Management Contract


The Management Contract is an arrangement under which a company provides managerial know-how in some or all functional areas to another party for a fee that ranges from 2 to 5 percent of sales. International companies make such contracts with 1) firms in which they have no ownership, 2) joint venture partners, and 3) wholly owned subsidiaries. The last arrangement is made solely for the purpose of allowing the parent to siphon off some of subsidiary’s profits. This becomes extremely important when, as in many foreign exchange poor nations, the parent firm is limited in the amount of profits it can repatriate. Moreover, because the fee is an expense, the subsidiary receives a tax benefit.

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.

Push vs. Pull in Supply Chain


When designing pieces of the supply chain, managers must determine whether these pieces are part of the push or pull in the chain. Push systems generally require information in the form of elaborate material requirement planning systems to take the master production schedule and roll it back, creating schedules for suppliers with part types, quantities, and delivery dates. Pull systems require information on actual demand to be transmitted extremely quickly throughout the entire chain so that production and distribution of parts and products may accurately reflect the real demand.

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.

Learn the Language


If you are going to spend a year or more in a country—definitely, absolutely, do your utmost to learn the language. It will make a tremendous difference to your state of mind. Ability to understand the local language seems to play a major role in adjustment to culture shock and personal success in a foreign world.

It is not clear why speaking the language makes such a big difference, but it does. Obviously it makes getting around a lot easier. In hundreds of moments of struggling to get something done, from shopping to household repairs to getting directions, just knowing some of the language removes huge portions of aggravation and helps you gain a sense of safety and self-assurance. When people around you are babbling away in a foreign language, you become vaguely insecure and feel isolated. Knowing the language gives you a sense of mastery in situations where you may feel vulnerable.

The more process of learning the language gets you more in tune with the culture, and breaks the ice, putting you in the right frame of mind to adjust. In some places, speaking a second language is important to enhance your image as a well-bred, educated person—you may be somewhat better off if the language you learn is not the language spoken in the country.

The frequent traveler should think about learning languages too, of course, depending on the amount of travel and bilingualism of the business community. Speaking a language fluently can permit you to attain levels of relationship and business advantage unattainably by someone who doesn’t.

Fluency in the language will allow the traveler into otherwise exclusive realms of local business. The process of negotiation often depends on behind-the-scenes information flow.

Learning the language is no substitute for learning the culture and appropriate behavior. People who are fluent in a language but not sensitive to the culture can make worse mistakes, perhaps because the local experts more of them. And there are dangers in speaking a language if you are not competent in it. Not knowing the nuances of words or being careless with intonations, you might say things you don’t mean. In most languages, some common words have extremely vulgar meanings if pronounced incorrectly. Or you may hear unintended meanings.

If you don’t speak the language well, it is best to reveal that you have made the effort to learn—but then rely on English or an interpreter. Experts advise that is generally best to speak the language for socializing and daily activities, but not when transacting business. As a rule of thumb, if you are not fluent and your foreign counterpart does not speak fluent English, always transact business with an interpreter. Traders who meet frequently with foreigners say that while English is the business language around the world, buyers are far more comfortable talking in their native language, and even if they can speak English, it is often better to have an interpreter. They don’t have to struggle so hard, and it puts them at ease.

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.

Premium for Speed


A factor that is driving the trend towards automating the sales department is the extent to which speed has become a strategic advantage in the selling process. Once, it was acceptable for salespeople to promise to get back to customers with answers to questions. Increasingly, those salespeople are finding that by the time they get back to their customers with the necessary information, the sales opportunity has evaporated. The ability to respond to customers quickly is crucial to success, and the tolerances are narrower than ever before.

Similarly, the ability to compress the sales order cycle is becoming an extremely significant factor in a competitive situation. Your customers, who are under the same competitive pressures as you, are placing more and more emphasis on increased cash flow and reduced inventories. Reducing your sales order cycle from four days to two can make an important and measurable difference, certainly enough of a difference to determine whether or not you get the order.

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.

Strategic Decisions


There are three central characteristics of strategic decision making:

  1. Strategic decisions that affect the very survival of the firm;
  2. The effects of a decision last a long time, perhaps five to ten years;
  3. The long range effects of a decision are very hard to forecast.

Actually, the first characteristic is really the definition of a strategic decision. The other two characteristics follow from it. If we could correct a bad decision of any size within a year or two, then it would be less likely to harm the firm permanently. And it should be clear that any decision whose effects last for many years will be extremely difficult to forecast.

Difficulties of long-range forecasting include:

  1. Long-range forecasts are usually ill-structured; that is, it is impossible to make a really good mathematical model of what is being forecasted.
  2. Forecasting accuracy drops off rapidly as one looks further into the future. This is essentially because unforeseeable change accumulate as we peer further and further ahead.
  3. Forecasts need to mix subjective and objective information, since different kinds of information are being captured.
  4. The longer the horizon, the less objective information is available, the worse models will be, and the more we must rely on subjective forecasts.

Given that huge financial stakes are involved and that strategic decisions have a long horizon with poor forecasts available, it is hardly surprising that most Operations Management texts do not delve deeply into this problem. Many methods which are in practical use are not deeply quantitive, and are, in any event, difficult to describe and justify. Nevertheless, manufacturing executives do not have the luxury of ignoring strategic decision making and must be careful consumers of the best available methods.

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

Knowledge Engineering


In the traditional approach to systems design, a system analyst, together with the ultimate end-users, or clients, for the project, will complete a functional specification of the system. At that point, the project is essentially in the hands of professional project management and programming staff, because that group possesses the knowledge and skill required to deliver the agreed upon features and functions. In the development of knowledge systems, this is simply not the case. Following the specification of function, a new problem arises. This is because it is not an algorithm that is being developed but knowledge that is being encoded for machine use.

 

The immediate problem is that traditional applications developers do not have sufficient knowledge of the applications area to complete the project from the starting point of a functional specification. This information generally exists in a variety of forms, depending on the application area. In some cases an individual or group of individuals may uniquely possess the relevant knowledge. In other cases, the knowledge may exist in the form of published materials like manuals or textbooks. In still other cases, the knowledge does not presently exist at all, and must be created and developed along with the system itself. This is an extremely difficult circumstance. Further compounding this problem is a critical factor: Regardless of the form in which the knowledge currently exists, it is not in a form that is ready for use by a knowledge system. Someone must decide what knowledge is relevant and desirable for inclusion, acquire the knowledge, and represent it in a form suitable for a knowledge system to apply. In all but trivial applications the task of representing the knowledge requires not only coding individual “chunks” of knowledge, but also organizing and structuring these individual components.

 

Historically, owing to the remoteness and enigmatic quality of artificial intelligence technologies, the person doing the actual systems development and the “expert,” or source of knowledge, were not the same. The availability of tools, in place of enigmatic technologies, has had an impact on reducing this problem. Even if one can imagine the case in which the “expert” whose knowledge is to be modeled is also an “expert” with the use of artificial intelligence development tools, there still remains a sizable problem.

 

In case where knowledge resides with some practitioner or expert, it does not exist explicitly as a series of IF …THEN rules, ready to be encoded. Most practitioners and experts find it difficult to explain explicitly what they are doing while solving problems. They are not cognizant of the underlying rules they are applying. Their expertise has been developed from numerous experiences and involves highly developed pattern recognition skills and heuristics.

 

In the case where the knowledge to be included is contained in text material like manuals, regulations, procedures, and the like, the information is still not in a form ready for inclusion in an expert system. It must be remembered that one of the most often cited advantages of expert systems is that they make explicit the knowledge that is most often implicit and unavailable for review, evaluation, dissemination, and modification. The task of making knowledge both explicit and available for systems application is that of knowledge engineering. Most literature on the development and application of knowledge systems has identified the need for individuals skilled in knowledge engineering as a critical factor to widespread use of technology.

 

Knowledge engineering involves acquiring, representing, and coding knowledge. The representation and coding aspects of systems development have been greatly impacted by these newly available tools. The speed with which prototyping can be accomplished has also helped reduce some of the difficulty in acquiring or refining knowledge. The knowledge engineer now finds it much less costly in time and effort to represent, code, and test early approaches to systems development, providing a more efficient feedback loop. This feedback loop is critical in the development of knowledge systems. The end-user/client for the project is, by nature, going to be much more involved in the systems design process. The “programmer” often is incapable of deciding if the system is behaving properly, owing to a lack of fundamental knowledge about the application area. This is simply not as strong a factor, where the programmer is capable of evaluating the accuracy and efficiency of algorithms. When the product is actionable knowledge rather than algorithms, the ability to evaluate project progress shifts to the end-user/client. This creates the increased emphasis on the feedback loop.

 

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