The greater the division of labor in an economy, the greater the need for communication and coordination. This is because increased division of labor entails a larger number of specialized producers, which results in a greater number of disruptions of supply and production.
An employer looking for long-term employees may be better served by hiring applicants with broad background. By way of their more general education, these applicants have acquired a variety of general and transferable skills. They may be more suitable than their business-background colleagues to solve general management problems, deal with business associates from different cultures and view issues at a variety of aspects. In general, the employees with broad background can accustom to changes more quickly than their business-majored colleagues.
Daimler Chrysler, one of the most successful automobile companies in the world, contributes significantly to the local employment of Stuttgart, Germany.
Philip Morris, the largest tobacco company in the world, has been sued by government and many other groups for producing products that are harmful to health. The fines and legal fees that have resulted from the legal attacks against the company have costed the company substantial amounts of money.
Bayer, one of the largest pharmaceutic companies in the world, announced that the company would cease production of one of its major products, because of the hazardous ingredients it contained. By doing so, the company suffers great loss on profitability, but gains strong public support and understanding, which can contribute to the long-term success of the company.
Mitsubishi Motors had concealed significant defects in the break system of Pajero, one of the company’s major products, before apologized to public. Hundreds of car accidents were directly caused by the break error. Thus, the company suffered a great goods return, losing not only the market share but also the confidence of consumers.
Henry Ford’s factory was so efficient that by 1926 a new “model-T” cost only $310, one-third the price of the original 1908 model.
Discriminating services may cause misunderstanding and unpleasant result. The best example is Toshiba, one of the largest Japanese companies. In 2000, the Company announced that among notebook computers it produced, one model had serious defect. Users in North America could choose either replacements with an upgraded model or full refund. However, no such offer for users in China. Chinese users were outrage at the company’s discrimination and refused to use any of Toshiba’s notebook computers. What the company lost is not only the temporary revenue but also the consumer’s confidence, which contribute to the long-term success of the company.
Compared with government officers, private corporation managers must pay more attention to efficiency and effectiveness of their decisions. Normally, maximizing profitability is not the primary goal of government owned enterprises and governmental planning, so that many unrealistic decisions may be resulted. It is the hidden reason that many government owned enterprises become profitable after the privatisations.
Traditionally, the first firm to commercialise a new technology has benefited from unique opportunity to shape product definitions, forcing followers to adapt to a standard or invest in an unproven alternative. Today, however, the largest payoffs may go to companies that lead in developing integrated approaches for successful mass production and distribution. For example, SEGA, producer of Saturn, was the first company to develop home video game machine commercially, but Sony Entertainment INC., producer of Play Station, proved to be more successful at forming strategic alliance with other producers and distributors to manufacture and market its hardware and software. Because consumers had more choices on Play Station’s games, they seldom bought SEGA Saturn. By the end of the 1990’s, Play Station dominated the home video game market while SEGA Saturn was no longer in production.