A1. Control in business may refer to development of management systems to control business activity (Business Case Studies LLP). Control is helpful when employees prefer to be guided and the organization knows exactly what it wants. Control may also be useful when there are serious time and resource constraints. Control ensures that everyone is on the same page and duplicating activities are not taking place. It also helps minimize waste by detecting variations in a timely manner and correct them before they may become too expensive to deal with.
Control is also useful because sometimes simple mistakes can inflict a great damage to reputation built over decades. Apple’s experience with its mapping software serves as a great example. Apple has developed a reputation for quality but when it replaced Google Maps with its own mapping software, it failed to follow the same quality control standards it usually follows in other products and services (Elmer-DeWitt, 2012). Thus, some degree of control is at least inevitable to fulfill the expectations of the customers as well as protect the corporate image of the organization and this is even more important in competitive industries.
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While some degree of control is desirable, too much control may also not be good for business. It may bring inflexibility into the organizational culture and it may also make it difficult to motivate employees who may want some discretion to explore their creative potential. Some employees may also take control as a sign of distrust by the management which would make it difficult for the management to inspire employees to do their best.
A2. Globalization has radically changed the competitive environment at both local and international levels. Though the competition has become more intensive, there are several advantages in addition to disadvantages as well. One of the advantages of globalization is that it expands the market for companies to sell their products and services and makes it easier for them to achieve economies of scale. Another benefit of globalization is that it also helps companies lower production costs by moving production activities to countries with lower labor costs. This explains why China, India, and Vietnam etc. have emerged as major manufacturing hubs for manufacturing.
Globalization also helps companies reduce risk through diversification of operations, thus, adverse conditions in any single market may be offset by favorable conditions in other markets. Globalization also helps companies exploit their branding power by creating cheap revenue streams through licensing and franchising.
An example of organization that has been a major player in globalization is McDonald’s. McDonald’s has been able to achieve higher growth and profitability by expanding into new countries as the U.S. and certain other western markets have reached points of saturation. At the same time, the company has also been mindful of cultural differences and often introduce country-specific products around the world to meet unique local preferences.
At the same time, there are several disadvantages of globalization, too.
First of all, globalization may increase the lure of expansion which could result to some loss of control over business operations due to expanded size, resulting in diseconomies of scale. In addition, globalization works better when there are similarities between different markets and the more dissimilar the markets may be, the greater the resources will be required for creating local-specific strategies which may eliminate any potential economies of scale. Another disadvantage of globalization is that it may increase the business risk because different countries have different political, legal, economic, and business-specific risks. Globalization may also increase risk of ethical violations many companies contract manufacturing or enter into joint partnerships and they have little control over the actions of their business partners.
A3. One of the outcomes of growing competition has been shorter product life cycles which have also complicated the product design process. First of all, companies have been forced to invest more in design and research activities to introduce new products more often to stay ahead of the competition. The second trend has been introducing new models with slight improvements to existing models instead of radical overhauls. We see this almost everywhere because complete redesigns are expensive and shorter product life cycles make it more challenging to recover the initial investment as well as earn profit within a short period of time. Apple serves as a great example. It often introduces new models of product lines such as iPhone and iPad with slide improvements over previous models and radical redesigns occur relatively infrequently as compared to introduction of new models. The same trend can also be seen in the automobile industry where new designs are gradually altered with each new model and radical redesigns only occur once every few years rather than every year.
But this doesn’t mean shorter product life cycles do not have any benefits. Companies like Apple which seek differentiation on the basis of product design and quality actually benefits from shorter product life cycles as it helps them stay ahead of the competition and maintain edge. In addition, these companies have significant resources, thus, they are better prepared to introduce newer products at shorter intervals. Shorter product life cycles also benefit companies which have strong brands and loyal customer base because higher prices make it possible for them to recover initial investment and make profit within short period of time.
- Business Case Studies LLP. (n.d.). Control of Business Activity. Retrieved April 18, 2013, from http://www.inventorymagazine.com/
- Elmer-DeWitt, P. (2012, September 29). Does Apple have a Scott Forstall problem? Retrieved April 18, 2013, from http://tech.fortune.cnn.com
