Midterm Question #1

MNC's are complex organizations however, they dominate the worldwide market. Knowing the background and nature of MNC's, answer the following:

Question 1:Identify the benefits and disadvantages of MNC's.

Answer:

Advantages:

• Gaining a strong foothold into the international market



• Low-cost locations



• Cheaper labor costs



• Cheaper raw materials and distribution costs



• Taking advantage of the many tax breaks offered by foreign countries



• Access to new technologies and methods



• Availability of government grants

Disadvantages:

• Trade restrictions imposed at the government-level



• Taxes or tariffs imposed on imports from other countries



• Limited quantities (quotas) of imports



• Effective management of a globally dispersed organization

Question 2: Identify one MNC company and describe its operation.

Answer:

Amway Corporation. As one of the world’s largest direct-sales organizations, Amway has more than 3 million distributors who sell about 450 nutrition, cosmetic and home care products. The DeVos and Van Andel families own Amway and its parent company, Alticor. Richard DeVos Sr. and his wife have long been top campaign contributors, personally giving more than $760,000 in individual contributions during the 2000 election cycle alone, all to Republicans. Amway lobbies on tax issues and on free trade, as 70 percent of the company’s business is done overseas.

Question 3: Describe how the parent control/coordinates with its subsidiaries in other countries or region.

Answer:

Alticor Corporation has lot of subsidiaries including the Amway Corporation. To control the operation in supplying its subsidiaries around the globe. Alticor develop one company - Access Business Group. Access Business Group was formed to develop, manufacture, and distribute products for Alticor companies, as well as to develop and produce contract manufactured products. Due to this vast number of products, Access needed quick access to the thousands of documents they produced: designs, specifications, user manuals, and sales brochures.

Question 4: How is IT maximized or used by this MNC?

Answer:

ARMONK, NY - 16 Nov 2007: Amway Corporation has selected a virtualized IBM (NYSE: IBM) server infrastructure for a worldwide rollout of Oracle's enterprise resource planning applications, the company announced today. The decision to run the applications on hundreds of virtual servers -- rather than an equivalent number of physical boxes -- is expected to provide a significant savings in energy, software and labor costs, Amway said.

The Oracle e-Business Suite applications -- including order entry, financials and shipping -- will be deployed on multiple System p systems, with logical partitions ranging from three to thirty on any given frame. Running the AIX operating system, these machines will handle production, development, test, and quality assurance functions and will serve organizations throughout the company globally.
"The IBM System p servers will be vital to running Amway's business, as they enable our independent business owners to order and receive product," said Randy Gast, supervisor, server technology, Amway. "The System p virtualized platform has been rock-solid, secure and extremely flexible."
"The Amway solution demonstrates how IBM's leadership in virtualization technology through Advanced Power Virtualization is helping customers consolidate their data centers and reduce energy and maintenance expenses in the process," said Scott Handy, vice president of marketing and strategy, IBM Power Systems. "System p servers provide customers with the performance, high availability and scalability they need to run their businesses most efficiently."

Question 5: What were the weaknesses/problems encountered by this MNC from its environment and global setup?

Answer:

Multi-level marketing in America is not new. Amway (Alticor) is one of the pioneering direct-selling companies started in 1959 in Ada, Michigan, USA. Founded by two bestfriend name Rich De Vos and Jay Van Andel. Inspite of the great success of this company still there are lot of critics they receive.Some commented that this company is a cult, scam and the like.

In United Kingdom, Amway UK is finding problem in commerce because the government won't allow its practices even though its there for quire a long time but still the company is trying to do the best things to protect it's independent business distributors and the proctection of it's name.

Cite your reference:

http://wiki.answers.com/Q/What_are_the_advantages_and_disadvantages_of_multinational_businesses
http://www.opensecrets.org/orgs/summary.php?id=D000000111

http://www-03.ibm.com/press/us/en/pressrelease/22629.wss

DUE: Wed.

Posted by ROSILIE at 10:31 PM 0 comments

Prelims Question 2

An organization may adopt a closed-system or open-system model. Answer the following:

Question #1. Discuss the pro's and con's of each model.

Answer:

Cost

Pros: Source codes are like keys to programmers. By exposing the source codes, programmers can improve, modify and tweak any part of the software. This could reduce development time that translates into lower costs. As OSS is freely distributed, programmers are also able to use this software for their benefits. From this aspect, OSS is free to the extent of having the source codes.

Cons: Although the source codes are provided, there are hidden costs that do not come with the software. Programmers will have to be familiar with integrating open source with other proprietary software. Middleware might be needed in many instances. This gives additional cost. Novice users are also unfamiliar with the bugs and fixes that often occur in OSS. They also need to pay for customer support service or even documentation and manuals.

Functionalities
Pros: The functionalities of OSS are beginning to rival that to commercial software. This is because the global community of programmers and users have a hand in improving the software. In some cases, the OSS offers more functionality.

Cons: Being free comes with hidden cost. In similar fashion, functionalities bring about bugs and usability issues. Users will find the software patches a hassle in OSS. Those who are familiar with commercial software like Microsoft may not get used to the user interface of Open Office. This involves re-learning new software and incurring switching cost.

Sustainability

Pros: One of the greatest things in OSS is the continuous contribution and effort from programmers. Bear in mind that these programmers are improving the software at their own time and cost. They are not being paid in anyway. It is their passion that drives the growth of the software like parents watching their children. Thus, the development of software will be moving at an amazing pace with a large community as compared to commercial software.

Cons: On the other hand, OSS faces major issues in backward compatibility, project management and customer support. Can OSS sustain and compete against commercial software? As most OSS grows from contributions from online community, resources are limited. There is also a need to manage the long-term vision of the software. Customers would demand support and help in using OSS.

OSS is a great threat to commercial software. Commercial software companies never expect that source codes would be freely distributed. Although OSS is "free", users expect more than just the source codes. Documentations, manuals and customer support could incur the additional cost. Switching cost will also comes in the form of training as most users are used to the functionalities of commercial software. Hence, new way has been introduced in the form of commercial open source to address the cons from OSS. In this way, consumers could have the best of both worlds.

Question #2. Cite a company that uses any of this model. Describe briefly how this chosen model affect the entire company.

Answer:

Company: Linux

Linux use open source system to streamline their operation especially in different places and it works great for them. It also brings the company a sense of security.

It made the company grow and faster in information gathering and more linkages developed.


Question #3. Evaluate how an environment affects the organization and its management. Discuss the pro's and con's of not responding to the demands of the environment.

Answer:

The key to successful internal control is having a control environment that sets a tone of integrity which influences the ethical and control consciousness of employees. Strong control environment supported by an ethical tone at the top is the cornerstone of a system of internal controls. Without consideration of the environment, any company may collapse in the future. Sometimes the environment dictates what style of management will be taken.

Therefore environment has the role on the rise and fall of organization and the management.

Pro's:

Responding to the demand of the environment does not guarantee to success of ones company sometimes it depends of the people it has and strategic style of the management.

Con's:

Environment is serving as the feedback instrument, management could gather enough information to analyze the demands of the stakeholders. Not responding to the environment in the long run could not compete with other companies who are up to date in short become obsolete

References: yahoo.com

Rejie G. Abayon



DUE: Friday

Posted by ROSILIE at 8:10 PM 0 comments

Prelim Question # 1

Question # 1 :

How do you perceive information as a resource of a company?

Answer:

Information Age was known during 20th Century this mark the shift from the traditional industry. Today skills and talents are not enough resources to become successful in different arena, you need to be informative. For business company information is treated as one of their important asset. It helps the managers in making wise decision and strategies for achieving their objectives and goals.

Surviving a business in a very competitive world and crisis acquiring the right information is the key to success because the more they are informative the more options you have.