Basic differences between managing information and managing knowledge? Is it necessary that we try to "get inside people's heads" to capture it?

Information and Knowledge are two interrelated concepts. Information is processed data that has the capacity to give form or shape to a matter or to the mind. Formation of matter can be appreciated in the way that “messages passed from Genes instruct the cell machinery to build an organism” (Campbell J., 1982). Shaping of mind happens when information reaches the receiver with a purpose and makes some sense to him. Shaping of mind leads to creation of Knowledge within the receiver that enables him to make intelligent decisions. Ever since Information Revolution, Information is accepted as the key organizational resource whereas it’s only recently that Knowledge has been given a similar status. Eventhough both Information and Knowledge gives strategic advantage to the organization, their management process differs greatly.

Basic Goal:
Information Management involves managing the collection, storage, processing and analysis of organizational information in such a way that it leads to efficient decision making. Here, the importance is on what shapes the decision making. Focus is on how IT can be effectively utilized so that the business uses the latest IM tools and systems that bring in competitive advantage and adaptability.

Knowledge Management on the other hand focuses on gathering together of all the specialist knowledge that the organization has accumulated throughout its history and coordinating the knowledge integration process towards a self building knowledge framework. Here, the focus is on how an organization can effectively utilize and reuse the knowledge that has already aided in decision making on a previous assignment. Strategic advantage is realized by building up of codified expert knowledge in specialized areas such as production, sales, services etc.

Efficiency Considerations:
Efficiency in Information Management is realized when the Information processing framework is able to deliver the right information at the right place at the right time in the right form and at the right cost. Focus is on selecting cost effective IT that would help realizing the ROI within the budgeted limits.
Efficiency in Knowledge Management is realized when there is effective integration of expert knowledge by minimizing knowledge transfer through cross-learning across the functions (Grant R.M. 1996). This means, when a programmer wants to know about the standard SSL based encryption technology used by the company, he can just log in to the company Knowledge System and search for experts in that area and get the help online.

Knowledge Management systems are designed and implemented in organizations with the goal of making the expert knowledge freely available to everyone in the organization, irrespective of the hierarchy. When you want a specialized knowledge, you need not run looking around for people, its there in the Knowledge framework. Only effort required is to login to the system and search for it. So, there is no need to “get inside people’s head” to capture knowledge. But, yes you have to if you do not have a KM system in place.

References:
1. Campbell J. (1982). Grammatical Man. Information, Entropy, Language and Life. Simon and Schuster, New York.

2. Grant R.M. (1996). Towards Knowledge Based Theory of Firm. Strategic Management Journal, Vol. 17

(c) Deepesh Joseph, 2006

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Motivation studies indicate that not all people are motivated by the same factors or rewards

Motivation is a very important psychological driving force that every individual require to complete an effort. An effort well done, leads to better performance and due satisfaction of one’s unfulfilled need. As we see from Maslow’s need hierarchy, this unfulfilled need belongs to various categories from physical (lower order) to mental (higher order) (William C., 2007, p. 419). Rewards is one of the various means that managers can use to motivate his workers. Tangible rewards such as bonuses, pay, vacation etc satisfy lower level needs of people while intangible rewards such as allowing worker to do challenging and responsible task satisfy one’s need to have a sense of accomplishment and achievement. In many cases, a manager has limited options available as a set of rewards depending upon the business environments.

From the theories of motivation that William describes in his textbook, I think Reinforcement theory (William C. 2007, p. 433) can be successfully applied by a manager in a situation of confined set of rewards. He may use the Integrated model for motivation (William C. 2007, p.443), to identify critical and observable performance related behaviors such as increased sales target, increased company revenue, successful execution of a tasks in a given timeframe etc. From this data, he may then lay down the rules or “schedules of reinforcement” that define when and how he may provide the rewards or consequences such as promotion, pay, time-off, support for education, bonus etc. For example, he may schedule the limited promotions available to be delivered, say, when the employees perform exemplary performance after 3 repeated projects and they need recognition for their accomplishment. Not every employee can exhibit this behavior, so such a fixed ratio reinforcement schedule will ensure that the positions are well utilized.

In case of fixed pay structure, he can schedule the pay to happen at every acceptable performance during a fixed timeframe (fixed interval reinforcement). This satisfies the basic lower level need of all the employees, and he should ensure that the employee receives the pay only if he does what he is expected to do, consistently. All employees exhibit need for time-off for the hard work they have done for a specific period of time. Time-off can be scheduled in the variable interval reinforcement format to reinforce this behavior. For example a full week paid time off during any time of the year. Time-offs can also be scheduled in the variable ratio reinforcement schedule format, where he gives chance for the employee for a full week paid vacation package after a major company profit, the profit amount being a variable one. Many companies offer education support programs wherein they sponsor the entire college study or Masters program. Since its an additional cost to the company, the option is usually limited to highly industrious and promising employees who would like to expand their expertise, thus contribute to the company by higher studies. This is a fixed ratio reinforcement, where the consequence happens after an expected employee behavior.

Reward based motivation, especially applying the Reinforcement Theory, aids in reinforcing critical performance related behaviors and are particularly useful when there is a need to schedule the rewards scheme based on the occurrences of the behaviors. One great advantage of this method is that it is simple to apply and monitor.


References:
1. Williams C. (2007). Management: Motivation (4th ed., ch. 13). Thomson South Western.

(c) Deepesh Joseph, 2006

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Reengineering New York Public Library (NYPL)

After analyzing the NYPL website (www.nypl.org), it becomes clear that the Digital Library project is a part of a bigger reengineering initiative that has been in place in NYPL for past few decades. NYPL has realized the importance of refining its business processes by implementing efficient process automation systems. They have done extensive work on analyzing the current library process and work flows to build IT based business process automation systems, mainly the integrated web-portal that automates major activities such as Search, Borrow, Reserve, Renew, Providing one-stop access to the services of Branch and Research Libraries, Supporting collaborative and learning activities with focus on diverse groups (NYPL website, 2007). The basic goal in implementing the Digital Library, as defined in NYPL website, is to act as a “gateway to The Library's rare and unique collections in digitized form, free” – is a newly identified requirement that required a lot of changes in the current process designs as well as building of new process models, for e.g. web based information search and retrieval system that supports efficient way to handle fragile and old works. This is evident in the way that NYPL created a separate web domain for this initiative (digital.nypl.org). This initiative thus supports Hammer’s first Reengineering Principle – finding innovative way to do business process and getting away from the routine and far less efficient process models . The old process requires physical storage and care of the deteriorating historical collections, less efficient ways of searching through them manually and distributing them for research and knowledge assimilation. In the reengineered system, the whole process is replaced with a web-based process automation system that supports efficient storage, sorting, searching and retrieval.

The Digital Library system is well organized around outcome and not just individual line of tasks. Here, the importance is on establishing an integrated IT solution that focuses on the quality and efficiency of the process to deliver immediate service to the visitor, rather than work trail involved in common library system - This is in accordance with the second principle. The first two principles thus focus on “compressing linear processes or work trails”. The heart of NYPL’s digital library system is a well structured Information Architecture that supports timely processing of information within the system. This Information Architecture is nothing but NYPL’s centralized data-warehouse and the coordination mechanisms that control the validity, integrity and timely flow of relevant information between sub-processes. This integrated Information processing approach thus seems to support the third and fourth rules – i.e. to Incorporate information processing capability into the processes that creates the information and Link decentralized parallel processes by effective information integration. For e.g. the search process for, say “African Personalities”, takes in the input information, performs parallel search across the differing subject areas available in the data-warehouse, links the results and then generates a web page that is formatted subject-wise.

The fifth principle says - Build in decision making points where the work is done in a process. This is again supported by NYPL’s digital Library in many different ways. One good example is where the user has full control to decide on what to search (Photographs) and how to search (search by caption, subject-wise, author-wise etc). The decision made is processed there itself and request is served on the spot. The search in turn can decide on what search method it should use – an indexed search or a heuristic search. The last principle speaks about Capturing Information once and at the source. This is actually made possible by the Centralized data warehouse which is accessed by NYPL’s reengineered business processes to store and share information, thus reducing data redundancy. For example by capturing (scanning, importing and uploading) and storing the old manuscript and its related information in the common data warehouse, any business process, say a normal search & query process or a pay & print process, can access it simultaneously without any contention.

-What additional improvements could be made to further refashion the project to integrate the ideas of process improvement?

Definitely there are areas where we can apply further process improvements such as follows :


1. Integrating with the Research Libraries and Branches so that the subject matter is further categorized.

2. Administration and content management capabilities that enable building of process controls that builds in static and dynamic data pumped to the website.

3. Extensive shopping cart facilities that can sell, resell and negotiate with other popular online stores via web services. This is one of the major sources of ROI for NYPL.

4. User rating capabilities which allows user to provide constructive feedback.

5. Personalized section for the users where they can login and set personalized web pages and customized searches.

It may be noted that any call for process improvement leads to a new reengineering initiative that has a huge cost, time and effort attached to it. NYPL should utilize its established process improvement methodologies to do a cost benefit analysis to make sure that the project is both financially and behaviorally feasible.


References:
1. Hammer M. (1990). "Reengineering Work: Don't Automate, Obliterate". Harvard Business Review.
2. NYPL. (2007) NYPL Website. Retrieved on February 27, 2007.

(c) Deepesh Joseph, 2006

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Personal Internet Usage at Workplace

a Director of Security for your organization, what policies or plans could you implement that might help control or diminish personal Internet use at the workplace? Do you trust that employees will use common sense and good judgment, or will you risk employee backlash when they discover that you’re implementing monitoring software?

Personal Internet usage is one of the identified performance constraint in any organization. It affects work process efficiency and might jeopardize company‘s secure information. Checking personal mails, chatting, viewing unauthorized websites, playing games etc are common “behaviors” exhibited which has a direct impact on worker productivity and performance. It affects the organizational goal when this activity leads to poor quality of work, increased cycle times, loss of vital organizational data to outsiders and breakdown of organization wide Information Systems by virus attacks and spam mails. At the same time, allowing employee to use internet to explore more about his work area skills, will lead to increased productivity. With this view in mind, as the Director of Security, I will attribute the kind of control process to be applied here as greatly related to the “Behavioral Control”, where we track and monitor employee’s actions to see whether it’s good to support the organizational goal (William C. 2007). I would also be inspired by Goldratt’s Theory of Constraints to see this behavior as a constraint that need to be controlled and coordinated in such a manner that expected goals are achieved (Goldratt E.M. 2004).

First of all I will analyze the work processes of each work group (e.g. Developers, Analysts, Supervisors, Managers, Data Entry operators, Customer Service Representatives (CSRs), Support Personnel) and identify their “level” of need to access the internet. For e.g. the Developers, Analysts, Supervisors, Managers and executives need to have access to all the Technical reference web-sites, popular search engines and general commercial websites that they use to benchmark and study. For Data Entry Operators, CSRs and Support Personnel, access will be restricted to a single Search Engine (Google) for accessing authorized websites and Internal Technical References. In general, access to all personal banking websites, porn sites, cultural websites, games web sites, chat sites, popular e-mail websites and messengers is restricted to all employees. The idea is that the work process involved and the nature of internet access required to perform that process efficiently, is identified. Accordingly, standards are set so that every work group member is expected to follow it. Here, the goal is to avoid "misuse of internet"(constraint) and thus reduce the cost incurred via loss of relevant company information (Spoofing, Phishing, Key Logging etc) and compromised company wide Information system (Viruses, Spams, Network Clogging, SQL Injection attacks etc). The standards will be mapped to Firewall rules where the internet access rules for each work group will be defined. Each user access to the internet is checked against the rules and is given warnings when that access is outside his list of authorized access. When the warnings exceeds a limit, the user’s internet access is automatically locked and further disciplinary action is taken (corrective action ).

The control policy that I described above is not a hidden process that the employees are not aware of. It involves both control and monitoring components. Every employee knows the standards and they know that their need to access internet for improving their job performance is already provided and anything more than that is not acceptable. I don’t think in such a case there is need for any negative reaction. Yes, absolutely, I trust that employees will act according to their conscience and make intelligent decisions to maximize their productivity.

References:
1. Williams C. (2007). Management: Control (4th ed., ch. 16). Thomson South Western.
2. Goldratt E.M. (2004). The Goal. A process of Ongoing Improvement (20th An. ed.). North River Press.

(c) Deepesh Joseph, 2007

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Spend Money or Loose It

Viscione’s article (as in Refernce section) pictures out how important is designing and implementing a continuously improving budget process, for any business firm to survive. He warns all business firms either small or big to build its budgeting system right from the beginning of first year of its inception. He suggests many helpful hints that a manager should consider to build and maintain a healthy and long-term budget system to manage money. The basic steps towards this are to allocate time and resources for formulating and evaluating targets of expenses and revenues, summarize the targets and increase the likelihood that the targets will be achieved (means targets should not be viewed as a “forecast” but something that he has to make happen), develop alternatives to each target, apply control measures to monitor progress each month or quarter and take corrective action if its deviates from the original goal of achieving profits from the targets (Viscione, 2000 ). This is the basic regulatory feature of any control process. In this case, we regulate and control the use of money.

My experience with directly involving in the budgeting process is very little, but I can easily relate what I understood from the article to one of my previous employer where I worked as a Project Leader. The organization structure was highly Bureaucratic in nature with the Governor on top followed by Chief Minister, then Secretaries for each specialized state department and the whole bunch of bureaucratic positions such as Directors, Joint-secretaries, Under-secretaries, Project Managers and other employees.

For applying the above mentioned steps to the fullest potential, the manager (the officials till the Under Secretary level, where I worked) should have strong support from his top management to oversee and delegate the budgetary responsibility. The responsibility and commitment should be clearly defined so that each budget category (sales, new product development, departmental projects, employee training for latest technology usage, facility improvement etc) is assigned to an appropriate manager who has full faith in the control process. The state budgeting process is greatly influenced by political and interest groups (citizens, industries, project agencies). This indirectly builds in top level support for the budgetary process. The budgeting process should not make everyone feel that he is the controller, even the manager. There should be generally one controller such as the President or CEO or sometimes a designated official called CFO. In my organization, the IT secretary was the person who had the powers to deal with budgets in the IT department. He devises the strategies for the department and allocates budgetary provisions for each department functions and for various projects. The IT mangers or the directors are given responsibility to set the targets and establish timeframes to achieve them. The idea is that the strategic planning and delegation should always come from the top level. The role of the manager is to make sure that the targets are achieved as assigned to him and take actions when budgetary system warns of a crisis.In this effort, it is useful for him to be aware of the various stakeholders who are either involved in execution of the budgetary process or who are affected by it.

The internal stakeholders include the President, CEO, IT Secretary (in my organization) and CFO (I assume he is who is referred to as “controller” in the article) at the top level who develops and oversees the overall budgetary strategies. Down the levels, we have the individual managers (my IT Manager) who actually “operate” and implement the targets and the employees (including me) who execute the individual tasks towards target achievement. The external stakeholders include company shareholders (are interested in the ultimate profits that budgets brings in, for e.g. the interest groups who have influenced the State budget), banks (are interested in the amounts invested or borrowed), customers or citizens (interested in value addition and prices tagged to the products and services that the company deliver during that budgetary period), budgetary consultants (e.g. CPA who consults on imparting knowledge on building and reshaping budgeting strategies), market environments (that determine the target areas of improvement and thus amount of money to be allocated) and competitors (for benchmarking).

In my opinion, the bureaucratic or hierarchical structure, similar to the one which we had in the IT department, will tend to be more structured as far as setting up and controlling the budgetary process than a flat organization structure where everybody tries to (or sometimes has to) control. Also the manager will have clear responsibilities and boundaries to commit to. The IT department where I worked had department budgeting system which was integrated with the state wide Budget Information System. Each manager can login to the system wherein they can view the budget information for each project that they are handling, summarized target and timelines, monthly, quarterly and yearly projections of money usage per project, drilled down to project tasks. The system can also track progress as the project goes on through its life cycle and can warn him if the resource allocation deviates from the budgetary provisions and thus take corrective actions.

References:
Viscione J.A. (2000). "Small Company Budgets: Targets Are Key". Harvard Business Review.

(c) Deepesh Joseph, 2006
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Strategic Alliances - Review and Case Study

The goal of Milne et. al. article is to study how non-profit alliances lead to shape environment policy and market behavior. Focusing on this goal, they developed five hypotheses and conducted extended research to prove or disprove them, thus determining the true behavior of alliances that exist between non-profit and non-profit, non-profit and governmental organization and non-profit and for-profit business. The article states that the alliances are successful if there is smooth coordination at both inter-organizational and interpersonal levels, high level of mutual trust, similar organizational culture, commitment and goal congruence (Milne et. al, 1996). Based on the finding that “cross-sector alliances tend to be more formal in nature”, organizations can look forward for less uncertainty in the relationship by writing down mutually agreeable contracts that defines clear targets of achievement.

The most important finding that the article brings into light is that "cross-sector alliances are more effective". Take the case of a for-profit software firm X that enters into alliance with a non-profit open source firm doing research on Unicode standardization and Native language processing. They may enter into a formal contractual project say development of a public website that is in Hindi (the native language of India). X can take this opportunity to improve their public image by marketing the website as a major initiative towards bringing technology to the common people. In this process, they acquire the scarce technical knowledge from Y. X provides their business property and necessary funding for Y to setup its R&D center in X’s location. Y provides all required technical resources and training required to deliver the product. Y benefits from the “ abundant financial funding” and its ability to motivate its volunteers to do a remarkable social oriented service

Since the study finds that “lobbying and joint fund raising efforts within-sector organizations improve their political positioning”, differing organization types may refrain from forming alliance on such activities. While studying the effect of the partner firm’s ability to influence each other’s goals, the article points out that in an alliance consisting of a non-profit and Government organization, the former acts as a “change agent”, influencing the way that a particular legislative initiative is implemented.

Alliance formation between US Olympic Team (non-profit headed by The US Olympic Committee, USOC), Coca-Cola Corporation (for-profit) and the American Red Cross (non-profit) can be analyzed to see how organizational alliances can be made successful in their respective marketing efforts. I think the way the alliance formed will be between Coca-Cola Corp. and USOC and between USOC and American Red Cross. The alliances can be analyzed and tabulated as follows -

Organization - Alliance Partner	Motivation for Success
US Olympic Team - Coca Cola Corp.	Propagating the US team spirit via extensive global advertising programs arranged by Coca-Cola. Various Ads and commercials can be produced including the athletes and nation’s major strengths. Sufficient funds raised via the alliance.
US Olympic Team - American Red Cross	Trusted support in case of life saving and other emergency situations.
Coca Cola Corp. - US Olympic Team	Being able to sponsor the most prestigious international team for the most watched global event. With the official Olympic sponsor tag, they can market their products effectively.
American Red Cross - US Olympic Team	Opportunity to utilize its volunteer expertise to cater to the event’s life saving needs and the goodwill generated from the humanitarian efforts.
Organization - Alliance Partner	Determining success or failure of marketing efforts:
US Olympic Team - Coca-Cola Corp.	Marketing efforts can be measured directly by the contractual agreement between the USOC and Coca-Cola Corp.Mutual trust, commitment towards delivering the values of the ads, commercials and smooth coordination of activities should determine the success or failure of the respective marketing strategies.
US Olympic Team - American Red Cross	Mutual trust, commitment and goal congruence in supporting the nation’s cause.
Organization - Alliance Partner	Effect of organizational culture on the interest in forming alliances
US Olympic Team - Coca-Cola Corp	USOC being a non-profit and Coca-Cola being a for-profit, they have two different organizational cultures which is difficult to coordinate. According to the article, they would need to enter into a formal contract which clearly defines the mutual interests, goal and coordination mechanisms. Through well coordinated alliance, they can each look upon the success of their individual marketing strategies.
US Olympic Team - American Red Cross	USOCand American Red Cross, both being non-profit, has greater similarity in organizational culture, structure, congressional influence and goal congruence. So the alliance can be more informal and the coordination mechanisms are less tightly controlled. Both of them will have greater interest in entering into alliance and marching towards success.

References:
1. Milne, George R; Iyer, Easwar S Gooding Williams, Sara (1996). Environmental organization alliance relationships within and across nonprofit, business, and government sectors. Journal of Public Policy & Marketing.
2. US Olympic team website. Retrieved March 18, 2007, from, http://www.usolympicteam.com/11937.htm
3. American Red Cross website. Retrieved March 19, 2007, from, http://www.redcross.org/index.html

(c) Deepesh Joseph, 2006-2008

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Strategic Planning

Strategic Planning - An analysis from view points of Mintzberg and King

1. The way strategic planning originates: Mintzburg states that strategies can originate as specific intentions of the leaders, as deliberate strategies which take a linear path. King, on the other hand states that strategic planning originates from the need to identify best ways to respond to organization’s vibrant environments, and are thus non-linear in nature. She is of the argument that sound exercise of organizational leadership cannot be considered as strategic planning.

I think both of their views might fall true or false in various situations of a non-profit or for-profit sector. For example, a for-profit organization like Microsoft can have strong impacts from its leader, in the way its strategy is built. The main reason behind this is the fact that the leader himself can bring about vibrancy in the current IT ecosystem. Whereas, in the case of, say, Mc Donalds, another for –profit, if the leadership decides to lay out strategic plan to popularize veggie sandwiches, it might not work out, even if it’s eco-friendly. Mintzburg’s view point seems not to hold in the case of non profits, since there is collective knowledge and expertise at the leadership level that calls for staying abreast of changes, as King points out.

2. Future Aspect: Mintzburg articulates strategic planning as what leaders plan to do in future without an emphasis on existing constraints. He assumes that the existing environment is more or less favorable. King on the other hand announces that strategic planning doesn’t attempt to make future decisions. Decisions are made in the present to select the best alternative to cope up with the changes.

Reflecting on the second key difference, Mintzberg’s view on future aspect of strategic planning can be seen in for-profit as well as non-profit organizations. For example, a non-profit organization such as the Open Source foundation may set a strategic plan such that all future applications are web service oriented and on demand based. In the case of a for-profit organization such as Coca-Cola, it cannot make future decisions about its product since the market is highly competitive and constantly changing.

Does nonprofit organizations with larger budgets, and for-profit organizations tend to do more strategic planning?

I don’t think so this statement is correct. I tend to be more supportive, though, of King’s approach that strategic planning arises from the need to face constantly changing business environments. The idea is that, the business needs to opt best alternative in a particular situation. Considering the service orientedness and voluntary nature of nonprofits, they are required to keep up with the changes to deliver what they believe is their mission. This is true for any organization whether it has a large or small budget. Seeing the excellent outcome of efforts put by nonprofits such as Red Cross, UNICEF and various other social service-oriented organizations, its hard to agree that they do not perform strategic planning. For-profit firms tend to do strategic planning more since they are compettitive in terms of making more profit. Even then, all of them do not necessarily do strategic planning in the right way.

References:
1. King K.N.. (1998). Nonprofit World. How are nonprofits using strategic planning [and is it worth their while]?. Copyright Society for Nonprofit Organizations.
2. Mintzberg, H. and Waters, J.,(1985) "Of Strategies, Deliberate and Emergent," Strategic Management Journal, Vol. 6, 257-252

Personal SWOT Analysis

Personal SWOT analysis is a good “data collection and analysis method” that we can use to arrive at high performance goal oriented plans. I feel that this is something that we do unintentionally, many times, during turning points in our life. We don't do this process theoretically and we might be interested in deriving it in writing. Below is a sample SWOT analysis that one would probably do before completing any major educational endeavour. One's educational and career background, outlook of life, personal and family values, current opportunities and trends in IT and possible risks that one may face in upholding his/hervalues and executing his/her responsibilities in raising his/her family and being wise and informed human being – would be the major factors in the SWOT analysis. A sample SMART goal, as described below is based on the above analysis.

Specific Goal: Deliver High quality services as a knowledgeable Information Management professional, focusing on business systems redesigns, process improvements and value addition.

Measurable: The goal is measurable from the tasks and projects that he/she is assigned - whether it leads to continuous process improvements and the customer is highly satisfied. It can be directly compared to whether it supports my strengths as derived in SWOT analysis.

Attainable: The goal is attainable considering one's current educational and career background and the particular course content/program. The goal will provide options of being flexible by constantly reviewing the IT developments in various sectors and being prepared to switch to any sector as the job requirement comes up. This increases the attainability of the goal.

Realistic: The goal is realistic from one major view point. From one's experience, goal oriented educational program will shape one’s mind and will-power to reach his goal. Another factor that makes the goal realistic is the increased need of businesses to be stable by focusing on reengineering efforts.

Timely: The goal is timely in the way that it supports one's current intellectual level of understanding and comprehending systems with focus on quality and value addition. Considering the current IT scenario, all business firms focus on quality, value addition and process redesigns. Customer is at the forefront. This further supports the timely nature of the goal.

As the major part of making a plan successful, is developing commitment, one would need to constantly update his/her skills and being open to change as far the flexibilty allows to do.

(c) Deepesh Joseph, 2006-2008
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About surveys on International Business - Are you World-Minded?

One interesting thing that I have noticed about is that most of the business case surverys that deal with world-mindedness, stresses more on religious, cultural and racial factors (surface level diversities) which are always hard to deal with. Also, stress on immigrant jobs, national loyalty and patriotic feelings was relevant. I think most of these surveys brings into light one’s positive global outlook, his acceptance of diversities and willingness to adapt to the global scenario. It indeed tells us whether we are actually “world-minded”. It gives us insight to areas to work on for increasing our “global management potential”.

Some surverys suggests abolishing all national governments and replacing them with a single global government. The scoring system gives that a regular score. I don’t agree to that since it’s hard to change the beliefs, values and perceptions that form each nation’s culture. Rather we should support efforts of global organizations such as UN, WTO, WHO etc.

I have been in my native country, India, before I settled in US. I can say that there exists a huge cultural (work, values framework) difference between the two countries. It is interesting to note that companies like Infosys strives hard to cope up with the differing modes of operations in India and US. One big thing that has helped Infosys to remain competitive is its ability to adapt to the new culture and work environment.

(c) Deepesh Joseph, 2006-2008
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Interesting business case review - Taking a Business Decision based on Ethical intensity and Social Responsibility

This review of a chapter from a famous management book reflects on a sample business case when a company which was moving towards bankruptcy was offered a fundreaising deal which might help her to to be saved. Read along the review as how we could apply ethical intensity and social responsibility to attach points to such a decision making situation. This chapter is useful in business decision making process.

The problem here, is, whether accepting the fundraising offer from the FastCheck company will affect the goodwill and credibility of CAP. CAP on the other side, also need to avoid bankruptcy by accepting the offer. Deriving the ethical intensity will help CAP to choose the appropriate decision. Ratings on the six ethical intensity factors goes as follows -

Magnitude of consequences – 5 (The decision to accept the offer will be harmful to CAP's goodwill and harmful to poor families by getting them trapped to high interest rates and making their life miserable. Its will be against CAP humanitarian mission)

Social consensus – 4 (majority believe that accepting the offer is harmful)Probability of Effect – 4 (its almost sure that harm is going to happen)

Temporal Immediacy – 2 (people actually getting trapped or loss of goodwill will happen gradually)

Proximity of effect – 4 (CAP works closely with the low income group)Concentration of effect – 4 (on an average basis)

Total points = 22

The above analysis brings into light how ethically intense will be the decision to accept the offer.

The high point of 22 over 30 shows that the decision to accept the offer will not be wise, ethically. Particularly, high points on the first three factors (13 over 15) shows that the ethical intensity of the decision is high and that CAP should not accept the offer.

References:

1. Williams C. (2007). Management: Ethics and Social Responsibility (4th ed., ch. 4). Thomson South Western.

(c) Deepesh Joseph, 2006-2008
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Applying Wanous Study to a Real Life Example in an organization

Employee resistance due to cynicism will be a major factor in any organizational change process. The negative affectivity (NA) (Wanous et. al, Jun 2000 ) and fear factors (psychological and desire based) are the reasons for this kind of resistance. My organization recently went through a major change process where the development team migrated from an easy to use version control system to a more wide-focused, process oriented Change management tool (Dimensions, from Serena). This process was a major change with lot of risk factors as it was done in the middle of the busy project cycles and tight deadlines. Let me try to reflect on the results of Wanuos study, how it makes sense to this particular change that my company went through.

Result #1: To reduce pessimism, all changes should be effectively communicated -

There was lot of fear factor in each team member as whether the new system will lead more work, waste of time in unnecessary documentation and increased project delays. But the management took efforts to conduct presentations and talks on how the new tool will refine the current process of version control and take it to a higher level of change management that actually simplifies the check-in/check-out process and moving the changes in more visual and controllable manner to the various testing,UAT (user acceptance testing) and production levels. The management was able to make the employees believe that the change was really beneficial for them to gain control of the development and deployment process, in the light of high growth rate that the company is experiencing.

Result #2: Involve more employee participation in the change process -

This was evident in the way that the whole team was involved in the migration and deployment process, providing feedback for improvement and having enough knowledge of the new system through training and hands-on live examples via a pilot system. This made employees to actually see the benefits and believe that the change process is necessary for their own good.

Result #3: Cynicism is negatively correlated with amount of previous organizational change and with the motivation to keep on trying to make change -

As far as previous change is concerned, there was no data available since this was a new of its kind throughout the company's history, so there is not much to think about in those lines. Yes, providing motivation was an important factor in the change process. Increased team member motivation to gain control over the whole process of version control and management, reduced the cynicism.

Result # 4: Increased level of pre-existing Cynicism leads to increased levels of effort from the change agents to effect the change -

There was no data available for this view point since this change was a new happening in the company.

Result # 5: Cynicism is positively correlated to decreased organizational commitment and increased grievance filing. -

In my company's case, organizational commitment and top management support was on a great level since the need was crucial to keep up with the current situation of effectively handling multiple large scale projects. Grievance filing seemed to have no place in the change process, although there was opportunity to provide feedbacks.

Result # 6: Stronger the Performance to Dollar link, the greater the effect of CAOC on it -

This was evident in the change process when the permanent employee staff passing remarks that "we are not paid extra time for the time we spend for extra research and insights to improve performance". While the contractual staff, who were paid hourly, found this beneficial since they can charge for each extra hour.

References:

1.Wanous, et al. (2000). Group & Organization Management 132-153 25, no. 2, p. 132-153. Copyright Sage Publications, Inc.

(c) Deepesh Joseph, 2006-2008
Related websites -- http://www.getallarticles.com

Handling Employee Negativity in an Organization- Review of Case study

The Wanous study (as in referred article) brings out the importance of considering negativity of employees during an organizational change and find remedies for it. Its core focus is on cynicism, defining it as “pessimistic outlook for successful change and placing blame on the managers and union leaders who are responsible for the change” (Wanous et. al, Jun 2000). The article argues that other books and studies don't focus on what is cynicism all about, why is it formed and continue to exist in an organization, its effect on organizational change, how does individual employee motivation and efforts is linked to it and general rules of thumb for a manager to reduce cynicism during organizational change.

According to me, the large unionized firm that was selected as the sample group, was a prefect example for the topic that the authors were trying to sell. In a unionized firm, employee power and voice is tremendous. This sets up environment to study the behavior and effects of individual employee resistance and how it can be managed to reduce its negative effects. In addition, the sampling group consisted of varied employee, supervisor and union behavior, strong motivational factors that affected employees efforts, increased urge for “dispositional attribution” (which is the cause for blaming superiors), grievance filing and varied performance to dollar relationships that supported the study of cynicism about organizational change (CAOC).

These factors lead to the effective study and derivation of the following outcomes that are targeted at dealing with COAC -

• All changes should be effectively communicated to all employees to reduce pessimism.
• Allowing greater employee participation in change process decisions and making them understand the outcomes will make them blame less
• Managers should acknowledge past errors and try to see from employee's eyes to understand the root cause of resistance and blame.

The article proclaims that it is based on the “action-research approach” (Likert, 1967), which focusses on individual employee efforts. So, given such a sample that has the above described qualities to be analyzed and studied, its logical that it lead to the intended outcomes that focuses on mitigating COAC.

References:
1. Wanous, et al. (2000). Group & Organization Management 132-153 25, no. 2, p. 132-153. Copyright Sage Publications, Inc.

(c) Deepesh Joseph, 2006-2008
Related websites -- http://www.getallarticles.com

Theory of Business (TOB) - What is it? Explained with case study of Sassy Scrubs

The main problem areas that Doran focuses on are Money management and Planning. It would be interesting to reflect on how the lack of a well defined Theory of Business (TOB) must have affected Sassy Scrub's failure. Looking at the circumstances under which the company originated, it is hard to believe that it had a well formulated TOB. Analyzing various resources, the initial TOB (the current company has changed a lot in its outlook and services), might have been as follows -

• Designing and producing fashionable scrub suits that is most comfortable for varied consumer segments (nurses, doctors, surgeons etc.) during their official working hours and on special occasions, focusing on “cottage industry model”. (Neal J., 2000)

A well defined TOB will focus on changing business environments (markets, customers, technology, financial conditions and society), company mission and core competencies required to meet the mission. Sassy Scrub's initial TOB has the following positive aspects -

• It had identified the major market segment.
  

• The main goal or mission i.e of producing fashionable and comfortable scrub suits is identified.
  

When it comes to adaptability to change and core competencies, the following drawbacks can be noted -

• It had the necessary technology and creativity to produce goods, but lacked the management skills to run the business profitably.
  

• Focus on too many directions without strong foundation in measuring, monitoring and controlling progress. Deviates from the initial goal of remaining as a cottage industry.
  

• Most importantly, it lacked the business model which can adapt to constant changes in environments such as late receivables, reduced cash inflow, increased sales, growing customer base and thus multiplied requirements in new designs and appearance.
  

The following ideas might have been considered in the plan to setup a flexible TOB.

• Set up plan for diversification into large scale industry from a cottage industry considering all aspects of management.This would have helped to tackle the unexpected growth rate.
  

• Alternate sources for building company capital by alliances and contacts.
  

• Establishing Just-in-Time manufacturing technology which is most suited for a medium sized manufacturing firm.
  

References:

1.Neal J. (n.d.). Entrepreneur Cleaning Up by Making Medical Scrubs. Retrieved on April 07, 2007 from http://www.thefreelibrary.com/

SWOT -Puting myself back to when Peggy Piontkowski first created Sassy Scrubs. If she would have done a SWOT analysis, what might she have listed.....

Put myself back to when Peggy Piontkowski first created Sassy Scrubs. If she would have done a SWOT analysis, what might she have listed in each category (S, W, O, and T)?

Quoting from an internet resource, about the circumstances in which Piontkowski started Sassy scrubs - Her daughter wanted a better scrub suit for her nursing school and at that moment, Piontkowski had the whole company vision (Neal J., 2000). She was a stay-at-home mom due to disability from a surgery. She was creative and industrious. Considering these circumstances, she would have done a SWOT analysis as follows -

Strengths:

-Cutting edge technology support from NIIST's MEP (National Institute of Standards and Technology's Manufacturing Extension Partnership) program (Neal J., 2000) which will help her to develop unique printed/cotton scrubs and products that is 100% US made.
- Strong will power to bring in change and taking risk.
- Strong marketing skills.

Weaknesses:

- Lack of long range business plan, strategy and goal.
- Lack of sufficient knowledge, skills and resources to manage mass production and distribution.

Opportunities:

- Unique product line (printed and cotton scrubs) will bring in quick brand name.
- Strong support for US products.
- Wide acceptance and support for small business owners, especially women.

Threats:

- Possible copy of the product line by competitors.
- Lack of established supply chain network.
- Lack of industrial contacts, partnerships and alliances.

Considering rapid growth rate of the company and its inability to effectively manage and control money and unexpected business changes, there is relevance for a frequent SWOT analysis done. Lets go back to end of 1999 and see how the SWOT would have looked like -

Strengths:

-Introducing fresh concepts for producing fashionable apparels as and when a particular consumer segment wants it.
- Strong marketing skills.
- Knowledge and determination to sell products online.

Weaknesses:

- No strategic planning, thus going in too many directions.
- Single leader trying to manage everything who lacks skills to run the business
- No knowledge about numbers – Piontkowski doesn't know what's the financial situation of the company is at any point, its cash flow, expenses, inventory and accounts receivables.

Opportunities:

- Build up of brand name and increased customer orders. This will lead to a steady business once the current constraints are taken care of.
- Wide usage of internet for online shopping will help the company to stay alive.
- Wide acceptance of Piontkowski's efforts throughout the industry will lead to possible take over, alliances and support.

Threats:

-Late receivables, insufficient cash flow and thus increased inventory.
- Credit card debts and losing line of credit which closes all doors for financial support. Possible calls for bankruptcy and closing of retails stores.
- Lack of focus, again this is an after effect of lack of planning.

From experience, Piontkowski discovered that creativity and ability to create scrubs alone is not sufficient but effective business management skills, most importantly, money management, is also necessary. She also discovered that strategic business planning has a great relevance in the midst of changing business environments. Based on this enlightenment, she should have considered performing SWOT analysis at least once in a year.

References:
1. Sassy Scrubs. About Us (2007). Latest Retrieved April 07, 2007 from http://www.sassyscrubs.com/about_sassy_scrubs.php
2. Dickinson, C. J. (Nov 24, 2000) Some Retailers Trading Bricks for Clicks. CNY Business Journal. Retrieved on April 07, 2007 from http://findarticles.com/p/articles/mi_qa3718/is_200011/ai_n8908823
3. Neal J. (n.d.). Entrepreneur Cleaning Up by Making Medical Scrubs. Retrieved on April 07, 2007 from http://www.thefreelibrary.com/Entrepreneur+Cleaning+Up+by+Making+Medical+Scrubs-a065464412

(c) Deepesh Joseph, 2006-2008
Related websites -- http://www.getallarticles.com

Assess Barnes and Noble's response to the substitution threat from Amazon. How did Amazon respond in turn, and to what net effect?

Barnes and Noble’s Response:

Barnes and Noble had started studying online business during late 1994. It was not in response of Amazon.com’s going online that they thought about doing online business. Their mission in starting online book retail was clear - To leverage Barnes & Noble brand name online. They soon realized the substitute threat from fully online retailer, Amazon.com. They now worked on establishing the strategy that could be in par with or possibly outperform that of Amazon. The following were their actions in response to this move -

- As an initial step, On Jan 28 1997, they entered into alliance with AOL, becoming exclusive bookseller
- Formed alliance with Firefly to develop personalized book recommendation service with the vision of incorporating this feature in its web site.
- On March 13, 1997, established transaction oriented web site that enabled online book selling. On the same day, filed suit against Amazon, challenging its claim of “Earth’s biggest bookstore”.
- Established online business strategy to bring in incremental sales by providing easy access for people to buy books and by tapping international markets.
- Established separate company - Barnes & Noble .com - with separate COO to account for centralized scope on online business.
- Established high performance logistics network that could reduce delivery times to a greater extend and that can ship on the same day an order was placed.
- Necessary upgrade and enhancements were made to the “back-office” software systems to account for online business. The existing systems provided stable back-end for the front-end web site.
- Offered deep discounts up to 40% for best selling hand covers
- Enabled direct-from-warehouse pricing for its customers
- Implemented more scalable and sophisticated user personalization tools on the web site, notably, “collaborative filtering” that presented users with books selections based on previous similar user profiles.
- Entered into alliance with other web sites to provide mutual links and thus increase site traffic.

Amazon’s response:

Amazon responded to Barns & Noble’s growth as a competitor in the following manner -

- Doubled the amount of book titles
- Expanded best-seller discounts to 40%
- Increased sales associate's first time sales commission from 8% to 15%
- Developed user personalization tool in alliance with Firefly’s major competitor
- Eventually, increased discounts applied at various points during the competition, lead to slow pay back of Associate’s program, web site advertisement and back-end systems. It was expected to break even in 1999.

(c) Deepesh Joseph, 2006-2008
Related websites -- http://www.getallarticles.com

Traditional bookselling and Online bookselling - Comparing a customer's willingness-to-pay

Traditional bookselling and Online bookselling - Comparing a customer's willingness-to-pay for books supplied in these two business models. (i.e. Do they expect to pay less online? Why? What else do they expect from each method?)

     The major differences between the customer’s willingness-to-pay in traditional bookselling and its online version can be analyzed on the basic dimensions such as - price, brand name and time & effort. Out of these, price is essentially the major deciding factor and the rest of them are relevant in the order they are listed. In the following table, I shall try to compare and analyze both models based on these dimensions.

	Online book selling	Traditional Book Selling
Price - Analyzing Related Factors
Mode of transaction: Since customers complete their own transaction, they expect and are entitled to receive direct-from-warehouse price.	Customer is willing to pay less and expects cheaper price.	There is no base for such expectation. He expects to pay as is listed.
Retailer competition: Retailers compete among themselves offering great discounts and special offers.	Being aware of this, the customer expects to pay less.	Not much effect due to the shift towards online book stores.
Shipping and Handling: Shipping and handling leads to increased price.	Customer is aware of this additional charge and expects and agrees to pay so much more while completing the transaction.	There is no shipping and handling costs. Customer enjoys freedom of being able to realize the transaction at the point when it is made.
Defects Identification: This refers to ability of the user to actually see and agree that the book is in good shape as per his expectations.	There is no way to do this and the customer expects to pay less since he is not able to satisfy this requirement. This mostly applies to used books.	This has no effect as the user can take the decision from the book store. This saves unnecessary worries of repacking or reshipping. He expects peace of mind and reliability.
Direct selling by Publisher and "Drop-Shipping": Many publishers have started opening online bookstores where they sell directly to customers. Also retailers (Amazon) tie up with wholesalers (Ingram) so that books are directly shipped to the customers from Ingram's warehouse.	Leads to slash of re-shipping and repacking cost from the retailer which further reduces the price of the book. In such cases, customer expects fast delivery and lesser price for such deals.	There is no scope for such a deal.
Price related Factors - Net Effect on willingness-to-pay : Customer expects to pay less in the case of online bookstore, as per above analysis.
Brand Name and Time & Effort
Band Name: Retailer brand name in the market is one of the deciding factors that the customer uses to decide whether to pay more or less.	An online customer who searches more is mostly looking at the brand name on which he is willing to pay more. He would probably not buy the cheaper one but is willing to pay more on a branded one which gives him sense of reliability and high value. Search, decision and transaction happens mostly at the same time.	The decision to opt the brand name is already done before the user goes to retail shop and he expects to get value for the price he is willing to pay.
Time & Effort:	Ease of access: Being able to access millions of titles without any physical effort of actually moving around in the store, is one of the advantages of online bookstores. Ability to review multiple titles at a time is another cool feature. Given these features and the excessive competition from online retail business, customer still expects to pay less. Delivery time: Delivery time affects the customer's willingness to pay according to his urgency of need. Normally he expects to pay less considering the delayed time of delivery.	Ease of access: Compared to online stores, ease of access is very less, still there is no scope of reduced price. Customer might, instead, expect to have a library environment, author interview events, cafe facility while reading through etc. Delivery time: There is no delayed time of delivery and doesn't affect customer's willingness-to-pay. He expects the item to be served at the point of transaction.

     Looking at current trends in online book selling and the intense competition, the customer can look forward to have more price cuts, decision power and get high valued service at low cost, time and effort.

References:

1. Bianco, A. (n.d). Virtual Book Stores start to get Real. Business Week. Retrieved on April 14, 2007 from http://www.businessweek.com/1997/43/b3550148.htm

2. MITSloan (Dec 6, 2004). Brand Still Matters Online. Retrieved on April 14, 2007 from http://mitsloan.mit.edu/newsroom/2004-internetshopping.php

Separation of Stores and Online Operations for Barnes and Nobles: Was this a good idea?? What was its intent and did it work??

The case study of Barnes and Noble would show that they split their operations into existing traditional and online bookstore, during Spring 1997. As the history states, the intent was two fold -

Avoid paying taxes on online sales:

As far as avoiding sales tax is concerned, I think it was a good idea and it worked to introduce “deep” discounts on online sales. This works in the way that if a retailer ships an item out of state, there will be no sales tax. Also by separating the customer interaction (on the web site that can accessed from any part of the world) from the actual retailer operation, sales tax can be reduced to almost negligible. Its a win-win situation for both the company and the customer.

Take bold move towards innovating the new idea of online sales and create unique identity:

Barnes and Noble had started testing their innovative online business during late 1980’s by joint venture between Sears and IBM (BarnesandNobleInc.com, 2007). Moving forward with the strategic planning to establish a full fledged web site, they started selling books online on CompuServe and later collaborated with AOL to open online bookstore.
(BarnesandNobleInc.com, 2007). Also, joining hands with Firefly, they implemented the user personalization system. Till now, they had the necessary technical and marketing skills to go ahead and go live with their own web site in mid of May 1997. These developments shows that the efforts enabled them to attract alliances and joint ventures. By creating unique identity, they were able to concentrate on continuously improving the online business model under the new COO and think about seamlessly integrating the already established back-end retail Information Management system to support high transaction intrinsic and global nature of the web site. This should also be considered as a strategic move towards extensive marketing of ‘Barnes and Noble’ brand name through the global outreach provided by the web site.

In effect, both the intents worked as expected to remain competitive and innovative in the midst of vibrant markets and technology changes.

References:
1. BarnesandNobleInc.com. History. Latest retrieved from http://www.barnesandnobleinc.com/our_company/history/bn_history.html

(c) Deepesh Joseph, 2006-2007
Related websites -- http://www.getallarticles.com

The Price Cut in amazon.com: Was this a good idea? What was its intent and did it work??

Price cuts are market strategies that companies introduce when they enter into competition. Barnes and Noble’s and Amazon.com’s case was no different. As seen from the case study, Barnes and Noble introduced deep discounts of 30% on hard-covers and 20% on paperbacks, same as that of Amazon.com, to pose direct threat to online sales. Responding to this, Amazon.com introduced price cuts of up to 40% on future best sellers and on selected titles. Applying these figures, from Exhibit 5, a best seller in Barnes and Noble was priced at $21.41 while it was only $18.92 in Amazon.com. The intent of introducing price cuts in both the cases was to pose threat to each other by increasing customer base and sales.

We can easily derive at whether this was a good idea or not, from thier financials. For Barnes and Noble, the market valuation did a positive climb after mid May 1997, when it launched the deep discounts. Whereas for Amazon.com, it can be seen that there was a fall in the same during the mid of May 1997. even though it introduced more discounts. The reason for this fall in market valuation can be explained from Exhibit 7 which shows negative ratios of Operating costs and Net Income (huge values during 1997) that slowly break even by 1999 (1.58 and 2.0 respectively). So, from the above analysis, Price cut was successful in the case Barnes and Noble’s to increase its market valuation, whereas it turned out to be not so beneficial for Amazon since the huge price cuts and increased Operating costs did not break even. It was a good idea for both the companies as far as remaining competitive. Yes, it worked for Barnes and Noble, where as it turned out to be a financial burden for Amazon.com.

Considering substitution threats, our US Post Office is faced with a serious threat from email and online banking. Their proposed solution is to .....

Considering substitution threats, our US Post Office is faced with a serious threat from email and online banking. Their proposed solution is to raise the price of first class mail again. What do you think of that strategy? Have they all but given up? Is it their only recourse? What happens next?

Considering the widespread use of email and online banking and the increased competition from fellow players such as UPS and FedEx has attributed to a steep decline in USPS business. Another reason that has lead to increased burden on the quasi-government organization is its wastage of money on sports-sponsorships and its inability to reduce labor costs even though they invested huge amounts on fancy automatic mail sorting equipment (Ryan S., 2004, March 10.).

All these events forces USPS to work on price hikes to remain financially stable. Increase in gas price or inflation, probably, is not the root cause for the price hikes. If it was, we could have seen the same in the history, almost constantly. The introduction of the ‘Forever’ stamps is an example that indirectly proves this (USPS, 2007, March 26). The consumers can use these stamps at 41 cents, forever, irrespective of the price cuts.

Given any situation, the price hikes is not at all a good strategy. Price hikes is not the only solution to improve or aid its financials. Instead, USPS need to consider organizational improvements, leveraging its current e-commerce capabilities, cutting down of labor costs and unnecessary spending on ads and commercials and sponsorship activities, which will retain huge capital and will reduce the operational costs to a greater extend. They really do not require extensive advertisement, since they already has the monopoly over first class mail service with full government support.

To retain its credibility, USPS need to work in these lines and make sure that its labor costs are kept under control. If not, and they continue with price hikes, soon, competitors will take advantage of the situation and will be succumbed to pressure by email and other online convenience services.

References:

1. Ryan S. (2004, March, 10). Going Postal. Retrieved April 27, 2007 from http://www.nationalreview.com/comment/ryan200403100927.asp

2. USPS. (2007, March, 26). Nation gets sneak peek of the forever stamp. Retrieved April 27, 2007 from http://www.usps.com/communications/newsroom/2007/sr07_011.htm

Amazon Vs Barnes and Nobles - How both companies differ in online book selling business

Since 2000, the competition between http://www.amazon.com/ and www.barnesandnoble.com/ has become intense with the entrance of competitors such as Borders and Books-A-Million Inc. Currently, as per the last traded values - 60.60 & 40.77 (Yahoo! Finance, 2007, April 27) and customer ratings - 97% & 92% (BizRates.com, 2007, April 27) , Amazon is ranked #1 in online bookselling. The best tool to analyze how the battle went on till now, is the last traded chart available for the entire company history at Yahoo! Finance.

The chart is as follows for Barnes and Noble -



The chart is as follows for Amazon.com -

Comparing the two charts, its evident that B & N was constantly trying to keep up with Amazon’s high market values and there was constant falls where it took time to come up with a competitive alternative or introduce the same technique that Amazon has already implemented. Amazon on the other hand was constantly improving its market share, expect for the time of recession during 2001. When we come to the end of 2003, the situation is interesting as B & N picks up, denoting introduction of new functionality to their web site as major enhancements. Amazon on the other hand, has a constant increase in traded value till now and continues as the leader. Right now, the technology innovation is almost stable and the graph looks stable in both cases.

Amazon’s game plan is to become a mass Internet marketer that sells a variety of products, not only books. Looking at B & N’s current web site (www.bn.com), its quite interesting that it is tuning its systems towards this trend too, by selling other products such as toys and such. This looks like deviating from its stated TOB that concentrates on selling books. Thus, looking at the history and current trends, it is evident that Amazon is the leader who initiates all major innovations and is likely to continue its trend creating substitution threats (William, 2007). Possibility is also there for Barnes and Noble to emerge as the leader, if they concentrate fully on books and when mainstream book consumers come online.

Mutual Funds and company stocks are unique product domain that is not so ubiquitous as books. The amount of individual knowledge required to market, sell and consume these products is very significant when compared to books. Such web sites will make more money by marketing these single product offering. Whereas, in the case of online selling of books, the competition is so high that companies can only make considerable profit if they utilize the e-commerce medium to implement innovation streams and try to stay ahead of others, like Amazon.

References:
1. Yahoo! Finance. (2007, April 27). Amazon.com Inc. Retrieved April 27, 2007, from http://finance.yahoo.com/q?s=AMZN
2. Yahoo! Finance. (2007, April 27). Barnes and Noble Inc. Retrieved April 27, 2007, from http://finance.yahoo.com/q?s=BKS
3. BizRates.com. (2007, April 27). Consumer Ratings for Amazon.com. Retrieved April 27, 2007, from http://www.bizrate.com/ratings_guide/cust_reviews__mid--23.html
4. BizRates.com. (2007, April 27). Consumer Ratings for www.bn.com. Retrieved April 27, 2007, from http://www.bizrate.com/ratings_guide/cust_reviews__mid--625.html
5. Knowledge@Wharton. (1999, October 27). It’s a Page Turner: Amazon vs. Barnes & Noble. Retrieved April 27, 2007, from http://knowledge.wharton.upenn.edu/article.cfm?articleid=91&CFID=11410451&CFTOKEN=17476760&jsessionid=a83021dbf34e10756a6b
6. Erhart V. (2007, April 7). Amazon vs. Barnes & Noble: Battle of the Brands. Retrieved April 27, 2007, from http://www.bloggingstocks.com/2007/04/07/amazon-vs-barnes-and-noble-battle-of-the-brands/
7. Williams C. (2007). Management: Innovation and Change (4th ed., ch. 7, p. 204-210). Thomson South Western