External/internal Factors
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External/Internal Factors
Dell is considered a very successful company. According to Govindarajan & Gupta (2005) one of the successes is its customer-direct concept that has been practiced since the companys inception. The concept involves dealing with customers directly and not through a third party, which helps maintain the quality of the relationship with its customers and also the products. In addition, this concept allows Dell to eliminate unnecessary inventories, warehouse space and storage expenses. Dell succeeds by expanding its business, which can be measured by how it creates relationships with other big businesses, such as Walmart, Boeing, and Ford. Dell expands its business by providing products other than computers, for example LCD TVs, digital cameras and financing services. Dell possesses a unique ability to manage its business well enough to continue down a path of notable growth and success in a fiercely competitive industry. The Companies commitments to reducing costs, developing its products to meet customer demands, and providing the best value to its customers are some of the ways that continue to drive the growth in Dell. Efficiencies in Dells direct business to personal customers and development of its appeal to enterprise computing customers also contribute to the success and growth of the Company. Dell follows a textbook model of effective management by incorporating planning, organizing, controlling and leading within its organization. Planning is setting goals and deciding on courses of action, developing rules and procedures, developing plans, and forecasting (Dessler, 1998). Organizing entails identifying jobs to be done, hiring people to do them, establishing department – groups – teams, delegating or pushing authority to subordinates, establishing a chain of command and coordinating work (Dessler, 1998). Controlling is setting standards, comparing actual performance with these standards, and then taking corrective actions as required (Dessler, 1998). Lastly, Leading means influencing other people to get the gob done, creating and sustaining a vision of direction and improvements, maintaining morale, molding company and group culture, and managing conflicts and communication. These are the four basic functions of management. Within these functions there will be internal and/or external factors that will have an influence on them. In this case study we will examine and illustrate on the attached table 1 how globalization, innovation, and technology affect the planning, organizing, leading, and controlling functions of management within Dell.
Table 1
Globalization
Innovation
Technology
Planning
▪Dell plans to grow its business by developing the capabilities of teams around the world. 1 ▪International expansion is key to Dells quest to double the companys revenue within the next few years, according to Dell Executives 1
▪Dell seeks growth by inventing other products, such as LCD TVs 2 ▪Dell plans to earn $80 billion in annual revenue within 4 years by working with business ventures 2
▪Dell technology is based on the industries standards, not on proprietary standards 4 ▪Dell products are not made to be cool and flashy. They are made to be effective and cost efficient 4 ▪Dell is a process innovation company rather than a product innovation company 4
Organizing
▪Dell is organizing a global network of suppliers to improve the performance and lower the cost of its systems 1 ▪Dell chose Oracles PeopleSoft Enterprise Online Marketing for its ease-of-use campaign delivery, powerful audience segmentation features and dynamic content management. With Online Marketing, Dell can focus on its corporate globalization 1
▪Dell does not offer new innovations; they offer products and services to improve existing technologies 3
▪We communicate directly with our customers – in person, via the Internet or by phone – so our understanding of their needs is instantaneous 5 ▪We operate one of the worlds leading Internet sites at www.dell.com, which makes us the ideal company to show customers how to take advantage of online tools 5
Footnotes
1 (Principles, 2004)
2 (Lyons, 2005, p. 2)
3 (Lindquist, 2005)
4 (Technology, 2005)
5 (Company, n.d.)
Table 1 cont.
Globalization
Innovation
Technology
Leading
▪Dells Management Development Program offers a course to international students employed by Dell in critical regions outside the U.S. The program offers a commitment to personal development by building knowledge, understanding, expertise and leadership effectiveness 6
▪Dell is referred to as an efficiency machine, investing heavily in brand marketing, innovative Websites and highly efficient sourcing and fulfillment processes 8
▪Niche leaders build a loyal customer base by offering quality merchandise, exceptional service, or both 8
▪Former Dell CIO led a change effort within the company to be more efficient, global, and more closely linked to business performance 10 ▪Direct contact with customers helped Dell gain a superior