Creating Departments around Products


With product departmentalization, departments are organized for each of the company’s products or services, or for each family of products. Department heads in this type of organization are responsible for both creating and marketing a product, a family of products, or a service.

Arranging departments around products is sometimes called diviosionalization. Divisionalization exists when the firm’s major departments are organized so that each can manage all the activities needed to develop, manufacture, and sell a particular product, product line, or service. The head of such a division usually has functional departments—say, for production, sales, and personnel—reporting to him or her. As a result, each of these product divisions is self-contained. In other words, each controls all or most of the resources required to create, produce, and supply its product or products.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Problems of Conduct


In Japan’s early history, a serious disregard for manners could be punishable by death, and any samurai could kill any common person who failed to show him proper respect. The Japanese were required to behave in precisely prescribed ways—wearing permitted clothing, walking only a certain way, sleeping with their heads pointing in a certain direction and legs arranged a particular way. Eating, greeting, gesturing with hands, opening doors and many work tasks had to be done in assigned ways without deviation. Conduct became a measure of morality, and virtue in manners was visible for all to see. Even today, the code of conduct plays a significant role in the lives of the Japanese. Many societies, not Japan alone, have a prescribed form and manner for every familiar situation that might arise. Unforeseen situations can cause intense embarrassment or discomfort. Throughout East Asia, actions are judged by the manner in which they are performed. More important than the accomplishment of a task is the question of how someone went about trying to complete the task: Did he act sincerely? More important than winning the race is the grace of the runner. More important than expertise is the way one gets along with others. More important than profits is harmony. In contrast, Westerners and particularly Americans are more concerned with the principles of things, hard “measures” and objective facts. Although rules of ethics are extremely important, we are more goal oriented than method-conscious, we say “a good loser is a loser.”

One aspect of form is the concept of “face.” Much has been written about “face-saving” in Japan and China, but face-saving is important absolutely everywhere. The difference is only a matter of degree and nuance. Where an American might feel a little guilty or inadequate, an Asian, Arab or South American may feel deep shame and humiliation. What an American might see as a little honest and constructive criticism, the foreigner may take as a devastating blow to pride and dignity. A foreigner is likely to be sensitive to feelings of others in transactions that an American would consider strictly impersonal, such as returning a defective product or switching hairdressers. The traveler simply must be more conscious of saying things or behaving in ways that cannot be taken as disrespect, criticism or humiliation. In some countries it seems just about anything can be taken personally, even such indirect affronts as not taking your shoes off in a mosque or complaining about the heat.

Harmony with the environment can be as important as sensitivity to people in some cultures. In Japan a woman wears a soft pastel dress to a flower show so as not to take away from the beauty of the flowers. In countries where people believe in reincarnation they are careful about all forms of life. In India, for example, people are careful not to swallow gnats or step on ants—one might be a relative.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight.

Partnering with Customers


  1. Pick high-visibility, vocal customers as your research partners and test sites. When you succeed together, they’ll spread the word quickly to their peers and pave your way into the market.
  2. As your customer list grows, organize their names and phone numbers by product and geographic area so you can easily provide references keyed to a prospect’s interests.
  3. Gather passive (i.e., written testimonials and quotes from customers to use in your sales materials, ads, and proposals. Remember to use videos.
  4. Use active testimonials with important prospects: Ask two or three present customers to call a prospective one, rather than waiting for the prospect to call them.
  5. Use on-site testimonials. Arrange a tour of customer premises where prospects can see your products performing.
  6. Find customers willing to meet prospects on your turf to endorse you and your products.
  7. Conduct joint presentations with your customers at industry meetings. Coauthor articles to automatically share the limelight with your customers.
  8. Bring your customers together at least once a year to share ideas with each other, give you feedback, critique new product concepts, and have a good time. Invite a few key prospects—they’re likely to come away sold.
  9. Take customers to trade shows and go to theirs. The better you know each other, the more value you both receive.
  10. Treat your customer-partners as heroes. Thank them—and more. For example, feature them in your newsletter, mail them a poster-sized letter signed by all your employees, or send a dozen balloons to their offices.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Release of Free Cash Flow


The project entry typically has a finite life. Its dividend policy is usually specified contractually at the time any outside equity financing is arranged. Cash flow not needed to cover operating expenses, pay debt service, or make capital improvements—so-called free cash flow—must normally be distributed to the project’s equity investors. Thus, the equity investors, rather than professional managers, get to decide how the project’s free cash flow will be reinvested.

 When project is financed on a company’s general credit, the project’s assets become part of the company’s asset portfolio. Free cash flow from the project augments the company’s internal cash resources. This free cash flow is retained or distributed to the company’s shareholders at the discretion of the company’s board of directors.

 Project financing eliminates the element of discretion. Investors may prefer to have the project company distribute the free cash flow, allowing them to invest it as they choose. Reducing the risk that the free cash flow might be retained and invested without the project’s equity investors’ approval should reduce the cost of equity capital to the project.

 The sponsor is not necessarily placed at a disadvantage under this arrangement. If the sponsor is considering additional projects that it believes are profitable, it can negotiate funding for these projects with outside equity investors. If they agree to fund any of these additional investments within the project entity, the dividend requirement can be waived by mutual agreement and the funds invested accordingly.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Being Accessible to Employees


One of your primary management responsibilities is to make yourself available to employees to answer their questions and address their concerns. When the press of daily activities tends to makes you unavailable:

  • Update your calendar regularly. Give your staff access to your calendar so they can arrange a time to meet with you.
  • Coordinate your schedule with your secretary and set up times when you will check in at the office, either by phone or in person. Let your staff know that your secretary has this information.
  • Set up regular meetings to answer employees’ questions and to get the information that will keep you abreast of their work.
  • Take time to contact employees periodically, particularly those you do not see daily. These need not be formal meetings. Taking time to talk with people, even informally, conveys a nonverbal message of support. Also, your employees will be less likely to view you as an “absentee manager.”

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight