Best Practices of Winning Companies

Winning companies realize the strategic value of building successful partnerships. While all companies experience periods of highs, lows, and transitions in their respective performance and in stock prices, truly successful companies build lasting partnerships that sustain and provide long term value to all partners, employees, and shareholders.

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.

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.

Incremental Change Analysis

Most business focuses on the current situation, with changes defined on an iterative, cumulative basis. In this context, issues represent problems or opportunities for change from the current situation. The gaps represent ways that a company may achieve or enhance a competitive edge.

The most common way to define issues is to assess the changes that are expected t occur. These are derived from either internal or external changes, intended by management or occurring as a result of uncontrolled forces (as in workforce changes). Issues are identified in the way that people normally think—incrementally from the present toward future.

In this process, managers identify and evaluate human resource issues by sorting through available strategic planning, competitive, and environmental information for evidence of changes having human resource implications and then define human resource issues that may be addressed. Such analysis may examine employee productivity issues, service quality, staffing surpluses or shortfalls, succession needs, skill requirements, utilization, costs, turnover/retention patterns, or employee attitudes.

Managers also obtain and consider perspectives of relevant constituents, such as other managers and employees, vendors, suppliers, and customers. Companies solicit inputs from managers at various levels through their participation in the planning process or through interviews, focus groups, or surveys with key managers. Many companies survey employees, either specifically for planning inputs or more broadly as an assessment of organizational climate and human resource practices. Companies may involve employees through interviews or focus groups to help define issues and alternative strategies. Some also interview or survey customers, contractors, and other business partners regarding human resource issues to be addressed.

Environmental scanning is used to identify prospective human resource issues deriving from changing external conditions. Scanning the many changes occurring in social, political, legislative, demographic, economic, technological and other areas yields a wide array of issues that may be considered.

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.

Global Sourcing & Operating Guidelines

Levi Strauss & Company developed the following policy to guide the firm through the maze of international business and maintain its high standard of ethical integrity. Levi Strauss & Co., has a heritage of conducting business in a manner that reflects its values. Because the company sources in many countries with diverse cultures, it must take special care in selecting business partners and countries whose practices are not incompatible with its values. Otherwise, its sourcing decisions have the potential of undermining this heritage, damaging the image of its brands and threatening its commercial success.

Business Partner Terms of Engagement

Terms of Engagement address issues that are substantially controllable by our individual business partners.

We have defined business partners as contractors and subcontractors who manufacture or finish our products and suppliers who provide material (including fabric, sundries, chemicals and/or stones) utilized in the manufacturing and finishing of our products.

i.            Environmental Requirements: We will only do business with partners who share our commitment to the environment and who conduct their business in a way that is consistent with Levi Strauss & Co.’s Environmental Philosophy and Guiding Principles.

ii.            Ethical Standards: We will seek to identify and utilize business partners who aspire as individuals and in the conduct of all their businesses to a set of ethical standards not incompatible with our own.

iii.            Legal Requirements: we expect our business partners to be law abiding as individuals and to comply with legal requirements relevant to the conduct of all their businesses.

iv.            Employment Practices: We will only do business partners whose workers are in all cases present voluntarily, not put at risk of physical harm, fairly compensated, allowed the right of free association and not exploited in any way. In addition . . . . specific guidelines [are provided in the areas of]: wages and benefits, . . . . working hours, . . . . . child labor, . . . . prison labor/forced labor, . . . . health and safety, . . . . discrimination, [and] . . . . disciplinary practices.

v.            Community Involvement: We will favor business partners who share our commitment to contribute to the betterment of community conditions.

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.

Partnering for Increased Value

A business marketer becomes a preferred supplier to major customers by working closely as a partner, developing an intimate knowledge of the customer’s operations, and contributing unique value that customer’s business. Business marketing programs increasingly involve a customized blend of tangible products, service support, and ongoing information services both before and after the sale. Market-driven firms place a high priority on customer-linking capabilities and closely align product decisions—with the customer’s operations.

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.

The Follies of Losers

Losers lose out on repeat business. They use rather than value their existing customers. They haggle over prices and margins, and discourage ‘variations’ from standard offerings that might create ‘extra work’ and cause ‘systems problems.’ They do just enough to fulfill any contracts that are won. They don’t really care about their customers’ businesses and keep ‘outsiders’ at a distance to protect their ‘know-how.’

Losers do little to lock their customers in. they are reluctant to establish online links because of worries about importing viruses. Open book accounting and partnering relationships are also avoided. Not surprisingly, clients seeking a deeper and more intimate relationship look elsewhere.

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.

Changing Buying and Selling Processes

Winning companies are all focused on speed to market, cost reduction, and customer satisfaction—whether buying or selling goods, services, and solutions. Today, many leading companies are changing their selling processes and tools, including the following actions:

• Expanding self-service sales via Web-based sales catalogs of products and related services available to buyers.
• Creating customized electronic interfaces between themselves and their strategic customers to facilitate rapid order receipt and order processing. Typically, sellers provide their most favored customers with preferred pricing or large discounts.
• Offering multinational companies global pricing policies for products and services with economic-related adjustments, i.e., variations due to labor rates in specific countries or regions, inflation or deflation, value-added taxes, etc.
• Developing standard statements of work, acceptance criteria, and standards intervals for consistent on-time delivery worldwide.
• Understanding the buyer’s business needs and budget in order to develop customized solutions priced to fit the buyer’s desired business case.
• Providing financing to buyers to help them purchase products when required.
• Offering extended payment terms to customers, well beyond the usual net—15 days, or net—30 days to net—90 days or net—180 days.
• Developing Web portals to facilitate rapid and direct communications between sellers and their strategic partners.
• Providing countertrade, offsets, or counter purchases, in order to secure large purchases.

These actions are just a few of the many innovative process changes, tools, or unique business arrangements that sellers are using to build successful partnerships with their best buyers.

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.

Foreign Licensing

The method of going global through the use of contractual agreements is foreign licensing. Such an agreement grants foreign marketers the right to distribute a firm’s merchandise or use its trademark, patent, or process in a specified geographic area. These arrangements usually set certain time limits, after which agreements are revised or renewed.

Licensing offers several advantages over exporting, including access to local partners’ marketing information and distribution channels and protection from various legal barriers. Because licensing does not require capital outlays, many firms, both small and large, regard it as attractive entry strategy. Like franchising, licensing allows a firm to quickly enter a foreign market with a known product or concept. The arrangement also may provide entry into a market, which government restrictions close to imports or international direct investment.

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.

Online Retail Selling: Barriers to Success

i.            Increasing consumers’ comfort levels: Online retailers need to improve convenience and value for customers and assist them in overcoming their concerns about security and trust.

ii.            Resolving technological limitations: The ability for online retailers to deliver unique experiences is linked to technology improvements. The internet is still constrained by lack of bandwidth and problems with reliability.

iii.            Rapidly scaling internal operations: Online retailers face the challenges of managing significant growth, internal organizational change and developing and scaling their customer service and fulfillment infrastructure—all while the technology is still evolving.

iv.            Engineering comprehensive convenience: Customers identify many convenience problems with today’s online environment. Among them are the need for customers to reenter personal data on different sites, the vide variation in customer service across sites and the lack of coordination between online and offline retail environments on the part of retailers using both channels.

v.            Resolving channel conflict: many offline retailers believe that there is a risk of cannibalizing sales through existing channels by going online. Many manufacturers fear alienating their existing distribution partners by providing an alternative channel for customers to purchase. These perceived channel conflicts are keeping some traditional retailers and manufacturers from joining the Internet.

vi.            Developing low-cost distribution: Distribution system can be expensive. Online fulfillment systems are still developing and there is a disconnect between what is required and what is currently offered by existing offline systems.

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.

 

Acute Corporate Stress

Acute corporate stress is the most easily diagnosed. Something is clearly wrong and this will be evident in its financial performance. In the worst cases, a type of organizational schizophrenia takes hold, with conflicting decision making criteria and behavior very much in evidence.

Many small organizations are run by two partners that hardly converse despite spitting distance of each other, both ordering the same people to do different things. There are also giant PLCs and governments where supposed colleagues direct whole divisions as if they were private armies in pursuit of incongruent goals.

The good news in these situations is that this type of crisis is hard to ignore, that there is little alternative to taking action and that there are several courses of action that are proven to help.

The bad news is that if action is not taken the organization is on a fast track of failure.

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.