Losers’ Description of Capabilities


Corporate losers describe their capabilities in terms of the physical and financial resources they own and control and the individuals whom they employ and can manage. Their markets are places. Their people are more comfortable with tangible assets that can be seen, smelt and touched, and easily counted, measured and valued.

Because their activities depend on the availability of physical resources some losers can operate only in certain geographical areas. It may be difficult for people living elsewhere to access them and work with them. Buildings become prisons and those excluded from participation become outsiders.

In general, losers prefer more rather than less. Some consider the accumulation of resources as an end in itself. Recruiting more staff and moving to a larger property is viewed as evidence of progress. Losers focus upon the individual items of capital rather than their relevance use, and the flow of benefits that they provide. The more losers succeed in accumulating fixed overheads, the more vulnerable they become to economic forces, commercial constraints and financial pressures.

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.

 

Human Capital


The economic growth, employment levels and the availability of a skilled workforce are inter-related. Economic growth creates employment, but economic growth partly depends on skilled human resources – a country’s human capital. The concept encompasses investment in the skills of the labor force, including education and vocational training to develop specific skills.

Personal and national success are increasingly correlated with the possession of skills. Skilled individuals can command a premium salary in periods of high economic activity. Worldwide, unemployed levels remain high, while organizations have difficulty filling vacancies which require specific expertise. A shortage of skilled people can act as a limiting factor on individual organizations and on the economy as a whole. Small firms are also vulnerable because their owners do not possess basic marketing and finance skills. It is in the interest of any country to maximize its human resources by investing in the skills of its workforce, its human capital. Human capital is one component of a country’s overall competitiveness.

The most successful developing countries are investing heavily in the education and technical skills of their population. Skills requirement are particularly critical at the managerial level.

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.

 

A Socially Responsive Company


Executive leaders of largest corporations have been confronted with an unprecedented increase in the social issues impinging upon their business policies and practices. Not only have a variety of social regulations have been developed that apply universally to all industries, but each industry has also experienced to varying degrees a proliferation of industry-specific challenges for the corporate social environment.

In response to the pressures, businesses have increased their efforts to manage for corporate social environment. The social environment encompasses business activities influenced by various community and government groups. Many chief executives spend more time on the external affairs of the business than any other activity. Most executives allocate significant personnel, time, and budget to the creation of elaborate staff groups to help them understand and manage this environment and its challenges.

Some firms may be more vulnerable to social group pressure and social regulation than others. A number of factors have been identified as contributing to this vulnerability. A firm may be more vulnerable to social forces if the firm is:

  • A large-sized or well-known company thus presenting a big target.
  • Located in an urban area and under increased scrutiny by the media and social groups.
  • Producing a consumer-oriented product viewed as a necessity by the public.
  • Providing a product or service that may cause harm or injury to the user.
  • Part of a heavily regulated industry that is expected to meet high public expectations.

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.

 

Inflation and Disinflation


Fiscal policy is related to inflation, which occurs when the prices of goods and services rise steadily throughout the economy. Although many factors (such as increases in the prices of imported goods) contribute to inflation, government borrowing is major factor. When the government borrows great sums of money to bolster the economy, the total amount of money circulating tends to increase. With more money chasing the same quantity of goods and services, inflation increases too.

Theoretically, the government is supposed to pay back its debt during inflationary times, thereby taking some of the excess money out of the economy and slowing inflation to moderate level. This system worked throughout 1950s and 1960s, but during the 1970s, inflation kept building. By the end of the decade, prices were increasing by almost 14 percent a year.

Inflation of this magnitude brings an unproductive mind-set. People become motivated to buy “before the prices goes up,” even if they have to borrow money to do it. With greater competition for available money, interest rates increase to a level that makes business borrowing riskier and business expansion slower. Businesses and individuals alike begin spending on short-term items instead of investing in things like new factories and children’s education, which are more valuable to the nation’s economy in the long run.

Because of the peculiar psychology that accompanies high inflation, slowing it has always been difficult. In addition, the causes of inflation are complex, and the remedies can be painful. Nevertheless, several factors conspired to bring about a period of disinflation, a moderation in the inflation rate, during the 1980s.

Whether inflation will remain under control is debatable. The country is still vulnerable to outside shock. Bad weather could jack up food prices, and political upheavals could limit the supply and boost the price of vital raw materials. Also, government efforts to stimulate the economy could rekindle inflation. When the economy slumps, the government is inclined to increase the money supply, which tends to drive prices up.

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.

Identifying Company Weaknesses and Resource Deficiencies


A weakness is something a company lacks or does poorly or a condition that puts it at a disadvantage. A company’s internal weaknesses can relate to a) deficiencies in competitively important skills or expertise, b) a lack of competitively important physical, human, organizational, or intangible assets, or c) missing or weak competitive capabilities in key areas. Internal weaknesses are thus shortcomings in a company’s compliment of resources. A weakness may or may not make a company competitively vulnerable, depending on how much the weakness matters in the market place and whether it can be overcome by the resources and strengths in the company’s possession.

Sizing up a company’s resource capabilities and deficiencies is akin to constructing a strategic balance sheet where resource strengths represent competitive assets and resource weaknesses represent competitive liabilities. Obviously, the ideal condition is for the company’s strengths/competitive assets to outweigh its weaknesses/competitive liabilities by an ample margin—50-50 balance is definitely not the desired condition.

Once managers identify a company’s resource strengths and weaknesses, the two compilations need to be carefully evaluated for their competitive and strategy-making implications. Some strengths are more competitively important than others because they matter more in forming a powerful strategy, in contributing to a strong market position, and in determining profitability. Likewise, some weaknesses can prove fatal if not remedied, while others are inconsequential, easily corrected, or offset by company strengths. A company’s resource weaknesses suggest a need to review its resource base: What existing resource deficiencies need to be remedied? Does the company have important resource gaps that need to be filled? What needs to be done to augment the company’s future resource base?

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.

Roadblocks to Transformation


The baggage from the past—old habbits, practices, commitments, and ways of thinking—that must be shed is enormous. Unless it is shed, however, the required changes cannot or will not be made. Let’s examine the roadblocks that will inevitably make it difficult for many companies to make the kind of transformation I am talking about:

  1. The first is a reluctance on the part of many managers to face the real facts about their markets and competitive positions.
  2. The second roadblock is a failure to recognize the crucial importance of being a lower cost supplier.
  3. The third is a bureaucratic approach to managing the business in a way that resists change and smothers the entrepreneurial sense of urgency.
  4. The fourth roadblock is an arrogant self-satisfaction with existing product offerings that makes the business vulnerable to being “blindsided” by shifting customer needs, new competitors, and new technologies.
  5. The final roadblock is an apparent lack of urgency and confiodence in the sales groups that have become conditioned to earning a living by simply taking orders.

 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

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