Talk by Les Matheson, MD, Retail Products (Financial Crisis)

1. Bachelors of Commerce (Honors)
2. Consumer marketing
3. P&G 7 years
4. Kraft Foods, GM in Argentina
5. Citi Taiwain, marketing head (Asia, Pacific)
6. Singapore, Japan (Tokyo)
7. 10 basis points = (0.1%)
8. Japan -> Australia -> Phillipeans
9. Q1 (What did Citi do that its Japanese Competitors didn't)?
10. Summary of Financial Crisis:
1. Q2:  Did 9-11 accelerate the problems which led to the financial crisis?
2. ICB is recommending leverage ratio of 10 or less (at crisis point closer to 33)
3. Regulatory Failure
11. Evolution of Crisis:
1. Low interest rates
2. sub-prime mortgages in the US
3. dis-incentive to pay back mortgages in the US
12. Q3- Can economies produce no physical goods and still remain afloat?
13. Problems in the Strategy of UBS
1. acquisition led
2. underinvestment in local businesses, over extension abroad
3. ignoring risk
4. overleverage
5. Q4:  Do you think the reason for your success in Tokyo (taking on risk) could have been the cause of difficulty during the downturn (financial crisis).
6. Q5:  Do you think that its ironic that the people who learned the lesson of this crisis can no l
7. Q6:  Why does creating a "bad bank" work?
8. Q7:  What concrete measures is RBS taking to ensure that risk control is built into the system?
9. Customer service
10. Q8:  2013 "goal line" what is the goal to achieve by then?
11. Determine core and non-core businesses
12. Example of an asset that you sold?  Went into Bad bank?
13. How do you differentiate yourself when the Govt is mandating certain changes (leverage ratios etc...)
14. What is organic growth?
15. Is anything preventing you from creating a mix of assets in the current market?
1. lack of entry opportunities
2. strategic abhorrence
16. What would you have done in retrospect?
17. HR practices at RBS -  How are personell assessments conducted?
18. Customer service performance:
1. Incentive program -  focused on sales vs other measures
2. Airlines First Class customers applied to banking
3. customer charter- list of 20 things that RBS will do
4. checks and balances at RBS
5. PPI- insurance

Productions Game Questions

1. (Comments by Nick Oliver)
2. link time
3. controllers- what are they? (Ian, Tom and Nick) 
1. Purchasing and prep.
2. two purchasing agents
3. orders taken throughout the game
4. order prices set by controllers
4. sign it out, and it's your order
5. multiple companies
6. you can bring helping documentation
7. templates are ok
8. not able to bring in production raw materials (fine can be assessed)
9. specifications are everything

OB, September 29th

1. Talk by CEO of Edinburgh Airport, discussion of operational challenges faced by airport
1. discussion of preserving quality when 500 or 5000 employees actually work for you.  The others are contractors, and their quality of service affects your customers.
2. M. Belbin's 9 "team roles" (1996) (From Henley Management College)
1. core roles must be filled for a group to be effective
2. Eddie Cochran's talk:  Problems with teamworking
3. Belbin creating assortments of teams (What was Belbin's background?)
1. Alpha Team- intelligence
2. How was the group performance measured?
3. Perhaps there are other identifiable factors that lead to group success
4. Situationally dependent roles, all roles of equal value
5. takes pressure off of us, because all roles are important
6. Roles:
1. Shaper
2. Coordinate
3. Plant- ideation
4. Resource investigation (what is the difference between this and a coordinator?)
5. Team Work- build cohesion
6. Monitor evaluator- detail oriented
7. implementer- hard worker (Boxer in Animal Farm)
8. completer finisher- follows through
9. specialist- technical expert
7. Self-Perception Inventory (SPI)  https://e-belbin.com/Inter-extranet
1. Login, Password provided in lecture (email Eddie for details)
8.  Autokinetic effect- Sherif
1. put in dark room, light spot perceived to be moving
2. issue for pilots
3. differences between individuals
4. tendency to converge on a common answer (to question to how much perceived motion was observed)
5. jokes as an indicator of when norms are broken
9. Shibutani- reference group:  Group from which we define our identity
1. a group whose norms we act out
2. deviants are those without reference groups represented in the current group
10. Symbols play a large part in group identity
1. company cars- make and cost
2. alpha male vs alpha female issue:  (research conducted?)
3. match communications structure to the task
11. "telephone game "
1. information quality control
2. memorable vs important
3. UBS example during financial crisis (Omar)
4. ATC code - brevity and clarity, standard coding structure, involves a confirmation step
5. wheel structure (hub in the center)
6. pass it on structure (serial path for information)  one break in the chain lead to loss of information
7. all to all structure, face to face (every member has point to point connectivity)
1. very time consuming
2. difficult to determine shared meaning
3. initially its important to get the face to face meeting
4. too much shared meaning (Tom) "group think"  extreme consensus and complacency
1. (standardization of terminology critical)
5. two 747 collided on a runway- KLM and Panam
6. Case studies about highly mission critical businesses which have a "stop the line" feature for rapid response.  How is it implemented?
8. Group Development
1. forming
2. storming
3. norming
4. performing
5. adjourning
9. Issues:
1. Group: size, members, developmental stage
2. Task: relevant, clarity, set performance criteria
3. Environment:  location, leader with influence, sub groupings, other groups
10. Procedures and Processes-> Outcomes
11. Impact of Education:
1. do any companies educate their employees about this stuff?  (Dave)
12. References for high performance, "stop the line" companies
1. Taka Fujimoto- TPS related
2. Carl Weick-
13. F1 Example:  
1. check lists
2. Clarity of roles, homogenizing teams
3. intergroup communication
4. trust
5. time constraints
6. importance of scientific method
7. "open leadership" vs authoritarian
8. winning over people's lives? (safety also important)
9. having a plan B
10. applications to medicine (ICU), checklists
11. interdependence of activities (similar to construction, problems of sub-contractor communication)
12. importance of repetition-
13. in many ways F1 is an idealized case
1. budget limitations in recent years- FIAA set limits on team budgets
2. complexity of printing at the Business School- trace steps
3. complexity of booking rooms at the Business School- write proposal
4. bbc iplayer-  chance to see F1 races (free to watch streaming online)
14. leadership
14. Decision Making
1. J.G. March
2. lateral vs. vertical decision making
3. Dearborn and Simon:  executive problem solving
4. Rational Models:  Systematically connect outcomes to behaviors
1. objectives, outcomes
2. methods of achieving outcomes
3. utilitarian
4. identity related decision-  what kind of person am I.  What kind of an outcome would be achieved through this endeavor
5. "its just not me"- not a good match with my image of myself
6. impact of emotions based decisions- (Sometimes cognitive functions are unconscious and emotions connect here?)
7. Idea of Open Courseware at UEBS
8. Start with reality gap:  
1. where are we now
2. where do we want to be?
3. from the beginning:
4.  define the problem correctly
5. (how to balance the "get it done" attitude with creative side?)
9. Objective= desired outcome (that you would like to achieve)
10. Constraint= condition that must not be violated (why outside your control?)
11. organizational structure based on objectives
12. fundamental to the organization ("needle of the compass that allows you to set a course")
13. for multiple objectives, danger of losing focus,danger or too many requirements, overstretch
1. must prioritize
2. establish weighing factors
3. University of Edinburgh's fear of duplication:  Begin with consultation exercise.  Too many requirements, behind schedule, cost overruns
4. Edinburgh Tram situation- 
14. Trip from EDI to Glasgow- what constraints?
1. min cost
2. min time
3. max safety
4. max passenger comfort
15. Brainstorming  divergent (Debonan's terminology)
1. arrange criteria on the vertical
2. arrange methods of achieving on horizontal
3. KPI=key performance indicators
4. estimate= basic modeling=using knowledge about historical data in order to extrapolate about the future
5. Criticisms of Rational Model:  
1. biased towards data that you have
2. removes ability of "Gut feel"
6. Alternatives to the rational model:
1. Herbert Simon "bounded rationality"
2. "good enough" solutions
3. suggestion for FT cost issue:  blogging as a cheaper alternative
4. search (for alternatives) cost- decreasing (almost costless!)
5. slack=unexploited opportunities
6. Rules and obligations (values based, but how to determine and unify values across groups)
7. Garbage Can Model-  goals and decisions are not always clear-cut and the group of decision makers is fluid (fluid participation)
1. being persistent
2. contentious issues last (tactically better because at the beginning of meetings, people are less likely to notice!)
3. "gambler's fallacy"- must continue risking "because you've already bet so much!" locks people into courses of action (Vietnam War?)

OM, September 27th

1. "fair share allocation"- partition retail so that stocks in multiple locations run out at the same time
2. behavior of customers in a store
3. 
   

Production Game (Organizational Behavior)

THE PRODUCTION GAME

University of Edinburgh Business School MBA
6 October 2011

Location: Conference Room, 4^th Floor, Business School

Before the Game

For the Production Game the MBA class will be divided into Groups of 7-8 people, each of which constitutes a company. Before the Game it is very important that you meet in your groups and plan how you will tackle the Game. Once you get into the Game itself you will be very busy and planning will be extremely difficult.

You will be given your starter pack of materials in the first OB session of the morning on 6 October..

Schedule for 6 October 2011

11:15 Conference Room and Roof Terrace open to begin setting up. Preparation in Groups for the Game, formulation of strategy and approach, discussion of this with controllers.

13.45 Final Briefing before trading begins

14.00 Trading commences

16.15 Trading ceases; all materials to be handed in to the controllers. Teams reflect on the Game - each team to prepares its report-back to the class

17.45 Controllers provide performance data and final results

18.00 Each company gives a short summary on its observations on the Game, with reference to issues of performance and organization. Initial discussion of issues arising

18.30 (approx) Close – those who wish can continue the debrief in the pub!

13 October 2011 – 0900-1045

Presentations (5-10 minutes duration per team) comprising complete analysis of each Group’s performance. This should cover the main issues contained in the brief for your assignment – see page 4 of this document.

THE PRODUCTION GAME

Introduction

The Production Game is a simulation of a manufacturing operation. Small companies (teams) are required to manufacture simple paper- based products based on orders from a market place. Products which meet the required standards of quality and delivery are purchased by the market. Unacceptable products are rejected.

At the start of the game each team is provided with a starter pack of equipment and materials. You may purchase more capital equipment and raw materials as the game goes on. The game is cashless; the controllers maintain a record of debits and credits to your company's account. However, each company is strongly advised to keep its own records to resolve differences between the controllers and the team about payments and receipts. In the case of discrepancies, the controllers' judgement is final. Equipment and materials available for purchase include:

1. 12" rulers £300
2. 5mm stencils £400
3. 10mm stencils £500
4. Pens £300
5. Pencils £100
6. Rubbers £300

7. Paper - white (per sheet) £10
8. Paper - coloured (per sheet) £20
9. Envelopes (each) £10

Extra materials or equipment must be ordered using the special procurement forms provided (a specimen form is included in this document). There is a 10 minute lead time on all purchases. At the end of the game capital equipment and unused consumables will be valued at 30% of their original purchase price, as long as it is still in pristine, usable condition..

If you wish, you can purchase a benchmarking report, showing the performance of companies from previous games, for £500.

Products and Company Operations

Each team produces greeting cards in a range of colours and sizes, with the occasion stencilled on the front of the card and an appropriate verse written on the inside. The market will buy at a declared price any order which is complete, manufactured to specification and delivered at or before the required time. Some cards (for example Christmas) may be ordered to a delivery date, that is a time in the game when they must be ready. Other cards, such as birthdays, may be open delivery and can be delivered at any time up to the end of play. There will be special orders, which embody some unusual requirement of size, shape or occasion and will carry a premium price.

Sizes are A5, A6 and A7. Paper is supplied as standard commercial A4 sheets. To make an A5 card fold an A4 sheet in half along the short dimension. The short dimension of the A4 is now the long dimension of the A5 - an A5 is hence half an A4. An A6 is made is made by folding an A5 sheet in half and an A7 by folding an A6 in half. The cards are formed by folding only. No cutting is required.

The format of a finished card is shown in figure 1. Seen from the front the fold runs down the long left hand side, with the occasion stencilled across the middle. The specification states that this should be centred in both the top-down and left-right dimensions. On the back the manufacturing team's identity and the sales order number is to be written on the bottom right-hand corner next to the fold. Inside the card the verse must rhyme, be neatly set out, legible and not enter the margins given in the specifications. Verse must be written on the right-hand inside page.

The Market

The marketplace is represented by an 'order board'. Orders are placed on the board by the controllers. Each order specifies the number and type of products required, the time by which they are required and the price that will be paid. As described above, some orders will specify 'open' delivery and will be accepted at any point of the game's duration. A team accepting a particular order undertakes to meet particular delivery and quality requirements with the game's controllers. For an order to be valid it must have a delivery deadline specified, and be signed by one of the controllers, to whom the finished product must be delivered. Orders which are taken on but not completed by the deadline are rejected, and due to a penalty clause render the company liable for 20% of the value of the order. Orders vary in terms of their size, complexity, delivery deadlines and of course price. Generally, the more demanding the order is, the more money it earns for the company completing it successfully. Sample orders from previous games are shown in figure 2. These accurately represent the nature of the market, and may be used to assess the relative attractiveness of orders.

Orders are placed using a standard 'SALES ORDER AND DELIVERY NOTICE', a specimen of which is attached.

Delivery

All the cards in a given order must be delivered together packed in an envelope with the original SALES ORDER AND DELIVERY NOTICE (SODN). Each order must be delivered in a separate envelope, marked on the outside with the identity of the manufacturer, which must also be written on the SODN. Neither part deliveries nor envelopes containing more than one sales order will be accepted, and no company will be paid for unidentified consignments.

If anything in the order is not up to specification, the whole order will be returned to its makers together with an indication of why the order has been rejected. That order is then lost, although salvageable materials may be re-used in later orders as long as they meet the specification.

Organization and Strategy

The teams may choose any form of organization they consider appropriate. Good organization is crucial to commercial success in the game, and careful thought on this will pay dividends. The process consists of 10 identifiable activities:

• selecting orders
• reducing sheets to size/folding sheets
• verse composition
• copying verses
• copying occasion (front cover)
• copying manufacturer's identity and order number (back cover)
• packing
• completing sales order and delivery notice
• labelling envelope
• delivery

There are five administrative functions:

· identifying and selecting orders (sales/marketing)

· estimating and ordering raw materials (stock control)

· process and organization of manufacturing (production control)

· cost and revenue calculations (accounting)

· record keeping as required

You need to think hard about an appropriate division of labour. Are you going to go for a functional or a product-based layout? What co-ordinating (integrating) mechanisms are you going to use? What is your strategy? What does ‘strategy’ mean in the context of the Game? What does your strategy imply for the structure you adopt? How are you going to make choices and decisions? And so on.

Trading runs for two and a quarter hours. At the end of this time the performance of each company (in terms of turnover, profit and loss, delivery and quality) will be calculated and compared. Each company will be required to make a short presentation on their performance during the game.

Report -Back

In preparing your presentation please reflect on the following areas:

1. Overview: Short summary of overall performance of your company and your reflections on the game.
2. Strategy: The strategy your company pursued (if any).
3. Strategy Formulation: The manner in which that strategy was formulated.
4. Strategy Execution: How the strategy was reflected in your decisions about the organization and control of the manufacturing process.
5. Control: The methods used to control costs, quality, time etc
6. System Management: How the whole system was managed – e.g. the coordination between 'Marketing and Sales' and 'Manufacturing', and between 'Manufacturing' and 'Purchasing'
7. Information Systems: Formal and informal information systems that were designed or evolved during the game; the appropriateness of these
8. Successes / Failures: The things that you feel you did right, and the major errors you made; how you would do it differently next time.
9. “Benchmarking”: Comparisons between the processes of your company and those of others. The impact of these on performance.

Good reports will not merely provide a summary of “what we did” but also provide some reflection on and analysis of these results.

Figure 1 Format of an A7 Easter card

EASTER

Co. A/S01

Outside back Outside front

Fold

Easter eggs me on to rhyme

All my greetings at this time

Figure 2 TYPICAL MARKET CONDITIONS

The data given below are drawn from a recent market research report on the market in which you will be operating. The report was produced by a reputable company, and it is safe to assume that it fairly represents the conditions under which you will be operating.

LEAD LINES OF
QUANTITY COLOUR SIZE TIME VERSE OCCASION PRICE
4 White A5 15mins 6 Christmas £106

12 Green A6 25mins 4 New Year £504

8 Pink A5 Open 6 Wife’s birthday £232

4 White A6 25mins 4 Father’s birthday £84

12 Salmon A5 20mins 6 Get Well Soon £768

8 Yellow A6 30mins 4 Baby Girl £280

6 Blue A5 15mins 6 Baby Triplets £212

12 White A6 15mins 4 Good Luck £516

8 Green A5 25mins 6 St David’s Day £320

4 Pink A6 Open 4 Mother’s Day £124

12 White A5 25mins 6 Examination Pass £252

8 Salmon A6 20mins 4 Marriage £440

12 Green A7 25mins 2 Pregnancy £504

4 Yellow A5 30mins 6 New Job £144

12 Blue A6 15mins 4 18 Birthday £1032

8 White A5 15mins 6 Driving Test Pass £280

4 Green A6 25mins 4 New Home £168

8 Yellow A7 30mins 2 Passover £280

12 Pink A5 Open 6 Easter £324

8 White A6 25mins 4 Silver Wedding £160

APPENDIX

Contains specimens of:

• Sales Order and Deliver Notices
• Specifications
• Starter pack contents
• Procurement Forms
• Final Accounts Forms

SALES ORDER AND DELIVERY NOTICE (to be retained by controllers after delivery)

Sales order number:

Company

Occasion	Quantity	Colour	Size	Number of lines of verse	Leadtime	Price

Time order granted			Accept			Comments
Time due			Reject
Controller signature	...............	......	...............

SPECIFICATIONS

1. Text inside and on the rear of the card to be neatly written.

2. All lines of text to be perfectly horizontal.

3. Title to be centred, both horizontally and vertically and stencilled on front cover. A5 cards must use 10mm stencils; A6 can use 5mm or 10 mm; A7 must use 5 mm stencils.

4. Verse text must not exceed the following margins:

Card Left Right Top Bottom
A5 30mm 30mm 40mm 40mm
A6 20mm 20mm 30mm 30mm
A7 10mm 10mm 20mm 20mm

5. Verses must rhyme.

6. Text to be written using pens provided with no smudges.

7. All cards in a batch to have the same verse.

8. No pencil marks to be visible .

9. Closed folds: - to be at the top of A6 and A7 cards

- to be on the frontispiece of A7 cards.

10. Manufacturers identity and sales order number to be written on the back of every card in the bottom right-hand corner next to the fold.

11. Products to be delivered in an A4 envelope, marked with the company's ID and the sales order number on the white label.

12. Neither part-deliveries nor envelopes containing more than one sales order will be accepted.

13. Missed deadlines or non-delivery mean the loss of that order plus a penalty charge of 20% of the value of the order.

14. No equipment to be used other than that bought from the game's controllers.

IF IN DOUBT - CONSULT THE CONTROLLERS

THE STARTER PACK

All companies are issued with the same starter pack containing:

1 Ruler £ 300
1 5 mm stencil £ 400
1 10 mm stencil £ 500
1 Pen £ 300
1 Pencil £ 100
1 Rubber £ 300
10 Envelopes @ £10 £ 100
10 sheets of white @ £10 £ 100
10 sheets of salmon @ £20 £ 200
10 sheets of pink @ £20 £ 200
10 sheets of blue @ £20 £ 200
10 sheets of green @£20 £ 200
10 sheets of yellow @ £20 £ 200

TOTAL VALUE: £3100

Each pack also contains the following material which is offered free of charge:

- 3 SPECIFICATIONS lists

- 20 PROCUREMENT forms

- A FINAL ACCOUNTS form

Extras of these are available free-of-charge during the game.

PROCUREMENT FORM

Use to order equipment and consumables: To be retained by controllers on final delivery of the order.

ALL ORDERS HAVE A LEAD TIME OF 10 MINUTES AND A MAXIMUM VALUE OF £1000.

Company: .............................

Capital Equipment

Number Price Total

12" rulers ...... £300 ......
5 mm stencils ...... £400 ......
10 mm stencils ...... £500 ......
Pens ...... £300 ......
Pencils ...... £100 ......
Rubbers ...... £300 ......

Consumables

Paper - white (per sheet) ...... £10 ......
Paper - coloured (p/sheet)
Sheets of salmon ...... £20 ......
Sheets of pink ...... £20 ......
Sheets of blue ...... £20 ......
Sheets of green ...... £20 ......
Sheets of yellow ...... £20 ......


Envelopes (each) ...... £10 ......

Benchmarking Report ...... £500 ......

TOTAL PAYABLE: ......

Time order placed:
Earliest collection time:

FINAL ACCOUNTS

Company Name: ..........................

INCOMINGS/ASSETS

Total value of sales £ ........

Assets at end of game:

Ruler ..... @ £ 300 £.........
5 mm stencil ..... @ £ 400 £.........
10mm stencil ..... @ £ 500 £.........
Pen ..... @ £ 300 £.........
Pencil ..... @ £ 100 £.........
Rubber ..... @ £ 300 £.........
Envelopes ..... @ £ 10 £.........
Sheets of white ..... @ £ 10 £.........
Sheets of salmon ..... @ £ 20 £.........
Sheets of pink ..... @ £ 20 £.........
Sheets of blue ..... @ £ 20 £.........
Sheets of green ..... @ £ 20 £.........
Sheets of yellow ..... @ £ 20 £.........

Benchmarking report ..... @ £ 500 £.........

Total Assets £.........

Assets at end of game (30% of total) £.........


TOTAL INCOMINGS/ASSETS £ ........



OUTGOINGS/LIABILITIES

Starter pack £ 3100

Materials purchased £........

Fines and penalties £........


TOTAL OUTGOINGS/LIABILITIES £........


PROFIT/LOSS £........

Number of rejected orders: .........

Organization Behavior, Buchanan and Huczynski (Chapter 8)

1. humans cannot take in too much sensory information, therefore we filter
2. selective attention- we pay attention to one thing over others
3. perceptual threshold- point beyond which we cannot sense
4. habituation- getting used to a certain sensory input
5. principle of closure- filling in missing information based on prior exposure
6. change blindness- we fill in the blanks and can often not detect even signifigant changes in the visual scene
7. How to avoid mis-perceiving:
1. get more information
2. get relavant information
3. don't see what we want to see, see what is
4. don't listen to hearsay
5. don't project
6. understand personal biases

Organization Behavior, Buchanan and Huczynski (Chapter 1)

1. Organizational Behavior: is concerned with the question of how human interactions and processes within organizations evolve, and why things occur as they do.  Also, how to get these interactions to serve a positive purpose?  Term first used by Fritz Jules Roethlisberger (1898-1974) He began using the term in the 1950's.  
2. basic conflict in organizations between individual and organizational aspirations
3. perspectives:  postivist vs. constructivist
1. constuctivist:  shared societal experiences lead to realized meaning, study processes that work
2. positivist: causal theories can be tested through regulated experiments, not always applicable to multivariate, ill-definable, interleaved, amorphous, imeasurable social phenomena.  Variance theories test effect when measurable variables are changed
4. theories: variance theory vs. process theory
5. evidence based management
6. "multiple stakeholders, inclusive adjenda":
7. organizational dilemma- meet objective and treat people well
8. organizations are necessarily stratified
9. Clarence H. Eckles, Dairy Cattle and Milk Production 1956 -> Gray and Starkt 1984
10. PESTLE analysis- Political, Economic, Social, Technological, Legal, Ecological context of an organization
11. two issues in particular are important:  Organization Outcomes, quality of Organizational Life
12. fundamental attribution error-blaming a member of the organization instead of the organization itself
13. Tools of the Social Scientist:  observation, questioning, documentation
14. Tools of Organizational Behavioral Action seeker:  
1. staff training
2. psychometric assessment
3. employee communication
4. job redesign
5. teambuilding
6. reorganization
7. organizational change and cultural change
8. human resource management
15. Principles of Management:
1. control the number of change variables, because managers can't typically focus on more than a few at any one time Rousseau, 2006
2. Factors which affect management decisions:
1. evidence
2. experience
3. Based on research conducted by J. P. MacDuffie of automotive plants, powerful management systems won out in terms of productiveness. (Pfeffer and Sutton 2006)
4. John Purcell defined three requirements for good performance:
1. ability
2. motivation
3. behavior
5.  BATH Model- good HR leads to stimulating workers
 
 

Operations Management, Ian Graham

1. OM=design and control of processes; 4 week course
2. quality, technology, knowledge management, inter-organizational relationships, risk (strategic level)
3. LEAN has become the dominant model
4. Grading based on 2 essays and 1 group wiki project
5. why is operations management taught less now than in the past?
1. software
2. specificity, simplicity of operations
3. expertise management has changed-sharing knowledge in a less formalized way (wiki approach)
6. 看板 (placard)-system:  not more inventory than the number of cards　平準化 　standardization, quality circles:  workers team together to solve problems.  Use the experience of everyday workers.  自動化->自働化　（Toyota put people into motion through their implantation of 自動化
7. Taiichi Ohno's 7 Wastes: in Toyota Production System (TPS), 1988
8. The Machine That Changed The World, The Story of Lean Production by Womack, Daniel Jones, Daniel Roos 1990
9. Customer-based demand triggers
10. Lean qualities: small quantities, synchronized flow
11. 1934 Percy Shaw- reflective "cat's eyes" road studs
12. Iphone, 24% parts come from Samsung
13. Qualcom-chipsets, now get most of their business from licensing LTE (Q: what is LTE?)
14. Crowd-sourcing, Open Standards
15. http://webdb.ucs.ed.ac.uk/operations/ftops/ 
16. Safari-com used in Kenya for mobile phone based 
17. British bank deregulation-1986

Womack and Jones, Lean Enterprise (1994)

1. collaboration required to implement LEAN
2. managers switch focus to enterprise from HR
3. lean enterprise vs. lean production-- different concepts?

Chesbrough 2003, The Era of Open Innovation (Spring, 2003)

1. Article is taken from the MIT Sloan Review
2. firms need to be semi-permeable to allow ideas to flow in
3. ideas which cannot be capitalized on, should be sold to other firms
4. Lucent should have benefited from Bell Labs facilities, but Cisco (founded 1984) was able to better compete through strategic acquisition instead of raw research
5. P&G changed their closed company culture to allow cross pollination of ideas outside of the organization
6. Innovation Investors and Benefactors (special terms used within the paper) facilitate innovation
7. VC has facilitated the change from closed to open.

Zara's POS and IT upgrade (or not)

1. 1st Zara store opened in La Coruna in 1975
2. 1985- Inditex (Industria de Diseno Textil) founded as a parent corporation to Zara
3. Questions Provided by Ian Graham:  Zara Case
   1. Describe Zara's Business model? What are the strengths
   of this model and how sustainable are these strengths?
   2. At the time of the case how can the opportunities to
   improve Zara's IT capability be assessed? Which changes
   do you you think would have been justified?
   3. Drawing on your knowledge of how technology and
   retailing has evolved in the intervening seven years, how
   do you believe the use of IT in a company like Inditex will
   have evolved?
   Reconvene at 4 pm: groups will be asked to comment briefly
   on these questions.
4. Link to Zara webpage

Innovation at BBVA (Operations Management)

1. Written by Juan Ramis-Pujol and Henning Droege of ESADE 311-098-1
2. Large retail bank BBVA faced competitor challenges 
3. BBVA=Banco Bilbao Vizcaya Argentaria, founded in 1857 in Bilbao and is the 2nd largest Spanish bank after Santander. 
4. Innovation is considered one of the companies "three strategic pillars"  (Source:  biographies-angel-cano-manuel-castro-ramon-monell-juan-ignacio-apoita.pdf)
5. Current CEO:  Francisco Gonzales, author of Innovation for the 21st Century Banking Industry
6. What distinguishes BBVA from other retail banks?
7. 2007-BBVA launched an innovation program spending 5 billion Euros to create Centro Innovacion, CI
8. Manuel Castro-Head of Innovation
9. Open Innovation approach of Google was studied.  Ref. 2:  Bring in outside knowledge and pursue outside paths to a market (Source Open Innovation, Chesbrough 2003)
10. Cooper's Stage Gate Model is a traditional institutional approach to innovation
11. at BBVA, each innovation is considered (and funded) in isolation using a non-standardized approaches (page 4,7)  Some common themes exist in how the company handles innovation, listed below:
1. Track the Consumer- customer insight unit was created (Ref 3) Including testing subgroups of consumers to see how they react to an idea (page 4 bottom).  Customer trends and needs are sought (page 5 top).  Research begins by examining existing market data on the consumer (Q: from which source?) Fig 2:  (Q: What "New Digital Tools?")
2. Looking outside of the company (Ref4 same as Ref3)  Business Partner Department for identifying technology and approach (outside partners for example) that can meet an innovation need.  BBVA is active in outside innovation fairs
3. Tools created to share "collective experience".  Innovations are given thorough scrutiny.  Project managers must report to an innovation team manager to allow higher level corporate oversight of each project.  Additional people are invited if they have experience to share (inside or outside of the company. (page 7 top)
12. innovation centers exist at the division level and higher up at the "Innovation Center" in Madrid, high up the corporate ladder and situated under the bank president (page 6).  There are also "strategic innovation councils" with the CEO involved.
13. Tu' Cuentas funded on a fixed budget while Tpresento required incremental (stepwise) funding
14. Project Example 1 :
1. tu cuentas- "customer experience" developed with Strands
2. outside BBVA accounts linked to a spending-watcher style portal
3. BBVA acquired a 24% minority stake in Strands.com, nike+ and ipod software creator
4. Joint project team created involving 60 BBVA employees
5. SCRUM technique-lean development method by Takeuchi and Nonaka 1986 (Ref 6)
6. daily meetings tracked project progress
7. Jan. 2009, limited website release of Tu' Cuentas
15.  Project Example 2:
1. POK-targeted at those aged 14-40 to allow users to choose the members of a reality TV show
2. represented BBVA's attempt to enter the Social Media industry (ie compete with Facebook)
3.  communications software outsourced to a small IT company, BBVA little involved (page 9)
4. concept failed past short term run of TV show, but was used as a marketing tool to understand user behavior.  POK helped to fuel the tpresento project
16. Project Example 3:
1. tpresento (SME means small and medium enterprises)
2. allowed small to medium size organizations to network and to have an internet "presence"
3. networking is culturally important to Spain and Latin American countries (page 10)
4. 50 interviews and 18 focus groups fueled a BBVA research project on the needs of small and medium sized businesses.  The result was that many companies required IT resources, but were unwilling to fund such an effort.  A flexible solution was required, because each customer had their own IT needs.
5. the project manager, named Javier outsourced design of portal to a Swedish design company.  This company used a design approach called PERSONAS.  8 fictional personas were developed to represent the distinct user styles discovered by the focus groups
6. 2 months of "intense" beta testing was conducted and the service was released in Spain
7. Yellow Pages Spain and others have begun to successfully compete with tpresento
8. As of 2011, I have found almost no trace of Tpresento, save this flyer in Spanish
17.  Project Example 4:
1. eConta- accounting services for small and medium sized businesses
2. begun based on BBVA perception that small businesses accounting quality was poor
3. BBVA bought a 70% stake in eConta in June 2007.  In February of 2009, BBVA began to assert decision making authority over the small company, changing its "organic" practices
4. Rather than struggling to enter their own accounting data online, it was discovered that many eConta users could be better served through a mailed form system based on an earlier document archival service (Virtualdoc)
18.  Project Example 5:
1. Virtualdoc-archival service for preserve valuable paper documents by scanning them and storing them securely online.
2. Virtualdoc is a 70% owned by BBVA and 30% by a partner.  Management is primarily through the partner, but BBVA retains a parallel management team based in the innovation center in Madrid.
19. Project Example 6:
1. New ATM development- a project initiated by management to check it ATM machines were being fully utilized by customers
2. IDEO was contracted to study people's use of technology.
3. According to The Art of Innovation, Tom Kelley 2001, the IDEO method of innovation is as follows:
1. Understand the market, client and technology
2. Observe problems
3. Visualize through prototype creation
4. Evaluate & Refine by building additional prototypes
5. Implement- commercialize and market
4. BBVA mediated among several ATM suppliers, communicating the design intent of IDEO
5. Some images of IDEO's ATM concept are shown on this website.
20. Questions for discussion:
1. What types of innovation were pursued by BBVA?  BBVA pursued software as a way to increase its access and appeal to customers.  It did so by acquiring or hiring smaller innovative firms to develop customer solutions (such as a new ATM design) which it then offered to customers.
2. Outline the main stages in the process of innovation at BBVA.  BBVA would embark on an idea from upper management, conduct research into the idea, and if the research confirmed the initial idea, they would hire outside companies to solve a particular problem.  In conjunction with the outside company, their own CI (Innovation Center, see above) would supervise and try to expand on the idea of outside firms.  Overall, BBVA cannot be said to be an innovative company in its own right.  The poorly written article proves this point many times.
3. How is Open Innovation applied at BBVA?  Because almost no innovative ideas could flourish within the large BBVA organization, it was almost exclusively brought in from other companies.
4. How do BBVA ensure that their lead from innovation is maintained?  Due to their size and market position, they are capable of simply "buying innovation" instead of having to breed it within their own company.  As long as they remain profitable, they can continue to "buy innovation" from other firms such as IDEO.
5. How can BBVA improve their management of innovation? How would you justify any changes? Are there any potential dangers?  Innovation is for smaller firms that can support rapid change.  A bank's activities don't lend themselves well to this type of rapid change.  BBVA cannot and should not be an innovative company.  What is should do is to simplify its operations and innovation management structure (preferably eliminating it all together) and focus on being a bank.  For innovation, BBVA is best hiring outside companies as it has done and should stop trying to be a software company.
6. Chesbrough Article on Innovation 
7. CRM- Customer Relationship Management- focus on innovation
8. https://www.wellsfargo.com/wfonline/wellsfargovsafe/plans
9. (Q:Why doesn't BBVA focus on banking innovation?
 

Introduction to Macroeconomics,Jonathan Crook

1. Demand for the Euro is less than supply.
2. Look at news before coming to class.
3. resources are scarce, how much should be produced?
4. What is the origin of scarcity?
5. Businesses seek to maximize profits and share price; individuals seek to maximize satisfaction
6. "Aggregate Demand"
7. "Goods Market" <has a relationship with> "Money Market"
8. Abstractions and assumptions are used to make predictions.  Economic Models are selected based on frequency of their correctness.
9. Lucca's question:  Why the infighting between economists with their different models?  Response:  Some new theories take time to verify
10. "Econometrics"-data analysis and correlation
11. Demand and Supply Curves plotted for every possible price
12. marginal=extra
13. marginal satisfaction/cost for it
14. Demand=amount people wish to buy at every possible price
15. Equilibrium Condition
16. Start next handout:  Determinants of Demand and Supply
17. spot market:  for sale then and there
18. Price Index:  A number which shows adjusted prices  CPI-weighted average (Question:  How are weights determined, ie cultural specificity)
19. "nominal amount"=money amount
20. Discussion of supply and demand curve moving factors

Guest Speakers on Innovation, Friday September 16th

1. Gordon from Wolfson Electronics
1. don't over or under-manage creative people
2. chip manufacturing methods (capital intensive) requires getting things right the first time
3. avoid complacency 
4. 80:20 principle (80% revenue flows from 20% of the individuals, 20% of customers create 80% of revenue)
5. Wolfson uses Fabs in Asia to produce it's chips.  DSP and sound related chips are used in portable devices
2. Mike from P&G
1. connect different piece of knowledge
2. create a novel idea
3. Gavin, a lecturer and angel investor
1. 10% margin companies cannot afford to innovate
2. 30-40% margin companies can afford to
3. there is an industry specific risk of innovation (certain industries lend themselves toward innovation better than others)
4. less venture capital in Scotland (by far) than in Silicon Valley

Summary of Bartlett, Mclean's "GE's Jeff Immelt: The Voyage from MBA to CEO"

1. This case is a rewrite of a larger case:  "GE's Talent Machine: The Making of a CEO" HBR 304049
2. Article is titled:  "GE's Jeff Immelt:  The Voyage from MBA to CEO" HBC 307096
1. Chris A. Bartlett
2. Andrew N. Mclean
3. Input provided by:  Jim Ettamarna Harvard MBA 2003
3. Introduction:
4. GE promotes CEO from within the company by tradition
5. Exhibit 1 is incorrect:  Should be the exhibit 1 from original article. (see HBR 304049 page 14)
6. GE CEO List:
1. Edison-> 1892 Charles Coffin
2. ->1951 Cordiner (establishes Crotonville in 1956, establishes Session C)
3. ->1963 Borsch (Nuclear power, plastics, computers)
4. ->1972 Jones (introduced the sector)
5. ->1981 Welch (Crotonville changed from "rite of passage" to talent search, implemented employee survey)
6. -> 2001 Immelt (Took over the day before 9/11, began to bring outside talent in, focused on shifting management overseas for GE India, China)
7. Crotonville- place where managers are educated within GE.  A sought after privilege.
8. Session C assessment- personnel development assessment (GE)
9. Reference 1, describing GE vs. McKinsey
10. Reference 2, describing GE CEO Charles Coffin
11. History of HR at GE:
12. Reference 3, Cordiner's Book on Professional Managers (open source)
13. Welch consolidated the 29 personnel levels (established by Cordiner) to only 7, leading to less frequent promotions
14. Welch used a method dubbed "the vitality curve" to drop the lowest 10% of employees.
15. Immelt entered GE in 1982 and was selected for Crontonville 6 years later.
16. Immelt's initial experience was in Plastics, and his progress was tracked by Dammerman at various stages.  Later he moved to medical devices, and began to cultivate talent around him, tracking and promoting others just as Dammerman had tracked him.
17. Discussion:  Can GE's culture be applied to other companies?  
18. Unique Culture of Edinburgh MBA
19. K. Andrews 1987.  The Concept of Corporate Strategy
20. SWOT analysis- strengths and weaknesses
21. Mintzberg's Emergent versus deliberate strategy
22. Semester 1:  Accounting, Business Ethics, Statistics, Macoecon, Finance, Marketing, OM, OB SM, Leadership & Personal Development
23. Semester 2a:  Corporate Strategy, Critical Inquiry for business
24. Semester 2b:  Leadership (Full time MBAs only)
25. Tom Peters, Management consultant
26. The Immelt Revolution (Bloomberg)