Management Practices Traditional vs Modern Innovative

Management Practices Traditional vs Modern Innovative In last many years, few management accounting innovations has been developed. Managers have to make decision on a daily basis as well make decisions regarding the future and how to survive and grow in an energetic market place with ever growing uncertain circumstances. Traditional or modern management accounting system give relevant information to all levels of management, financial and other information to make decisions about planning, control of operations and identifying opportunities to add value. The modern management accounting practice are typically different from that of traditional management accounting as they enable managers to make sound decisions to minimize cost as well in the same time add value to the products and services by improving the quality of products, which is required by the customers, and reduce waste. In addition, the modern management accounting systems allow the organisation as whole to develop the innovative capacity of the organisation and flexibility so that it can continually change and improve performance financially as well in its non financial areas of performance. Traditional vs. Modern Innovative Traditional will focus on cost control and, in particular, what is recognized as variance analysis and which involves evaluating forecast outcomes with real outcomes for example for costs such as materials and labour. The types of activity, therefore, that management accountants have traditionally involved themselves with include: †¢ Cost analysis †¢ Cost control †¢ Budget preparation †¢ Budgetary control processes †¢ Cost/benefit analysis †¢ Investment appraisal. More modern, innovative approaches include initiatives such as: †¢ Business process re-engineering: This is about rethinking and re-designing business processes as a means of reducing costs and improving delivery †¢ Zero-based budgeting: re-thinking budgets in a way that engage justifying and prioritising all items of expenditure †¢ Activity-based management: looking at what actually causes costs to be incurred, and being better able to forecast and control costs †¢ Life cycle costing: considering a products costs over its entire life cycle (rather than just, for example, the initial building costs) †¢ Total quality management: the process of continuous quality improvement †¢ beyond budgeting: a challenge to traditional budgeting techniques via the use of more flexible and wide ranging processes †¢ Balanced scorecards: the use of key performance indicators within four different perspectives financial, customer, internal business process and learning/growth. Non financial performance measurement approached gained momentum as a result of dissatisfaction with the traditional techniques such as balance sheets and income statement, as technology increasing and increasing global competition, companies able to recognize better their fault and might to improve their existing capabilities and create new ones the most successful of these being Economic Value Added (EVA). Initially Return on Investment (ROI) was used to enhancement the intuition and insight of managers. It was used to send down the goal for division managers to meet from corporate office. Since managers reward and endorsement prospects depended on the ability to meet targets, these core managers has a strong incentive to adjust their information accordingly. Some businesses have built accounting teaching modules for their managers that help them recognize the detailed information they get. Management accountants have a vital responsibility in preparing and distributing training materials. Nowadays multifaceted managerial surroundings technical functions, particularly accounting, need to become more than suppliers of information. They must turn into a kind of an educating where managers can obtain training. So far in numerous organizations, accountants are too hectic to turn out to be instructors and internal reward systems likely depress such performances. As the range of management accounting messages enlarge to contain non-financial presentation indicators, management accountants get an additional challenge. Many managers have complexities visualizing the cause and result relationships that connect cost drivers to financial returns. Yet this is the key information needed to manage value, and education is regularly required to help managers recognize improved the reason and result relations that cause shareholder value. Increasing functional area means that managers are ever more detached from shareholder values. Many managers are powerfully devoted to the association without being dedicated to the financial aim that drives it. Management accountants have a responsibility to take part in instilling financial control and assigning financial values to non-financial managers. One technique is to need operating managers (rather than accountants) to systematically organize and present the financial study of their industry unit. At the similar occasion that the management accounting role must pay great amount of attention to the efficiency of its inner infrastructure processes, other demands are occurring. There is rising pressure to decrease on the whole cost of the finance function as a fraction of revenues. There are gradually more time consuming demands for more comprehensive external reporting. While these final goals are vital and must be achieved, setting the precedence there only boost the risk that internal accounting communications will be unsuccessful to get their objectives and that management accounting system modify will be further postponed. Conclusion As discussed above, the modern  management  accounting  relevant to modern organizational  management  issues as well rectify and reform the   traditional management   accounting  practices  to make decisions and specialized decisions based on relevant financial and non-financial information depending on the nature of activities, size, external circumstances and market conditions, customer profiles, organizational human resource issues, structural issues. Even the modern  management  accounting  is not additional but can be entirely different. As well, some are more appropriate to various organizations and some are not, given the internal  management  practices, size of organizations, top management  support, human resource  practices. Organizational structural issues, employee motivational factors, centralization decentralization issues. In other words, before considering implementing modern  management  accounting practices  the  management  must have a feasibility study considering the above issues and evaluate the cost and benefit of the systems in financial and non-financial terms. Otherwise the benefits are applied  without through evaluation and commitment by top  management, therefore the benefits of these  practices will not be realized fully. If carefully considered based on enough facts and not on emotions, then the modern  management  accounting  with other strategies will certainly help ful for  management  to make sound decisions and therefore contribute to the success of the organization than the  traditional  management accounting  practices.

Social environment

This is an example of a business changing to meet the needs of customers. Subways are trying to be more socially responsible by stunning their animals first, to appease consumers with strong moral objections. This Is Important because a study by Forbes showed that 65% of workers would seriously consider leaving their Jobs if they worked for a company that harmed the environment. Research has shown that over 88% of consumers think companies should try to achieve their business goals while Improving society and the environment.So therefore Subways diverse workforce may provide ideas that a more homogeneous workforce could miss. Also, they might eve a greater understanding of markets that may be segmented on these factors. They may also provide more natural links to market opportunities abroad, through linguistic skills, cultural knowledge and knowledge of foreign markets. This can explain why Subway operates in 83 countries, with a rapid rise in sales in Germany, its second most valuab le Western European market.Income Income can affect business. A company's products usually appeal to certain income groups. People with lower incomes are more sensitive to price and may prefer purchasing discount products. Permeates are experiencing a change In market share because of the increase of people with lower incomes and less disposable income who are sensitive to price (elasticity of demand) and a shift in tastes and trends, with cheap foods becoming Increasingly In demand.This means that the demand for discount food stores Is Increasing. Tests; an example of a food store that is experiencing a decrease in market share because people cannot afford Tests foods and prefer bargain stores like Lid. Deco's market share over the last 12 weeks (from outhouse) compared to a year ago Is down from 29. 6% to 28. %. Tests have responded to the threat with ‘hard discounters' by launching a poorly war on milk and other essentials. Tests has cut the price of pant milk to El to matc h budget chains.People are more aware of the importance of the environment and becoming ‘green consumers'; prefer environmentally-friendly goods which have less Impact on the environment e. G. Prefer to travel by bus. Cutbacks; expanding their recycling programmer to reduce waste developing more environmentally-friendly cups, evaluating store design and operations to identify ways to reduce the amount of water used, use responsible alluding materials and energy efficient designs for their stores The changing nature of the ethical environment Moral principles that should underpin decision making.Ethical behavior involves actions and decisions that are seen to be morally correct Ethics are the set of moral values held by an individual or group. An organization may make decision that it believes to be morally right, rather than one that suits the needs of some of its stakeholders. Thus a decision made on ethical grounds might reject the most profitable solution for an organizatio n in favor of one of greater infinite to society.Possible ethical stances Organizations may take different stances in relation to ethics, including: Viewing shareholders' or owners' short term interests as their only responsibility Recognizing that well managed relationships with other stakeholders bring long term benefits to shareholders or owners Including the interested and expectations of stakeholders in their mission Taking an ideological approach and placing financial considerations secondary Ethical Codes An instruction from an organization to its employees to indicate how they should exact to situations relating to moral values The focus of the code will depend on the business concerned. A typical code may include sections on Personal integrity in dealing with suppliers and in handling the firm's resources Corporate integrity such as forbidding collusion with competitors and predatory pricing Social responsibility Critics believe there is nothing more than public relations e xercises Ethical Investment Stock market investment based on a restricted list of firms that are ethically sound Ethical investors do not invest in firms thatFinance weapons deals to oppressive governments Make products involving tobacco, fur, animal testing and exploitative farming Do not act responsibly towards the environment or are not good employers Advantages/Disadvantages with Ethical Behavior Reviewing a firms ethical position A number of elements should be considered when reviewing a company's ethical position. Individuals Each person has their own set of personal standards derived from their upbringing, educations and background. As they make decisions, their own ideas of what is right and wrong is involved Corporate culture Set of unwritten rules that affect the attitudes and management style of a business. This can affect how employees behave in order to do well at the business Public standards Operate in an environment that affect everything they do and the results they achieve. A public outcry against a particular type of activity will force a business to look at itself and decide if it needs to change.It may also mean other businesses look at themselves as well Competitors A USPS can be built based on emphasizing their ethical stance. Other businesses may then review their operations Ethics, Business Culture and Delegation Organizations have cultures and codes of behavior that affect attitudes, decision making and management style. If there is conflict between the ethical position of the organization and the moral values of the individuals it employs, then delegated decision making may not reflect the ethical position of the organization. The potential of this problem can be minimized if the culture is one which all employees understand and take responsibility for.Changing business cultures is not easy and investment in effective training and communication is important to ensure that all Taft behave in an agreed ethical manner. Creating an ethic al culture within a business can actually improve motivation and can become part of a wider policy of employee empowerment. The duties of an organization towards employees, customers, society and the environment Benefits to Society Problems such as unemployment and pollution are likely to be reduced Quality of life is likely to be improved Society longer term needs are likely to be considered rather than simply the short term needs of a business Life and business activity will be easier if everyone involved s working together for the common good Simply the right thing to do.Firms have a duty to be concerned with the wider impact of their activities Benefits to Firms Improved financial performance Reduced operating costs due to greater recycling Enhanced brand image and reputation which could bring in more customers, trading partners and makes it easier to attract capital investment Increased sales and customer loyalty Increased ability to attract and retain employees Access to capit al Arguments against CARS Efficient use or resources is likely to be reduced if business are restricted by how hey can produce and where they can locate which could lead to higher costs and prices Socially responsible policies can be costly to introduce Stakeholders tend to have differing objectives and are therefore unlikely to agree on what is socially responsible behavior Social responsibility may be Just a passing fashion and nobody can be sure of the value of firms being socially responsible During a recession the objectives are profit and survival – social responsibility doesn't matter here If something is important to society at large it can be argued that the overspent should pass laws to ensure everybody acts responsibly Just an extension of a firm being market orientated, meaning its only done as the customer wants it Overall, in the long term, CARS could benefit businesses, as the local community may improve in terms of wealth, quality of life and standard of livin g, meaning the firm could also benefit. Most large firms will produce an ethical code of practice. This will uphold the firms social responsibilities. This might include being environmentally-friendly wherever possible. Cutbacks CARS; giving back to the environment Environmental mission statement;Understanding environmental issues and sharing these with staff Striving to buy, sell and use environmentally-friendly products Recognize that fiscal responsibility is essential to our environment future Installing environmental responsibility at a corporate value Example; serve high quality coffee that is ethically traded and responsibly grown. They do this through forest conservation efforts and farmer Why be ethical Marketing opportunities: A good reputation in relation to environmental issues can act as a positive marketing tool that encourages customers to choose one brand over another. They can also build a loyal customer base through USPS. Financial opportunities: Can actually make i t easier to get money off certain banks – banks like Cooperative will not lend money to firms with a reputation for damaging the environment. Lower costs through recycling and less waste.Human resources opportunities: Motivation, attract the best workers who want to work for a company with high standards. Poor reputation can damage reputation and the ability to attract high quality applicants Why not be ethical; More expensive to source raw materials, more expensive capital goods to cut pollution, Training workers to be ethical costs money, losing custom from more ruthless competitors Ethics or Public Relations? Public Relations – Activities to boost the public profiles of an organization Public relations usually involves obtaining favorable publicity via the press, television or radio. Unlike advertising, it is not paid for and there is no control over its content.When a business behaves ethically it may be good for PR. It has been suggested that the good PR is the ma in reason for ethical behavior – it can help enhance the image of a business and is likely to generate more goodwill. This in turn will lead to improved sales and may eventually boost the company's share value. Example; Foxing (public relations)(benefits of not being ethical) Criticized for polluting nearby rivers with factory chemicals, black-green water dumped twice a day. Foxing said it is complying with emission standards and bring the factories into full compliance with policies and that other companies within the same industrial park are dumping water into the rivers too.This shows they are stating that their complying with emission standards for public relations because really they onto want to lose their competitive advantage from more ruthless competitors; doing it to save costs, generate profitability quick, keep costs low, keep up with demand etc†¦ More evidence that they care more about public relations is that they installed solving underlying problem of sui cide so the social responsibility doesn't reflect genuine values, don't care about their staff, only care about deadlines and money. Example Primary: (genuine values) The roof of their factory in Bangladesh collapsed, killing more than 1000 people.Long-term compensation and support services for the errors and families who were working in the factory payments end this month ($mm) = High cash outflows so less revenue. They also had building surveys to assess the structural integrity of factories which means they are addressing the underlying problem. However this may not actually affect Primary, this may be cheaper in the long term than paying their staff higher wages; a significant variable cost. This shows that corporate social responsibility is Just a form of public relations and a way to back their reputation and offer a method to ‘shut them up'. Could be because of public relations?

Lab Cojy Background (for Research Proposal)

Lab CoJY Background Cooperatives have been flourishing in the Philippines as early as the time of our national hero Dr. Jose Rizal. Way back, cooperatives has been associated with the farmers who are the intended and original beneficiaries of the cooperative movement. But as time goes by, it is defined by the law as a vehicle for promoting self reliance and harnessing people power towards the attainment of economic development and social justice (Art. 2, R. A. 9520, Philippine Cooperative Code of the Philippines). Cooperatives is an institution that could be an instrument for socio-economic upliftment and sustainable development. With all the corporations owned by financially capable persons, cooperatives give people with limited resources to come together and pool out their resources and put up a business that they can call their own- member-owned. Although the cooperative is designed for legal adults, even the young ones nowadays are caught by the principle of cooperativism. Laboratory cooperatives are established as an affiliate of an adult cooperative to cater the needs of the minors and serve as a training ground for young entrepreneurs. Laboratory cooperative is a cooperative that is organized by minors and must be affiliated with a registered cooperative. It is a venue for students to develop the habit of thrift and savings, leadership competencies and business management. According to Sr. Leontina Castillo, OSA, founder of the cooperative program in ASOLC schools, in her guidebook Supervising Laboratory Cooperative Junior Youth, â€Å"Lab CoJY is one of the potent avenues in schools where the students learn and live values while at the same time hone their leadership and business skill. Operating and managing the Lab COJY is a challenging and enriching task that require the living out of values like thrift, wise use of money, orderliness, prudence, sacrifice, love for coop and honesty. A deep sense of responsibility, as fidelity to duties and responsibilities, is developed. †(2) Investing on people while they are still young is worthy in the long-run. According in an article by Gumban, NATCCO’s Aflatoun (Youth) Program Coordinator â€Å"investment requires the element of wait. Waiting could take weeks, months, even year. Truly, investing in the young people takes a lot of wait. Take for example the simple savings program. The money saved is actually secondary, but the values of thrift and responsibility slowly honed through constant practice are something of great value. The fruits of this cannot be seen overnight, and maybe not even in the adult cooperators’ lifetime, but certainly would manifest as they go through their chosen careers†(Services for Children and Teenagers, Why invest on Young Members? ). In the same article she made mention that exposing the young members to conferences, trainings and mentors, as well as the co-op environment would give them the chance to learn, to speak their minds, and share their dreams with their fellow youth cooperators in a wholesome and fun way. In some schools, DepEd puts up a co-curricular program that promotes entrepreneurship and cooperativism which aims to establish a shift from the employment creation culture by nurturing the entrepreneurial and cooperative environment, skills and competencies of the students.

Feed RD - or Farm It Out Case Analysis - Free Essay Example

Sample details Pages: 10 Words: 2943 Downloads: 2 Date added: 2017/06/26 Category Marketing Essay Type Analytical essay Did you like this example? Feed RD- or Farm It Out?à ¢Ã¢â€š ¬Ã¢â‚¬Å"à ¢Ã¢â€š ¬Ã¢â‚¬Å"Case Analysis 1 Contents Review the Strategic Issues presented in the Case Discuss the key issues management needs to consider in deciding whether to support an in-house RD function or outsource all Research Development. Discuss the implications of outsourcing RD for middle managers. Recommendations: Review the Strategic Issues presented in the Case Many Strategic issues are presented in the Case à ¢Ã¢â€š ¬Ã…“Feed RD-or Farm it Outà ¢Ã¢â€š ¬Ã‚  which are all interwoven. This case discusses the RLK media and the managerial problems it is facing. The major discussion in this case is the outsourcing decision and its impact on different departments like RD, HR, marketing and overall process of the decision making. Don’t waste time! Our writers will create an original "Feed RD or Farm It Out? Case Analysis" essay for you Create order The external environment of the company it changed and it is affecting its internal structures and the processes. The competition with its competitors has tremendously increased. A major portion of the management thinks that outsourcing is the perfect need of the time and it will be useful for managing time and the cost. The rest of the managerial portion suggests that the manpower should be increased and strengthened in the research and management section. It has been noted that there is a decrease in the margins of profits and sales and competition is greatly increasing. This issue is also of an important strategic concern. The market value of brand is good. All the stakeholders and investors contacts the RLK with superior quality and high profiled design. But just a high brand equity is not enough to inspire the customers to make purchases. The decrease in sales is one of the major issues for the Chairman of the company, and for the CEO innovation is the only strategic tool. Different companies are making a trend to outsource different services for many operations of the company. Outsourcing gives an opening to reduce the cost by cutting operational costs and fixed costs. Most of the competitors prefer to outsource their R D services from different companies in Asia. As it will be more costly if celebrity engineers are hired from America. Though Lars doesnt prefer the idea of outsourcing, but the conditions and present scenarios, like limited time and finance and force from the Chairman of the firm, has compelled him to think of outsourcing. (Outsource Or In Source RD, 2011) Lars has put himself into a very hard situation. The survival of RLK depends on the success of their single product and they do not have adequate skills to develop that, it appears. The two main issues that need to be taken proper care of are, Organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s behavior and its Marketing. In the current situation, the company is in a critical situation and any wrong decision can end in a disaster. Inside the company, there are noticeable variances between employees in top managerial positions. These dissimilarities are outcomes of lack of similar goals and communication gaps. There are questions about customer behavior, organizational culture, and cultural dissimilarities of the two organizations that are of concern. Also, there is a difference in culture of nations. And encouraging the employees to work for similar goals or interest is an issue. There is another major issue to hold the talent and skills in the company. The Chief Executive Officer of RLK media, is fronting one such crossways. The profits which are earned from the current products are not being sustained to RD by RLK media. The company will not have broad scope, and it has to slender its scope if the CEO is not able to develop a business strategy that helps internal improvement, production, innovation and the sales The internal environment of the firm is being strongly influenced by the external situations which have extremely changed from the past. Absent contact with the customers who are buying their products. And there is only one significant product which seems to be in the pipelines. There is an increase in competition. The companies like Japanese giants are competing with the company. And the competitors are offering quite reasonable and good prices for similar products. (Nohria N. , 2005) There are numerous further strategic problems which are presented in the case such as: There should be more investments in the RD department in RLK If the CEO is deciding to capitalize approx. $6 million additional in the RD department, it will be very much risky because the survival of the company is mainly dependent on the successful launch of its new product. Most of the customers think that RLK is having association with high end video design, so pushing money into Research and Development will increase the brand equity and also the expectations of the customers of highly innovative products will be met. Yet, the competitors of RLK are laying off and outsourcing Research and Development and exploiting on the cost benefits. If the company thinks of investing more money in Research and Development and launch the new product they can be in a danger of falling bankrupt. To work on a new product, collaboration with Inova The software skills needed from Inova for the production of the iVid can be produced by the company for 1/5th of the cost they need if they do it in the States. There will be a huge cost saving and it would be quite beneficial for RLK. Ray can be a possible hurdle in outsourcing who has always repelled outside participation in Research and Development. He may not be happy with ideas, coming from an external source, which are competing with his ideas and hence decline to work with Inova. Organizational culture of both the companies is quite different. It will not be easy to cooperate because of huge cultural difference. Moreover, the difference in time zones and huge distance will also be a problem. Investment in the marketing division for building a brand image and brand equity and to satisfy the needs of the consumers. It is suggested by Keith that there should be more investment in the marketing to know more about the customers and to know more about customersà ¢Ã¢â€š ¬Ã¢â€ž ¢ needs and wants. Though, ità ¢Ã¢â€š ¬Ã¢â€ž ¢s not the main problem and the issues would not be just resolved by marketing. The issue is whether the brand value of RLK should be exploited, because it is known for its creativity and innovations. However, it should also be taken into consideration that outsourcing is not the only solution. They must look for more possibilities. (Nohria N. , 2005) Discuss the key issues management needs to consider in deciding whether to support an in-house RD function or outsource all Research Development. The CEO of the RLK Company, Lars Inman thinks that innovation is a way to recovery for the company. The Chairman thinks that satisfying consumerà ¢Ã¢â€š ¬Ã¢â€ž ¢s needs may be the possible solution. In their context, both are right. In place of asking a question like, à ¢Ã¢â€š ¬Ã…“To get a competitive advantage do we need to outsource to get iVid?à ¢Ã¢â€š ¬Ã‚  Lars is in a need to think that, à ¢Ã¢â€š ¬Ã…“What are the actual needs of our customers, what do they desire, and what are our competitive strengths. Eventually, the strategy of Lars must be able to attach whatà ¢Ã¢â€š ¬Ã¢â€ž ¢s the need of the time with whatà ¢Ã¢â€š ¬Ã¢â€ž ¢s possible in the time. Definitely, the brand equity should be exploited by the company as a trend setter and innovator. And the capabilities, is possessed, to innovate should be utilized. But the thing is Lars should give up, completely, the concept that what is possible in the time can be delivered by the scientist Ray, whether they outso urce or not. The world should be invited in by starting the innovation process of the company. The ideas should be implored aggressively where ever there is any need. In an inventorà ¢Ã¢â€š ¬Ã¢â€ž ¢s laboratory, the future offerings of RLK may exist in a shape of prototypes, they could be having a meeting with a VC in Silicon Valley, or they could be with a competitor. For a firm like RLK, going out in this pattern may appear like a tall order, but it must be seen how it worked for PG. Most of the Western executives face many risks when they estimate offshore outsourcing choices and Lars dangers, dipping into such trap. Mostly, they do not think broadly of outsourcing as a method to do cost savings and other such operating results. In its place, they must calculate this choice from a strategic point of view: Lars must evaluate this thing that whether outsourcing RD will assist the company to speed up the building of its own unique competencies. (Nohria N. , 2005) And it should be determined by him whether mutually both the parties will succeed in mounting deeper abilities, if the association finishes once this project is completed, then they would have had they selected other associates or not at all worked together. An incentive is created by the aptitude of great joint benefit to continue a relationship. And this decision on mutual benefit also reduces exit costs. So ità ¢Ã¢â€š ¬Ã¢â€ž ¢s the time Lars should decide where there will be a competitive edge for RLK in the future and he should make an outsourcing relationship with all these things in mind. For gaining the competitive advantage in product innovation, focusing on the product design and seeking high-class abilities in a software engineering form outside, can be one option. Developing a unique ability in software design can be another option in which Lars finally would want to introduce the talent of software engineering. In both of these options there are many good reasons for outsourcing to a software firm. Like the firm such as Inova for the project of iVid. An outsourced relation will help RLK in many ways. It will give RLK an understanding about different software abilities needed. RLK will also involve in collective learning by outsourcing. It is not a smooth process, but it has a large potential and productivity. A careful and proper management is needed to change a destructive friction into a force that eventually gives rise to innovation. Several attributes are shared when different well-managed teams working together with high level of creative friction. Attributes like a common and clear goal, aggressive performance. Actions are taken to resolve the disagreements. When teams work together, there is a common basis for problem solving and communication. There is relevant, proper, adequate and equivalent skill set. And mutual respect among members arises. In the partnership between Inova and RLK, many components for the creative fricti on seem to be in place. The teams will be helped by the iVid prototype in design negotiations and engineering. With the deadline for launching the product there is a distinct goal and also the implied action points are clear. Both the teams have the necessary skills and an equal level of skillà ¢Ã¢â€š ¬Ã¢â‚¬Å"though the CEO of RLK will be wanting to do more because of attentiveness related to the capabilities of Inova, as heà ¢Ã¢â€š ¬Ã¢â€ž ¢ll require to be very convincing in selling them to his own Research and Development team. Whether the mutual respect required by the productive friction can be gathered by these dissimilar teams, is uncertain. The Inova team calls this relationship as a give and take relation, and this thing is encouraging. But if the same approach is adopted by RLK, even then they will get productive friction. Though, the two teams are possessing skill sets that are world class, but the nature of skills is different. Also the national cultures, work styles and environment is different. And they are located at a wide geographic distance. The geographic distance can be minimized by latest technologies, but the rest of the issues stay as they are. A common ground and trust are needed for continuing this partnership and Lars should make sure that both the teams spend enough time together to build the trust. Even the schedule seems to be aggressive, both the teams need to remain slow at the outset. And this will help them go much faster in the coming future. Because of the challenges and risks of this partnership and to bring both the teams together, the CEO and the senior members of his Research and Development team need to have a plan to give much time travelling to India, especially in the starting of the project. (Oshri Kotlarsky, 2010) Discuss the implications of outsourcing RD for middle managers. To be prosperous in the business, RLK needs to take care of its innovative abilities and brand value. Farming out, united with the resources of Inova and RLK, will be beneficial for the competitive advantage of RLK. As there are cultural difference, it is a need of the firm to put the gigantic changes, for supporting the farming out, in the mindset of: Corporates Leadership Execution RLK must build a mindset of its employees to be flexible enough to accept external ideas. And they should be open to innovation. Middle managers have a very important role in ensuring this thing. (Middle Level Management, 2009) Moreover, the managers of RLK should make processes to involve a collective learning. Management needs to connect and modify with the outsourced expertise. Middle managers should be focusing on visible leadership and proper execution of orders and commands. The management needs to modify the performance metrics, like rewarding people not for being innovative but for giving a success to RLK products in the market. For the sustainability of Research and development of RLK, just outsourcing will not be helpful, but the mindset of the employees will also contribute to it. Same is the case with long term strategies, they require the contribution of middle managers. This is not only a relation of strategic alliance, but also RLK will face changes in operations and structures. And for this, the employees need to be more open minded. Hence, the decision to farm out should be taken seriously in giving the company and the managers a new direction. It must not be just considered as a cost saving short-term strategy. (Ramanathan, 2009) To make outsourcing successful, middle management has a vital role. In the global business partnership like this, middle management acts as a glue that holds the firms together. In the companies that are making such relation, the middle managers are very important because they are the one who are responsible for dealing with the suppliers and customers externally, and with the senior managers internally. The middle managers need to have a decent mix of skills. They should be able to make virtual teams, for RLK and Inova, across the boundaries of RLK, country and culture. They require a high level of experience in order to perform their duties well. And they must execute as required. A good middle managers are need of outsourcing to deliver proper business services and to fulfil the requirements of RLK. The middle managers of RLK should be kept informed so that they are able to communicate properly to Inova. (Overby, Outsourcing Problems? Middle Management May Be to Blame, 2010) There are six positive attributes that RLKà ¢Ã¢â€š ¬Ã¢â€ž ¢s middle managers must have in order to show good results in outsourcing its RD. These attributes are: Watching and Shielding: To manage the risks and agreements comprehensively. Simplification and Problem Solving: To make sure that things are happening properly and to simplify the hurdles. Shaping by Planning Procedures: To maintain the proper records, to audit the trials. Bond Development: To give respect, facilitate the interpersonal relation and build trust. Entrepreneurship: To be innovative, to find better ways of getting things done and influencing long term potential. Looking over: To be well connected. (Overby, Outsourcing Problems? Middle Management May Be to Blame, 2010) Recommendations: I recommend that Lars needs to hire some more software engineers to give strength to the Research and Development of RLK and meanwhile, hand over some of his leaders in Research and Development to Gurgaon to get trained in Inova. Lars should suggest Ray a two-way Research and Development model that should be acceptable so that he comes to an agreement to make partnership with Inova. Once this is done, both RLK and Inova will be able to get cost advantages for RLK by working collectively. And also to launch its new product i.e. iVid. Bibliography Middle Level Management. (2009, July 03). Retrieved May 07, 2014, from www.boundless.com: https://www.boundless.com/management/introduction-to-management/management-levels-and-types/middle-level-management/ Nohria, N. (2005, July). Feed RD or Farm it Out. Retrieved May 07, 2014 Nohria, N. (2005, July). Feed RD or Farm it out? 17-28. Retrieved May 07, 2014 Oshri, I., Kotlarsky, J. (2010). Global Sourcing of Information Technology and Business Processes. Zermatt, Switzerland. Retrieved May 07, 2014 Outsource Or In Source RD. (2011, 05). Retrieved May 07, 2014, from researchomatic: https://www.researchomatic.com/Outsource-Or-In-Source-RAndD-72647.html Overby, S. (2010, January 28). Outsourcing Problems? Middle Management May Be to Blame. Retrieved May 07, 2014, from www.computerworld.com: https://www.computerworld.com/s/article/9149931/Outsourcing_Problems_Middle_Management_May_Be_to_Blame Overby, S. (2010, February 04). Outsourcing Problems? Middle Management May B e to Blame. Retrieved May 07, 2014, from www.cio.com.au: https://www.cio.com.au/article/334385/outsourcing_problems_middle_management_may_blame/ Ramanathan, T. R. (2009). The Role of Organisational Change Management in Offshore Outsourcing of Information Technology Services. Universal-Publishers. Retrieved May 07, 2014, from https://books.google.com.pk/books?id=luZd6PF6i0ICpg=PA109lpg=PA109dq=middle+managers+in+outsourcingsource=blots=HQf1FFVOJfsig=pFNafKCPe0XsIuzEtXOsaWd9Do8hl=ensa=Xei=Lj9rU9CYEoK8Od6sgdgLved=0CHQQ6AEwBw#v=onepageq=middle managers in outsourc