Wednesday, April 6, 2011

Maintaining Identity in Changing Times

The main focus of a business is to capitalize. They seek to capitalize on the skills of their employees, and the products and resources they sell and/or develop for consumers. Capitalizing on Capabilities by Dave Ulrich and Norm Smallwood touch on the many facets of a companies capabilities. Ulrich and Smallwood listed 11 capabilities of a good business i.e., Speed (making important changes quickly), strategic unity (sharing strategy through company), Shared Mind-Set (coherent brand identity), etc... showing the plethora of capabilities that are sought by business executives.

We have touched on several companies that have been successful at capitalizing on their capabilities, like: Nike, Apple, Microsoft, GE etc..., but their successes must be attributed to more than chance. In Strategic Sourcing, Mark Gottfrendson, Rudy Puryear, and Steven Phillips touch on a key aspect of capitalizing in changing times. There is no secret that companies have turned to foreign markets to outsource production and/or services. This is a decision based on recent financial trends, where a company sees foreign opportunity to save and does so. Gottfredredson, et al., state
"It's no longer a company's ownership of capabilities that matters but rather its ability to control and make the most of critical capabilities"

Ulrich and Smallwood emphasized the fact that a companies capabilities must be shared amongst members of the company. How then do companies maintain this "lockstep" goal when peaces of the company are somewhat disconnected? Some companies have done it well like Disney Co., who have been outsourcing many technological processes for the past few years while remaining very tied to their traditions and ideals.

However, Disney is only one example and one where IT may not have a profound impact on the visions, values and identity of corporation. Are there companies that have grown weaker in capitalizing on capabilities because of outsourcing?

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