Introduction to Management _Project_ (Whirlpool corporation)
Current management differs from traditional management due to the new developments in markets, technological advances, communication revolution, particularly instant communications through the internet and electronic mail, all require an evolution in the science of management, so as to match and accommodate these developments. In this context, we come across numerous celebrated articles discussing three main key issues: Task environment, diversity, and total quality management (TQM). All these articles, plus the chapter and the pages in the course book are interrelated. Since the task environment is a more comprehensive concept embracing diverse issues, such as those surrounding the production process, e.g., competitors, clients, strategic allies, suppliers, outsourcing, and regulators. These issues are strongly interrelated.
The task environment provides useful information more readily than does the general environment because the manager can identify environmental factors of specific interest to the organization rather than having to deal with the more abstract dimensions of the general environment. (The course book, p.75) The task environment consists of five dimensions:
1. Regulatory agencies: created by government to protect the public from business practices or to protect organization from one another.
2. Interest group: is formed by their own individual members to attempt to influence business.
The article in the book discusses how Ford Motors Company’s surrounding environment affects the process of management so as to maximize profits and to achieve best products. Of course, the market forces and aggressive competitors influence the decision madding process. Diversity in the article, titled "Expanding definitions of Diversity", is related to cultural diversity: "In California, it’s folly to dream of a homogenized, One culture pool of professionals". But, in the field of management, diversification may be related to the extension of other markets or to diversified sources of supplies or to diversified products so as to match diverse colors of customers’ tastes. Diversity can either enrich work or render it disturbingly chaotic and unpredictable. Those who like being challenged by differences, innovators at heart, thrive on diversity. For others, whose identities are dependent on the status quo, diversity is scary because of the misunderstanding, which can arise from differences on any of the above named dimensions. On the other hand, diversity can be beneficial in the following dimension:
1. Work speed and case load tolerance.
2. Work family balance considers actions.
3. Accountability ducking it or taking on too much, status on the provide team.
4. Preference for face-to-face criticism/correction.
5. Attitude towards authority toward service.
6. Attitudes towards receiving care, being touched, intimate contact.
The start-up of managing diversity intervention also contains the seeds of corporate success or failure down the line. It takes place through four over lapping stages: (1) entry (2) problem (3) education and awareness (4) organization and implementation. (The diversity factor by cross white, p.4)
Furthermore, nowadays, we are increasingly coming familiar with the term TQM. In the article, "The right Way to Go Global", we find that over the past fifty years ago, more changes happened due to the changes in the economy, and the market as a whole. Everything became global from economy, to competition, to market... The environment in which traditional businesses and management thinking over-ruled is no longer adequate. The environment is currently market driven instead of technology driven. Currently, diversification is a great source of success. People are no longer considered as replaceable parts, rather, they currently represent a strategic asset.
Total quality management (TQM) is a management philosophy that can provide organizations with the impetus for positive change, stimulating the workforce and creating an environment that gives a company the competitive edge. It is a system of dealing with quality at every stage of the production. TQM aims to improve the effectiveness and flexibility of the business as a whole and attempt to eliminate wasted effort. TQM pays constant attention to the needs of the customer and requires a continuing process of gathering relevant. (Environmental Management and Business Strategy, p.180)
Griffin also adds other factors related to quality improvements, such as benchmarking, which means the process of learning how other companies do better qualities. There is a direct method to apply benchmarking by buying samples of the better product and studying it to see how it exceeds our product. Outsourcing is also a contributing factor in TQM: The process of outsourcing is related to subcontracting business to other firms which may do the services at comparative advantages in term of quality, precision, and price. (The course book, p.639)
In summary, TQM has a number of key attributes. It:
1. Asks customers what they want and satisfies their requirements.
2. Attacks processes, not employees.
3. Instills teamwork and creates an atmosphere for innovation and continuous quality improvement.
4. Empowers people.
Number of employees 1997 61,370
Number of shareholders 1997 $10,171
Total revenues (in millions) 1997 $8,617
Net earning (in millions) 1997 $238
Stock value (at year end) 1997 $55
Fortune 500 ranking 1997 182
Whirlpool Corporation is the world’s leading manufacturer and marketer of major home appliances. Its growth is the result of strategic direction set in the mid 1980’s and integrated strategic planning process in 1992. In the 1980, Whirlpool was unable to find growth potential in the U.S. appliance market and unwilling to accept the status quo, the company began a systematic evaluation of opportunities-both inside and put side the appliance industry-worldwide. At the same time, Whirlpool established parameters within which decisions about the company’s future would be made. With growth parameters established and study data in, the decision was made to remain focused on major home appliances but to expand into markets not already served by Whirlpool. The goal was world leadership in a rapidly globalizing major appliance industry.
Throughout the early 1990s, Whirlpool continued its expansion in the Latin America and Europe. And, to manage its small appliance business on a global basis, a small Appliance Business Unit was formed. In the past four years, Whirlpool has aggressively pursued its Asian strategy. Two years later, five majority-owned joint ventures were announced in the India and china to expand the company’s Asian manufacturing base. In Asia, Latin America, North America, Europe, and in all the countries where it has a presence, Whirlpool pursues the goals of its Worldwide Excellence System (WES). WES incorporates the best of all Whirlpool quality programs, worldwide, with Malcom Baldrige Award and International Standards Organization criteria to establish a common approach to quality, one that dedicates the company to the pursuit of excellence and total customer satisfaction. Whirlpool’s strategy to shape and lead the emerging global home appliance industry is working because the company consistently improves the quality of its product and services while refining its understanding of customers and what they want from Whirlpool.
Now we have to match the theoretical setting into the giant Whirlpool Corporation’s current practices. To accomplish this job, there is a very useful and informative article, which centers on an interview with Whirlpool CEO, David Whitwam, who provided the following unsatisfied background of the company. "When Whitwam became CEO in 1987, whirlpool was mired in just such an unwinnable war in the North American major-appliances market." (The Right Way to go Global. P135).
Whitwam tried to introduce whatever changes necessary to secure real growth for the future of the company. First of all, Whitwam reidentified the company’s new goal, which considers the customers’ satisfaction. This decision, according to Whitwam, should precede any development in common technologies and processes. "He mentioned: But before you can develop common technologies and processes, don’t you have to define the new organization’s goals?" (The Right Way to go Global, p.136) By focusing on the customers’ satisfaction, Whirlpool integrated the task environment in its system.
Incorporating new technologies within the firm is also one basic element in the process of designing, manufacturing and selling services at the lowest possible cost. Improvements in products are also manifested in Whirlpool’s new purchases of Philips. The new Philips possessed their own particularities, which could not fit in other machines’ spare parts. These inventions of new products, and the rapid expansion of Whirlpool in different parts of the world, represent the concept of diversity.
Furthermore, concerning outsourcing and bench marking as well as standardization of ISO-9000, it is maintained in the same company, Whirlpool: "One of the company’s challenges was creating a company wide total quality management system, which we now call the Whirlpool Excellence System (WES). When we acquired Philips, we suddenly had one organization that focuses on ISO-9000, the European total quality system, and another that focused on the U.S. Baldrige approach to quality." (The Right Way to go Global, p.141)
As for the involvement of all employees in the management process and product improvement, Whirlpool is integrating the (TQM) in its system and as a result, it has been successful ever since. Traditional management is no longer surviving in the age of instant communication, electronic transaction, and surprising technological breakthroughs, which provide certain companies an edge over others. (TQM) considers all these variables Whirlpool, In particular has changed, and sparked its employees on all levels to accept such changes: "One of the best way to change an inflexible mind-set is to expose people to both challenges and new ideas that can meet those challenges," (The right way to go global, p.141)
In conclusion, setting the theoretical approach in the Whirlpool current management strategy we can say that all the above mentioned major issues revolve around the integral requirements:
In brief, we can not but confirm that TQM is a must for any company willing to survive in this very competitive environment. For a firm, to be successful, it must consider the task environment with all its dimensions. Whirlpool is successful because it is applying the three management principles that we discussed.
1. Maruca, Fasio. "The right way to go global"(p.135-145)
2. Griffen Management fifth ed. : Mifflin Co., 1996, p. 75-80.
3. The diversity factor, by Crosswhite. P.4-7
4. Environmental management and business strategy, p. 180-183
5. Gary Namie. "Expanding definitions of diversity" p.133-144
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