Graziadio Business Report Blog

Joseph Lee

The Los Angeles Times had been stalking Toyota for months about the runaway acceleration in some of the automaker’s models. Ordinarily, I  dismiss such articles as over-aggressive reporting or even Japan-bashing. But last week, events proved the LA Times to be correct. In a weekend report, the New York Times noted how Toyota had initially refused to acknowledge the depth and breadth of a serious problem with many of their most popular models. Toyota’s mea culpa came in the form of a massive recall and stop sales impacting over 9 million of the company’s cars around the globe.

Although I point to corporate arrogance as a principal cause in the delayed response, I’d still be the first to tell everyone to stop writing Toyota’s obituary. After all, this company is far from being a GM.

Success Comes from Sacrifice

A decade ago, I had a chance to visit Toyota headquarters in Toyota City, near Nagoya. I was president of a Big 4 consultancy in Tokyo, and we were implementing PeopleSoft, the human resource management enterprise solution. At the time, Toyota was already head and shoulders above its nearest competitors in Japan and within striking distance of Ford and GM. It was quite an honor to do business with Toyota, although we all knew that it wasn’t going to be the most profitable engagement. To work with Toyota meant that we would have to sacrifice. Continue reading ‘Let’s Not Write Toyota’s Obituary Just Yet’

Joseph Lee

On January 20, 2010, the New York Times and all major Japanese papers reported the bankruptcy filing of JAL (Japan Airlines). The crane that once symbolized Japan’s powerful national airline is no more. Not even privatization could help an airline run into the ground by arrogance and incompetence.

But this is actually old news—everyone knew this was coming. The activities of the Enterprise Turnaround Initiative Corporation of Japan (ETIC), a new government body “with broad powers and a five-year mandate to revitalize Japan’s ailing regional economies,” were being reported on in the media every day.

We knew that the old CEO was a goner when Kyocera Honorary Chairman Inamori, a well respected old-timer, was dragged out of retirement into the frenzy. The appointment was supposed to add credibility to the so-called management team.

Lesson 1: Getting Bill Gates to run a bankrupt United Airlines doesn’t make too much sense, does it?

Likewise, the government’s plan of slashing 15,700 employees, mothballing all of JAL’s 747’s, and drastically reducing the debt were, perhaps, necessary steps, but hardly the foundation of a successful enterprise. In fact, we have no idea what JAL will be doing to continue as a viable player in the airline community going forward. Continue reading ‘Four Lessons from the Demise of Japan Airlines’

Along with his co-authors, Dr. Harjoto’s research on CSR was awarded the prestigious 2009 Moskowitz Prize for Socially Responsible Investing at SRI in the Rockies, the largest and longest-running sustainable and responsible investing conference in the world. Below is a summary of his paper offering the most salient points for managers. You can read the entire paper here.

Following the unprecedented corporate scandals in the early 21st century, there has been significant interest among corporate managers regarding socially responsible activities in an effort to restore public image and to differentiate themselves.

In simple terms, corporate social responsibility (CSR) is how a firm manages its business processes to produce an overall positive impact on society; it refers to serving people, communities, and the environment (stakeholders) in ways that go above and beyond what is legally required. While CSR tends to be morally motivated, a firm may utilize CSR for its own self interest. We define corporate social actions as corporate social performance (CSP) rather than CSR as not all social actions are morally motivated.

How Does Corporate Social Performance Serve the Bottom Line?

So, why would a firm conduct CSP? Let us examine three separate markets: the capital market, the product market, and the market for social pressure. Continue reading ‘The Costs and Benefits of CSR’

Joseph Lee

The media, sports, business, ethics, and image pundits are all out now, pointing out what Tiger must do to revamp his shattered image. Meanwhile, we all ask the question: What do we learn from this?

Surprisingly, the business takeaway isn’t really about ruined images or the billion-dollar golf industry that Tiger almost single-handedly created and handed over to his fellow golfers. And there may be those who say that integrity counts both in real life and in business—few will doubt that. However, perhaps the greatest lesson is that arrogance and power come hand-in-hand—no matter how good a person may be. That’s why we’ve decided that as a society, we don’t need a benevolent dictator—or perhaps, more precisely, we cannot allow one because a single bad act can undo all the great things that are done.

Ken Blanchard has mentioned that there are only three ways that people can change: by experiencing a near-death experience, by finding a spiritual guide, or by having a strong role model.

I can make a safe guess that Tiger Woods will not have a spiritual awakening and I don’t think running into a fire hydrant with a SUV qualifies as a near-death experience. That leaves only one alternative. Continue reading ‘Tiger Woods needs Yoda’

Ross Atwater

U.S. businesses are at a critical crossroad as they decide whether to reinstate the 9 million jobs that have been lost in the recession so far. Many experts say that they will not, and the reason is that companies still believe that employees are inefficient compared to contract workers, shared services, and outsourcing. This view is reinforced satirically on a daily basis in mainstream news media. In this comic strip published in the L.A. Times on December 8, 2009, the author’s irony reflects the view of companies that believe workers are inefficient whether they are outsourced overseas or employed domestically.

A case can be made that it is not employees but companies who have created work environments that are increasingly inefficient—environments where “messing up” up is a self-fulfilling prophecy as information is stored in an array of locations across dispersed business units. But this cycle is being broken by companies like Nestlé who are discovering that the value of employees can be dramatically increased if the right blend of Web tools and process changes are put in place. We refer to this blend as a virtual insourcing business model (read more on virtual insourcing here).

Virtual Insourcing Vs. Traditional Business Model

Continue reading ‘An Outsourcing Myth Exposed’

These book reviews are from the latest issue of the Graziadio Business Report:

The Change Cycle: How People Can Survive and Thrive in Organizational Change

By Ann Salerno and Lillie Brock
Berrett-Koehler Publishers, 2008

Reviewed by John Oppenheim, Adjunct Professor of Management Information Systems

The Change Cycle is full of examples. It provides keys to the stages of change that help organizations understand what to watch out for and the necessary interventions. Read more…

A Primer on Corporate Governance

By Cornelis A. de Kluyver
Business Expert Press, 2009

Reviewed by Sean D. Jasso, PhD, Practitioner Faculty of Economics

In traditional MBA programs, formal training in corporate governance is often brief, inconsistent, or entirely nonexistent. The author provides management students and practitioners the opportunity to fill this void. Read more…

Strategic Customer Service: Managing the Customer Experience to Increase Positive Word of Mouth, Build Loyalty, and Maximize Profits

By John A. Goodman
AMACOM, 2009

Reviewed by Bill Bleuel, PhD, Professor of Decision Sciences

True to its title, Strategic Customer Service contains the keys to integrating customer service into a company’s business model. Read more…

Putting Our Differences to Work

By Debbe Kennedy
Berrett-Koehler, 2008

Reviewed by Robert Fulmer, PhD, GBR Editorial Review Board

Kennedy offers a chapter on each step of a detailed six-stage process for “making the most of differences in the workforce” but more accurately, I think, it is about being an innovative leader. Read more… Continue reading ‘See What Pepperdine Faculty are Reading’

Can’t see the above video? Click this link to watch.

In this video interview, Ann Feyerherm, PhD, Professor of Organization and Management and Chair of the Applied Behavior Science and Organization Theory and Management Department, explores the psychological impact of losing a job and effective methods for bouncing back. Continue reading ‘The Psychological Impact of Layoffs’

Matthew E. May

During a recent talk to a group of small business owners on the practice of innovation, someone asked this interesting question:

“Which is better: new or different?”

The question gave me pause—first, because we tend to think of the two terms as almost the same thing, and second, because I had never actually considered forcing the choice.

Is there even such a thing as a new idea anymore? It seems that every new product or service is derivative of something, somewhere. I remember the first time that I saw a vending machine dispensing high-ticket items like mp3 players, cell phone accessories, and digital cameras. I was walking through an airport, and I thought, “That’s new…what clever entrepreneur dreamed that up?” But I soon found out that these machines weren’t really new. The practice had been commonplace in Japan for years. It turns out that vending machines are actually 2000 years old. Greek scientist Hero built a contraption that would release holy water when a coin fell on a lever which opened a valve.

Nearly everything we might think of as new and revolutionary is in reality quite evolutionary. For example, email is a combination of two pre-existing applications: one written for a computer to send messages to itself and the other written to enable two computers to communicate. Or take the TiVo recipe: one part computer, one part TV Guide, one part video recorder—mix and stir. Continue reading ‘New or Different?’

Joseph Lee

November 19th is management pioneer (now deceased) Peter Drucker’s 100^th birthday. To celebrate the life and teachings of this remarkable man, the Drucker Institute hosted a weeklong event, Drucker Week, featuring some of the most respected business academicians (a paradox?) of the world at Claremont University.

Ken Blanchard (author of The One-Minute Manager and Know Can Do!) was there, along with Warren Bennis (author of Judgment), Stephen Covey (author of The 7 Habits of Highly Effective People), Charles Handy (author of The Gods of Management and Myself and Other More Important Matters, Frances Hesselbein (co-editor of the Drucker Foundation’s three-volume Future Series and Leading Beyond the Walls, and Jim Collins (author of Good to Great)—real heavyweights.

Here is a short account of my experiences attending this notable event:

On Tuesday, November 4^th, Ken, Warren, and Charles entertained a downtown Los Angeles crowd at Club Nokia. Ken spoke of the need for the servant leader—someone willing to put himself at the bottom of the organization chart (an upside down pyramid)—to support those closest to the customers. After all, as Peter Drucker said, the only purpose of a business is to create a customer. Continue reading ‘Peter Drucker, Masatoshi Ito, and In-N-Out Burger’

Kasra Ferasat of Palos Verdes, CA., (pictured center) a fully employed MBA program student at Pepperdine University’s Graziadio School of Business and Management, is the 2009 first place $1000 winner in the student paper competition held by the Graziadio Business Report. For the second year, the publication has invited Graziadio School students to submit articles and compete for the chance to be published and for a cash prize awarded by Dean Linda A. Livingstone (pictured left) and Editor-in-Chief Owen Hall, Jr., a professor of decision sciences (picture right).

Mr. Ferasat’s award-winning composition presents five recession-fighting tactics that must be incorporated into a restaurant’s overall strategy in order to maintain a competitive advantage. The restaurant business is facing its worst time in 40 years with fine-dining restaurants expected to decline by 12 to 15 percent, he writes.

How can restaurateurs create and maintain a profitable business while adding value, increasing sustainability, and providing fresh food for the consumer? Consistent food service, food quality and safety, embracing technology, marketing, and creativity are solutions addressed in the article, available at gbr.pepperdine.edu/094/studentpaperwinner.html, in the Fall 2009 issue of the GBR. Continue reading ‘MBA Paper Recession-Proofs Restaurants’