One subsystem, organizational culture, directly impacts and plays a vital role in regards to the functioning and well being of an organization. Organizational culture, as defined by Schein, is a: (…) pattern of shared basic assumptions that the group learned as it solved its problems of external adaptations and internal integrations that has worked well enough to be considered valid and, therefore to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (as cited in Guzman, Stam, & Stanton, 2008, p. 34).
Therefore, IT managers must consider that organizational culture is an important factor to be taken into consideration within the value chain. As stated by Schein, culture is relevant and it matters because it is a powerful, latent, and often unconscious set of forces that determine both our individual and collective behavior, ways of perceiving, thought patterns, and values (Guzman et al., 2008). In order to take a look deep inside an organization’s social and technical dynamics, via value chain we turn our attention to “The Mini-cases: 5 companies, 5 strategies, 5 transformations”. This unique interaction case study was conducted by Balu Bagopal, Maurice Berns, Zayna Khajat, Martin Reeves and Andrew Townsend a MIT Sloan Management Review and knowledge partner. The Boston Consulting Group, with sponsorship support from business analytics provider SAS, are collaborating on a project called the Sustainability Initiative. This case study is a survey of five corporate executives and managers about their perspectives on the intersection of sustainability and business strategy (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009). The researchers started their analysis by separating the case study participants into three specific groups: companies, strategies and transformations. The five companies that participated were Better Place, Nike, Rio Tinto, General Electric, and Wal-Mart.
Better Place
The technology developers at Better Place facility located in Palo Alto, California international company’s vision were to incorporate electric battery-charging and battery-switching filling stations for electric cars. Better Place outsourced their work to areas that were already utilizing the electric cars which was a process oriented framework. It consists of technological and economical processes that are performed in order to do business, Stylianou & Temizkan (2009). The use of IT in the value chain enhances the value-creating potential for Better Place. Israel which wants all new cars to be electric by 2020, Denmark who is dedicated to downsizing carbon emissions by 21% by 2012, and the city of Cogenhagen with a speedy consumption of electric recharging stations, (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009)., are in the operational process phase actions referring to “doing of business.” Competitive force that influenced Better Place Company would be the demand for the electric filling stations. This particular product is not high in demand therefore it does not have as many buyers waiting to purchase the item for consumption. Not being high in demand not only affects the manufacture but it also has an effect on the customers.
Nike
Nike management implemented a zero waste/toxic goal. This objective was put into operation because of the concerns that the customers had about where the manufactured goods came from and the amount of misused materials to make a pair of shoes. Nike was wasting $700 million a year in materials. (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009). Assisting with the zero waste/toxic goals the following associates were brought in: BASF, DuPoint and Dow. The team’s analysis of the data and expertise within each member’s field contributed to the complete information and data collection, thereby allowing its members to have full confidence in their data and analysis.
Outsourcing played a major role in Nike competitive force. Nike understood that they needed to bring in consultants to help modify production. Transformation effect used by Nike to outsource other companies to assist in reinvention of the Nike shoe process by streamlining the shoe cut which resulted in a reduction of misuse of materials. Now that there is a cost advantage, Nike design of the shoes which was changed in order to reduce manufacturing cost has also improved the quality to help Nike make a profit. NetMBA. (2011).
Rio Tinto Rio Tinto a mining industry has been tasked with creating economic opportunities “social license” in the community of Madagascar. The community as a whole is not pleased on seeing another operation destroying their district. Majority of the island had already been demolished from farming; grazing and charcoal production. (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009). Rio Tinto decided they had to transform the effect (redesign the procedure) of mining in the area. An operational process was put in place to protect the environment and generate financial opportunities for the community: Protect biodiversity and water quality around mine locations; Employment for native people living in the community; Training plans to assist employees from physical labor into skilled positions; Preparation for scheduling mining would be put in place to avoid “ghost towns”; Goals for greenhouse-gas emissions and energy use. (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009).
The operational process also served as competitive forces. The approach that Rio Tinto plan to take will build a positive relationship within the community by building an open, honest relationship based on Code of Ethics and Compliance Guidelines. Cable, A. (2012). Rio Tinto commitment to support the communities through company sponsored educational, development and volunteer programs. And, ensuring the supply chain partners support the company’s commitment to Corporate Social Responsibility. Teaching new skills while at the same time putting their new skills to work for Rio Tinto in there mining industry not to mention preserving Madagascar.
General Electric General Electric realized that with the population development that energy and water usage, waste and carbon emissions would decline with most established companies. (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009). This was an opportunity for GE to have a positive outcome utilizing the value chain by providing their assistance and also making a profit. GE partnered up with other businesses to make the best decisions about which product to purchase and install an operation of the future (transformation effect). GE also visited other job sites to provide “hands on” assistance. Considerations include first cost as well as cost of operation throughout the anticipated life-cycle. GE involved their employees in making an impact in their company. Employees were encouraged to get involved by turning off lights when not in used, installing LED lights, and recycling water which all played a role in reducing manufacturing cost and improved energy saving that resulted in $100 million.
Wal-Mart
One of the leading merchants in the world is Wal-Mart. They have been trying to progress in zero waste and producing products that will not harm the atmosphere. In 2005 Wal-Mart and Unilever partnered up to produced a stronger detergent but in a smaller container. (Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009). This operational process had a ripple effect; the companies were able to produce a more powerful detergent, reduce waste and in return use less plastic, cardboard and water. These actions started an informational effect. There was a positive impact on Wal-Mart for reducing waste which also affected the landfills.
It became the norm for manufacturing companies to use concentrated detergents. Wal-Mart is setting the bar for their competitive manufactures. Redesigning the structure so that the customer has influence; getting merchants to grade their products, produce information about the product from the time it was manufactured until it is consumed, and maintain a directory that will amplify intelligibility. These are not only a competitive force but it also gives the customer power. If these changes had not been made the customer could leave for a competitor manufacture. Porter, M. E. (2008, January 1).