Internet Exercises


1			Foreign operations are taking on an increased strategic importance for many companies in Japan, the U.S., and Europe as more and more companies shift their back office operations to Mexico, Costa Rica, the Philippines, China, and India among other locations. What is the attraction to these foreign locations? Cheap labour—white-collar labour. Companies including Germany's Siemens and INA-Schaeffler, America's Boeing and Texas Instruments are turning to new locations for their white-collar operations. Driving this trend are digitalization, the Internet, and high-speed data networks. Companies are finding that activities such as product design that used to be completed at the headquarters location can now be performed easily and more cheaply elsewhere. Phillips, the Dutch consumer electronics giant, for example, has outsourced its product design for televisions, cell phones, and audio products to China. Outsourcing white-collar activities to cheap locations can save a company 40% to 50% of their costs. Consider the implications of a globally integrated knowledge economy on the strategic role of foreign factories. What risks are involved for companies that outsource manufacturing and design work? Discuss the notion that foreign factories should not be viewed simply as sweatshops where unskilled labour churns out low-cost goods, but rather that foreign factories can be centres of excellence and that local managers should be encouraged to upgrade the capabilities of their factories, and their strategic importance within the firm. Then, explore the operations of Eastman Kodak (http://www.kodak.com/), Microsoft (www.microsoft.com), and Dell Computer (www.dell.com) and the role of white-collar globalization in their operations. Source: "Is Your Job Next?" Businessweek, 2/3/03, p.50.




2			TQM - Total Quality Management Consumer perceptions of the Quality and the price they are willing to pay Although many companies strive for Quality, it is not a simple thing. Quality has costs associated with it and the cost of obtaining very good quality is something that can make the subsequent product to expensive and not "price competitive". For many large companies that are publicly traded, the purpose is not to make and sell the best stuff, the purpose is to make and market the most competitive stuff which earns the highest revenue for the company and leads to profit for the shareholders. In the 1980's and early 1990's, when many large Japanese companies set up manufacturing operations in North America they suffered from a competitive environment that caused people to think that North American goods were better in quality than Japanese goods. To address this public perception, Japanese companies sought manufacturing methods to produce goods with a very high level of quality so they could penetrate the market. TQM was not invented in Japan, it was invented in the U.S., but it was used by the Japanese very effectively in the 1980's and the term has subsequently become associated with Japanese management principles. Review http://www.witiger.com/internationalbusiness/TQM.htm To understand the 14 points that Demming recommended for companies to improve quality.

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