Saturday, June 30, 2012

Inter-organizational Business, the Sherman Antitrust Act, and the Single Entity Defense

Inter-organizational Studies. Review of a practitioner article.

Article


Article’s Purpose

The article explains the single entity defense that has evolved in response to the Sherman Antitrust Act and the effect it has had in antitrust court cases. Numerous court cases and their rulings are examined.  The article is written in 3 parts: the evolution of the single entity defense, the history and outcome of the American Needle litigation, and criticisms and implications of the ruling in that case.  I will follow a similar outline in this review of the article.

The Sherman Antitrust Act

There are two sections of the SAA.  Section One’s concern is concerted action, or two or more companies acting in the restraint of trade.  Section Two covers independent action and regulates monopolization.  As stated in the article, § 2 cases generally lose; the conflict of opinion resides in the §1 verbiage dealing with what constitutes concerted action and restraints of trade.

Origin and Evolution of the Single Entity Defense

Historically courts ruled using the Intra-Enterprise Conspiracy Doctrine; effectively meaning that separate legal entities are always subject to §1, even when one is a wholly-owned subsidiary of the other.  As the article states, this did not provide the protection for which SAA was meant.  Courts increasingly began avoiding its application.

In the 1984 Copperweld case, the Supreme Court conveniently rejected the doctrine and ruled that a parent and wholly-owned subsidiary are a single entity and outside the scope of §1.  However, as pointed out in the article, this ruling did not provide a solid substantive measure for lower courts to determine what constitutes a single entity.  Different interpretations of the case led to the lower courts implementing their own measure; with inconsistent rulings of what constitutes a single entity and thus immunity to §1:
  • Parent companies and less than wholly-owned subsidiaries. (As low as 51% parent ownership)
  • Commonly owned and controlled companies. (E.g. Sister subsidiaries, franchises)
  • Members of trade and professional associations.
  • Parties acting on the basis of contractual agreements.
The article next addresses joint ventures. Courts have ruled more uniformly concerning joints ventures, deciding that they were either competitors or potential competitors and thus the Copperweld single entity defense did not apply.  The Supreme Court, however, reversed this in the Dagher case.  Dagher was a joint venture of Shell and Texaco.  The two companies agreed to consolidate operations, set a price, and end competition in the western U.S. with equal shares of profits and losses under the joint venture (They still competed in other markets).  Relying on their interpretation of the verbiage of§1, the Supreme Court ruled that in the case of Dagher, a single entity existed and it therefore could not possibly act in restraint of trade.

As explained in more detail in the article, these two Supreme Court cases, Copperweld and Dagher, have led to a lot of confusion amongst lower courts as to what the actual definition of a single entity is or should be. With confusion already surrounding the interpretation of §1, the verbiage of the Supreme Court rulings do very little in clearing it up.

History and Final Decision of American Needle

The American Needle case was brought by a hat manufacturer suing the NFL when NFL Properties decided to grant Reebok exclusive access to its trademarks concerning the 32 NFL franchises.  The NFL teams, or franchises, gave the power to use the trademarks to NFL Properties, whom was owned equally and jointly by all 32 NFL teams.  A defense for the NFL is that, even though all the teams are separate entities, they are dependent on each other to produce one product, the sport, and because NFL Properties had the sole power to use the trademarks, the NFL franchises are effectively a single entity.

Even though the argument for the NFL makes sense, the Supreme Court, ruled that the franchises lack the capacity to operate as a single decisive unit.  Again, the Supreme Court seems to have added to the confusion regarding what is and isn’t a single entity in the verbiage of their ruling.  The article explains in depth how this case could have cleared up both the Copperweld and Dagher rulings, yet failed to do so.

Criticisms and Implications of the American Needle Decision

This section of the article provides some very rational criticisms of American Needle and the implications of the decision on the sports industry and past and future rulings.  It seems as if American Needle only added to the confusion and future rulings can be deemed unpredictable.  The wording of §1 and the exact details of the inter-organizational setup are central in the Supreme Courts’ rulings.

Implications of the Article

Perhaps foreshadowed in the author’s assessment of the implications, management should carefully determine the exact detail of how they organize their inter-organizational business dealings.  This is especially true if the company runs a potential risk of having an antitrust case brought against them and they wish to use the single entity defense.

Grow, Nathaniel. “American Needle And The Future Of The Single Entity Defense Under Section One Of The Sherman Act.” American Business Law Journal 48.3 (2011): 449-501. Business Source Complete. Web. 30 June 2012

Thursday, June 28, 2012

Dynamic Strategy - Practitioner - Market Strategy for Small Business



Small business marketing has been a problem with almost half of new businesses closing within five years. As a small business owner, marketing has been a problem for the company, but have continued to do well because of the word by mouth. There are two reasons, according to the article, that have contributed to the high amount of closings: inadequate marketing or poorly focused and executed marketing. A small business is what drives the economy today.
The purpose of this article is to examine how small business owners conduct marketing, try to understand why these decisions are made, how decisions relate to marketing strategy of the company, and how these decisions affect their small business. Small businesses are important to the economy, not only because they hire about one-fourth of the working economy, but because they create more new ideas than large businesses. Small businesses are needed by large corporations to sell their products. Small firms who later grow into mid-size to large companies employ about three-fourths of new jobs. Creating better opportunity for small firms to have better access to marketing strategies would benefit many people.
Many small business owners are willing to be trained when it comes to marketing strategies. But many of these owners do not know how knowledgeable these trainers are. Many of the owners who were interview only plan marketing strategies six-months ahead. The article suggests small business owners should include networking with other companies as part of their long-term marketing strategy. But owning a small business is very risky and these owners are not willing to “financially dependent” upon other companies.
Managers of small businesses should be proactive when it comes to market strategies. They should seek help from qualified professionals. Keeping an open mind will pay dividends in the future. As a small business owner, I did not have enough money to market my firm. I had to depend on the people who used my services to spread the word for me. I believed in my service and the customer service we provide.


Reference:
Cronin-Gilmore, Julia. "Exploring Marketing Strategies in Small Businesses." Journal of Marketing
    Development and Competitiveness 6.1 (2012): 96-107. Business Source Complete. Web. June 2012

Innovation- Practitioner Article-Harvesting Vehicles’ Waste Heat




The purpose of the article, “Harvesting Vehicles’ Waste Heat”, is about how General Motors have recently researched ways to increase energy efficiency of a car by creating a new technology for the exhaust system. This is an important issue because of the rise of environmental concern due to the increases of emissions into the atmosphere by the use of fossil fuels as a source of energy. The articles states that half to three-fourths of the energy that is conducted by an automobile is lost from the exhaust pipe, which is why GM decided to fully research ways this can be improved. The company Dynallow is assisting GM with researching ways to improve and design a thermal recovery system which will recycle the energy to power the car’s air conditioning system or radio.   The U.S. Government has also recently granted GM $8 million dollars to fund the project for further research and development on this issue. The findings from this article suggest that this new technology would be ideal for diesel trucks, mass transit, and even farm vehicles like tractors. The author also suggests since cars are only driven sporadically, the technology would be the most beneficial for transportation systems like railroads, which are always running.

Although there needs to be a more efficient way for a car or other mode of transportation to manage fuel and energy, this new technology has many implications that could cause more harm than help the cause. I believe that the first issue is the funding for the research. Even though GM is receiving incentives from the government to implement this project, I believe that there should also be outside money involved from the private sector. When the government plays venture capitalist, usually the end results do not always come out positive. Why do alternative energy projects have to depend on government money to get jump started? The problem is, when the company cannot find a cost efficient solution to this problem they are researching, the government then has to tax the people to pay for this debt. Another implication may be that end product will take years for the average consumer to afford, which is really the largest target market of the automobile industry. So with that said, there would most likely be negative cash flow for the first 5 years that it is available for the consumer to purchase. The cost of development and research as well as inputs to create it for each vehicle model will outweigh the revenue they will receive from sales. I believe that if GM and the other vehicle companies are so passionate about developing this type of technology, they need to first asses how much this will cost after the government funds run out.

Growing the Firm; Organizational Development

Organizational Development in Mergers and Acquisitions

            Jim Sanders in conjunction with David Jamieson wrote an article "OD's role in improving Mergers and Acquisitions". Jim Sanders and David Jamieson are both professors at a Universities that have interests in business.
            In this article they are calling on individuals to contribute to a new article concerning Organizational Developments role in mergers and acquisitions. He is attempting to crowd source information concerning mergers and acquisitions in an upcoming article in the organizational development network. This is an online journal dedicated to further the development of Organizational Development.
            In this article he is addressing the key role of organizational development(OD) in mergers and acquisitions. He is asking for key information about methods and practices being utilized today. What has worked. What methods have been used and whether or not they have been successful. The whole purpose of which is to document this information in writing. He is looking for new ideas, information, studies and best practices on how business has handled mergers and acquisitions.
            Mr. Sanders has stated several potential topics that could be addressed in this new article that is to be produced. These are organizing the effort, strategy phase, targeting initial communications, due diligence, closing and announcement, integration, culture, and organizational learning and improvement. Mr. Sanders offers many questions in each area. Hoping it will spark input for the main ides. He does not want to limit the information that might be helpful in creating this article or that might be helpful to the business community.
            This article is basically a teaser for what information might be coming in the next article.
It does address several good key issues. What it does not provide are answers to what works or has not worked in business today. Yet, that is what they want to address in the next article.
            He realizes the importance of documenting information for what the business community needs concerning mergers and acquisitions. How important it is to get this information written down so that it can be shared and taught. They are stressing the importance of real world knowledge needed to make this an article that stands out. This is not only important for the business community but also to the universities that are teaching our business graduates. If the information being taught is not current it is not relevant to society today. The major emphasis is being current with information.
Works Cited
Sanders, Jim, and David Jamieson. "OD's Role in Improving Mergers and Acquisitions." OD Practitioner 44.2 (2012): 2. Web. 23 June 2012. <http://http://libproxy.uhcl.edu:2057/ehost/pdfviewer/pdfviewer?sid=3614bd49-7d84-4bf6-a84b-e4d0d7e79f32%40sessionmgr12&vid=1&hid=13>.

Tuesday, June 26, 2012

Applied Strategy - Academic- Internet Strategy of E-Commerce Business in Thailand


Applied Strategy- Academic – Internet Strategy of E-Commerce Business in Thailand

The purpose of this article was to test the effects of internet strategy used by E-Commerce businesses in Thailand. Internet strategy covers information richness, relational exchange and joint-learning strategy. Outcomes were measured by a company’s competitive advantage, marketing effectiveness and firm performance. Factors that affected the outcomes were hypothesized as moderators which included; environmental dynamism, competitive intensity and information technology. Environmental dynamism is “the degree and instability of change in a firm’s environment (Li and Ye, 1999); competitive intensity is a situation where competition is fierce due to the number of competitors in the market and the lack of potential opportunities for further growth (Auh and Menguc, 2005).”

The data provided by this research shows how a company’s success or failure can be based upon how they do business online. Each factor has a specific affect on each outcome which ultimately helps or hurts the company.

Research was based on hypothesis testing gathered on 322 E-Commerce Businesses in Thailand. There were a total of 11 hypotheses that were tested. An example of one of the hypothesis is as follows:

Hypothesis 3a: Competitive advantage gas a positive influence on marketing effectiveness

Hypothesis 3b: Competitive advantage has a positive influence on firm performance

Data collected supports the hypotheses listed above. Each hypothesis has a descriptive statistics table and correlation matrix to support or deny it. The results show that information richness, relational exchange and joint-learning strategy positively affect on competitive advantage and firm performance. Marketing effectiveness positively affects firm performance and IT competency positively influences joint-learning strategy.

The information found through this testing can help management understand the relationship among each factor. They can better utilize company resources to enhance competitive advantage, marketing effectiveness and firm performance.

Ussahawanitchakit P, Intakhan P. INTERNET STRATEGY OF E-COMMERCE BUSINESSES IN THAILAND. International Journal Of Business Strategy [serial online]. March 2011;11(1):47-66. Available from: Business Source Complete, Ipswich, MA. Accessed June 26, 2012.

Auh, Seigyoung and Menguc, Bulent. 2005. Balancing Exploration and Exploitation: The Moderating Role of Competitive Intensity. Journal of Business Research, 58: 1652-1661.

Li, Mingfang and Ye, L. Richard. 1999. Information Technology and Firm Performance: Linking with Environmental, Strategic, and Managerial Contexts. Information and Management, 35: 43-51.

Editors Note

Topic links updated through this post

Monday, June 25, 2012

Business Governance and Ethics - Academic - CEO Ethical Leadership and Ethical climate


Yuhyung Shin (2012) , "CEO Ethical Leadership, Ethical Climate, Climate Strength,and Collective Organizational Citizenship Behavior", Journal of Business Ethics; Jul2012, Vol. 108 Issue 3, p299-312, 14p.Web Accessed June 20.

Recent downturns in the economy ,subsequent to collapse of major corporations owing to unethical practices by top management,point to the reality that an organization's success is not dependent solely on their pursuit of profitability . A company's continued economic success also depends on how well the company is functioning in harmony with its stakeholders, and a sense of belonging can arise only when employees have a shared commitment and value positive interactions with all stakeholders. The author of the paper  " CEO Ethical Leadership, Ethical Climate, Climate Strength, and Collective Organizational Citizenship Behavior" , Yuhyung Shin, defines the relationship between the Chief Operating Officer (CEO) ethical leadership and ethical climate. He also explores the moderating effect of climate strength ,defined as agreement in climate perceptions, on the relationship between ethical climate and collective organizational citizenship behavior(OCB).

Among the theories the study draws from, the Carlson and Perrewe (1995) work on "Institutionalization of organizational ethics through transformational leadership" which provides the premise that CEOs set the standards for ethical norms and practices of a company. Another important theory ,among others that the study is based on is the theory of organizational climate (Ozcelik et al. 2008; Walumbwa et al. 2010) . Additionally , the study conducts hypotheses on the two dimensions of OCB , categorized previously as " interpersonally directed OCB" (OCBI) and "organizationally directed OCB" (OCBO) (Williams and Anderson 1991).

The study is developed via hypothesis testing  based on a firm based analysis , using self-report data collected from Chief Operating  Officers from 223 companies from varying sizes and industries and across 6,021 employees, all from South Korea.
The first hypothesis uses hierarchical  regression analysis to establish the positive relationship between the ethical leadership of the CEO and ethical climate. The second hypothesis proposes that the relationship between ethical climate and collective OCBI is higher when ethical climate is higher than when it is low .Extending this to OCBO ,the third hypothesis proposes that a similar pattern exists for OCBO as well and that ethical climate positively correlates with collective OCBO. 

While considerable research has been done in the field of ethical climate ,this study is the first to establish an empirical  relationship between the ethical leadership of the CEO and ethical climate .One of the key findings of the paper is that it goes beyond individual ethical considerations to a more comprehensive theory of ethics by defining this relationship between ethical climate and CEO , collective OCB and climate strength.

It is also of considerable significance that impact of ethical leadership on an organization in an emerging market is to such a tangible degree, since corruption and unethical practices are seemingly more widespread in these markets compared to those of developed countries.
However ,the author does point out the limitations of the paper in that it is based on self report data ,which may be subject to some bias. Additionally, the findings are based on the shared perceptions of employees which can also be subjective. Although further work may be needed to extend this study based on what some would perceive an inadequate sample size of Korean employees before a generalized implementation, the study nevertheless, has some direct and useful practical applications. Firstly , since the positive relationship between CEO's and the ethical climate is well established, it would prompt the company to either hire an ethical CEO or alternately adopt rigorous training on ethics for CEOs .Furthermore ,the author rightly points out that it can act as a catalyst for CEOs to undertake proactive measures on building higher ethical standards in addition to profitability targeting initiatives.


References :
Yuhyung Shin (2012) , "CEO Ethical Leadership, Ethical Climate, Climate Strength,and Collective Organizational Citizenship Behavior", Journal of Business Ethics; Jul2012, Vol. 108 Issue 3, p299-312, 14p


Carlson, D. S., & Perrewe, P. L. (1995). Institutionalization of organizational ethics through transformational leadership. Journal of Business Ethics, 14, 829–838.

Ozcelik, H., Langton, N., & Aldrich, H. (2008). Doing well and doing good: The relationship between leadership practices that facilitate a positive emotional climate and organizational performance. Journal of Managerial Psychology, 23(2), 186–203.

Walumbwa, F. O., Hartnell, C. A., & Oke, A. (2010). Servant leadership, procedural justice climate, service climate, employee attitudes, and organizational citizenship behavior: A cross-level investigation. Journal of Applied Psychology, 95(3), 517–529.



Growing your company- Academic Article - Workplace Education


This article brings light to the various work educational programs and their effectiveness in growing your company of financial planning. As many people are aware, many times a company's growth is beyond the simple increase in their net worth. This article allows one to evaluate an inside look on how a company can grow through the use of different educational techniques.

http://libproxy.uhcl.edu:5255/docview/867684730


The first technique evaluated is the two-hour seminars. This particular technique seemed to have little benefits and an extensive list of drawbacks. Overall, the main benefit was the ability to speak to several people in one sitting, some of these people being top management. They also observed existing customers increasing their faithfulness to the business.

The next educational route for a company to go would be the articles and online help. This tends to come off not as personable as the two hour seminar but could also be seen as more reasonable for those who don’t have two hours straight to train. Another downfall in my opinion would be the fact that they could not ask nor could they receive direct feedback from the instructor and teacher. When discussed in this article you see the possible pitfalls and plusses of an online help system.

The last technique is the word of mouth and a discount technique. This technique was seen as the most time efficient and seemed the most personable. The difficulty falls within the new planner with few clientele categories, for clear reasons. If a planner has a small amount of customers to refer their planning services, it is clearly difficult for one to receive more clientele on the basis of referrals.

Overall, this article was clear and concise on the possible education for financial planners and the educations effectiveness in growing a business. One must continually be looking for opportunities to expand and grow. With a planners continued efforts and workplace education, one should see equal results within their business.

Sunday, June 24, 2012

Growing Your Company - Academic Examination of Growth Strategies of Chinese Companies


This review concerns an academic article discussing the strategies used by the top three Chinese hotel companies to successfully grow their domestic market share in the face of foreign and domestic competition.  By paying close attention to the market and adjusting strategies appropriately, each company was able to achieve greater success than before.  Examining some of the strategies, we can see tactics that can be applied to grow one's own company.


Article Link: http://www.sciedu.ca/journal/index.php/jms/article/view/759

The article, "Successful Growth Strategies of Three Chinese Domestic Hotel Companies," by Yu Qin, Howard Adler, and Liping Cai, derives its research both from examination of the companies and interviews with executives.  Prior to this study Porter's Five-Forces model of competition had been applied to the structure of companies in the Chinese lodging industry by Schaffer.  This case study seeks to build on prior work and examine how the strategies either fit into or challenge Porter's model.

The context of the lodging industry in China lies in changing government policies, an increasingly mobile middle-to-upper-class population, and increased international traffic due to globalization (Qin, Adler, and Liping 41).  In the midst of this dynamic environment, new strategies were required.

The first common strategy Qin, Adler, and Liping identify is one of innovative positioning in the market (43).  As international lodging firms took interest in China, they focused on upper-class demographics.  In contrast, there was little competition for less affluent Chinese.  By noticing and focusing their efforts on this demographic, each company was able to grow significantly by seizing this unutilized market share.  Environment analysis

Maintaining low costs was the second strategy prioritized by the companies (Qin, Adler, and Liping 44).  Recognizing that many of their customers did not have a large budget for lodging, the companies strove to keep costs modest while maximizing the value for the customer.  By reducing the barriers to utilizing their services as well as standardizing inventory, the companies were able to grow significantly in the volume of customers without costs ballooning up (Qin, Adler, and Liping 44).  One's own company could benefit from the reduction in redundant inventory and overhead.

Another strategy that can be applied to one's own company is the rapid expansion that the Chinese companies utilized.  Due to the large increases in market share and targeting of new customers, significant amounts of new facilities needed to be created to service more customers.  Qin, Adler, and Liping's data show that the companies were growing by over 30% per year.  This allowed the companies to achieve competitive advantage by utilizing economies of scale (Qin, Adler, and Liping 46).  This is a positive aspect for a company due to reducing costs per unit, allowing a greater volume of service and level of profit.

Quality consistency and extensive training were another area identified (Qin, Adler, and Liping 46, 47.)  The companies prioritized training their employees to be functional in multiple roles rather than specializing in one so that the hotels could function if personnel were not available.  Maximizing the value of one's support systems leads both to a higher quality of product, and greater consistency leads to less money lost from defects, returns, or lost customers.

The other successful strategies identified by Qin, Adler, and Liping focused on leveraging Chinese industrial and cultural practices, a product of examining the domestic market (47-48).  For one's own company, it can be proposed that careful analysis of the domestic market and utilizing its cultural personality can be important in getting customers to identify with a brand and retain their interest.

UK's Executive Pay


As the World Economy becomes more uncertain shareholders and stakeholders are wanting more control when it comes to corporate governance. Executive pay is at the top of this list. Investors are revolting against the pay of top executives. 
BBC online reports “chief executives in 87 of the FTSE 100 companies took home an average of £5.1m in basic pay, bonuses, share incentives and pension contributions in 2010-11. This represents a year-on-year increase of 33%, while the average increase in company value was 24%” (BBC News Online).The correlation between pay and performance have been lost.
In Britain WPP PLC an advertising company awarded the CEO Martin Sorrell a 60% pay raise in 2011 (Hodgson). This sparked an investor protest. In result “shareholders voted three out of every five shares against the company's executive compensation plan for 2011 (Hodgson).” 
The British Government in the past week has revealed new legislation in regards to shareholder power of top executive pay. In the past shareholders could vote on executive pay, but their vote was non binding. The new legislation would override the current laws and make the shareholder vote binding. The Wallstreet Journal reported “Shareholders would have an annual binding vote on director pay unless a company leaves its policy unchanged, in which case the vote will take place every three years. Investors will also vote on exit payments” (Bryan).
 This legislation must be approved by Parliament, but is expected to pass.(Bryan) 
Resources:
BBC News Online  http://www.bbc.co.uk/news/uk-16458570
U.K. Reveals New 'Say on Pay' Laws
Bryan-Low, Cassell. Wall Street Journal (Online) [New York, N.Y] 20 June 2012: n/a.
Shareholder Unrest Grows In England, Now Hits WPP
Hodgson, Jessica; Sonne, Paul. Wall Street Journal [New York, N.Y] 14 June 2012: B.1.

Goverance and Ethics- Practitioner- Leadership Centrality and Corporate Social Ir-Responsibility (CSIR): The Potential Ameliorating Effects of Self and Shared Leadership on CSIR


Pearce, Craig, and Charles Manz. "Leadership Centrality And Corporate Social Ir-Responsibility (CSIR): The Potential Ameliorating Effects Of Self And Shared Leadership On CSIR." Journal Of Business Ethics 102.4 (2011): 563-579. Business Source Complete. Web. 23 June 2012.

The unethical behavioral of executives has negative effects on employees, shareholders, and other stakeholders of the company. The unethical behavior of top executives, from companies such as Enron and Worldcom, has highlighted the topic of corporate social responsibility. These executives overstated the earnings of their companies in order to receive higher compensations. They were acting in their own self-interest and there were no checks and balances. This article examines the two types of leadership, from Pearce’s 1997 study, that should use to prevent corporate social irresponsibility by executives



The article suggests that a combination of both strong self-leadership and shared-leadership are required to keep executives from committing irresponsible behavior. Self-leadership and shared-leadership are alternatives to the more common centralized leadership. Self-leadership is managing oneself, being both a leader and follower. Self-leadership helps reduce centralized leadership. In shared-leadership the leadership is decentralized and shared among the different leaders. Shared-leadership helps create checks and balances. The authors believe that using these two forms of leadership creates a balance of power.



The authors believe that you must have both strong self-leadership and shared-leadership. Having a strong form of either leadership and a weak form of the other will not reduce corporate social irresponsibility. A strong self-leadership and a weak shared-leadership can lead to individual corporate social irresponsibility. A weak self-leadership and strong shared-leadership can create group think among the executives.


Innovation: Does the Cloud Pay Off?


Innovation:  Does the Cloud Pay Off?




According to an article from Information Week the cloud may or may not pay off for all companies.  This is a question that many IT executives across the world are currently asking themselves daily.

Cloud computing is the latest IT buzz word and something that is changing the IT world.  IT execs over the last 2-3 years have spent time reducing the number of servers they have through a technology called virtualization.  Virtualization allows you to take one physical server and run multiple virtual servers on it.  Companies have been able to reduce the number of physical server s they manage by as much at a ratio of 1-to-35. (Babcock,2012). Virtualization technology has reduced energy, hardware, and datacenter costs.  With virtualization technology use at its peak we are now seeing cloud computing start to grow. Cloud Computing involves not only placing your company network into the cloud but can also involve using software applications on the web which is known as Software as a Service(SAAS).  

Cloud computing costs are something that IT Execs are having a hard time trying to figure out if these costs are less expensive.    The companies that are providing the cloud computing and SAAS infrastructures have pricing structures that make it very difficult to be able to compare to their current enterprise environment.  One challenge many organization are facing it they not able to go 100% into the cloud with their entire IT infrastructure then they still need the full IT staff so there are not able to save any money in IT labor costs.  Cloud computing prices have been dropping and I feel we are still close to a feasible price range to draw in more organizations to cloud computing.

There are several implications of cloud computing.  As more and more organizations move to cloud computing it will push the current high cost down due to the companies that offer these services are able to fully utilize its entire developed IT hardware infrastructure.  As companies migrate more of its IT infrastructure to the cloud they will eventually have a need to reduce the size of its IT staff. Cloud computing growth will also increase datacenter growth due to companies no longer managing their IT infrastructure at their offices.

I believe cloud computing for medium to large organization is still too expensive but I do see this changing in the next 2-5 years.  For small companies that have little or no IT staff, cloud computing is inexpensive but gives them all of the IT technologies that are normally only available to medium to large organizations.
Sources:
Babcock, Charles. “Does the Cloud Pay Off” Information Week. June 12,2012. Web. June 12, 2012. <http://informationweek.com/1336/cloud>

Generating Knowledge That Drives Change – Practitioner - Corporate Renewal


This Academy of Management Perspectives article, by Susan Mohram and Edward Lawler III, focuses on the fact that researchers should collaborate with practitioners in order for their research to be most beneficial. This collaboration between academia and practice will provide a valuable knowledge transfer. The current business environment is ever-changing, this means that organizational design should also be quick to adapt. Practices and theories that have worked in the past may not be able to withhold through this global environment of business. 

This article focuses on the amount of impact that research has on business practice. The current business environment we compete in is ever-changing. An organization’s design should be able to adapt to the environment or maybe it needs to be changed in order to adapt. It is important for researchers to work with practitioners to truly be on the forefront of using knowledge to develop organizational change. Organizations should be designed to be able to adapt to current situations within the market. According to this article, it is crucial that researchers go beyond the current business norm in order to provide implications that work and what doesn’t work. A researcher should focus on those companies that fall outside the norm. The author emphasizes that these outside the norm companies will allow knowledge transfer which in turn will create new organizational design. 

It is evident that practitioners should work together with researchers and the knowledge transferred should reflect a need or a future need for material. As the article states, researchers should want their material to be beneficial for this currently fast paced business environment. In order for research to be beneficial to the practitioner, the researcher must have acquired data from organizations. The author supports these findings by using questions that practitioners have and applying them to theory based questions that could be researched. 

Practicing managers need to be able to take research and apply it to their company in a way that benefits them. There are many questions that practitioners have about how to handle this global market that is rapidly changing. The transfer of knowledge between researchers and practitioners will be valuable to both parties. Practicing managers are on the forefront of dealing with issues such as globalization with intense competition. As these pressures continue, it will be important for research to be more future oriented and their will need to be collaboration between the practice and academia. This collaboration will allow a vast amount of knowledge transfer. The more knowledge transfer that occurs between the two different specialties the more benefit. One way to implement this knowledge transfer would be for a company to submit their organizational design questions to academia research. The company could choose to sponsor the research in order to receive the most benefit. These two areas of management expertise are the forefront of the future organizational design.

References:
Mohran, Susan and Edward Lawler III. Generating Knowledge that Drives Change. 2012. Academy of Management Perspectives. Feb 2012, Vol. 26 Issue I, p.41-51