1. 1
Dongok Kim
Spring 2015
BUSI 6105: MBA Portfolio
I propose this body of work for consideration as fulfillment of course requirements for the MBA
portfolio.
2. 2
Table of Contents
Resume .........................................................................................................................................................3
References ................................................................................................................................................5
Introductory Statement................................................................................................................................6
Goal 1: Professional Communication: 1.1 Professional Writing..................................................................7
Two Companies’ Analysis: Apple vs. Samsung Electronics .......................................................................9
Goal 1: Professional Communication: 1.2 Oral Communication ...............................................................34
Responding to the Will?..........................................................................................................................36
Goal 2: Leadership: 2.1 Capacity to Lead ...................................................................................................42
Toyota Recall Case Study ........................................................................................................................44
Presentation PPT.....................................................................................................................................52
Goal 2: Leadership: 2.2 Goal Setting ..........................................................................................................71
Performance Evaluation Situation..........................................................................................................73
Goal 3: Business Environment: 3.1 Business Ethics ...................................................................................92
Examining the benefits and problems at Walmart after implementing the RFID ..................................93
Goal 3: Business Environment: 3.2 Global Business Environment ..........................................................123
WTO and Changing International Trade ...............................................................................................124
Goal 4: Business Integration: 4.1 Decision Making..................................................................................145
Ways to Make CEFCO more competitive in the Amarillo Market....................................................147
Goal 4: Business Integration: 4.2 Strategic Planning ...............................................................................170
Emerging Market: Current Issues and Future Prospects......................................................................172
3. 3
Resume
DONGOK KIM
2400 4th
Ave. Apt. #246 ● Canyon, Texas 79015
beautykdo@gmail.com ● (806) 437-8409
OBJECTIVE
To obtain a professional career position where my successful marketing experience and
knowledge will be utilized
EDUCATION
West Texas A&M University Canyon, Texas
MBA Emphasis in Marketing GPA 3.9/4.0 May 2015 (expected)
Dong-a University Busan, South Korea
Bachelor’s degree in Industrial Engineering GPA 3.74/4.5 Feb. 2001
SUMMARY OF QUALIFICATIONS
Extensive experiences as a PM (product manager), specialist and in sales for one of
the top pharmaceutical companies in Korea
Aggressive, optimistic, highly adaptable and vibrant personality
Developed and implemented a number of sales strategies to win over new accounts
Strong skills in customer relationship-building, effective listening, and needs
assessment
Ability to discover the strengths of products
Know how to structure and develop projects
Fast learner, eager to master new skills and knowledge
Computer proficiency includes MS office, etc.
WORK EXPERIENCE
West Texas A&M University Canyon, Texas
Grading Assistant in the Education Department Sept. 2013 - present
Self-Employed Busan, South Korea
Freelance Private One-To-One Tutor Nov. 2010 – May 2012
Taught Math, Korean and English to elementary students
Daewoong Bio Co. Ltd Seoul, South Korea
Product Manager, Marketing Mar.2010 ~ Oct.2010
Conducted a number of market researches and analysis, and implemented
marketing plans
Choongwae Pharmaceutical Corporation (2003 – 2010) Seoul, South Korea
4. 4
Product Specialist and Sales personnel to General Hospital Sept.2009 – Feb. 2010
Played a key role in opening product presentation fairs and seminars and carried
out work as a PT for products, and therefore enhanced the brand recognition
remarkably.
Product Manager, Marketing Oct. 2005 – Aug.2009
Conducted a number of market researches and analysis, and implemented
marketing plans and sales promotion strategies
Directed sales forecasts of developed products and performed duties entailing
sales objectives and profits
Handled annual budget management and inventory control
Created promotional materials, including brochures, leaflets and so on
Participated in a number of exhibitions, fairs and meetings to keep track of the
latest trends
Clinics(local hospital) Sales Representative Jun.2003 – Sept. 2005
Took charge of sales and marketing of HRT and urology products, and directed
new product launches
Gaya Middle School Busan, South Korea
Staff, Data Processing Room Jan. 2002 – Dec. 2002
Took charge of all grounds of daily operations including web server
management, computer and accessories maintenance.
Dong Yang Pore Mfg. Co., Ltd. Busan, South Korea
Staff, Data Processing Room Feb. 2001 – Oct. 2001
Responsible for web server management and programming.
COMPETENCES
Obtained Information Processing Technician license from Human Resources
Development Service of Korea Sep. 2000
Completed Tactical Marketing (by IMS) program Aug. 2008
ACTIVITES AND HONORS
Executive of Student Associations Mar. 1997 – Feb. 1999
WTAMU Graduate School Scholarship of College of Business Aug. 2013 - present
5. 5
References
Dr. Sang Hwang
Associate Professor in West Texas A&M University
Department of Education OM 447
WTAMU Box 60208
Canyon, TX 79016-0001
(806) 651-2617
shwang@wtamu.edu
Angie Elkins, Ph.D.
Educational Diagnostician Program
Chair, Special Education
Department of Education in West Texas A&M University
Old Main 215A
Canyon, TX 79016
806-651-3612
aelkins@wtamu.edu
Huabing Wang, Ph.D.
Associate Professor of Finance
Gene Edwards Professor of Banking
Department of Accounting, Economics and Finance
WTAMU Box 60187
Canyon, TX 79016-0001
806-651-2508
hwang@wtamu.edu
Syed Tariq Anwar, DBA
Professor of Marketing and International Business
College of Business
WTAMU Box 60809
Canyon, TX 79016
806-651-2491
sanwar@wtamu.edu
Andrew Li, Ph.D.
Associate Professor of Management
Department of Management, Marketing, and General Business
WTAMU Box 60809
Canyon, Texas 79016
806-651-2496
ali@wtamu.edu
6. 6
Introductory Statement
MBA was my long-cherished desire when I worked in Korea. I had worked in sales and
marketing department for pharmaceutical companies for years, and I learned the responsibility as
a marketer and gained plenty of experiences and knowledge of sales and marketing; however, I
felt that there was still lack of professional skills and expert knowledge because I was not a
business management graduate.
I have developed various experiences in several job positions in different industry, but I
am still eager to learn new things and try to challenge myself. I have been acquiring a diversity
of knowledge at WTAMU including marketing theories, expert knowledge in business, team
work skills, analysis skill, and so on, which improve my self-confidence and develop my abilities
and skills. I believe those experiences will be used in the real world.
I plan to get a MSFE degree at WTAMU after completing the MBA program. While I
study the MBA program, I take an interest in finance and want to challenge myself to take a
license. Even though I achieve a MBA degree, which covers comprehensive area, a certificate in
finance provides me with specialized knowledge and more chance to build my career. Also, I am
interested in improving my country’s international competitiveness in the world and would like
to contribute in some way. Finally, I continue to develop myself and try to work for world
organizations or NGOs.
7. 7
Goal 1: Professional Communication: 1.1 Professional Writing
MKT 6340 Seminar in Marketing: Research paper on analysis of two companies; Apple vs.
Samsung Electronics, as lectured by Professor Syed Tarik Anwar in Fall of 2013.
Project Requirements:
To research the marketing issues of two competing companies which have similarities
and differences. To analyze marketing functions, problems, and strategic issues, and to discuss
and demonstrate recommendations and future prospects.
Executive Summary:
Apple Inc. and Samsung Electronics are the leading information technology companies in
the world. This paper describes the two companies’ profiles, marketing problems, and strategy
issues including history, product lines, management structure, financial analysis, and marketing
problems and opportunities. It also provides analysis on market structure, such as market needs,
preferences, trends, growth, and competitive issues, such as two competitors’ differentiation
strategy and competitive advantage. Finally, there is a set of conclusions including
recommendations for the two companies and future prospects.
Introduction:
This paper provides overall information of two companies, including profile, history,
product lines, current market issues, management structure and financial data. These are the basis
of marketing strategy analyses of those companies. Moreover, it discusses recommendations and
future prospects which are based on the technology and competition issues of these two
companies.
Background:
To clarify the situation, problems, and issues, the research was conducted with a lot of
data which came from reliable sources including official report data and websites. As Apple and
Samsung are leaders in the mobile industry, this paper reviews what the companies’ backgrounds
are, what their marketing issues and strategies are, and what their competitive advantages and
problems are. This paper presented not only that information and marketing strategy issues, but
also recommendations and future prospects of those companies.
Analysis of Issue:
The majority of the research was conducted around how Apple and Samsung became the
leading companies in the mobile industry. Also, this analysis was done by focusing on market
structure, such as market needs, preferences, trends, growth, and problems which two companies
8. 8
face and needed to solve. Moreover, this paper covered competitive analysis: two competitors’
differentiation strategies and competitive advantages. Finally, it was conducted to develop global
marketing and critical thinking.
Recommendation:
The recommendation for the two companies is found in the “Recommendations” section.
International marketing managers and leaders should know their strong points and problems, and
continue to develop their competitive advantages while making up for the weaknesses. The main
recommendation for Apple is that they need to diversify price policies for new products to target
lower-end markets and to develop other product lines for future competition. On the other hand,
Samsung should focus on improving brand competitive positions and differentiations for each
product line and enhancing customer loyalty and retention.
Conclusion:
Although Apple and Samsung are leading companies in the market and the trend is
expected to continue in the near future, there is a lot of competition in the global market and
technologies change rapidly. To keep their strong market positions, they should differentiate
their marketing strategies and continue to improve their competitive advantages.
References:
To clarify the analysis of marketing issues and business activities, the research was
conducted with a lot of reliable sources. This paper contains about 25 references among reliable
sources and publishers including their official report data and websites, cited in APA style.
Style:
This written paper makes it easy to follow the flow of information and how the two
companies are similar and different compared to each other by offering the profiles of companies
and marketing strategy issues. The structure flows from profile, history, product lines, and
management structure to marketing opportunities and problems and strategy issues,
recommendations, and future prospects.
Comment:
This was the first project that I worked on in my MBA program, and I learned a lot on
how to conduct research as well as global marketing strategy issues throughout the global
leading companies. Also, I learned how to develop critical thinking and analyze a lot of
information and market functions, problems, and situations.
9. 9
Goal 1: Professional Communication: 1.1 Professional Writing
Research Paper
Two Companies’ Analysis: Apple vs. Samsung Electronics
Dongok Kim
MKT 6340-61 Seminar in Marketing
Syed Tariq Anwar
December 2, 2013
10. 10
Two Companies’ Analysis: Apple vs. Samsung Electronics
Profile
Apple Inc. is an American multinational corporation which designs, develops,
manufactures, and sells mobile communication and media devices, personal computers, and
portable digital music players worldwide. It also sells software, services, peripherals, networking
solutions, and third-party digital content and applications related to its products. Apple’s core
competency is innovative design and technology. Apple’s famous ad campaign, “Think
Different,” reflects this idea. The company wants not only their product but also their consumers
to think differently and challenge new style. Macbook, iPad, iPhone, and Apple Display created
new lifestyle. Apple pursues to make “the best” products rather than “the most” (Blodget, 2013).
Tim Cook, the CEO of Apple, unveiled its mission statement in the Worldwide Developers
Conference in 2013:
If everyone is busy making everything, how can anyone perfect anything? We start to
confuse convenience with joy, abundance with choice. Designing something requires focus.
The first thing we ask is: What do we want people to feel? Delight. Surprise. Love.
Connection. Then we begin to craft around our intention. It takes time... There are a
thousand no's for every yes. We simplify. We perfect. We start over. Until everything we
touch enhances each life it touches. Only then do we sign our work: Designed by Apple in
California. (Guglielmo, 2013)
Samsung Electronics is s South Korean multinational electronics company which is one of
subsidiary companies of the Samsung Group. Samsung Electronics has been a major
manufacturer of electronics such as lithium-ion batteries, semiconductors, chips, flash memory
and hard drive devices. Nowadays, Samsung Electronics become one of the world’s largest
manufacturers of mobile phones, smartphones and tablets. Samsung has considered innovation in
11. 11
its management strategy. Instead, Samsung explain its official mission the company express its
philosophy: “At Samsung, we follow a simple business philosophy: to devote our talent and
technology to creating superior products and services that contribute to a better global society”
(Samsung). Also, Samsung says its vision for the new decade is “Inspire the World, Create the
Future.” Through the vision, the company hopes to inspire the world by leveraging its three
strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.”
History
Apple was established on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne.
Apple I personal computer kit designed by Wozniak was the first product the company sold. The
Apple II was introduced in April 1977, and the Apple III was introduced in May 1980. In 1983,
Apple released Apple Lisa which became the first personal computer to feature a graphical user
interface but was failed commercially because of the high price. In 1984, Apple launched its first
Macintosh which was equipped with a 9-inch monitor, a keyboard, and mouse. Apple introduced
the Macintosh Portable in 1989, the PowerBook in 1991, and Macintosh LC. In 1990’, Apple
faced a risk with “delivering a richly engineered, but expensive, experience” while Microsoft
continued to increase its market share with Windows focusing on cheap personal computers.
After Apple introduced a new all-in-one computer, the iMac which featured modern and unique
design in 1998, the company got a success in its sales and turned its era from decline to
profitable. On October 2001, Apple introduced the iPod portable digital audio player that met
with a fair measure of success. In 2006, the company released the new MacBook pro and iMac
that were used intel’s Core Duo CPU at first. Instead, the Power Mac, iBook, and PowerBook
brands had retired the Mac Pro, MacBook, and MacBook Pro became its new representative
computer brands. After 2007, Apple achieved widespread success because of its iPhone, iPot
12. 12
Touch and iPad: iPhone first designed to integrate a touch-screen device; iPot Touch, a touch-
screen music player equipped with wireless capacities; iPad, a touch-screen tablet computer.
Apple has developed and distributed Mac OS X which operates on their Macintosh and iOS
which is a mobile operate system for iPhone, iPot Touch and iPad.
Samsung Electric Industries was established as a subsidiary company of Samsung Group in
1969 in South Korea. In 1970, Samsung Group established Samsung-NEC, jointly with Japan’s
NEC Corporation and that company manufactured electrical appliances and audiovisual devices.
Samsung expanded its business into the semiconductor business in 1974 and acquired Korea
Telecommunications in 1980. In 1984, Samsung became the third develop company of a 64kb
DRAM in the world. Samsung Electronics launched its first mobile in 1988, but the market share
was just 10 percent in the domestic market compared to 60 percent for Motorola. Through 1990’
and 2000’, Samsung made the foundation of a world-class corporation by developing a number
of world’s first memory chips: 64Mb DRAM in 1992, 256 DRAM in 1994, 1Gb DRAM in 1996,
and 8Gb NAND in 2004. Despite of the 1997 financial crisis of South Korea, Samsung grew and
strengthen its No1. position in the country. In 2007, Samsung Electronics became the second
largest mobile-phone manufacturer in the world, exceeding Motorola. In 2009, Samsung enter
into a smartphone market and released Galaxy line. In 2012, Samsung became the world’s
highest-selling mobile phone company overtaking Nokia and Apple, and the largest smartphone
vendor.
Product lines and markets
Apple has 5 product categories: Mac, iPad, iPhone, iPod, and accessories.
First, Mac is classified by desktop, laptop, and server: iMac, Mac Pro and Mac Mini are
desktops; MacBook Pro and MacBook Air are laptops; Mac Pro and Mac Mini are also servers.
13. 13
Every Mac use OS X as its operating system which is developed for Apple’s own Macs.
On January 2010, Apple introduced the iPad, which was thinner and lighter than any
laptop and offered multi-touch interaction, “as a revolutionary device for browsing the web,
reading and sending email, enjoying photos, watching videos, listening to music, playing games,
reading e-books and much more.” After the first release of the iPad, Apple had introduced the
iPad2 in 2011, the third and fourth-generation iPad, and the iPad mini in 2012, and the fifth
generation iPad in 2013 consistently.
iPhone is an internet-enabled smartphone released on June 2007 at first. Apple released
iPhone 3G in 2008, 3GS in 2009, 4 in 2010, 4S in 2011, 5 in 2012, 5S and 5C in 2013. iPhone
rus Apple’s iOS mobile operating system and provide multi-touch screen including a virtual
keyboard. Currently, iPhone 4S, 5S and 5C are on sale in the market. iPhone 4S features an A5
chip, an 8Mp iSight camera, and Siri, the intelligent assistant which control with voice. iPhone
5C features an A6 chip, ultrafast LTE wireless, an 8MP iSight camera, and iOS 7. iPhone
features an A7 chip, a Touch ID fingerprint identity sensor, ultrafast LTE wireless, an iSight
camera with a larger 8MP sensor, and iOS 7.
Next, the iPod is a digital music player which was introduced in 2001. There are four
variants of the iPod: iPod shuffle which is currently available in 1 2 GB model, introduced in
2005; iPod Nano which is currently available in a 16 GB model, introduced in 2005; iPod Touch
which is currently available in 32 and 64 GB models, introduced in 2007; iPod Classic which is
currently available in a 160 GB model, introduced in 2001.
Apple TV is another product of Apple. It is a set-top video device which links up to user’s
TV with digital content from iTunes. Apple also sell accessories related to their main products.
In the near future, Apple will release new iPhone models. The company is developing new
14. 14
designs which have bigger screens with curved glass and enhanced sensors targeting to release in
the second half of 2014 (Culpan and Satariano, 2013). Next anticipated product Apple will
release is AppleiWatch. This is Apple’s first try to make a wearable computing device as recent
prediction that the next devices and platforms will be based on wearable computing (Bilton and
Chen, 2013)
Compare to Apple’s simple product lines, Samsung Electronics has a diversity of products:
AV including TV and Video, LCD and LED panel, mobile phones, semiconductors, home
appliances, computers, cameras and others. Samsung concentrate on four main fields: digital
media, semiconductor, telecommunication network, and LCD digital appliances.
First, the digital media business part includes computer devices, digital displays,
entertainment devices, and home appliances. This business is responsible to produce many types
of merchandise such as laptop computers, laser printers, televisions, computer monitors, DVD
players, refrigerators, air conditioners, and vacuum cleaners. Especially TV part is one of core
business parts. Samsung maintains the largest market share of TV for a couple of years. Samsung
has developed full HD 3D LED TV, Internet TV, and Smart TV consistently.
The semiconductor-business area includes semiconductor chips, smart cards, mobile
application processors, mobile TV receivers, RF transceivers, CMOS Image sensors, Smart Card
IC, MP3 IC, DVD/Blu-ray Disc/HD DVD Player SOC, multi-chip package (MCP), and storage
devices. Samsung Electronics is the largest memory chip producer in the world and in the top
position in the world. Samsung’s some memory chips have recorded as the first development in
the world.
Samsung’s telecommunication-network-business section includes DSLAMs, cellular devices,
and satellite receivers. Mobile phone is one of main products: specially Samsung Galaxy series
15. 15
are considered the main competitor of Apple’s iPhone. The sales of the Samsung Galaxy range of
smartphones exceeded Apple’s smartphone sales in the world in 2011. Samsung became the
largest mobile phone vendor in the world in 2012.
Another main business of Samsung is LCD business. LCD and OLED (organic light-emitting
diode) panels are used for laptops, desktop monitors, and televisions. Samsung produces diverse
kind of LCD and LED panels. Also, Samsung has a 98% global market share of AMOLED
(active-matrix organic light-emitting diode), a display technology for use in mobile devices and
televisions, in 2010.
Samsung will focus on developing wearable technology and the company has already
released Smartwatche. Even though the Smartwatch showed not enough attractiveness and
features, it is expected the demand will increase in the future according to statistics and
researches that show the desire of new technology (Clinch, 2013). Also, the company will
develop and release software for its own mobile devices and computer in the future because the
company has been searching and trying to deal with software developers to acquire a software
company.
Management structure
Apple’s executives are made up eight major members around Tim Cook, CEO. Apple’s
management structure has not been known well. When Steve Jobs was alive, the company’s
everything was gathered into him. He was the strong decision maker and was in the middle of the
company. The company was around him and followed his decisions. Now the company
emphasizes collaboration with other teams. Tim Cook considers the company as one
organization. Under the idea, one hardware organization, one marketing organization and others
exist (Vascellaro, 2012). Also, the company accepts the concept of organizing the company
16. 16
around three major part: software, hardware and services. After the company integrates all of
ideas of employees and then derives the best result.
In contrast, Samsung Electronics reveals clear business organization. Samsung focuses on
reinforcing “organizational efficiency and competence.” The company emphasizes three key
business areas: Consumer Electronics (CE), IT & Mobile Communications (IM), and Device
Solutions (DS). Consumer Electronics (CE) sector include four substructures: Visual Display
business, Digital Appliance Business, Printing Solution Business, and Health & Medical
Equipment Business. In addition to Samsung’s TV worldwide reputation, the company expects to
expand its printing solutions and medical equipment into the world market. IM (IT & Mobile
Communication) covers Mobile Communications Business, Network Business, Digital Imaging
Business, and Media Solution Center. Thereby integrating PC part into IM sector, the company
derives collaboration between PC and samrtphone technologies in software and hardware
production, and marketing. Finally DS (Device Solutions) includes Memory Business, S.LSI
Business, and LED Business. This sector will run independently to keep the highest reputation in
the world. Through the organization, the company expects to make decision more quickly and
react to the global change more effectively (Sustainability Report, 2013).
Financial Analysis
Apple has grown dramatically and continuously for last a couple of years in both sales and
net profit (figure 1). The release of variable new products of Apple, such as iPad and new series
of iPhone leaded the outstanding achievement in sales and net profit during latest years. Apple’s
sales growth rate shows great growth for last a few years. In 2012, Sales grew up by 45% from
108 billion $ to 127 billion $ compared to 2011. On the strength of sales, net profit also increased
from 26 billion $ in 2011 to 42 billion $ in 2012 by 61%. The positive consumers’ reaction for
17. 17
new iPhone 5 series which Apple recently launched on October 2013 and a record of high rate of
sales will lead the company to achieve more than 168 bn. $ sales amount in 2013 (Value line).
Apple’s geographical sales are evenly spread across the world. 37% of sales were from
Americas, 23% were from Europe, and 28% were from Asia in 2012. 12% were from retail sales.
Especially, the change of China is 78% compared to 2011, and Japan’s is 94% (figure 2). Asian
market is essential to grow the sales. In sales by product, iPhone is the most major part of
revenue. In 2012, 50% of sales, about 78 bn. $ were from iPhone, also the sales of iPhone
increased by 71% compared to 2011 (figure 3). The next large portion of sales was iPad which
shared 20% of total revenue. Mac took 15%, and others took the other share, 15%. Most sales
were from iPhone and iPad which recorded 71% and 61% growth each, while iPod showed 25%
of negative growth.
Samsung Electronics has been growing in the market continuously. For the last 4 years from
2009 to 2012, the company’s revenue had increased and net income also increased consistently.
Year on year, Samsung grew revenues by 22% from 165 Trillion KRW to 201 Trillion KRW
while net income increased by 73% from 13 Trillion KRW to 23 Trillion KRW (figure 4).
According to one report, Samsung divided its revenues into four groups: Semiconductors, LCD,
Telecommunications, and Digital Media. It shows Semiconductors 22.4% of revenue, LCD
17.7%, Telecommunications 33.6%, and digital media at 35.7% in 2011(Global Value Chain,
2012). Especially, telecommunication section grew up annual sales by 35% in 2011. Also this
report shows the reason of Samsung Electronics’ sales growth that owed to the rise of the smart
phone in 2011. Telecommunication’s share of total Samsung Electronics sales rose from 24.8%
in 2010 to 28.8% in Q1 2011, to 34.7% in Q3, and 37.6% in Q4 while other businesses remained
with similar sales share.
18. 18
Marketing Opportunities & Problems
Nowadays the preferences toward touch-based products such as smartphone and tablet have
been increasing. Smartphones’ sales rose 46 percent and captured 55 percent of mobile phone
sales: 250.2million units of smartphones out of the overall 455.6 million mobile phones sold in
the third quarter 2013 in the world. The demand in the Americas and the Western Europe was a
little increased, while demand in the Asia-pacific was raised 77.3 percent (Guglielmo, 2013,
November). According to IDC, “Tablet shipments will grow at a 17% CAGR from $62 billion in
2012 to $133 billion in 2017. Similarly, worldwide smartphone and mobile phone shipments will
grow at a 5% CAGR and 3% CAGR, respectively, by value between 2012 and 2017” (S&P
NetAdvantage, 2013). This trend is a good opportunity for Apple. Apple’s major sales products
are iPhone and iPad and higher demand on portable touch-based products help Apple increase its
sales of iPhone and iPad. Another opportunity for Apple is Asian, especially China market. China
is one of world biggest market, and still has been growing. According to IDC, “Annual
smartphone shipments in China, already an $80 billion market, will rise in value to $120 billion
by 2017” (Ghosh and Alawachi, 2013). However, Apple’s market share is 6 percent even though
the company increased its sales by 32 percent year on year (Mishkin, 2013). If Apple spreads
proper marketing strategies into China, it will gain a good chance to increase its sales. Next,
rising demand for cloud-based skills is a good chance for Apple. Cushing Anderson, program
vice president at IDC said, "Cloud computing is crucial to the bottom line of the company—it
creates cost savings and efficiencies for companies and their customers" (McCafferty, 2013).
Also, increase of help-wanted ad shows rising on the demand on cloud skills. Apple has already
provided the cloud service named iCloud which is a cloud storage and cloud computing service.
Despite of Apple’s strong advantages over the market, there are a few problems the company
19. 19
has to solve. Many customers feel Apple’s products are expensive. Apple released iPhone 5C
which is lower priced than 5S. However, the lower product did not catch more attention than 5S
from customer because the iPhone 5C misses a few key points that iPhone 5S has such as the
higher processor speed, fingerprint scanner, advanced camera features, storage capacity, and so
on which are new iPhone 5’ advancement. The 5C is $100 cheaper than the 5S, which starts at
$649 for 16GB model without contract. Competitive goods which have similar performances and
features have developed a lot and captured some parts of market share. In the tablet market,
lower price products have launched and some tablets are introduced at under $100. The high
price issue may be one reason of Apple’s decline in market share. Samsung has 32 percent of the
global smartphone market share, while Apple has 12 percent in Q3 2013. Even though Apple
increased its sales by 23%, its smartphone market share went down from 14% a year ago. On the
other hand, Samsung’s sales increased 46% and the smartphone market also grew 46% (Blodget,
Come on,). Decreasing market share is a big issue that Apple has to catch up.
Just like Apple, the increase of smartphone and tablet market is a great opportunity for
Samsung. Samsung hold the first rank in the smartphone market and the growth trend will make
Samsung accelerate increasing sales. In the tablet market, Samsung’s outcome is noticeable. In
2013, Q3, Samsung’s tablet shipment increased 123 percent over a year ago and took 20.4
percent of market share; while Apple increased 0.6 percent and took 29.6 percent share (Fingas,
2013). Nowadays, Samsung’s reputation has significantly improved and it is considered the only
brand against Apple. According to Interbrand’s Best Global Brands ranking, Samsung up 20% in
brand value and ranked at No. 8 in 2013. Higher reputation is one of Samsung’s strength points.
Samsung can not only expand into developed countries in which Apple already has had a large
part of market share and a high brand preference but also penetrate into developing countries
20. 20
whose using rate of smartphone and tablet is low more easily with its higher awareness. Also,
high reputation help Samsung promote its variable other electronics such as television, laptop,
camera, air conditioner, and so on in the world. Wearable technology is a hot issue rising.
Samsung has already introduced its new wearable device, the smart watch named the Galaxy
Gear. Even though the Galaxy Gear was pointed out some negative reviews especially lacks of
apps and design, and requiring Samsung’s smartphone, Samsung is the first large company to
launch a smart watch in the market which showed Samsung’s ability to develop new technology.
That will be a big opportunity for Samsung.
Samsung is a huge electronic company and has a lot of products which have competitiveness
in the world market. However, that means too many products to focus on for the company. Many
people know “Samsung”, but how about their products? In case of Apple, not only the
company’s name; Apple, but also its product; iPhone, iPad, iPod, Mac, are well known to the
people, which means Apple has recognition on both the company and its products. Samsung’s
products have also their brand names; nevertheless, the names are not imprinted on customers’
mind and the brand awareness of Samsung’s products has not been surpassing Apple’s. To keep a
large frame of the company, its competence breaks up into many different directions and a huge
capital is needed, which can incur the company’s financial problem. Compare to Apple,
Samsung’s another problem is lack of its own software. While Apple develops its own OS, iOS,
Samsung’s mobile devices are operated by Android which is owned by Google and its computer
products are operated by Windows. Actually, Samsung is trying to acquire and build software
section. According to WSJ, “Samsung has plenty of other Silicon Valley software startups in its
sights, particularly in games, mobile search, social media and mapping-related services”(Cheng,
Rusli, and Lee, 2013). Samsung is targeting some companies like Unity Technologies, Green
21. 21
Throttle Games, Glympse, Rounds, and Everything.me for Samsung’s potential acquisition and
investment targets. Furthermore, patent infringement is Samsung’s another problem. Patent
infringement occur two big negative results to Samsung. One is compensation to pay to Apple,
and the other is copycat image. According to CNBC, “A Silicon Valley jury on Thursday ordered
Samsung Electronics to pay Apple $290 million for copying vital iPhone and iPad features. The
verdict covers 13 older Samsung devices that previous jury found were among 26 Samsung
products that infringed Apple patent” (2013). In addition, Samsung has already been ordered to
pay $598 million, so Samsung has to pay totally $888 million to Apple. Samsung’s real damage
amount is bigger than that because Samsung has to spend time and money for the lawsuit. Even
though Samsung make a good showing in the sales on its smartphones and tablets, it must be true
that the result of the trial brings a big loss to Samsung. Also, the trial may cause a serious
damage to Samsung which aim at innovative image, and help Samsung get a copycat image,
which result in negative reputation on Samsung and its products.
Marketing Strategy Issues
As I mentioned in this paper, Apple meets some problems on the market share and its high
prices. In the U.S. market, after a period of huge growth, Android is a leveling, while Apple has
steadily improved (Graph 1). This graph shows Apple is catching up the U.S.A. market, but there
is still a big gap between Android and iOS. Also, in the world market, Samsung became the
largest smartphone vendor and Samsung is still expanding its market share in the world. Many
competitors are producing low-cost mobiles using free Android. According to IDC
Android runs on nearly 80 percent of the world’s smartphones and nearly two-thirds of its
tablets. The average unsubsidized price for a smartphone fell from $450 to $375.
(Unsubsidized means the phone’s full price, without any discount that comes with a
22. 22
multiyear contract. That’s how most people outside the U.S. buy mobile phones.) The
iPhone 5S sells for $650 and up, unsubsidized. (Grobart, 2013)
Under the high competition, how to increase its market share is a big issue for Apple to keep
high price, while there are a lot of cheaper mobile products in the world. Apple released it’s a
low-cost phone, iPhone 5C, its price is not actually low which costs $550 unsubsidized – only
$100 less than 5S. Moreover its sales did not reach expectation. Apple is still increasing sales,
but it was not superior to the Samsung’s growth. The expansion of low price market is one of the
Apple’s issues. For example, China is a big market in which Apple must penetrate and important
for Apple to increase its market share. So Apple has been trying to contact Chinese
telecommunication companies such as China Unicom (CHU), China Telecom (CHA), and China
Mobile to deal with them. China Mobil has more than 700 million subscribers, and more than
three times the customers of AT&T and Verizon Wireless combined. However, the problem is too
expensive for most Chinese people. The price of iPhone 5S in China is about &864 which is
higher than the average monthly salary earned in Beijing (Schiavenza, 2013). Apple’s lower
price product, iPhone 5C, is also expensive. To success in China price strategy is a key issue for
Apple. Even though Apple feels attractiveness on China market, Apple is reluctant to provide
low cost products. Since Apple keeps product differentiation strategy and its most valuable asset
is brand loyalty, its strategy how to catch up China market without abandon its luxury brand
loyalty is task for Apple to solve.
Looked at Apple’ long term marketing strategy issues, how does the company develop its new
products innovatively? Apple’s brand identity is from its innovative technology and Apple is
considered the company which releases product in the earliest stages and creates new lifestyle.
Technology is changed so quickly and there are many competitors which have high technology
23. 23
and pursue innovation. In addition to the timing how quickly, meeting the quality standard of
new product is key issue. Apple is usually proud of it innovation and perfect technology, some
consumers revealed dissatisfaction on its products; Apple map, battery life. Keeping innovative
company image is a key issue to keep Apple’s differentiation from others and the value of its
brand loyalty. Also, how to continue growing rapidly while keeping brand loyalty is another
issue. It is necessary for Apple to find the marketing strategy to expand its market into emerging
market such as China. That is a key for the company to keep growing continuously and have
competitive advantage in the world.
Samsung has truly achieved a dominant position in the mobile market. Keeping this trend is
Samsung’s major task. To continue the largest share of mobile market in the world, Saumsung
adopt offensive strategies; Samsung spends 5.7 percent of its revenue to research, compared to
Apple’s 2.4 percent (Nisen, 2013). Actually, Samsung’s start was late to enter the smartphone
market, but its effort to catch up the leading market has kept going and the company has
achieved its dominance. Samsung invests to improve competitive position; for example,
Samsung has the second largest number of U.S. patents filed, followed by IBM, and associated
with the new technology of the Galaxy S4 filed 150 patents. Related to keep the high reputation
in the mobile market, brand awareness is hot issue for Samsung. Samsung may be worried about
copycat image and try to eliminate negative factors for its image with respect to the latest result
of the trial with Apple. The company adopts not only offensive but also defensive strategies to
improve and protect its brand equity. The Galaxy Gear’s release showed its effort to develop and
improve new technology and keep its dominance. Even though the Galaxy Gear lacks
attractiveness and compatibility with other products, Samsung expects to increase the
smartwatch market. How well to success the market is also an important issue to keep a solid
24. 24
foothold in the smartphone market and to establish market leadership in the wearable technology
market. Compared to Apple, Samsung will achieve a competitive advantage in the wearable
product market, if the Galaxy Gear is improved its performance and attractiveness. Another big
issue of Samsung is to acquire a software company. The company’s one weakness point is the
lack of its own software, while Apple developed iOS for its products. To overcome the problem,
Samsung has been making efforts to search a software company.
“Samsung’s corporate mindset has long been focused on developing hardware.
Transitioning to a software mindset is not an easy task,” said Neil Mawston, an executive
director at Strategy Analytics. “Samsung should be looking to buy North American or
Chinese companies that can give it a leg up the software ladder,” Mr. Mawston added. (as
cited in Lee, 2013)
As the company recorded more market share, the more necessary for its own software.
Similar to Apple, rapidly changing technology situation is an urgent problem for Samsung to
react quickly. In the future, it is also expected to be a lot of competition in the market. Samsung
will focus on developing new technology and innovative product, as Samsung revealed its vision
2020. Samsung’s smartphone sales caught up with Apples; however, Apple’s brand awareness is
firm and keeps No.1. Samsung will try to improve its brand equity and customer loyalty. The
company emphasizes on creative solutions and creative innovation image. In conclusion,
Samsung will focus to make brand loyalty and reputations like Apple, while the company will try
to inculcate a sense of creativeness and innovation in its customers.
Recommendations
Apple has superior brand loyalty and a market leader position; however, latest figures about
its sales and market position are a little disappointed. Apple needs to diversify price policies for
25. 25
its new products. The premium image of Apple products is essential, but the lower-end markets
across the world such as China are too big to ignore. The market demand on smartphones and
tablets has been rising, and everybody will use smartphones and tablets in the near future. Apple
should target the lower-end markets, while the company aim keeping higher grade with
innovation. Another point that I want to recommend for the company is to find and prepare other
competitive product line for the future. Apple has only four major product lines; iPhone, iPad,
Mac, and iPod. PC market has declined continuously and iPod’s sales have also declined. Even
though smartphone and tablet markets have been growing, the markets are mature and highly
competitive. Moreover, Samsung, the rival of Apple, already released the smartwatch which
shows the new trend on wearable technology. To find new source of growth, Apple should
expand its product line in the near future.
Compared to Apple, Samsung’s brand awareness is lower relatively and its product brand
awareness is weaker than Apple’s. Samsung has a lot of product lines and too many products to
imprint on consumers’ mind. Consumers know “Samsung,” but they don’t know the brand name
of Samsung’s products. Samsung has increased its brand reputation in the world as a result of the
success of smartphone and many consumers know Galaxy, the brand name of the smratphone;
however, consumers don’t recognize very well other products and brand names which Samsung
produces such as home appliances, laptops, and so on. Samsung should focus on improving
brand competitive positions and differentiation for each product line. Also, the company should
invest to improve customer loyalty and retention. It would be good practice to grow market share
with a wide range of selections; however, it is necessary to differentiate its products, and to
develop specialized products which focus on quality and target on consumers who expect a
differentiated, premium services and products.
26. 26
Future Prospects
Both Apple and Samsung are leading companies in the market and that trend is expected to
continue throughout next a couple of years. Demand on portable computing devices such as
smarthphones and tablets has will have been rising consistently, which is good opportunities for
both companies to grow. Both are ranked Global 500 World’s Largest Corporations in 2012;
Samsung Electronics is nominated at No.14, while Apple is nominated at No.18. Also, they have
set new high record in its net sales annually. Moreover, they have a few similarities; not only
Apple but also Samsung has long history and successes through the history, they both acquire a
good reputation, and they have developed their own innovation technologies. Those strengths
which both companies have will help them achieve good results in sales and growth. On the
other hand, there are some problems which companies have to solve; there is a lot of competition
in the market, technologies change rapidly, and the consumers required higher standards on the
products. If Apple and Samsung deal with the situations, they will keep their competitive
position.
Apple has high customer loyalty, which help the company is expected to operate well in the
future. In case of Samsung, the company has a large-scale production system, which makes the
Samsung expand its product line easily and quickly. So, Samsung is expected to be able to
quickly cope with changes. In conclusion, both Apple and Samsung are predicted to a positive
outlook.
27. 27
References
Bilton and Chen. (2013, July 25). What Are Apple’s ‘Amazing’ New Products? The New Yourk
Times. Retrieved from http://bits.blogs.nytimes.com/2013/07/25/what-are-apples-
upcoming-amazing-new-products/
Blodget, H. (2013, August 3). Apple’s ‘mission Statement’ is Making People Worry That The
Company Has Gone To Hell. Business Insider. Retrieved from
http://www.businessinsider.com/apples-new-mission-statement-2013-8
Blodget, H. (2013, November 15). Come on, Apple Fans, It’s Time To Admit That The Company
is Blowing it. Business Insider. Retrieved from http://www.businessinsider.com/apple-
prices-too-high-2013-11
Cheng, Rusli, and Lee. (2013, October 7). Samsung Plays Catch-Up on Software. The Wall Street
Journal. Retrieved from
http://online.wsj.com/news/articles/SB10001424052702304906704579115464161019726
Clinch, M. (2013, September 5). Samsung takes shaky first step into wearable future. CNBC.
Retrieved from http://www.cnbc.com/id/101010057
CNBC. (2013, November 21) Samsung owes Apple another $290 million for patent
infringement. Retrieved from http://www.cnbc.com/id/101212043
Culpan and Adam. (2013, November 10) Apple Said Developing Curved iPhone Screens, New
Sensors. Bloomberg. Retrieved from http://www.bloomberg.com/news/2013-11-10/apple-
said-developing-curved-iphone-screens-enhanced-sensors.html
Fingas, J. (2013). ASUS and Samsung gain wide swaths of tablet market share in Q3. Engadget.
Retrieved from http://www.engadget.com/2013/10/30/idc-tablet-share-q3-2013/
Graph. (2013, March 8). CHART OF THE DAY: Apple Is Slowly Eating Away At Android's
28. 28
Lead In The U.S. Business Insider. Retrieved from http://www.businessinsider.com/apple-
android-market-share-2013-3
Ghosh and Alawachi. (2013, November 19). Analysis: In China’s smartphone boom, market
share trumps margins. Reuters. Retrieved from
http://www.reuters.com/article/2013/11/19/us-smartphones-china-analysis-
idUSBRE9AI0HI20131119
Global Value Chain Analysis on Samsung Electronics. (2012, February). Retrieved from
http://albertacanada.com/korea/images/GlobalValueChainAnalysisSamsungElectronics.pdf
Grobart, S. (2013, September 19). Apple Chiefs Discuss Strategy, Market Share—and the New
iPhones. BloombergBusinessweek. Retrieved from
http://www.businessweek.com/articles/2013-09-19/cook-ive-and-federighi-on-the-new-
iphone-and-apples-once-and-future-strategy#p2
Guglielmo, C. (2013, June 15). Apple Loop: Cook Unveils Mission Statement, iOS7 Gets
Colorful, New iPhone In The Fall. Forbes. Retrieved from
http://www.forbes.com/sites/connieguglielmo/2013/06/15/apple-loop-cook-unveils-
mission-statement-ios-7-gets-colorful-new-iphone-in-the-fall/
Guglielmo, C. (2013, November 14). Smartphones Dominate Mobile Phone Sales in Q3, Lenovo
Joins Samsung, Apple In Top Three. Forbes. Retrieved from
http://www.forbes.com/sites/connieguglielmo/2013/11/14/smartphones-dominate-mobile-
phone-sales-in-q3-lenovo-joins-samsung-apple-in-top-three/
Interbrand. (2013). Best Global Brands 2013. Retrieved from http://interbrand.com/ko/best-
global-brands/2013/Samsung
Lee, M. (2013, November 4). Is a Tizen Phone from Samsung Near? The Wall Street Journal.
29. 29
Retrieved from http://blogs.wsj.com/digits/2013/11/04/is-a-tizen-phone-from-samsung-
near/
McCafferty, D. (2013, January, 23). Demand for Cloud-Based skills will Grow Rapidly.
Baseline. Retrieved from http://www.baselinemag.com/cloud-
computing/slideshows/demand-for-cloud-based-skills-will-grow-rapidly/
Mishkin, S. (2013, November 6). New iPhones nudge up Apple’s market share in China.
Financial Times. Retrieved from http://blogs.ft.com/tech-blog/2013/11/new-iphones-
nudge-up-apples-market-share-in-china/
Nisen, M. (2013, March 15). Samsung Has A Totally Different Strategy From Apple, And It's
Working Great. Business Insider. Retrieved from
http://www.businessinsider.com/samsung-corporate-strategy-2013-3
Samsung. Retrieved from http://www.samsung.com/
S&P NetAdvantage. ( 2013). Retrieved from
http://www.netadvantage.standardandpoors.com/NASApp/NetAdvantage/showIndustrySur
vey.do?code=coh
Schiavenza, M. (2013, September 12). The Logic Behind Apple's Strategy in China. The
Atlantic. Retrieved from http://www.theatlantic.com/china/archive/2013/09/the-logic-
behind-apples-strategy-in-china/279569/
Sustainability Report. (2013). Samsung. Retrieved from
http://www.samsung.com/us/aboutsamsung/sustainability/sustainabilityreports/download/2
013/2013_Sustainability_Report.pdf
Value line. Retrieved from http://www3.valueline.com/secure/vlispdf/stk1700/vlispdf/f644.pdf
Vascellaro, J.E. (2012, February 16). Tim Cook on Hardware, Apple’s Structure and Being
30. 30
‘Simpletons’. The Wall Street Journal. Retrieved from
http://blogs.wsj.com/digits/2012/02/16/tim-cook-on-hardware-apples-structure-and-being-
simpletons/
31. 31
Appendices
<Figure 1: Apple’s Sales & Net profit>
Year 2008 2009 2010 2011 2012
Sales ($mill) 32,479 36,537 65,225 108,249 156,508
Net Profit ($mill) 4,834 5,704 14,013 25,922 41,733
<Figure 2: Apple’s Sales by Operating Segment ($mill)>
Sales by Operating Segment 2012 change 2011
Americas 57,512 50% 38,315
Europe 36,323 31% 27,778
Greater China 22,533 78% 12,690
Japan 10,571 94% 5,437
Rest of Asia Pacific 10,741 8% 9,902
Retail 18,828 33% 14,127
Total 156,508 45% 108,249
37%
23%
14%
7%
7%
12%
Sales by Operating Segment
Americas Europe Greater China
Japan Rest of Asia Pacific Retail
33. 33
Year 2009 2010 2011 2012
Revenues 136,324 154,630 165,002 201,104
Net Income 9,572 15,799 13,383 23,185
Bloomberg Businessweek. Retrieved from
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=005930
:KS
<Graph 1>
34. 34
Goal 1: Professional Communication: 1.2 Oral Communication
ECON 6305 Seminar in Advanced Microeconomic: Group Presentation; Responding to the
Wii? as lectured by Dr. Neil Meredith in Fall of 2013
Project Requirements:
The purpose of this assignment is for students to work in groups to present an analysis of
a case study by applying microeconomic theory and concepts. This required students to address
the separation between theory and practice by having students use the tools of microeconomic
analysis to evaluate strategies in an actual case study.
Organization:
The presentation used Prezi, which is a new software tool, to make presentation slides
and provide more visual functions. This oral presentation was enacted to give audiences a
strategy issue and analysis of the videogame console industry. The presentation began with a
welcoming statement and the introduction of team members. Also, it consisted of an overview,
preview of main points, analysis of the case, recommendations, and conclusions. The
presentation was given first, and then there was time for a question and answer.
Content:
This oral presentation included a lot of information of the basic background on the case,
analysis of videogame console companies, strategic options for Sony, recommendations, and key
massages of the case analysis.
Summary:
The case presented an analysis of the videogame console industry and companies, such as
Sony, Nintendo, and Microsoft. It served as a guideline for the leader of Sony Computer
Entertainment Inc., about the history of the industry, which had been marked by rapid and
frequent changes of fortune. It was presented with some issues related to questions which were
provided by the instructor, including how the videogame console industry is structurally
attractive in 2008, why complementors are so important in the videogame industry, and what
Sony’s strategic options are for regaining industry leadership. There were also some useful
recommendations.
Delivery:
The presentation was interesting, confident, and clear because each student was in charge
of a specific part and correctly modulated their voice with confidence. It was not unilateral
speech, but interactive communication. Throughout the time for Q&A, doubtful points of the
case analysis were resolved, and the slides using Prezi encouraged students to focus on the
presentation.
Mannerisms:
35. 35
For the presentation, each member dressed up professionally and delivered the
presentation with confidence. Also, each student maintained good eye contact with audience, and
provided appropriate hand gestures. There were no distraction mannerisms of presenters.
Use of Media:
This presentation used the Prezi software tool, which provides visualizations and
opportunities to link imagery to motion. So Prezi slide presentation made it possible to increase
the aesthetics by the smooth and visible slide transitions. Finally, it created a deeper
understanding for the audience.
Comment:
It was my first presentation with a team in my MBA program. I felt very nervous about
working with a team at the beginning of the semester; however, it brought me a good chance to
learn how to build a presentation with a team and the use of Prezi, which I had never heard
about. Furthermore, it was a good practice to present and to build a group-work skill.
42. 42
Goal 2: Leadership: 2.1 Capacity to Lead
MKT 5340 International Marketing: Group Case Presentation and Written analysis;
Toyota Recall, as lectured by Professor Syed Tarik Anwar in Fall of 2014.
Project Requirements:
This group project required students to learn to work together as a team and to explain
and demonstrate international marketing creativity and innovativeness. Also, students were
required to evaluate alternatives and solutions based on facts and to develop a contingency plan
for the case study.
Relating to Group:
There were two sections for the group project; case presentation and written analysis. Each
member took responsibility for a specific part of the written paper, with each member working
on the paper that would be more effective for them. Our members conducted their part and
gathered complete and accurate information related to the tasks we were in charge of
respectively. After that, we combined and integrated all information, discussed solutions, and
drew the conclusion including the contingency plan. We were altogether motivated and worked
well with others, and successfully completed the presentation.
Ability to Listen:
For a better and more efficient discussion, we made a group on Facebook which helped us
to communicate more often and to offer more ideas whenever we were available, as well as to
listen to and pay attention to each other. We respected opinions that we had not considered, and
we understood different points of views on the problems. Throughout the Facebook group, we
discussed and integrated a variety of our opinions on the issues. Through the process of the
project, we drew the best conclusion and learned how to produce better results.
Ability to Manage:
At the beginning of the project, our team chose the team leader and a regular meeting
schedule. For the project, it was mandatory for each member to attend every meeting, to meet
deadlines for each task, and to keep the pace of the project. Also, the members agreed to the
plan, their parts and role on the project, how to collect ideas to develop alternatives, the
contingency plan, and how to complete the project. The Facebook group we set up at the
beginning of the semester played an important role in communicating with each other and
managing our time and schedule effectively.
Although there was a team leader, it was important that each member had the authority to
decide the direction of team. As every team player had responsibility for the project, the team
could actively participate in a discussion.
Balance:
43. 43
Throughout the process of completing the team project, I was thinking about the
importance of the role of a leader. A leader should motivate and encourage team members and
assign the work while considering each member’s strengths and weaknesses. Moreover, the
participation of each member is essential for a team to operate well. For the better distribution of
work, each member presented the strengths and backgrounds and undertook assignments
voluntarily. When team members had similar skills, the team leader had a duty to assign work
fairly to team members while considering the balance.
Decision:
Each member developed alternatives and solutions for the case. After that, our team
evaluated alternatives for the case and developed the contingency plan based on global
marketing activities and issues. To draw the final conclusion, we spent time to discuss which
alternative was a better deal for the case, and finally integrated all solutions to make the
contingency plan, which took into consideration the past experiences in order to create an
efficient back up plan to approach the comparable future situation. Also, the management guide
provided in detail the marketing strategy plan to be used during a time of crisis.
Understanding Change:
A group project requires members to understand that each member has a different
background, lifestyle, location, and point of view. Although everybody agreed with the schedule
and details to complete the project, there were unexpected changes on the schedule and in
decision making. In the project, each member understood the others’ situation, and respected
each other. Also, we agreed that team members committed to a common purpose and a set of
performance goals. There was no problem with any change on the project, because those
unexpected changes did not disturb the pace of the project and the commitment to common
objectives.
Comment:
This project was one of the most successful projects in my MBA program. All team
members followed the team regulations well and respected each other. I learned about reaching
and bringing members together, and the importance of effectively and efficiently assigning the
work to team members. Also, both the team leader and members understood their parts of the
project in the team and participated in the team working enthusiastically. I learned how to
develop team work, and why team work makes a better result while saving time and trouble
compared with individual work.
44. 44
Goal 2: Leadership: 2.1 Capacity to Lead
MKT 5340: International Marketing
Toyota Recall Case Study
November 24, 2014
By: Taylor Drake
Jon Solis
Paul Alongo
Angela Bradley
Kaycie Carlson
Dongok Kim
45. 45
Case Problem
Toyota faced a major failure back in 2009 from the release of five recalls within less than four
months. Since then, Toyota has been climbing the walls trying to rebuild the relationships with their
consumers and the reputation they once held. With the issue of the safety problems that were released,
also comes the problem from senior management and how they responded to the issue. There were
several steps that should’ve been taken first and fast, and now Toyota is having to take a longer time to
respond and rebrand itself than it should’ve.
Alternatives
Toyota Motor Corporation (TM) has regained its number one spot in the competitive automobile
industry worldwide. The effect of the recalls was swift and severe yet not permanently
detrimental. Toyota stocks today are trading at 118.59 points and are continuing to rise at a steady pace
since the astounding 15% loss of value in the week of January 25th, 2010, following the recalls. The
action that Toyota took following the recalls was less than ideal. There are many aspects that the
company could have considered that could have helped minimize the effects of the 7 million vehicle
recall.
The first recall was announced in November of 2009, months after Toyota had issued a public
safety advisory, regarding ill-fitting floor mats. By January of 2010, Toyota recalled 2 million more
vehicles for faulty accelerator pedals. Only 8 days later, a recall was announced in Europe. By this time,
the media, the public and the government were already in an uproar and there had already been multiple
deaths as a result of the issues with the vehicles. February 5th, 2010 was the first public statement that
the company made. CEO, Akio Toyoda, issued a public apology stating that Toyota could “go back to
the basics of customers first and improve its product quality.” Only four days after the apology, Toyota
issued the 4th recall and three days after that, the 5th and final recall was announced. The order of events
was not ideal for the imaging of the company. It was speculated that Toyota had already known about the
46. 46
final recalls before it issued an apology. 37 deaths were reported in the first few months of the recalls as a
result of the faulty vehicles, and that number continued to increase in the months following. The slow
time frame that Toyota followed in issuing any statements or showing any apparent concern for its
customers severely tarnished its reputation of putting the customer’s safety first. It appeared as if Toyota
was embarrassed and trying to avoid the fact of the matter. Similarly, in lying about the petal
malfunction in the second recall only to be exposed by the NHTSA, Toyota presented its once venerable
brand name in a poor light.
A quicker response time could have been very beneficial for Toyota. In the situation that a
statement been released at the first death resulting from the faulty cars, Toyota could have put out the fire
before it was raging. The media has a large influence on the American consumer; and in this situation,
the media was talking about the issues long before Toyota was making steps to resolve them. Had a
response come in a more timely fashion, the media wouldn’t have had as strong of a devastating effect on
the company and its reputation.
As explained earlier, Toyota is one of the leading automotive companies in the world. A main
reason for their success, was the power and strategy of their marketing department. From the beginning,
Toyota has instilled the importance of customer value in all their campaigns while also building a
consistent brand that emphasizes on reliability and quality has significantly contributed to their high
consumer accolades. However, once the recalls were issued with the silence of Toyota officials--Toyota
customers began to feel betrayed and lost trust in the company and their products. To counteract this
reaction, Toyota has invested $50 million into automobile safety research for the next five years. The data
they will collect from this research will advance the face of automobile safety and provide all automakers
with statistics needed to improve driver safety. By incorporating this action into their marketing plan,
Toyota will reinstate their passion and promise to consumers for vehicle safety. The advantage of this
alternative is to gain trust back from their once loyal customers. Unfortunately, such ventures take time
and a significant amount of money. Marketing campaigns are expensive and will take time to persuade
47. 47
consumers to refine views. In addition to spending $50 million in research studies as well as the loss in
overall sales, generating a complex and well-thought-out campaign will add to overall expenses.
If Toyota Motor Co. would begin implementing a local management branch for quality control
much like the North America Toyota quality branch, it could serve as a more localized management
branch. This could help consumers receive a faster response to other quality control issues such as what
happened in 2000 with the CCC21. A more localized Toyota branch could help with gaining trust back in
the company as it once was. Another plus would be getting rid of the CCC21 program. This could cost the
company more with manufacturing costs ($2.2 billion per year) as this program cut costs but more
importantly the weight of the components which not only makes them worse in quality but is the main
source of the malfunctions. This has already gone to show that if there were upper management in Toyota
Co in a North American division, it could have more ties to the area and could more than likely be eager
to fix any problems that arise. This is also known as ‘impression management’ which is a goal-directed
conscious or subconscious process that the company can influence the public’s perception of it. The main
improvement from this would be the focus on professional communication and public relations that can
reform Toyota’s public image. For this to happen, Toyota Motor Co would have to revamp all of its core
values and claim a new personal identity for the company. (TBC)
Solution
Toyota has taken many steps to solve the problem that they faced almost five years ago. They have
made changes in marketing, management, and safety. Starting in marketing, about four months after the
first recall was released, Akio Toyoda issued a public apology claiming they would change their service
to customers first and improve the quality. Immediately following this statement release, two more recalls
were released. To relieve the pressure of the situation the marketing department shifted the focus of the
automobiles to quality and reliability.
48. 48
Implications for management change was that an officer was named for Chief Safety Technology
and Chief Quality Officer. These seemed to be two of the biggest issues they were facing with the recalls.
More than 30 deaths were attributed from the vehicles and someone wasn’t taking the time to make sure
what was being produced was up to the standards of Toyota. This was put into action because with these
positions in place, there should be no problem even to begin with if the officers in these positions are
doing their job.
Toyota has made sure but slow but sure progress towards responding to this crisis within the
company since 2009, but they are taking many leaps. They take each and every offense that they are
called out on very seriously and are consistently taking steps to solve each of the issues. Since the recall,
Toyota has been working overtime to prove not only to the consumers but also to their reputation that
they are working together to pull the company back together. Recalls are something every automobile
company has had to deal with, Toyota just had five hit at once and it’s taken more than just a couple of
years to fix. They are continuously working toward success.
Contingency Plan/Back-Up Plan
Toyota’s contingency plan must take into consideration the experience gained from the past
mistakes in order to create an efficient back up plan to approach comparable future situations. The case
study explains that Toyota initially handled the recall crisis opting to remain silent, blame others, and
deny their responsibilities. They should have immediately stepped up, taken responsibility, and addressed
critical information to consumers.
The contingency plan that we chose is an iterative process that will make Toyota Corporation
ready to deal with unexpected future crisis. Since quick action, reactivity, and transparency within the
corporation is one of the keys to repair and reestablish trust in the brand during controversial times, we
decided to suggest the redaction of a crisis management manual including an action plan, a strategic plan,
49. 49
a marketing plan and solutions that must be applied by the decentralized power authorities in case of
similar recalls.
Another part to this plan is that regional executives, regional Chief Quality officers, and all other
authorities concerned by the issue will get together and use this crisis management guide, previously
created and approved by Toyota’s headquarters in Japan, to make faster decisions in order to solve the
specific issues affecting the regional market.
The crisis management guide will provide in details the marketing strategy plan to adopt as soon as
a crisis arises. The main elements of this strategic marketing plan to be used during time of crisis:
• How Toyota’s marketing/Public relation team must “publicized” the investigation showing that
the company is immediately listening to the complaints.
• How the marketing campaign must reassure the consumer that the company management is in
complete control of the situation.
• How the regional management must admit and apologize publicly for the error as soon as
definitive corporation responsibilities are found.
• How the regional marketing team must create a campaign to limit the scope of the issue by
pointing out the fact that Toyota has more models on the road than any other automobile maker and that
the issues concerns only a smaller portion of the models. The campaign must back up historic quality and
safety claims with sufficient independent credible data.
In terms of actions, this comprehensive and detailed crisis management guide, will provide some
operations to be applied by the regional management of Toyota such as to extend warranty in order to
relieve some of the fears of Toyota buyers, or how a recall will be organized step by step (tv, radio, and
press recalls, Toyota car dealerships and car shops where the customers can get their car checked/fixed
for free, replacement cars provided…)"
50. 50
Conclusion
Toyota is one of global reputable automobile company with a better quality control system;
however, the Toyota recall shows the importance of crisis management in the global market. The recall
caused questions about safety issue and management ability of Toyota. Even though Toyota tried to
restore consumer confidence and rebuild brand image through its global marketing efforts such as new ad
campaign and a new recall website, there were complains about Toyota’s slow reaction to the recall crisis.
To respond to the market in a timely manner, it is necessary for Toyota to decentralize its
organizational structure and permit more power to its local regional divisions. Local authority would
make Toyota react as fast as to its consumer requirements and market changes. With this crisis, Toyota
should consider the importance of customer satisfaction in a timely manner and deal with a hard situation
with an immediate reaction. Furthermore, Toyota management needs to keep in mind that they would
meet any unexpected crisis in the future and prepare to control that situation efficiently. In the one of
most competitive global industry, the ability to manage a severe crisis would be an important competitive
advantage while satisfying its consumer.
51. 51
References
Toyota Recall. (February 12, 2014). Global Marketing Management. 6th Edition. M
Kotabe. K. Helsen. Accessed 10/2014.
Toyota Motor Corporation. NYSE. Google Finance.
Toyota.com. Retrieved October 10, 2014 from http://www.dailymail.co.uk/news/article-
1248177/Toyota-recall-Last-words-father-family-died-Lexus-crash.html
https://www.youtube.com/watch?v=zm80r9UhcKg
Toyota CEO Apologizes for Recall, Accidents. Retrieved November 10, 2014 from
https://www.youtube.com/watch?v=OIHgB6GHTwQ
71. 71
Goal 2: Leadership: 2.2 Goal Setting
MGT 6334 Organizational Behavior: Performance Evaluation Situation as lectured by Dr.
Andrew Li in Spring of 2015
Project Requirements:
The project requires the use of theories and research material to understand the impact of
various factors on human behavior in organizations. These factors include: decision making,
motivation, organizational culture, conflict, etc. Also, the project requires students to develop a
group case study that describes an organizational problem that one of the team members has
actually encountered.
Goal Recommendation:
This paper presents a case that sheds light on the flaws associated with how companies
use goals and objectives to motivate employees and how they measure performance. 20-70-10
differentiation performance evaluation is the primary organizational behavior concept driving the
case, and conflict between various groups, concerns with employee motivation, and the desire for
HR to send a consistent message are the organizational behavior concepts evoked by the
performance evaluation system issue. The case concludes with a fair resolution for the subject
employee. The final suggestions for the case are to remove the forced ranking system and its
being tied to extrinsic rewards, with a systematic practice of feedback for employees’ continuous
improvement so as to cultivate the under-utilized, and often more effective, approach of intrinsic
rewards and motivation.
The recommendations include instituting an on-site peer-to-peer training and mentoring
program, implementing a relief policy which reflects quantitative performance of employees.
Any all of these recommendations would be adequate for removing the root causes of the
problems identified in the case.
Measuring Outcomes:
The idealistic way to measure outcomes is to implement a recommendation and then to
track and monitor the result; however, there has been no attempt. One possible way to measure
outcomes is to find examples of similar cases and to analyze managerial issues/dilemmas and the
actions in the cases. Actually, some proposed solutions which are detailed, realistic, and concrete
are based on real cases.
Conclusion:
The case presents detailed descriptions of the causes of the problems and conflict, and the
organizational behavior theories are implied to clear up the description of the main events. The
project provides conclusions regarding the goals and recommendations for the case. By
removing the root cause of the problems, the organization is able to motivate employees and
prevent a repeat occurrence in other parts of the organization, which leads employees to
enhanced productivity and allows the organization to achieve higher levels of output. The
72. 72
management of motivation is crucial for an organization to improve work efficiency, to increase
revenue, and to save costs.
Presentation:
The paper begins with the synopsis of the case which provides the key OB concepts.
After that, it provides detailed descriptions of the main events, including the main characters, the
organizational structure, the stages for the event to occur, and the problems of organizational
management. Lastly, it draws upon research as the basis of potential solutions and final
solutions.
Comment:
The project was quite interesting because it involved the development of a case that one
of the team members had actually experienced. The theories which are related to the case are
essential to improve organizational effectiveness. Throughout the project, I learned skills to
manage people and interpersonal relationships. Also, I learned how to think critically about
ideas.
73. 73
Goal 2: Leadership: 2.2 Goal Setting
MGT 6334: Organizational Behavior
Performance Evaluation Situation
MGT 6334, Spring 2015
Team
Catherine Lee
Dongok Kim
Gilbert Rendon
Kelby Koelder
Nickolas Lynch
Shadha Khan
74. 74
Synopsis
This paper presents an intriguing case that sheds light on the flaws associated with how
companies use goals and objectives to motivate employees and how they measure performance.
Babcock and Wilcox, the management and operating company that is the contractor for the
BrickTech Plant, had recently deployed a 20-70-10 differentiation performance evaluation
system very similar to that introduced by GE CEO, Jack Welch, in the early 1980’s.
In this case, an employee was negatively impacted by this performance evaluation
method. The employee was rated in the 70% group in fiscal year 2012. To garner a higher
rating, he requested the specific goals and objectives he needed to accomplish to be in the 20%
group (Exceed and Far Exceed Expectations) for fiscal year 2013. His manager performed a
detailed evaluation to identify stretch goals and objectives in addition to the base goals and
objectives that, if accomplished, would warrant a rating in the upper 20% category. The
employee accomplished the goals and was initially rated as Exceeds Expectations by his direct
manager. However, based on the 20-70-10 method, the Human Resources (HR) department
mandated that the employee rating needed be reduced to Meets Expectations to maintain the
required distribution. This is the primary organizational behavior concept driving the case.
Conflict between various groups, concerns with employee motivation, and the desire for HR to
send a consistent message are the organizational behavior concepts evoked by the performance
evaluation system issue.
The case concludes with a fair resolution for the subject employee, however, the global
business policies that created this situation remained in place allowing for a repeat occurrence in
other parts of the organization.
75. 75
The Case
It was early in the morning and Tom Jackson was anxiously going to his 2013
performance evaluation review meeting with his manager, Frank Thomas. Tom was anxious
because he knew this was going to be the year that he would get a rating of Exceeds Expectations
and not just Meets Expectations like he received the previous year. The higher rating is usually
accompanied with a large merit raise. Tom and Frank worked at a manufacturing facility called
the BrickTech Plant that produces products in support of the Department of Defense. The
BrickTech Plant is the name of a government owned location that is managed and operated via
government contract by Babcock and Wilcox. There are approximately 3,000 employees at the
site that consist of a mixture of exempt and bargaining employees. Babcock and Wilcox won the
contract in 2001 and had been operating the site for 11 years. The company utilized a
hierarchical organizational structure to manage employees and the mission.
Tom felt he would be rated higher because of the discussion he had with Frank just a year
earlier during his fiscal year 2012 performance review. The two had a very productive
discussion related to goals and objectives. In fiscal year 2012, Tom received a rating of “Meets
Expectations”. In the new 20-70-10 differentiation performance evaluation system that was
deployed in 2011, 20% of employees are rated as “exceeding expectations”, 70% are rated as
“meeting expectations”, and 10% are rated as “needs improvement”. The new BrickTech Plant
Human Resources (HR) Division Manager, Richard Clampett, had brought the methodology
with him from his former company. The 20-70-10 approach replaced a rating system that had
been in place for the previous 15 years. The prior performance review method was a numerical
rating system with scores ranging between 1 and 5, with 5 being the highest performance
possible.
76. 76
Many employees didn’t like the 20-70-10 system since it lumped people into rating bins
that were too broad in their opinion. They felt that if they were on the high end of the 70% group
that they would be viewed the same and rewarded the same as those who were on the low end of
the 70% group. Tom shared those same feelings. Tom was an engineer with 8 years of
experience at BrickTech. He had a reputation for being a hard worker. For his efforts, he had
already been promoted twice within the engineering career ladder. Of course, the measure of his
performance and the subsequent rewards were based on the previous numerical rating system
that was not tied to a required distribution. Tom was comfortable with the prior system and
understood the effort required to get a high rating. When he was informed that he was within the
70% group (Meets Expectations), Tom wanted to know the specific goals and objectives that he
needed to accomplish to be in the 20% group (Exceed Expectations) for his fiscal year 2013
performance evaluation period. Frank identified stretch goals and objectives in addition to the
base goals and objectives that, if accomplished, would warrant a rating in the 20% category. The
additional goals were associated with working on cost savings projects and mentoring new
engineers within the department. With the required input, Tom dedicated his performance to
meeting the new goals and objectives. He was engaged in his work, he was highly motivated,
and his efforts were in alignment with the overall organizations mission.
Tom walked into Frank’s office, shut the door behind him, and had a seat. “Good
morning Tom, let’s get right into the performance review,” Frank said. “You have had a great
year and I appreciate your efforts tremendously! Before we get into a discussion of each
performance area I want to talk about your overall performance rating for this year. I want you
to know that I truly believe that you have exceeded expectations this year, however, based on the
20-70-10 performance rating method Human Resources has forced many managers to
77. 77
downgrade final performance ratings to Meets Expectations to meet the required distribution.
Unfortunately you have been impacted.” The news was not good and an awkward silence
followed. After gathering his thoughts, Tom exclaimed, “I don’t agree with the process that is
used for evaluating employee performance and I am disappointed that my rating was
downgraded. I completed the biggest cost savings project in our department this year and my
mentoring of new engineers has resulted in their qualification three months ahead of time. I did
the things you requested, I don’t get it.”
Frank was also struggling with the situation. He had been Tom’s manager for the
previous 3 years. Overall, Frank had been in management at BrickTech for 6 years and had not
had to deal with this type of performance management situation in the past. As with Tom,
Frank’s background was in engineering. He ascended the ranks in engineering and eventually
into management based on his performance. He saw much of his own motivation and ambition
within Tom. That is the major reason why Frank was interested in developing Tom’s career and
could relate to the current situation.
It was two weeks earlier when Frank had finished performance evaluations for all his
employees and submitted the documentation to his manager, Bob Williams, and to HR. In this
initial submission, Frank was happy to give a rating of Exceeds Expectations to Tom. In his
view it was a matter of keeping his word and living up to his part of the bargain. It was pretty
simple, he asked Tom to accomplish certain goals and objectives and Tom did with exceptional
results. A few days later, Bob returned the performance evaluation paperwork to Frank and gave
him the authorization to start meeting with employees to discuss ratings. Before Bob left Frank’s
office, Frank exclaimed, “There is a problem with the paperwork! I rated Tom Jackson as
Exceeding Expectations and this paperwork has him rated as Meets Expectations. We need to
78. 78
get this mistake fixed.” “It is not a mistake. HR approached me about making some adjustments
to ratings to fit the required distribution and I agreed to downgrading Tom’s rating,” Bob stated.
“Well, I don’t agree! They need to adjust someone else’s rating, not Tom’s! We had an
agreement and he did everything he was asked to do. Rating him as Meeting Expectations is
going to create some problems. It is going to send the wrong message to other employees and it
may even result in demotivation. I have to contact Richard Clampett to resolve this issue? Do
you mind if I take on this problem?” Bob approved Frank’s request but didn’t seem to share the
same passion leaving the impression that he was not interested in pursuing the issue.
Frank knew he had to act quickly since the schedule for completing the performance
review process and determining merit raises was very tight. As soon as Bob left, he sent Richard
the following message:
“Richard, I am about to start conducting performance review with my employees and am
struggling with telling high performing employees that they “Meet Expectations”. This
situation is the result of the required performance distribution of ratings that has been
prescribed.
From my perspective, I am verbally telling employees that they have exceeded the
defined expectations but documenting their final performance rating as Meeting
Expectations. I feel that the current system is putting me in a position that is hard to
defend no matter how it is spun.
I am concerned that employees will feel demotivated and demoralized as a result of this
system. Employees use their performance goals and objectives and past performance
reviews as a roadmap to work hard and improve their performance and get a rating higher
79. 79
than Meets Expectations. This is how performance objectives, goals, and reviews should
work to motivate employees to improve performance for the benefit of the
company…However, due to the allotment provided they were redistributed into the
Meets Expectations category.
By utilizing this system, I am afraid, will result in employees losing faith in the
evaluation process, feeling demoralized for the time and effort spent on goals and
objectives, and will end up demotivated by the feedback they will get.
We should be rewarding top performers, motivating them to continue performing at a
high level, and providing incentives that will ensure that we can retain them for the
continued benefit of our company…Please contact me at your earliest convenience so we
may discuss this issue as it relates to a specific employee.”
There was just a little over a week to resolve the issue before his performance review
meeting with Tom. Fortunately, Richard responded promptly. Unfortunately, the response was
not favorable. Richard’s response was as follows:
“Frank, thank you for recent message on our performance management process. I
appreciate your feedback.
Over the years here at BrickTech, the rating system employed allowed for employees to
be rated above Meeting Expectations without limit or with only minor limitations. As a
result, employees began to expect a rating above Meets Expectations and meeting
expectations took on a negative connotation. The former process did not serve to define
the expected level of performance or make employees look at meeting expectations as a
positive thing.
80. 80
Accordingly, last year we revised the Performance Management Process to move to the
current designations as opposed to the numbers previously used. The new system is one
commonly used in industry, many times with more aggressive goals than we have in
place.
One component of the new process is that being rated as Meets Expectations means that
the employee gets things done, accepts leadership responsibilities, is competent in their
current position, is able to influence others, and is an effective communicator. These are
certainly valued employees. In addition, in a normal environment, you would expect that
70 percent of the work force would fall under that description. We set a goal of 70%
with 20% open to be rated above Meets Expectations. I believe that the availability of
20% of the work forced to Exceed Expectations is a reasonable standard.
I know it is tough to tell people who have been motivated to work hard that they are
standard but the bar has been raised and being rated as Meets Expectations is not
something to be disappointed about.
I hope this helps explain the process and I appreciate your comments…”
The challenge Frank now faced was to find a way to break the news to Tom. He didn’t
want to discourage Tom with the feedback. After all, Tom’s efforts were critical to the success
of the department. If he took it the wrong way, Frank could lose Tom to another company or his
attitude could become so negative that he would not be a beneficial contributor to the
department. After contemplating several scenarios, Frank determined that the best approach
would be to explain the entire situation to Tom during the performance review meeting even
going as far as sharing the conversation he had with Richard in HR. His hopes were that if Tom
81. 81
knew he fought for his rating, he would remain loyal to the department and continue being a key
contributor with the same motivation level.
The performance review meeting was over, both Tom and Frank resumed their normal
activities for the day. Frank couldn’t help from thinking about what was going to happen next
with Tom. Fortunately, his choice in trying to retain Tom’s loyalty paid off! Tom not only
continued to work at a high level, he seemed even more motivated to get the Exceeds
Expectations rating for fiscal year 2014. Frank, Bob, and all of Tom’s peers could easily see that
he was excelling at his assigned tasks. He maintained his motivation even without the additional
money that he would have received if he had been rated higher.
Half way through the year it was announced that some retention bonus money was
available for top performers. Managers needed to nominate employees that were worthy of the
bonus and write a justification. Frank saw this as a great opportunity to do the right thing for
Tom. His request was approved and it was with great joy that Frank informed Tom of the
retention bonus. Tom was elated to hear the news and he maintained the same level of effort for
the remainder of the year.
When it was time for performance reviews at the end of the year, Frank once again rated
Tom as Exceeding Expectations. This time there was no doubt about what Tom had
accomplished and the rating was not downgraded. In addition to the rating, Tom was also
promoted to the next grade level in the engineering job family.
Frank was satisfied with the outcome for Tom, however, he was still uneasy about the
global implications of the 20-70-10 performance rating system. What if he had to go through
this again with a different employee? What if the scenario was different next time? What if he
82. 82
had to change an employee’s rating from Meets Expectations to Needs Improvement? He
certainly didn’t want to have to work through that problem. The rating system had the potential
to impact all managers at the plant and the morale of all employees. What should be done or
changed to help prevent other managers and employees from going through the same situation?
83. 83
Case Analysis/Proposed Solutions
There are four organizational behavior concepts that are in play in this case. They are
motivation, performance evaluation systems (20-70-10 differentiation in this case), consistency
in human resource practices, and conflict. The 20-70-10 evaluation method is the primary
organization behavior concept that is driving the overall case problem. The other three
organizational behavior concepts are driven by the primary concept. The following paragraphs
provide a thorough description and analysis of the concepts as they relate to this case.
Let’s begin with motivation. Motivation refers to the driving force which directs the
performance of an individual. Motivation is not a function of one factor, rather it depends upon
several factors primarily tied to one’s needs and expectations. The challenge for leaders is to
select the right set of factors in order to motivate employees towards achievement of
organizational goals. The ultimate goal is to have highly motivated individuals that work with
high levels of passion and take ownership of their tasks. In return, the organization reaps the
benefits of the individual’s efforts. According to Dan Ariely’s article, “Man’s search for
meaning: The case of Legos,” methods for driving motivation include acknowledging people for
their contributions, providing meaningful tasks, and communicating the significance of their
tasks to others. These concepts are evident when Tom and Frank met the first time and defined
specific performance goals and objectives that tied directly to the mission. Tom’s motivation to
meet the goals and objectives was soaring because he understood his efforts would be
acknowledged through the rating system.
Another aspect of motivation is associated with the Expectancy Theory. F. Lundberg
describes the Expectancy Theory in his article titled, “Expectancy Theory of Motivation:
Motivating by Altering Expectations.” This theory suggests employees look for fair reward for
84. 84
their performance. Therefore, it is predictable that Tom expected his performance to be rated as
Exceeding Expectations after he had done everything that was asked of him. Further,
Expectancy Theory states that motivation is a function of expectancy, valance and
instrumentality. This also explains Tom’s continued motivation because his efforts are backed
by valid expectations. According to the theory, when Tom did not get rewarded he would have
become demotivated because the force which was driving his motivation was gone. Luckily, this
did not happen. The article by James Heyman titled, “Effort for Payment,” indicates that
employees feel motivated beyond monetary rewards and in some cases rewards other than
monetary payments work even better. Tom’s situation is a prime example of the difference
between intrinsic and extrinsic motivation. Despite not receiving a higher rating, Tom kept his
motivation level up and continued performing well because he understood that his management
stood behind him. He felt that management was loyal to him so he would reciprocate. By not
allowing his motivation to diminish, Tom was able to secure a retention bonus and a rating of
Exceeds Expectations in the following evaluation period. Here, intrinsic motivation played a
vital role by keeping Tom at the necessary motivation level for him to obtain the targeted
rewards.
The next organization behavior concept to discuss is conflict. The article “How to Pick a
Good Fight,” by Saj-nicole A. Joni and Damon Beyer says, “Strong leaders create the kind of
conflict that can spark creativity and innovation.” With this being said, business people can be
certain that conflict is going to take place, however the means of resolution will determine the
success of the workplace. Conflict, when used fundamentally, can be essential to better
employee performance and it can be used as a motivational tool to help jump start workers.
Unfortunately, when not utilized correctly, conflict can ultimately be the driving force behind
