Global Business Today: Asia-Pacific Perspective 5th edition by Charles W. L. Hill Solution manual
1. Is it a necessary and sufficient condition that efficiency measures ‘win out’ over effectiveness outcomes?
Discussion points: Elements in the efficiency paradigm are notably quantitative measures that are predominantly used in the financial and accounting disciplines under ratio analyses. These type of statistical measures help form judgements about revenue and costs with resulting profit and loss in the business. To maintain its competitive advantage in world markets, Apple looks at and uses these statistics very carefully. To continue to be ‘the best at what we do’ is expensive. Consumer demand for excellence continues to grow in expectation, but without the added expense. In other words, consumers want high quality at a low price. This is technically unachievable. Consequently, Apple’s move to offshoring and outsourcing production to China and other parts of the world is an effort to help achieve this mantle.
However, the effectiveness paradigm in the case of Apple’s production manufacturing offshore involves more qualitative measures and is harder to pin down or, in other words, to inculcate as a norm in the business. Examples for Apple might include how profits are distributed in the company and how new and existing customers of Apple are managed. In operations management it might be how response rates are recorded and measures on the fulfilment of orders achieved. Outcomes that arise from qualitative measures appear to be ‘off the radar’ in terms of importance to stakeholders, more than efficiency measures. It is not until something goes wrong that both come to the attention of the media, governments, customers and shareholders. In Apple’s case, there has been huge criticism about profiteering at the expense of human (labour) costs. Ideally, there needs to be a balance between efficiency and effectiveness. At the end of the day, it is Philip Kotler’s balance of ‘doing things right’ (efficiency) with its natural complement of ‘doing the right things’ (effectiveness) that is important to achieve here.
2. What mechanism of competitive advantage can Apple continue to enjoy over its major rival Samsung?
Discussion points: Competitiveness is a specific quality that enables a company to prosper in the marketplace despite the actions of its rivals. Many factors both internal and external to the company determine competitiveness. Some of the factors from within the company are product differentiation, new products, process redesign and innovation in the organisation. In Apple’s case, outside the company, sourcing a cluster of successful suppliers in China and in the Asia region, including a pool of skilled labour (engineers) as well as process workers, has led to the specialisation of business practices in manufacturing technologies.
Emerging Markets: India’s IT software sector
Summary
This feature explores the growth of India’s information technology (IT) software industry. Starting from nothing just 30 years ago, the industry now generates revenues of nearly US$100 billion (if IT hardware is included) and exports of US$69 billion. With global spending on IT forecast to reach US$3.8 trillion in 2013 (www.pcworld.com/article/2032528/global-tech-spending-forecast-to-hit-3-8-trillion-in-2013.html), Indian companies are primed to capture a significant share of the pie, forcing their Western counterparts to make changes to their strategies.
Suggested discussion questions
1. What factors have contributed to the growth of India’s software industry?
Discussion points: Four key factors have contributed to the growth of India’s software industry. First is the huge number of engineers in India. Some 400 000 engineers graduate from Indian universities every year. A second factor is India’s low wage structure. Indian engineers make about 12 per cent of what an Australian or American colleague might make. Third, coordination between Western companies and Indian companies is facilitated by the large number of English-speaking Indians. Finally, because of the differences in time zones, Indian companies operate while on the other side of the globe, American companies are closed.
2. How has India’s software industry changed in recent years? What are the implications of these changes for American companies like IBM and Microsoft?
Discussion points: There has been a gradual shift in the Indian software industry in recent years. Initially, Indian companies focused on the low end of the industry to supply basic software development and testing services to Western companies. Today, however, many companies have moved into higher-end services to compete for large software development projects, business outsourcing contracts and IT consulting services. This new competitive threat is forcing Western companies like IBM and Microsoft to rethink their global strategies. Some Western companies are now investing in India with the goal of capturing some of the cost advantages Indian companies like Infosys and Wipro enjoy.
This feature explores the growth of India’s information technology (IT) software industry. Starting from nothing just 30 years ago, the industry now generates revenues of nearly US$100 billion (if IT hardware is included) and exports of US$69 billion. With global spending on IT forecast to reach US$3.8 trillion in 2013 (www.pcworld.com/article/2032528/global-tech-spending-forecast-to-hit-3-8-trillion-in-2013.html), Indian companies are primed to capture a significant share of the pie, forcing their Western counterparts to make changes to their strategies.
Suggested discussion questions
1. What factors have contributed to the growth of India’s software industry?
Discussion points: Four key factors have contributed to the growth of India’s software industry. First is the huge number of engineers in India. Some 400 000 engineers graduate from Indian universities every year. A second factor is India’s low wage structure. Indian engineers make about 12 per cent of what an Australian or American colleague might make. Third, coordination between Western companies and Indian companies is facilitated by the large number of English-speaking Indians. Finally, because of the differences in time zones, Indian companies operate while on the other side of the globe, American companies are closed.
2. How has India’s software industry changed in recent years? What are the implications of these changes for American companies like IBM and Microsoft?
Discussion points: There has been a gradual shift in the Indian software industry in recent years. Initially, Indian companies focused on the low end of the industry to supply basic software development and testing services to Western companies. Today, however, many companies have moved into higher-end services to compete for large software development projects, business outsourcing contracts and IT consulting services. This new competitive threat is forcing Western companies like IBM and Microsoft to rethink their global strategies. Some Western companies are now investing in India with the goal of capturing some of the cost advantages Indian companies like Infosys and Wipro enjoy.