Operations, Processes, and Decisions

Which is easier management in developed countries or in developing countries.

 Management in Developed countries

• There is a common style of management and people are used to that style
• Information about the market, competitors, labor market..etc are available
• Highly qualified labor are available
• Qualified suppliers
• Very strong infrastructure (roads, transportation, …)
• Very tough environmental requirements
• Building trust and long term relationship based on mutual benefit is common behavior
• Laying off is accepted to some extent
• Competition is very high
• It is understood that companies and their employees should do everything to satisy the customer
• People are used to obey the law and so it is expected that they will follow the organization’s systems
• Salaries and wages are very high
• The effect of personal relationships and personal attitude is minor
• Labor are encouraged to innovate
• Most of the research on management is based on developed countries
• e-business is used in most organizations

Management in developing countries:

• Very different styles of management: Local which may not match the modern styles, and many foriegn styles applied in the foreign companies
• Information are rare
• Labor are not well trained
• Suppliers are not aware of quality systems and delivery reliability
• Easier environmental requirements
• Long term relations based on trust and mutual benefit is difficult to convey
• Firing people is not usual and thus people may feel they will never get fired regardless of what they do
• Competition is not high
• Since competition is not high, the customer does not get very high priority
• People are not used to obey rules and so it is hard to get employees follow a company system of work
• Salaries and wages are low
• Personal relationships and personal attitude comes before organization rules
• Labor is expected to work hard only and is not expected to innovate
• Research on management in the developing countries is very limited
• e-business is just starting

What does that mean?

Management in developed countries seems easier except that the environmental requirements are very tough and the competition is very high.

If you are a manger in a developing countries then have a positive thinking!

From my point of view, you should do the following: 

First, think about what you have:

• It is easy to gain competitive advantage
• You have access to non-expensive labor
• competitors are not a big headache for you
• You don’t have information and your competitor does not have information too. So, you have the same information.
• The environmental requirements are not very expensive
• You are not expected to be fired easily
• Labor are not used to get respect and to be encouraged to innovate. So, think what will happen if you show them respect and encouraged them to innovate
• There is a lot of waste in the processes so it is easy to decrease the waste
• You and your competitors are using the same infrastructure

Second, think what you have to do differently from managers in developed countries

• Invest in training. Trian the labor and let them train each other. Give them opportunities to training and let the trained people train the others.  You may find them after a while similar to or better than the labor in developed countries. But remember it is an investment so you have to spend on this investment.
• Build a culture of following the organization system and be an example for that
• Develop your supplier. Why not train your supplier? Give them free training opportunities
• Show your supplier that they can trust you. Cooperate with them, keep your word with them
• Cooperate with good competitors to have vertical integration if you cannot have a supplier satisfy your needs
• Put the customer first and build a culture of customer satisfaction
• Make sure that the salaries are reasonable compared with living expenses 
• Think about effective ways of using e-business
• Let yourself and your people get exposure to the best practices in the world
• Do not compare yourself with local competitors. Compare yourself with world class competitors
• Give your people every support and build your personal relationship with them
• Do not believe those who says that no management practices can be conveyed from developed countries because people here are different
• Build a culture of ethical business

Third, there are still some difficult points:

• There are cost and effort needed for each “build, train, make” word mentioned in the previous paragraph: build culture, make relationship, train… 
• What to do if the employees are not well paid and you can do nothing for them?
• How to compete with companies in developed countries where infrastructure is better?
• It is difficult to know when to change the local culture and when to follow the local culture
• It is not easy to fire employees and so it is not so easy to control them
• Having a boss that does not believe in new management practices may make your task impossible

Fourth, cooperate with successful organizations in your home country and try to transfer your knowledge and applications. Tell them what you did and what you couldn’t do. Tell them how you managed to apply new systems, how did you change the culture…and listen to their experiences. Talk with them about the difficult points mentioned in the previous paragraph. You will be building the “successful” style of management for this country.

Fifth, stop complaining and start doing.

Sixth, keep trying…kepp trying…at least you have done your best and you may succeed.

You cannot eyesight is limited. You cannot see a building from inside and outside at the same time. You cannot see a building from the front and the back at the same time. You cannot see the details of things that are far away from you. So what?….As a manager you see things from one side and in many cases you need to see the other sides. You need to see what they see.

Departments (islands) of the same organizations

Every manager or employee in one department of af a big organization knows aht he is doing and what others are doing around him in the same department. But when it comes to other departments, he does not know much. He knows they are doing so and so but he does not know their capabilities, their problems, their challenges, what they can do in few minutes and what they can do in hours.days …

The result is that the departments are islands and population in those islands really need some tourism in other departments. We need to understand each other. The design department should know the capabilities of the manufacturing so that the design department will not ask for impossible or very difficult/expensive processing. The IT department needs to know what other departments need and they need to know what the IT can do and cannot do. The maintenance people should see the plant from the operation view and the operation people should see it from the maintenance view. We need to see what other see.

Managers and their decisions

Managers see their decisions from their sides while employees see it from a different side. The manager takes the decision based on certain information and obviously he is biased towards his decision. The employees may not the information the manager knows and may know other information that he does not know. The employees see the decision from their side. They see the results and may feel it themselves.

The point is that the manager needs to see what employees see and sometimes need to show them what he sees. Managers need to do that before and after taking the decision. Obviously, it is not the same case for every decision but it is important for the decisions that affects the employees and the way of doing work.

The produce and the customer

The producer likes his product, of course, and he knows the details of the manufacturing and the financial data. The customer is using the product and he sees it differently. The customer knows nothing about the manufacturing and the financial data. He likes and hates certain things in the product.

The producer needs to know what the customer sees in his product. He needs these information in order to imporve the product. All the managers in the producing company needs to get information about the customer view of the product. 

The trainer and the trainees

The training knows the training material and thus he feels it is so easy. The trainer may have never heard about the training topic and so he thinks it is so difficult. The trainer may not feel tired quickly because he is talking about something he knows but the trainer gets tired because he is trying to understand new things.

The trainer needs to see things from the trainers view. He needs to know when they are tired, how do they feel, whether they understand or not.

Simply, we need to communicate, to visit each other, to listen to each other. We need to realize that we can’t see from all sides and that we need to get help from the others to see what they see.

Whatto do in your last day in your current position if you have been transferred to a new position in the same organization?

• make sue that you transfer all the necessary information to your colleague or your boss
• show respect for your experience there
• make sure you get your belongings
• make arrangement to transfer any special information system authority to your colleague or your manager: administrator password, authority to approve budget or plans….etc
• give the people your new contact
• Tell those who may contact you that you are leaving
• say goodbye to your colleagues and manager
• transfer any necessary electronic information, as permitted, to your new computer

What to do in the first day in a new managerial position:

• understand the function of this position and its relation with other functions
• get to know the subordinates and the managers
• Understand the cutlure
• Show enthusiasm and interest
• show respect for previous achievements of this function
• get organized
• find the sources of information
• start identifying the main challenges

One of the mistakes that happen, sometimes, in workplace, research and in life is asking the wrong question and spending time to solve it. What does that mean? Read the following examples:

• The solution of a certain problem is not known. Then someone suggests a model that is very difficult to solve. Then researchers spend years trying to suggest a solution to that model. But we forget to find another model that can be easily solved
• Someone suggests an IT system then the IT people of the company are busy trying to decide how to build the system and whether it should be built in-house or outsourced. But the important question “do we really need this system?” is not asked
• A manager is happy with the results of his subordinates but he never asks if he was using the right measures or performance
• A quality manager is very proud of the quality of the company’s products or services but he forgets to ensure that this quality improvement is perceived by customers
• A manger says that he does not need to apply any new management practices because he was doing the same work for decades and it has been successful. But he forgot for decades to ask himself “How are we doing compared with others?”
• A training manager and a CEO are celebrating the company’s successful training activities. But they forgot to ask are those training activities improving the performance and are we training people on what they need
• A manager asks for a presentation everyday but he never asks “do we need a presentation?”
• A CEO visits a company that applies JIT then he decides to apply JIT. Then he gets to hear about Lean so he decides to apply “Lean”. Then he attends a seminar about six sigma so he decides to apply six sigma. Then someone tells him about Kaizen so he decides to apply Kaizen. But he never asks “Do we really need this initiative? Is it applicable for us? Is it different from what we have?”
• People tend to try to achieve what others like to achieve. So, someone will kill himself working for decades to end up as a CEO. But he forgets to ask “Is that what makes me happy?”. The other works very hard to have millions of dollars but he forgets to ask “do I need more to be happier?”

When taking managerial decision don’t forget to ask yourself: Is this the right question? Do we need this? Are we eliminating the results of the problem and not asking about the root? Are these activities really improving our performance?

Many people or most people think that what they do will affect them only, however; what you do or say leads to a long list of actions. Think about this example:

someone lies….he may get what he does not deserve…since he lied once, it is easy for him to lie again….since he can lie and he knows that lying is very bad, then he can do other bad things….other people know that he was lying….Some of them may disrespect him…some of them will have less negative reaction to lying since it is becoming more common…some of them will start lying….someone will lie to you…he may get from you what he does not deserve…since he lied to you, you are more willing to lie…you may hate him…we lose trust…we don’t want to cooperate..we don’t want to interact…we don’t want to invest together….job opportunities are less…more people are willing to lie to get job opportunity…people lose trust in the CV…it becomes easy for people to do bad things becasue when asked about it they can lie………it becomes terrible and ugly

Another example
Someone says: “I know this is bad but given the circumstances…and …then for me it may not be so bad to do…”….Since he did it once then it easy for him to make any argument to make anything that is very bad seems right….he loses the limits between bad and good….other people follow the same behavior…the bad things become very common…the evil arguments that changes bad to good become very common….New arguments that changes good to bad appears….right and wrong lose their meanings……..it becomes very terrible and ugly

Another example
some companies give false promises to customers while doing marketing research….other companies follow the same behavior…people become reluctant to participate in marketing research….compnaies do not know the real customers’ needs….products does not suit customers…business go down…lack of job opportunities…more umemployed people…social problems…umenployed people having difficulty starting new projects because they cannot contact customers……..

Doing a bad thing is not a single action but it may lead to a long chain of bad actions. We should not accept bad behavior or try to imitate it because it will result in a terrible world. On the other hand, you may do a good thing that leads to a long chain of good things.

When you study management, you find that there are several ways to success and several ways to failure. When a manager tells me that a certain system has more advantages than the other system while it has some disadvantages, I say to myself “He knows about management”. However, many times I find people that think that there is one way to success or that certain way will lead to failure no matter what else you do. The reasons for the erroneous conclusions are:

• I did it and succeeded so it is the only way to success, or it cannot lead to failure, or any other way will lead to failure. Well, you are a sample of one…is this a sample? Your case is just one case which can be used to make such conclusion. Even if you did it several times in few circumstances, you cannot make such judgment because simply may be you know how to successfully apply that system and you usually apply the strategies that make this system succeed.

• I read this way in the book of the chairman or the CEO of the multinational great company, so this is the only way to succeed. Again, this chairman is telling you about his own experience which were applied in certain circumstances and he/she did other things to support that strategy or decision. Not every case will be like his/her case.

• This strategy or policy is being applied in the most developed countries, thus every company needs to apply the same strategy to succeed. Assuming the previous statement is right, then what are other strategies that are applied there? what are there goals?, what is the work culture there?, what is the work environment?

• All management practices that are applied in country X cannot succeed in country Y because people there are different. Ok, then people in country X cannot eat anything that people in country Y eat. People in country X cannot read in the same way they do on country Y. Yes, some practices succeed in country X but may not succeed in country Y; however, we cannot make a general conclusion that whatever succeed there cannot succeed here.

One of the valuable things you get from the research is that it tells you that based on a large sample of companies, it was found that so and so help companies improve their profitability, for example. It also tells you that it was found that certain strategies succeed in certain conditions. Based on those findings, you can analyze your case and find the best way to succeed in your own and may be unique case. So, the research gives you general guidelines which are better that those erroneous conclusions.

Some organizations try to improve part of this service dramatically but they forget to make sure that other parts of the service are good enough.

• Recently a company announced in the major newspaper in Egypt about a certain service. The ad was one page of this daily newspaper for several days. I decided to call them one day and I heard a recorded message that tells me that no one is available to answer my call. I repeated the trial on the same day and in the next day and everytime I got the same reply. I was not even told to wait until someone is available. You may think I called after the working hour but I actually called during the hours they mentioned in their ad. They spent on the ad and did not spend on their sales persons? If the company cannot answer to your call when your are asking about their services, how will they respond to you after your purchase the service

• A big store, that I visited several times, has high quality products, very good offers, and very bad customer service. The customer associates does not know how to deal with customer professionally, and the management of the store does not know how to train or motivate them. The result is that I hate that store

 High Quality is not measured with what you did or what you spent. If the customer is not satisfied then you have low quality. To improve the customer perception about your service then you need the customer to be satisfied with everything in your service. It is not enough to have very high quality goods, it is not enough to have a store in very good location, it is not enough to spend millions in ads. You need to have a good service which means you need  to have trained employees, short waiting time, quick response, good service environment, good after sales service besides the high quality goods. 

There are several challenges for strategic management in developing countries (based on my experience and knowledge):

• Data: finding data is a real challenge becasue there is available statistics are far below those available in developing countries. Most companies try to keep any financial information and consider them secrets. It is not possible to know the demand in last year of a certain product or service. People are not used to market research and they don’t want to talk to the marketing people
• Employees: most employees and managers are not aware about the value of strategic planning and they may consider it waste of time and something that is applicable in developed countries
• Owners: Many owners of successful companies believe they don’t need to do strategic planning and they do not know that their success will go one day when there are more competitors or there are changes in the market.
• Managers’ selection: Most company’s managers in developing countries are experts in the technical process of the organization but they are not well educated in management and thus they want to focus on what they know and neglect what they do not know. Accordingly, strategic management does not fall in their area of interest
• Qualitative Analysis: Strategic planning needs a lot of forecasting and qualitative analysis besides the quantitative analysis. Many technical managers are not used to neither the qualitative analysis nor the forecasting.
• “I am the manager”: The strategy shows a guide for decisions,so, an employee may, sometimes, tell the senior manager that his decision is against the company strategy. Thus the manager avoid having a strategy to keep his freedom to decide whatever he likes
• “Analysis” versus “Intuition”: Most people do not think that a manager should do analysis or have done for him they think that some people are talented to take the right decision without doing many calculations or having subordinates make a study for them.
• Implementation: To get every manager follow the same strategy is not an easy task
• Investors: Having a clear strategic plan and clear goals for the future (other than increasing sales of the current products) does not affect the stock price because most of the investors do not care about those issues
• Security: Most managers feel that everything is  a
  secret and obviously they think that no one else should know the
  strategy and thus no one else should make a study for our strategic
  plan….and there is no strategy

As you may know, there are three main types of organizational structure: functional structure, Divisional structure and Matrix structure. Each structure has its own strong and weak points.

In the functional structure, above, the employees are working in departments based on what they are doing i.e. we have engineering department, maintenance department, finanance department, research department, Warehouse department, purchasing department. This structure enhances the experience of each function. For example, all the maintenance engineers are working in the same department and thus they will exchange knowledge and support each other. This structure saves us money because of the economies of scale. This structure makes the coordination between different department more difficult than other structures. It also does not allow for flexibility becasue of the centralization.

Divisional structure divides, shown above, the employees based on the product/customer segment/geographical location. For example, each division is responsible for certain product and has its own resources such as finance, marketing, warehouse, maintnenace..etc. Accordingly, this structures is a decentralized structure and thus allows for flexibility and quick response to environmental changes. It also enhances innovation and differentioan strategies. On the other hand, this struture results in duplication of resources becasue, for ex., we need to have warehouse for each division. Obviuosly, it does not support the exchange of knowledge between people working in the same profession because part of them are working in one division and the others are working in other divisions.

Matrix structure, shown above, combines both structures. For example, we can have a functional structure and then assign a manager for each product. Some employees will have two managers: functional manager and product manager. This type of structure tries to get the benefits of functional structure and also of divisional structure; however, it is not easy to implement becasue of the dual authority. This struture is vey useful for multinational companies.

It is important to keep in mind that each managerial decision has its pros and cons. Sometimes, writers will convinve you that divisional or matrix structure are the recent trends and that you need to reengineer your structure tomorrow morning. Obviuosly, this is not true. Many organizations still has functional structure and is doing very well. It is very important to select the structure that best service your condition. What is your strategy? How many products do you have? What type of technology are you using? How big is your company/organization?

Management should take necessary actions to decrease the disadvantages of the chosen structure and to enhance its the positive effects. For example, if we think the divisional structure is the best type for our condition then we should have tools to exchange knowledge between engineers working in different divisions. These tools can include forums on the LAN and conferences to exchange knowledge. Conversely, if we adopt functional struture, we can form teams from different functions to solve problems and develop our products.

Developing countries suffer from the lack of research. Most of research on organization structure based on studying Japanes, American and European compoanies but it is rare to find a research based on a sample of african companies. That is a challenge for managers working in developing countries because the research does not really tell them what to do and what to expect. The differences in cultures can affect the results of adopting certain structure in certain part of the world. Sometimes, you deal with the same organization in different parts of the world and get very different standard of service. This shows that this multinational organization failed to reach the same results in the developing country.

Management should not think they are going to double their profits because they adopted flat structure (less number of management layers). If this structure reengineering is not part of a certain strategy, it will not work. For example, if we adopt flat structure and then transfer the authorities of the middle management to the top management then we are increasing centralization and decreasing our flexibility. Similarly, if we adopt functional structure and allow for the duplication of resources, then we will get the disadvantages of the functional structure and will lose one of its main advantages which is economies of scale.

Many companies have combination between functional, divisional and matrix structure. Many of the decentralized companies will have one or two department centralized such as human resources or marketing.

Whatever structure you have, the results are the most important. The results are not your perception that you are the best. Measure yourself compared with similar companies. Do you need one week to take a decision that they make in one hour? Are your employees motivated more than those in other companies? Are you devloping new products and services faster than other companies? Are you achieving your main strategy?