Management Quotes

What is often overlooked is that if one person can single-handedly save the ship, that one person can probably single-handedly sink the ship, too.
— Unknown

No Comments » Posted by Administrator / Risk

Put bluntly, those with the best work forces will win the competitive game of the 21st century. The quality of the work force is the key strategic competitive weapon for the individual, the firm, and the nation. In a global economy, those without skills have to face what economists know as “factor price equalization.” The unskilled who live in a rich society can make no more than the unskilled who live in a poor society. If the unskilled in rich societies won’t work for such wages, unskilled jobs will simply be moved to poor countries where the unskilled will work for such wages. In a global economy, the effective supply of unskilled workers expands enormously and the wages of the unskilled in rich countries fall.
— Lester C. Thurow

No Comments » Posted by Administrator / Economics and International

If the winners are the inventors of products, the education of the top 2 5 percent of the labor force is critical, because someone in that group will invent the new products. If the winners are the cheapest and best producers of products, the education of the bottom 50 percent of the population moves center stage, because this part of the work force must master the new processes. If the bottom 50 percent cannot learn what must be learned, new high-tech processes cannot be employed. If a firm or country is to be successful, each and every worker must have high-tech skills.
— Lester C. Thurow

No Comments » Posted by Administrator / Economics and Education

Over time, the pay and promotion curves for managers and engineers handling production-process problems have fallen behind those in design and new product development. In the United States, production has ceased to be the route to the top. Among today’s CEOs of Fortune 500 companies, 34 percent come from marketing, 25 percent from finance, 24 percent from general management, and only 4 percent from production. Noticing this fact, America’s brightest and best talent have not gone into the production area. Reversing this allocation of talent will be very difficult. What has come to be seen as a second-class activity has to be made into a first-class activity. Traditional salary scales and promotion practices have to be disrupted.
— Lester C. Thurow

No Comments » Posted by Administrator / Career and Miscellaneous

[In the past,] a new product gave the inventor a monopoly power to set higher prices and earn higher profits. The inventor had a new product that others did not have. In contrast, a new process still left the inventor in a competitive business making a competitive product. The inventor’s competitors knew how to make the product, and they could always lower their prices to match the inventor’s prices as long as they were covering marginal costs in their old facilities.

In contrast, to establish a similar monopoly position by inventing new process technologies, it was necessary to drive one’s competitors out of business completely. To do this, the new process technologies had to have average costs below the marginal costs of the old process technologies. Since marginal costs are typically far below average costs, an enormous (very unlikely) process breakthrough was necessary. Driving one’s competitor out of business was also likely to get one into trouble with the antitrust laws. With new products, in contrast, there were no old competitors to be driven out of business. Since new process technologies were less profitable than new product technologies, it was reasonable for a firm to spend most of its R&D money on new product development.

Today, however, levels of technical sophistication…are not very different. Furthermore, reverse engineering has become a highly developed art form…If I can make a product cheaper than you can, I can take it away from you even if you are the inventor. In today’s world, it does very little good to invent a new product if the inventor is not the cheapest producer of that product.
— Lester C. Thurow

No Comments » Posted by Administrator / Competition and Economics

Information is not intelligence, and gathering information is not carrying out competitive intelligence. Many companies have mechanisms to accumulate large amounts of information; significantly fewer companies have mechanisms for conducting competitive intelligence.

Intelligence uses information as raw material, screening, sifting, sorting, verifying, analyzing, interpreting, and compiling it to create a useful output. And just as information is raw material for intelligence, intelligence is raw material for a higher-level process: decision-making
— Stephen E. Rudolph, Ernest R. Gilmont, Andrew S. Magee, and Nancy F. Smith

No Comments » Posted by Administrator / Competitive Intelligence and Intelligence

In my previous book, I said that top management and employees are disconnected. That is still true-in fact, if you look at all the scandals, it’s because the disconnect became even larger in the last ten years. This book says that there’s a huge disconnect between all managers in multinational companies-not just senior managers-and 5 billion potential consumers. Because we don’t see poor people, we don’t know how they live.
— C.K. Prahalad

No Comments » Posted by Administrator / Miscellaneous and Social Responsibility

Euphemisms are widely employed by corporate executives. Thus, in standard financial reporting, companies “earn profits” - a phrase that conjures up the notion of positive achievement of their own doing. In contrast, firms “suffer losses.” That sounds like an unexpected blow inflicted by some sinister force in the external environment beyond corporate influence.
— Murray Weidenbaum

No Comments » Posted by Administrator / Communication and Miscellaneous

At least in the United States, most policymakers understand that in the long run, economic growth requires productivity growth: For per-capita living standards to increase, so must per-capita output. What is less well understood is that productivity growth requires the creation and satisfaction of new wants, not just the more efficient provision of existing wants.

Currently, discussions of productivity tend to focus on increases in efficiency and ignore the development of new markets, which is a dead end: Economies cannot sustain growth in productivity and living standards simply through efficiency. Sure, in the short run, increased efficiency does reduce costs, and as costs decline, people consume more of the good or service. But eventually, the law of diminishing utilities sets in: Sated consumers refuse to buy more even if prices continue to decline. After that, further increases in production efficiencies must come at the expense of the demand for labor.

In principle, societies could accommodate reductions in the demand for labor by increasing the time for everyone’s leisure. Over the last century, economic growth has helped reduce working hours and increase vacations. But somehow, beyond a certain point, societies seem unable to accommodate reductions in labor demand by spreading the work around…It is the entrepreneurial activity of creating and satisfying new wants that keeps the system humming.

Outsourcing jobs to low-wage countries resembles efficiency improvement in its symbiotic relationship to the satisfaction of new wants. It improves living standards in the United States, provided the human capital released here can be used to make new goods and services. Otherwise, as with improvements in efficiency, outsourcing is all too likely to reduce the demand for domestic labor.
— Amar Bhidé

No Comments » Posted by Administrator / Economics and Outsourcing

To tear down a factory or to revolt against a government or to avoid repair of a motorcycle because it is a system is to attack effects rather than causes; and as long as the attack is upon effects only, no change is possible. The true system, the real system, is our present construction of systematic thought itself, rationality itself, and if a factory is torn down but the rationality, which produced it, is left standing, then the rationality will simply produce another factory. If a revolution destroys a systematic government, but the systematic patterns of thought that produced that government are left intact, then those patterns will repeat themselves in the succeeding government. There is so much talk about the system. And so little understanding.
— Robert Pirsig

No Comments » Posted by Administrator / Change Management