’s what they are going to continue to be about for the foreseeable future. A website called "Vision and Strategic Plans: Who needs them?” lays out some specific criteria that should be used to guide whether an organization should have a vision statement. They state that an organization should have a vision if one or more of the following is true (Hiatt, 1999):

• You have embarked on an initiative to produce breakthrough results for your organization, and you are on the team or the leader of the initiative.

• Your organization is performing poorly in critical areas for business success (operating costs, customer satisfaction, quality of goods or services, etc.), and you have been ask to help work this issue.

• You need to prioritize a limited amount of investment dollars between a variety of improvement initiatives (the organization can't do everything).

• You have been asked to set short and long-term goals for your organization in key performance areas.

Whereas it seems almost obvious that if caught in any of these situations the company would surly want to develop a vision, if the organization had a vision in place to begin with some of the aforementioned scenarios would have surly been avoided.

Personally, I believe that it is the duty of the organization to strive for breakthrough results and the vision should be laid out to help achieve those results. If an organization has enough forethought to set the ground works of their operations by developing a sound mission and vision statement, then they will surely avoid falling off their intended paths or becoming overwhelmed by trying to do too much. We don’t go into business to do poorly and a well thought out mission and vision helps us to stay on track. We are here to do what it is we do best at the highest possible level we are able to do it and the mission and vision are there to funnel out any possible distraction to the end result; success.

Works Cited

Google. (2010). www.google.com/corporate. Retrieved 01 24, 2010, from Google: http://www.google.com/corporate/index.html

Hiatt, J. (1999). Vision and Strategic Plans: Who needs them? Retrieved 01 24, 2010, from Prosci: BPR Learning Center: http://www.prosci.com/vis1.htm

Lewis, P. S., Goodman, S. H., Fandt, P. M., & Michlitsch, J. F. (2007). Management: Challenges for Tomorrow's Leaders. Mason: Thomson South-Western.

Vaughan-Nichols, S. J. (12/21/2009). All Google, All the Time, Everywhere. Computerworld , Pg. 27.

On Hamel: Managment Must Be Reinvented

Gary Hamel brings up an interesting set of contrasting ideas in his “Management Must Be Reinvented” speech (Hamel, 2008). Hamel suggests that one of two things in management innovation must be going on; either management has gotten it right and should continue on doing what it’s doing, or that we’ve hit an intellectual plateau and no one has any new revolutionary management techniques to lead us into the future. I feel that both of these viewpoints hold a good deal of merit.

It is of my belief that the field of management has all of the intellectual tools it needs to perform at optimal levels, however I believe that these ideas have not as of yet been arranged in a way that meets the management needs of today, let alone those for tomorrow.

In Hamel’s speech he delivers a laundry list of “new” ideas that many companies large and small are implementing across the globe. The majority of these ideas would fall under what constitutes a Theory Y management style (Lewis, Goodman, Fandt, & Michlitsch, 2007). Theory Y management suggests that employees genuinely enjoy and proactively seek out work if allowed to do so. Employees given vast liberties will perform better than employees who are being over managed. This is one of the fundamental principles behind Theory Y management. Hamel proclaims that these liberties in fact can make the job of manager extremely difficult to do (Hamel, 2008). This makes sense because if you give employees the option of free reign it makes the manager’s essential job functions of planning, leading, organizing, and controlling almost impossible. Employees become their own managers. I would argue that this isn’t a good thing, but it’s not necessarily a bad thing either. I have also heard rumors of a Theory Z management style that incorporates the ideas of Theory Y and expands on them to include things like personalized scheduling and telecommuting.

I think the human relations tools and soft management techniques that Theory Y teaches can be very useful but I believe they are most productive when paired with some of the techniques of Theory X. Theory X is an older theory that is considered to be authoritarian in nature, although I don’t believe that has to be the case. Theory X involves close supervision and direction of the employees (Lewis, Goodman, Fandt, & Michlitsch, 2007).

I believe the future in management lies in a blending of the Theories. A manager should direct and control their employees while being able to complete the four management functions, but they should also be able to empower their team. I think if the managers took a Theory X approach to the leading and controlling portions of the management function they could use Theory Y methodologies to allow their employees greater freedoms in the planning and organizing factions.

In one Theory X/Theory Y self assessment, I learned that my own particular management style just so happens to fall at the crossroads of the two theories. On a scale of 0 to 30, 0 being Theory X and 30 being Theory Y, I scored an 11.

Works Cited

Hamel, G. (2008, 12 29). YouTube - Management Must be Reinvented. Retrieved 01 21, 2010, from YouTube.com: http://www.youtube.com/watch?v=TVX8XhiR1UY

Lewis, P. S., Goodman, S. H., Fandt, P. M., & Michlitsch, J. F. (2007). Management: Challenges for Tomorrow's Leaders. Mason: Thomson South-Western.

Response to Alex Tabarrok: How Ideas Trump Crisis

Alex Tabarrok really touched on two megatrends that stand to change the course of human economic evolution over the course of the 21st century. These trends are education and globalization; which really, in my opinion, tie into one another and will change drastically how managers of the 21st century will have to operate.

Tabarrok uses the basic economic principle of supply and demand to help explain why he is optimistic about the future (Tabarrok, 2009). As globalization continues to occur, demand for technology, healthcare, entertainment, and many other things that the currently industrialized and rapidly industrializing worlds currently enjoy will surely increase. As the demand increases the supply of qualified individuals to deliver the products and services will decrease thereby increasing the demand for educated individuals. Managers of the 21st century are going to have to be prepared by making allowances for their employees to keep educationally up to date. The invention of the learning organization is somewhat of a newer concept but will need to be expanded upon further if companies wish to thrive in a global marketplace. Mangers will increasingly need to learn more about languages and cultures than ever before and they’ll have to use these ideas to learn how to market and deliver quality products to these emerging nations. Also, as technology is rapidly advancing, managers will need to learn how to better understand the tools that they have available to help them achieve their organizations primary objectives.

Other areas of the business environment will also be affected by globalization and managers will need to continuously make sure that their employees have received the proper training for the global market. In an article presented in the American Journal of Business Education titled “Employer Expectations of Accounting Undergraduates Entry-Level Knowledge and Skills in Global Financial Reporting” states that, “Few U.S. universities have a strategy in place to integrate IFRS (International Financial Reporting Standards) into the undergraduate accounting curriculum,” (Jones & Vedd, 11/2009). Demand for these services are rapidly increasing and the supply of qualified individuals is decreasing. Because globalization is occurring and standards are changing at such a rapid rate, it’s up to managers, and not just the education system, to start ensuring that their employees receive the proper training.

Works Cited:

Jones, C. G., & Vedd, R. (11/2009). Employer Expectations of Accounting Undergraduates Entry-Level Knowledge and Skills in Global Financial Reporting. American Journal of Business Education , 85-101.

Tabarrok, A. (2009, 02). Alex Tabarrock on how ideas trump crises. Retrieved 01 16, 2010, from TED: http://www.ted.com/index.php/talks/alex_tabarrok_foresees_economic_growth.html