Nestle: A Global Multinational company

Nestle: A Global Multinational company Brief of company: Nestlà © with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlà © and is today the worlds leading nutrition, health and wellness company. Its sales for 2009 were $ 112.3 billion, with a net profit of $ 11.1 billion. They employ around 276,050 people and have factories or operations in almost every country in the world. Reasons for selecting the company: Nestlà © can trace back its origins to 1867, from selling milk-based baby foods and condensed milk as its primary products to a market leader in todays Food Beverage Industry with more than 6000 brands under its belt ranging from coffee and candy to hotdogs and pasta. Instead of just reaping the profits from the market, Nestlà © has given back to the community by adopting social responsibilities, showing above the bar ethical behaviour and in many cases raising the standards in the industry. Its founding ethos reflects the basic ideas of fairness, honesty, and a general concern for people. Main strategic issues facing the company: Nestlà © has been facing Nestlà © boycott since 1977 due to its promotions of the use of artificial infant foods. Growing resistance of consumers against the use of genetically engineered foods in Nestlà ©s products. Increasing competition. Increasing awareness in the consumers with the demand of being socially and ethically responsible increasing day by day. Increasing control and regulations in the policies of the governments worldwide. Companys contribution to the National Economy: Switzerlands GDP for the year 2009 was estimated at $522.4 billion with GDP growth rate of 2.8% (2010 estimate). Out of which Merchandise exports for 2009 were of $173 billion. *Companys contribution to the regional economy: Nestlà © employs around 280,000 people all over the world and have factories or operations in almost every country in the world. Nestlà ©s gross revenue for the year 2009 was $ 112.3 billion and RD investment was $ 2.11 billion. *Recent strategic dilemma: Environmental impact of palm oil and the role of multi-nationals such as Nestlà © in this. Recent strategic choice: In March 2010, Nestlà © purchased Krafts North American frozen pizza business for $3.7 billion. Nestlà © has been heavily investing in Africa. Source of Information on Company: http://www.nestle.com (334 words) Executive Summary This assignment analyzes Nestlà ©s current situation and strategies in context of Global Food Beverage Industry and then recommends the key strategies Nestlà © should use to be more successful and retain its status as the global market leader in future. To analyze the FB Industry on a higher level and examine Nestlà ©s external environment, the following business models are used in this assignment: Industry Life Cycle, Key Success Factors and Porters Five Forces. And to analyze Nestlà ©s current status and its internal environment the business models used are: SWOT analysis, Strategic Factor Analysis, TOWS Matrix. After analyzing the information based on the above mentioned models, Nestlà © is currently facing issues like product recalls, stagnant growth, high logistical costs, negative publicity and false allegations which are damaging its image and goodwill in the market. To combat some of these issues Nestlà © has introduced innovative and healthier food products to cater the rising number of health conscious consumers, started focusing on the rising middle class consumers in developing and emerging economies, which has helped Nestlà © to increase their growth again post the 2009 Financial Crisis. For further improvement in the market share and company image, key strategies recommended to Nestlà © are Expansion strategy through strategically acquiring and merging with its competitors and investing in production facilities in developing economies and Growth through Innovation in health nutrition food segment. One area that Nestlà © has to care of immediately is improvement in its Public Relations management to create a high level of loyalty and trust in its customers by building and reinforcing the notion that Nestlà © still follows its founding ethos of fairness, honesty, and a general concern for people. (277 words) Industry Life Cycle Introduction Growth Maturity Decline Time I ND U S T R Y SALES The Global Food, Beverage and Tobacco Industrys growth has slowed down in recent years. But all this is set to change due to the recent technological advancements, rapid globalisation and opening up of the many restricted markets worldwide such as India, China, African nations, etc. With the technological advancements in food processing, handling and storing capacity and the rapid emergence of organized retailing in Asia, Africa, and other third world countries, along with fast changing demographics and habits has changed consumption the patterns and is fuelling the next growth trajectory for the global food, beverage and tobacco industry. The Global Food, Beverage and Tobacco Industry is in the High Growth stage of the growth phase as the increase in sales has slowed down in recent years. The global food, beverage tobacco industry generated total revenues of $6,319.2 billion in 2009, growing at a compound annual growth rate (CAGR) of 3.4% for the period spanning 2005-2009. Food sales generated total revenues of $4,235.4 billion, equivalent to 67.1% of the industrys overall value and sale of beverages generated revenues of $1,581.7 billion in 2009, equating to 25% of the industrys aggregate revenues. The industry is forecasted to grow at CAGR of 3.8% for the five year period 2009-2014. Nestlà © recorded revenues of $99 billion in year ending December 2009, showing decrease of 2.1% compared to fiscal 2008. In 2009, Nestlà © renovated 7,252 products for nutrition or health reasons, as health awareness among consumers is rapidly increasing and it wants capitalize on the health conscious trend. Nestlà © has been active in Developing Emerging (DE) economies through its subsidiaries in Asia Pacific, Africa, the Middle East, Turkey and Latin America. Nestlà ©s sales in emerging countries accounted for almost 32.5% of total revenue and reached $32.32 billion in 2009. According to IMF, the advanced economies are set to grow at 2.1% and 2.4%, respectively, in 2010 and 2011, while the DE economies are forecasted to grow at 6% and 6.3% in 2010 and 2011, respectively. Therefore in the future, Nestlà ©s growth will be driven by high-growth DE economies. Key Factors for Success Key Success Factors Weight Rating Weighted Scorecard Rating Weighted Scorecard Rating Weighted Scorecard Branding 0.20 5.00 1.00 4.00 0.80 4.50 0.90 Diversification 0.15 4.50 0.67 4.00 0.60 4.50 0.67 Product Quality 0.15 4.00 0.60 4.00 0.60 4.00 0.60 Pricing 0.15 3.50 0.52 3.50 0.52 4.00 0.60 Distribution Network 0.10 5.00 0.50 3.50 0.35 5.00 0.50 Packaging 0.10 4.00 0.40 3.50 0.35 4.50 0.45 R D 0.10 5.00 0.50 3.00 0.30 4.50 0.45 Market Dominance 0.05 5.00 0.25 4.50 0.22 4.00 0.20 Total 1.00 4.44 3.74 4.37 Key Factors for Success in the Food and Beverage Industry: Branding in FB industry is of utmost importance as people do not prefer to buy products that they are not familiar with; also in this industry brand image is everything as it can attract consumers to a companys new products if it is already reputable in the market. Diversification in FB industry are almost always related as companies prefer to have a healthy portfolio of products while still maintaining their core competencies and using them in their related products; as by having a large range of products a company will be more competitive and would not have to rely on a single product. Product quality is very important in FB industry, as bad quality products can will lead to consumer boycott of the companys products, health issues in consumers and lawsuits against the company. While quality of the products also have to justify their prices, such as normal milk chocolates (Nestlà ©, Cadbury, etc.) cannot be priced high while specialty chocolates (Lindt, Godiva, etc.) are high priced. A strong distribution network is a must in FB industry as it gives the companies low costs operations, fast delivery, and optimal shelf presence in retail stores. RD is vital for gaining market share for the companies as development of better tasting, more nutritional and new foods beverages is the fastest way of capitalizing on the fast changing trends of the consumers (like current healthy organic food trend). Two of the many competitors that Nestlà © has, I have chosen Kraft Foods and Unilever for the comparison of KFS. After analyzing the KFS it is clear that Nestlà ©s response to the current and expected key success factors is above the industry average, with Unilever quite close behind and Kraft Foods just managing the industry average. So the analysis of KFS also reinforces Nestlà ©s position as the largest FB Company in the world. Porters Five Forces Model: Potential Entrants: Product Differentiation Switching Costs Distribution Channels Cost Disadvantages Suppliers: Financially weak Large no. of suppliers Buyers can do Backward Integration Substitutes: Private label products Niche products Cheaper alternatives available Buyers: Large Retailers Financially strong Backward Integration Low Profit margin Other Stakeholders: Health Groups Environmental Groups Fair Trade Organizations Rivalry among existing firms: Large number of players Dominance of big players Highly diversified markets Analysis of Porters Five Forces: The Bargaining Power of Suppliers (Low): The bargaining power of suppliers in FB Industry low as the raw materials for this industry includes fruits and vegetables, meat and fish, dairy products and grains, tobacco, cereals and grains, etc which could be purchased in the open markets around the world. And some FB producers have integrated backwards into producing their own raw materials, negating the need for suppliers. Also suppliers tend to be financially quite weak giving market players upper hand. The Bargaining Power of Buyers (High): The bargaining power of suppliers on the other hand is quite high as typical buyers are large retailers such as Wal-Mart, Carrefour, etc. who are financially very strong and usually make large purchases and enter into long term contracts with market players; as the profit margins for the buyers is quite low. So loss of one retailer could significantly impact upon a manufacturers revenue. Buyers are frequently integrating backwards, with many retail chains offering their own branded packaged food goods usually referred to as Private label products. The Threat of Potential New Entrants (Present): The threat of new entrants is high for small players who only serve few products and few markets (regional or national players) but is low for highly diversified big market players such as Nestlà ©, Unilever, etc. who operate globally. Since its a highly fragmented market small-scale entrance by occupying a niche in the industry is possible and high these days. But new entrants have to bear switching costs (which can be quite high) as its very hard to convince consumers to try new brands/products. Also big players can restrict the access to distribution channels for new players through their contacts and power in the market. The Threat of Substitutes (High): The substitutes are often cheaper and just as popular with consumers in FB Industry as most of the products in this industry are in a way a substitute of some other products, like Tea for Coffee, Coke for Pepsi, NutraSweet for Sugar, etc. These days private label products, organic foods; nutritional foods, etc. are also rapidly substituting the packaged foods. And there are almost no switching costs for end consumers as they just pick any new products instead of their regular ones if they want to experiment. The Extent of Competitive Rivalry (High): The competitive rivalry among the firms is quite high in this industry as the enormous size of the industry creates endless opportunities for the players to compete for. Large number of players, ready availability of substitutes, low entry barriers, low bargaining power of suppliers and fast changing customer tastes intensifies rivalry in the FB Industry. And also slow down of sales in the industry in 2009 will intensify the competition in the market, as everyone would try and gain market share now by take sales away from other competitors. Relative Power of Other Stakeholders (High): SWOT Analysis: Internal Factors Analysis Summary (IFAS): Internal Factors Weight Rating Weighted Score Comments Strengths S1: Finance 0.15 5.00 0.75 Low debt/asset ratio S2: Global Presence 0.10 4.50 0.45 Market Leader S3: Brand 0.10 4.50 0.45 One of USAs most admired S4: RD 0.10 5.00 0.50 Industry leader S5: Diversified Portfolio 0.05 4.50 0.22 More than 6000 brands Weaknesses W1: Quality Control 0.20 3.50 0.70 Increase in product recalls W2: Growth 0.10 3.00 0.30 Growth recovery slow W3: Emerging Markets 0.10 3.20 0.32 Less emphasis W4: Logistics Cost 0.05 2.00 0.10 Quite high W5: Perceived Image 0.05 2.00 0.10 Considered to put profit first Total Score 1.00 3.89 Strengths: Nestlà © apart from being the market leader in FB Industry is also financially very strong with highly diversified portfolio of more than 6000 brands, global presence, and strong RD capabilities; and in the process has developed a very strong brand image which it uses as leverage to generate high sales. As it has global presence it has customized its products according to consumer preferences in the local markets. Nestlà © is also the leading company to invest heavily in RD (annual invest of $ 1.8 billon approx.) as it considers innovation as one of its primary growth drivers. Weaknesses: Due to the sheer size and geographical diversity of Nestlà ©, controlling quality in many of its factories and supply chains is becoming difficult for Nestlà ©; which in turn is resulting in product recalls, loss of goodwill, and effect to the brand image of the company, which can lead to low customer loyalty. Another one aspect where Nestlà © is lagging behind is that it has not been focusing much on emerging markets as majority of its sales are from developed markets. Its logistical costs and inventory management costs are also quite high due to its geographical diversity. Its growth has been has slow after the economic downturn as compared the industry as a whole, which has been on the recovery track since. External Factors Analysis Summary (EFAS): External Factors Weight Rating Weighted Score Comments Opportunities O1: Health food trend 0.15 4.50 0.67 Rise in health consciousness O2: Developing Emerging economies 0.10 3.50 0.35 High growth rate O3: Opening of Eastern Europe 0.05 3.00 0.15 Can expand there O4: Out-of-home consumption 0.10 3.50 0.35 More than 40% in Americas O5: Premiumisation 0.10 3.20 0.32 Growing incomes Threats T1: Rising prices of raw materials 0.10 3.00 0.30 Climate change food shortages T2: Specialized competitors 0.15 3.50 0.52 General Mills in Yogurt Mkt. T3: Increasing Regulations 0.15 4.00 0.60 Spats with FDA T4: Currency Fluctuations 0.05 2.50 0.12 Strong Swiss Franc T5: Negative Publicity 0.05 3.00 0.15 Due to alleged unethical business practices Total Score 1.00 3.53 Opportunities: One of the major opportunities which can be the future growth driver for Nestlà © is healthy and nutritional foods segment, as by 2014 the global organic food market is forecasted grow by 60.7% since 2009 and while the global functional drinks market is forecasted to grow by 32.9% since 2009. Also further penetrating the Asian, African and Eastern European markets by using merger, acquisition and joint venture strategies can also be a major growth driver for Nestlà ©. The growing level of incomes of the middle class around the world is also providing Nestlà © with opportunities for launching its premium products such as Mà ¶venpick, etc. in the developing economies. Threats: Two of the major factors threatening Nestlà © are specialized competitors and increasing regulations by government bodies. As Nestlà © is highly diversified it faces problems when it has to compete with competitors who are highly specialized in one product such General Mills in US Yogurt Market. Also any change or stricter enforcement of regulations by government bodies like FDA, tend to threaten Nestlà © as it would have to change its production process or may even face lawsuits pay fines due to some violations of the regulations, which will also give rise negative publicity about the company. Due to the economic downturn of 2009, currencies fluctuations have been hurting Nestlà © as Swiss Franc has strong against the most of the other currencies. Strategic Factors Analysis Summary: Strategic Factors Weight Rating Weighted Score Duration Comments S H O R T I N T E R M E D I A T E L O N G S1: Finance (S) S3: Brand (S) 0.15 5.00 0.75 X Large amount of cash 0.10 4.50 0.45 X Major global brand W1: Quality Control (W) W3: Emerging Markets (W+O) 0.20 3.50 0.70 X Recent product recalls 0.10 3.20 0.32 X Give more emphasis O1: Health Food Trend (O+S) O5: Premiumisation (O) 0.15 4.50 0.67 X Major growth area 0.10 3.20 0.32 X Increasing incomes T2: Specialized Competitors (T+O) T5: Negative Publicity (T) 0.15 3.50 0.52 X Possibilities of JVs 0.05 3.00 0.15 X Significant impact on customer loyalty Total: 1.00 3.88 Short Term: The FB Industry can see short and explosive bursts of growth, so it is necessary for Nestlà © to always have few strategies ready for short periods or it might not be able to capitalize on important trends or fads. For short term Nestlà © should focus on Premiumisation in developing and emerging economies as the incomes of the middle classes is rising there, which is fuelling their want of premium products now. Since Nestlà © already has lot of products in the premium segment, so all it has to do is to launch them into developing and emerging economies now; which will only take short time period to do and with minimum costs. Intermediate Term: Quality Control, Emerging markets, health food trend and specialized competitors are factors which Nestlà © will have to address in the intermediate time period, as they can adversely its sales if left unchecked. Nestlà © has to bring its quality in to control quickly otherwise it will be at risk of losing its loyal customers and might even face lawsuits. By expanding and capitalizing in emerging markets like India, China, etc. and current health food trend Nestlà © will be able to compete with its competitors and maybe also gain market share in the process. Collaborating with its competitors or buying them out in the segments which require specialized skills will take some time but is a necessary step or in long term they might become a huge threat to it. Long Term: Nestlà ©s long term scenario is quite balanced as it is financially very strong with a brand name that is counted among the top 25 brands in the world, but it also has repair its deteriorating image in customers minds. Being the market leader in the industry and with worldwide renowned brand Nestlà ©s sales revenue is far greater than that of its competitors which gives it high leverage capabilities while operating in the market. It has been coming under attacks from various social groups in recent years, which has been damaging its goodwill among its customers. Nestlà © has to strongly address this issue slowly and carefully so that it is come back to haunt it, and do that it has to invest heavily in very effective and efficient Public Relations management team. TOWS Matrix: Internal Factors (IFAS): External Factors (EFAS): Strengths (S): Finance Global Presence Brand RD Diversified Portfolio Weaknesses (W): Quality Control Growth Emerging Markets Logistics Cost Perceived Image Opportunities (O): Health Food Trend Developing and Emerging Economies Opening up of Eastern Europe Out-of-home consumption Premiumisation SO Strategies: Develop products for health nutrition segment. Find joint venture partners in Eastern Europe. WO Strategies: Expand Nestlà ©s presence in Eastern Europe Asia. Change Nestlà ©s perceived image. Threats (T): Rising prices of raw materials Specialized Competitors Increasing Regulations Currency Fluctuations Negative Publicity ST Strategies: Do backward integration. Either use joint venture acquisition strategies or RD to gain market share. WT Strategies: Invest in PR management to improve the image of Nestlà ©. Emphasize on developing emerging markets to gain market share. SO Strategies (Maxi-Maxi): SO strategies are formed so that the strengths of a company can be used to capitalize on its external opportunities. So by analyzing Nestlà ©s strengths and opportunities available to it I have decided to use two strategies for Nestlà ©s future growth. As the demand of healthy nutritional foods is increasing Nestlà © can use its strong RD capabilities to develop products for this segment. Another strategy that Nestlà © can use is to find partners for joint ventures in Eastern European market as it being relatively new, it might not be aware of how things happen there; so it should first do joint ventures there to study the market first as opposed to moving with full force in the market. ST Strategies (Maxi-Mini): A company applies ST strategies to avoid its external threats using its strengths. As Nestlà © is financially very string it has the capabilities to do backward integration with its suppliers, which will in turn insure Nestlà © of a secure steady supply chain and quality of its raw materials. Another strategy that Nestlà © can also use is that through its financial strength, brand image and global presence it can either acquire or enter into joint ventures with its competitors who are highly specialized; or it can use its strong RD to also develop specialized products for that segment. WO Strategies (Mini-Maxi): WO strategies are aimed to improve a companys internal weaknesses by capitalizing on its external opportunities. Nestlà © can reduce its logistical and inventory management costs by expanding its presence to Eastern Europe and Asia. Another strategy that Nestlà © can use is to change its Perceived image (of putting profit first) by developing and introducing more healthy nutritional products. WT Strategies (Mini-Mini): WT strategies are defensive tactics employed by a company to reduce its weaknesses and avoiding its external threats. As the image of Nestlà © is being tarnished by negative publicity arising out of recent product recalls, compliance issues for violating regulations, etc. it should heavily invest in its PR management; so that such negative publicity could be avoided next time. Nestlà © should put more emphasis on selling in developing and emerging markets to continue steady growth while increasing market share and also for purchasing and producing there to counter the rising prices of raw materials and labor costs. Assessment of Current Company Performance: Efficiency: Nestlà ©s recently been following the strategically expanding through acquisitions and investments. It has been quite successful in expand its line of frozen foods in North America through the acquisition of Kraft Foods frozen pizza line for $ 3.7 billion in cash. Nestlà © also had several other small acquisitions in the first quarter of 2010 which did not have a significant impact on the Groups sales and profit for the period. Nestlà ©s acquisition related costs in the first quarter of 2010 were about $ 13.4 million. Effectiveness: Nestlà © was effective in carrying out its expansion strategy through acquiring frozen pizza line from Kraft Foods as where the company had only a minor presence until now; it is the market leader in frozen food segment in North America. It successfully integrated Kraft Foods pizza business into the Nestlà © Group as well as its 3,620 employees, with their valuable talent and expertise in Nestlà ©. The frozen pizza line showed 14% organic growth in the first quarter of 2010. Sales and profit of Kraft Foods frozen pizza business in the first quarter of 2010 amount respectively to $ 6.11 billion and $ 65.2 million. Return to Investors: Nestlà © paid dividend of $ 5.632 billion in the first quarter of 2010 which showed an increase of 7.8% when compared to the dividend payment of $ 5.223 billion in 2009 for the same period. Increase in dividend shows that Nestlà © is starting to recover from the financial crisis of 2009. The share value of Nestlà © went up by $ 0.91 per share for 2010. Review of Options for Future Direction In order to address its weaknesses and external threats Nestlà © has to critically use its strengths and capitalize on its external opportunities by using some of the strategies mentioned in the TOWS matrix earlier. One of the strategies that Nestlà © can use is expansion strategy through strategically acquiring and merging with its competitors and investing in production facilities in developing economies. It should acquire or start joint ventures with firms in developing markets like India, China, Russia, etc. to capitalize on their booming economies and gain market share quickly before other global players enter the markets as it has the financial backing to support such expensive ventures. Also it should start investing in developing markets to develop its own production and distribution facilities so as to eliminate dependency on local players. Another strategy that Nestlà © should undertake is Growth through Innovation in health nutrition food segment. Due to the rising education levels and general awareness around the world consumers are becoming more more health conscious, which is an important opportunity and will be a future growth driver for Nestlà ©. It should use its highly developed RD capabilities to develop more healthy and nutritional foods to cater to this growing group of consumers. Implementation of New Strategies Structure: Nestlà © has a decentralized organizational structure which has been very beneficial to it as far flung divisions could take decisions in real time to exploit the opportunities present to them; but due the huge technological advancements in the past few years this autonomy has led to conflicting practices within the company; making it a nightmare to coordinate activities between divisions in different geographical zones. It has to centralize its operations to gain a tighter control over its far flung divisions and businesses, so that Nestlà © can (with a unified centralized system) leverage its products in real time on a worldwide scale to generate higher sales. Systems: Nestlà © has its production and logistical systems under control to meet any unexpected growth surge in a short period of time and to fuel growth for expanding in developing markets. But Nestlà © has to take care of its supply chains as they can virtually leave Nestlà © hanging in the air if any change in natural political environment takes place with the possibility of disruption in supply of raw materials or a drop in the Why do Multinational Companies Exist? Why do Multinational Companies Exist? According to Needle (2010), Multinational enterprises are those enterprises which carry its production activities in more than one country. These companies make sure of the supply of raw material to the other country they are operating in. As per Buckley and Casson (2009) many of the multinational operate in different country because of many reasons such as low labour costs, serving a huge market, cutting of their taxes and production costs, innovation in technology and exploitation of resources. According to Dickens (2011), today we are living in borderless world as there are no boundaries that exist between the countries or nations. Globalisation is the new trend changing the political and cultural order of the world (Buckley and Ghauri,2004). Every operation that has been carried out by companies goes around the world. Innovation is growing very fast and so do competitiveness. Globalisation can be define as the increase in the frequency and duration of linkages between countries leading to similarities in activities of individuals, practices of companies, and policies of governments (Czinkota 2005). From the statement we can say that companies go global because of many reasons as now the countries are linking to each other to share the information and wealth. As said by Rugman and Verbeke (2005), Firms become multinational because they want to grow, expand and diversify their operations. Operating in their home country wont satisfy them so they go global. Using the resources of their home country make it obsolete or bound them in a limit to not to go further. Then firm decides to go global by making investment on their further growth. As argued by Madura (2008) following are the theories which a firm follows when it globalises such as: Theory of Comparative Advantage The Imperfect Markets Theory The Product Cycle Theory As explained by Madura (2008), Comparative advantage theory says that when countries specializes or have expertise knowledge in one field than they dont waste their resources or energy on research of other field, they share or trade with other countries to share their expertise field. They take advantage of their expertise knowledge and become a head in comparison with others. Labour force is skilled and lower in cost in India and China as compared to western countries. They can be transported or hired for the operations for other companies. Companies such as Intel, IBM, Wipro operate in different countries because to utilise their efficient resources. These companies are operating in India, having their call centres outsource sharing the expertise knowledge in the field of Information Technology as India produces a large amount of IT experts. Imperfect market theory says that if the markets of a country stop trading with other countries than there will be no international trade. As per Dewey (1969), if the markets of the countries were perfect then there would be an easy transfer of resources from one country to another. Factors of production like labour, raw material, machines and capital can be transferred wherever they are demanded. This temperament of deal between the countries creates a similarity in costs and removes the relative cost of advantage, global trade and investment. In todays world there are situation when imperfect market conditions arises, where transfer of labour and other factors of production is restricted at some level. For example, MNEs such as Gap and Nike take advantage of the resources related countries. Imperfect market offers these companies to exploit their market and cross the trade barriers of import and export. According to Madura (2008), in Product Cycle theory, firms establish first in their home country by utilising all the resources available in the market. In home market they have an advantage over competitors. After operating in home market firm feels to expand their operations by entering into foreign market and producing their products overseas, reducing their transportation cost and other cost of production. There are existing competitors in the global market and to compete with them they introduces new technology and products in the market. For example, Dell, Lenovo, Toshiba are the companies who spent lot of their resources in their research and development for the latest technology. As argued by Kapoor and Grub (1973), firms motivate themselves to become multinational enterprises because of the foreign direct investment that helps in crossing the trade barriers to other countries. They also explore different cultures and management structure followed in different countries. Firms become multinationals in order to reduce the risk of foreign trade and become politically and economically well established. By going global they create a good relationship between the nations and create a name and goodwill to the firm. For example, many of the American companies are going global as they now operating their activities in the growing economy of different countries such as Brazil, China, India, Russia etc. Many of the emerging market companies such as HTC, Samsung, Nokia etc. are also spending on their research and development and sharing the information on technology sector. According to Markusen (1995), as he explains the Dunnings OLI framework that there are three advantages in which a company can have direct investment. Firstly, Ownership advantage is when a company has trademarks and copyrights of producing a product line and no other company can duplicate their product. Secondly, Location advantage is there when a firm creates his monopoly in a particular region serving a large amount of society. It is done as the foreign market offers the low cost of production to firms which make it profitable for the firm to serve that region. Thirdly, Internationalisation advantage says that if there is a market to cater than instead of going out there and start a new production unit, its better to license and sell your technology to a company and they will produce units for you. As stated by Madura (2008), there are some ways by which firms become multinational enterprises. International Trade Licensing Franchising Joint Ventures Acquisitions of existing operations Establishing new foreign subsidiaries According to Hill (1994), International trade means exporting and importing of goods and services between different nations and different companies. If a company start facing losses that it can reduce or stop exporting or importing from different countries as there is no huge investment involved in it. For example, many of the U.S. firms such as Microsoft, IBM, General Electric generates there huge amount of revenue from import export. As argued by Needle (2010), Licensing means that a firm uses several modes such as copyrights, trademarks, patents etc. to register their process of operations or the technology they use. They can transfer or share their technology with others according to their wish with low capital involved in it. For example, in India all the parts of telephone communications are manufacture by ATT and Verizon Communications as they have a licensed agreement. All the drugs that are produced and exported to Hungary and other countries are made by Eli Lilly Company. It has been argued (Spinelli et al. 2004) that Franchising means when a company authorizes its residents of the same country or other country to open an outlet using the brand of the company. Its market policies, product line and the franchisee have to follow the protocol of the parent company. In return to this the franchisee has to pay a royalty fee to the company periodically. For example, McDonald, Pizza Hut, Subway sandwiches have many outlets in many countries that are operated by the local residents of the respective countries. As per Yan and Luo (2007), in Joint Ventures two firms come together to achieve their common goal in the competitive market. In ventures risk sharing ratio is equally divided for the defined project and there should be a mutually understanding between them. These enterprises are also politically acceptable in different nations. For example, Nestle has a wide distribution of its home products throughout the world. So there has been a joint venture between General Mills Inc. and Nestle to distribute the cereals produced by the General Mills by using the distribution channel of the Nestle. It has been argued (Reed et al. 2007) that acquisition of existing operations means that the company acquires the existing competitors in the local market or in the foreign market. A company takes over another organisation as they incur heavy losses and cannot operate in the competitive market and also to vertically or horizontally integrate. A company explores the resources of another company and take advantage of the already setup done by that company. For example, Procter and Gamble acquired a bleach company situated in Panama. According to Rugman and Verbeke (2005), another way of entering in global world is by establishing new subsidiaries. The large organisations create or distribute its departments into different companies and are wholly or partially controlled by the parent company. The main organisations are called the parent company and the other is known as holding companies. If the company is totally owned by the parent company that their stock is also owned by the parent company. There is always a protection of technology as the information is not leaked out. At the same time it also involves high costs and risks in the foreign market. For example, a truck company called Overnite Transportation is a totally purchased subsidiary of Union Pacific Corporation. Conclusion At last it can be said that, the role of MNC in developing itself and the nations are very important. It in one way helps to build and economy by various advantages. At the same time it can have different repercussions if not properly strategized. The above description gives all the major points in making of an MNC. Also the essay describes the various parameters needed in making of an MNC.

McDonald’s Corporation (MCD) Essay

Introduction McDonald’s Corporation (MCD) is the world’s largest chain of fast food restaurants, serving nearly 47 million customers daily. McDonald’s primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes and desserts. More recently, it has begun to offer salads, wraps and fruit. Many McDonald’s restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more ‘natural’ style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables. Each McDonald’s restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations’ revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company operated restaurants. McDonald’s revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion. McDonalds’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. Approximately 85% of McDonald’s restaurant businesses world-wide are owned and operated by franchisees .All franchisees are independent, full-time operators. McDonalds Vision Mission Statement and Values * Vision: To be the best & leading fast food providers around the globe. * Mission: To be the world’s best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.† * Values: Our values summarized in â€Å"Q.S.C & V†. Provide good quality, services to customer . Have cleanliness environment when customer enjoys their meal .The value of food product makes every customer is smiling. Management structure Managing Director Head of MarketingDirector of FinanceHuman Resource head Accounts Manager Senior marketing executiveFinance managerEmployees Marketing executive Brand ManageResearch & Development officer Assistant Brand Manager Customer service managerProduct Development Sales managerMarket research TeamCompensation officer Branch managerRecruitment & Selection Training & Development Branch employees Porters Five Forces(in reference to McDonalds) Competitive rivalry According to Porter’s Five Forces Model, if entry into a market is easy then rivalry is likely to be high. Considering McDonald’s competitive rivalry, there is intense competition in fast food industry that many small fast food businesses fight with each other to improve their customer base. This makes a competition the major focus between businesses. Although, McDonald’s, with more than 32,000 local restaurants serving more than 60 million people in 117 countries each day, has a number of fast food outlet competitors across the countries such as Burger King, Taco Bell, KFC, Wendy’s, it is currently the leader of the industry in market capitalization with a cap of $39.31 billion. The Threat of new entrants The threat of new entrants in the fast food industry is high because there are no legal barriers which would keep them from entering the industry. The economies of scale and the access of the distribution are the major barriers that firms face in the industry. Firms must spend a large amount of capital on advertising and marketing in order to enjoy successful existence and long life of a fast food outlet. Large established companies with strong brand names such as McDonald’s make it more difficult to enter the market because new entrants are faced with price competition from existing chain restaurants. Thus, it takes a pretty much time for a new business to establish in the fast food industry. Supplier bargaining power The bargaining power of suppliers of McDonald’s is high because McDonald’s restaurants use the same products from the same suppliers and it doesn’t matter if you are in Rochester, MN or Beijing, China you can get the same Big Mac everywhere. This is a feature McDonald’s want to keep going on by encouraging consistency among its restaurants. Supplying these products to McDonald’s across the globe is the whole business for the suppliers and, however, if McDonald’s would lose even one supplier it would have to change one or more of its product lines and perhaps the whole menu what the McDonald’s customers were used to. This gives the suppliers of McDonald’s a high bargaining power. Buyer bargaining power Bargaining power of customers of McDonald’s is low because of low customer switching costs which are nearly zero; however, for example, one-fifth of the USA population eats in a fast food restaurant every day. Thus, fast food industry does not worry about customers’ loyalty. Fast food products industry is differentiated which are usually or almost always promoted by advertising – that is because of a vast competition between fast food firms Furthermore, if the fast food industry does not match the demands of the buyers and the general consumer trends, then the buyers can choose not to buy their product and convince others to do the same. A good example of this is the movie ‘Super Size Me’. It is a movie showing an ordinary consumer trying to live of McDonalds fast food, and the purpose of the movie was to see what the traditional fast food from McDonalds could do to your health if you were to eat their products for every meal. This movie shows what the buyers possible reactions could be if not satisfied or not being pleased. The reactions from the whole market were a large change in consumer preferences and brand preferences. The Threat of Substitutes With so many firms in the fast food industry with low switching costs, vide variety of similar products that people can chose, and healthier alternatives, the threat of substitutes is very high.As there is intense competition between rival sellers in the fast food industry, the competition between firms selling substitute products is intense as well. One very important issue is that the customer always tends to find another product comparable or better in terms of the quality of fast food products. Another thing is that fast food industry is unhealthy to its customers’ health. The majority of the public think that fast food restaurants primarily serve high in fat content foods which are unhealthy and as a consequence they tend to look elsewhere for healthier alternatives. While fast food products are not always associated with health and quality, fast food restaurants keeps a major advantage over other firms selling substitute products through the lower prices of their products and a quick, convenient service. Competitive Profile Matrix The above matrix re-establishes McDonald’s supremacy in the fast food market. * Pricing: McDonalds certainly gets an edge on the pricing front. Its competitors like Wendy’s are rapidly proliferating high-quality burger chains like Five Guys. Wendy’s has more premium products on its menu and therefore is relatively highly priced. The line â€Å"apke zamane mein baap ke zamane kaa daam† reinforces pricing edge enjoyed by McDonalds. They follow the value based pricing strategy * Financial Position: Wendy’s sales as in 2011 was 8.5 billion dollars closely competing with Burger King at 8.4 billion dollars. However McDonalds total sales were 27 billion dollars that is more than three times of its competitors. * Advertisement : McDonalds spends on an average 6 percent of its sales on advertisement. Slogans like â€Å"I am loving it† are really catchy and every McDonalds customer can associate with it. Also McDonalds can be seen using a marketing mixture by being there as a sponsor for Olympics to TV advertisement. However McDonalds generally doesn’t use print media. * Market Share: McDonalds market share is much more than its competitors and all the above factors such as pricing, quality, marketing strategy have played their role in this. * Global Expansion: McDonalds high sales are a result of its global expansion. McDonalds has its presence in 119 countries and serves 68 million customers daily which is way more than any of its competitors. Since its inception, McDonalds has consistently emphasized on restaurant operations procedures, service, quality and cleanliness. Here are a few milestones which the firm accomplished: 1. Hamburger University: It is a training facility which was designed to instruct personnel employed by McDonald’s in the various aspects of restaurant management. More than 80,000 restaurant managers, mid-managers and owner/operators have graduated from this facility. It is also located in Shanghai, China. 2. The Big Mac: The Big Mac was created by Jim Delligatti, who was operating several restaurants in the Pittsburgh area.It was introduced in 1967. The sandwich was so popular that it was added to the menu of all the U.S restaurants by 1968. 3. Happy Meal: A Happy Meal is a form of kids’ meal specifically marketed at childrensince June 1979. A toy is typically included with the food, both of which are usually contained in a box or paper bag with the McDonald’s logo. Frequently, the packaging and toy are part of a marketing tie-in to a popular film, TV show, or toy-line. 4. Drive-Thru: The first McDonald’s drive-through was created in 1975 in Arizona on a military base to serve soldiers who weren’t permitted to get out of their cars while wearing fatigues.McDonald’s drive-through service is called McDrive. 5. McDonaldization: McDonaldization is a term used by a sociologist, George Ritzer. It occurs when a culture possesses the characteristics of a fast-food restaurant. McDonaldization is a reconceptualization of rationalization, or moving from traditional to rational modes of thought, and scientific management. Its five components are Efficiency, Calculability, Predictability, Control and Culture. 6. Plan to Win Strategy This strategy was adopted in 2003 with its strategic focus on being better and not just bigger. The 4 P’s of this strategy were People, Place, Price and Product. SWOT Analysis Strength * McDonalds holds a very strong brand name worldwide.. * It is said that McDonalds was the first food outlet to provide its customers with nutritional facts. Nutrition information is printed on all packaging and more recently added to the McDonald’s Internet site. McDonalds offers salads, fruit, roasted chicken, bottled water and other low fat and calorie conscious alternatives. * McDonald’s uses only 100% pure USDA inspected beef, no fillers or additives. Additionally the produce is farm fresh. McDonald’s serves 100% farm raised chicken no fillers or additives and only grade-A eggs. McDonald’s foods are purchased from only certified and inspected suppliers. McDonalds works closely with ranchers, growers and suppliers to ensure food quality and freshness. * Loyal employees and management and customers is their biggest strength * McDonalds makes sure that cultural and regional barriers are kept in mind while providing food to different countries. * Clean environment and play areas for children where they can enjoy their time. Weakness * The weakness that hits the list is the employee turnover rate. Every year many of their employees are fired out of the restaurant * Health conscious people seldom complain that they do not provide us with the organic and healthy food. This becomes their weakness when they get in the complaints. Opportunities * Discounts given on every food item may help them gain more customers. * In today’s health conscious societies the introduction of a healthy hamburger is a great opportunity. They would be the first QSR (Quick Service Restaurant) to have FDA approval on marketing a low fat low calorie hamburger with low calorie combo alternatives. Currently McDonald’s and its competition health choice items do not include hamburgers. * In order to be environment friendly, they can use packing material which can be recycled later or material that does not create pollution. Threats * Emerging competition of similar outlets is becoming a problem for McDonalds. They have a threat of local food outlets in different countries. * As it is a multinational food outlet, fluctuations in the currency of other countries becomes a problem for such companies * Political factors Political Factors The international operations of McDonald’s are extremely under influence of a policy of the separate state put into practice by each government. For example, there are certain groups in Europe and the United States, which demand the acts of governmental power concerning medical values of meal of fast food. They have specified that harmful elements as cholesterol and negative influences as fatness are concerning consumption of products of fast food. Economic factors The organizations in the fast food industry aren’t excused from any disputes and problems. Definitely, they really have the separate problems involving business factors. Branches and privileges of networks of the enterprises of fast service as McDonald’s has a tendency to experience difficulty in cases where the economy of the corresponding states is amazed by inflation and changes in exchange rates. Clients hence face a survey stalemate through their separate budgets, whether they should spend more on these foreign networks of the enterprises of fast food. Hence, to these chains, possibly, it is necessary to take out problems of effects of economic environment. Especially, their problem depends on the answer of consumers to these main principles and how it could influence their general sales. In an estimation of operations of the company, food chains as McDonald’s tend to import the biggest part of the raw materials to certain territory if there is a delivery lack. Exchange rate fluctuations will also play an essential role in company’s operations. The company’s international supply as well as the existing exchange rates is merely a part of the overall components needed to guarantee success for the foreign operations of McDonald’s. It is besides obligatory, that the company has been informed on the existing tax requirements needed by the separate governments on which they operate. It basically guarantees smooth operations of McDonald’s privileges. In the same relation the company should consider also a state economic situation on which they influence. Level at which the economy of special state grows, defines purchasing capacity of consumers in that country. Hence, if the privilege works in the especially economically weak state, then their products should cost above than other existing products in the market, these privileges should take certain regulators to support economy at the expense of manufacture growth. Social The main reason is the consumers’ worries had greatly increased with health fears so customers now opted for healthier options like subway, which offered more of a variety for health conscious customers. Social Considerations: To ease customers concern about health issues, McDonald’s has made changes to the following; McDonalds changed its image vastly by evaluating the current menu and making changes to it from using organic products to revising the whole menu entirely by offering salads and vegetarian burgers. McDonald’s serves a range of high-quality foods that can fit into a balanced diet. The accurate and accessible nutrition information help guests make informed menu choices. Social Considerations Emphasis on food safety: McDonald’s suppliers have food safety management systems in place, including Good Manufacturing Practices (GMP), a verified Hazard Analysis Critical Control Point (HACCP) plan and crisis management, food security and other applicabl e programs Technology Technological Advantages McDonald’s has taken advantage of technology to streamline their processes and improve efficiency. Through technology enhancements such as FPI’s Help Desk Service, network and application consolidation, and other technology implementations, operations of the company are greatly improved. Technological Advantages: * Technological Advantages Touch Order Allows You To Place Order At McDonald’s Via handset. * T The customers can place their order directly from their tables, dubbed as â€Å"Touch Order†. It’s the first self-ordering system in the world to use RFID* Technology Spotlight. * McDonald’s has also implemented technology to improve supply chain management, and allows customers to access this information to make more informed decisions about what they eat. Supply Chain They strive to ensure that every step of the McDonald’s supply chain contributes positively to the safety, quality and availability of their final products. They also want their product ingredients to be produced in ways that contribute positively to the development of sustainable agricultural and food manufacturing practices. Since McDonald’s does not actually produce any of the food they ultimately serve their customers, it’s essential that they work with suppliers who share our values, and we do. They have a large number of direct suppliers – companies that make or deliver final products for their restaurants as well as an even larger number of indirect suppliers companies and farms that grow or process the ingredients that are eventually delivered to their direct suppliers. They work closely with their direct suppliers to continuously improve the practices that impact their employees, their communities, the environment, their own suppliers and, of course, McDonald’s customers. Profit Pyramid Model The key is to get customers to buy at a low price, low price, entry point and move them upto high price and high margin products where the company makes its profit. For example McDonalds uses products like Mc Aloo Tikki to get the customer inside the restaurant. Once the customer establishes a taste for its products his focus is shifted to products belonging to the higher strung of the ladder such as Mc Paneer Spicy, Chicken Maharaja Wrap etc. This is where it makes it profit. Thus McDonalds follows a Profit Pyramid Model. Corporate strategy Corporate level strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of businesses. McDonald’s is engaged in. Mc Donald’s only deals in the restaurant business, so its corporate strategy is a single business unit strategy, likely of growth. Business strategy: A strategic business unit may be a division, product line, or other profit center that can be planned independently from the other business units of the firm.McDonald’s has pursued two strategies since 2003. To keep up with rapidly changing consumer preferences, demographics, and spending patterns, McDonald’s has introduced new items (Premium Chicken sandwiches and the Angus Beef Burger) and campaigns to create more healthy foods (Premium Salads). The strategy reflects the philosophy that novelty, as opposed to loyalty to traditional products, is the key determinant of sales in the fast food industry. McDonald’s has also focused on increasing sales at existing restaurants instead of opening new ones. To do so, McDonald’s has remodelled many restaurants, kept stores open longer, and increased menu options. Marketing Strategy McDonalds uses marketing mixture by using the different sources of media to reach the consumer: * Medium: Marketing medium of McDonalds ranges from TV advertisement to sponsoring the Olympics.It normally doesn’t use the print media for advertisement. * Branding: When someone says McDonald’s things like the golden arches ,Ronald McDonald Big Mac, etc come automatically comes to our mind. McDonald’s is loaded with brand images that are embedded into our souls from a very early age, and the company’s influence has been profound. * They Speak to the Children: McDonalds has established strong relationships in their brand by marketing directly to children, and giving them the products they want—little meals with lots of color, happy faces, and a toy (hence, Happy Meal). Core Competency The only core competency that Mc Donalds has is developing localized products. We can explain this with the example of the products that were provided to their French customers. They included beer in their menu. All their hamburgers also included a tinge of mustard to it since the French are extremely fond of mustard sauce. To overcome their unhealthy image they also began to include salads in their menu. In Thailand some of their dishes also included rice since all their meals have rice. To cater to the taste buds of Indians they have started dishes like Paneer McSpicy. McDonalds also focuses mostly on children by providing Happy Meals and toys along with it which attract the kids. There no other fast food brand which has customized its product to such an extent and therefore it is a core competency for McDonalds. Distinctive Competency The distinctive competencies of McDonalds are as follows: * Price * Standardized products * Quick service VRIO Analysis * Value: McDonalds provides value to the customer’s because of its competitive pricing. There are not many brands which can match the same prcing, standardized product, quality which McDonalds provides therefore it does provide value to the customer’s. * Rareness: McDonald’s approach towards children is very rare and no other competitor has the same to this extent. Also localizing their products is one more rare feature of this brand. * Imitability: Designing a business model which has been successful in 119 countries with annual sales of 27 billion dollars and with so much brand recognition is definitely not easy to imitate. * Organization: They exploit their resources because they cater to the local customers in an extremely efficient manner.

A Cognitive-Behavioral Approach to Addressing Implicit Bias in Policing - Free Essay Example

Sample details Pages: 7 Words: 2195 Downloads: 8 Date added: 2019/04/05 Category Psychology Essay Level High school Tags: Behavior Essay Did you like this example? It has been almost 60 years since the Civil Rights Movement yet underlying racial tensions and documentation of police brutality continue on in America. While criminal activity knows no race, there seems to be a correlation between increased use of force by police officers on people of color compared to their white counterparts (Spencer, Charbonneau, Glasser, 2016). Whether it is media portrayal, or actual bias by officers, the number of deaths at the hands of police officers since 2014 has sparked outcry from the public. Don’t waste time! Our writers will create an original "A Cognitive-Behavioral Approach to Addressing Implicit Bias in Policing" essay for you Create order Much like the 1960s and the height of the Civil Rights Movement, a grassroots movement, Black Lives Matter, has begun to take a stand against what is viewed as excessive policing. Currently there is no cohesive database documenting the number of police related shootings. Empirically based research and literature is limited regarding criminal homicide and police shootings (Bejan, Hickman, Parkin Pozo, 2018). Current research also suggests an under-reporting or misreporting on governmental websites such as The National Vital Statistics System (NVSS) (Feldman, Gruskin, Coull, Krieger, 2017). The creation of the Black Lives Matter Movement (BLM) in response to the shooting of Trayvon Martin has pushed these types of incidents to the forefront of media. The coverage, negative or positive have sparked conversation and research into these matters. Though racism, racial discord and the use of excessive force by police officers is not a new subject area, the seemingly increase of unarmed individuals being shot by police, social media encounters of racism and misuse of police resources by individuals reporting people of color for infractions such as studying in their dorms (Wootson, 2018) or hosting a barbeque (Fernow, 2018) have opened the door for more research (Bejan, Hickman, Parkin Pozo, 2018). One area of research questions the role of implicit bias in racial interactions, particularly in regard to police interactions with persons of color (Plant Peruche, 2005; Correll, Park, Judd, Wittenbrink, Sadler Keesee, 2007; Spencer, Charbonneau, Glasser, 2016). Implicit bias holds to the idea that individuals are unaware of their own biases that affect their behavior, often in a discriminatory manner (Selmi, 2018). Due to the ignorance of their own bias, behaviors and responses can be attributed to external influences and events, rather than recognizing the internal workings occurring (Plant Peruche, 2005). Coupled with this underlying theory is a response on ways to counteract implicit bias, specifically in police training. Police departments themselves are seeking ways to better train their officers in an attempt to reduce fatalities. Researchers, as well, are considering the implementation of cognitive-behavioral based training as well as exposure-based training in an attempt to minimize implicit bias, therefore reducing the number of police brutality incidents (Kawakami, Dovidio, Moll, Hermsen, Russin, 2000; Lai, Marini, Lehr, Cerruti, Shin, Joy-Gaba, Nosek, 2014; Plant Peruche, 2005). Cognitive-behavioral approaches to treatment focus on the observable or overt behavior as well as the non-observable or covert behavior. The theory examines the importance of the current environment, in this case, that of police encounters, and the development of problematic behaviors; excessive force or police brutality (Plante, 2011). Addressing the overt and covert behaviors through exposure to individuals of different ethnicities through computer simulation, real life intergroup experiences and counter stereotypical materials are areas of methodology under examination. Working to find a more adaptive response to perceived threat through counterconditioning, as well as behavioral rehearsal associated with high stress situations is of consideration as well (Spencer, Charbonneau, Glaser, 2016; Lai et al., 2014; Kawakami et al., 2000). Understanding the underlying behaviors and thought processes and addressing them with a multi-faceted treatment of cognitive behavioral and exposure techniques to address implicit bias within police training, may bring about a reduction in the use of excessive force and incidents of police brutality. This paper examines cognitive-behavioral approaches to reducing implicit bias, specifically looking assessing the effects of exposure training and counter-stereotyping as two successful means of treatment. Counterarguments to these treatments are also presented. Literature Review While some would like to believe they are living in a post-racial America, where race and racism is virtually non-existent, statistics reveal that over the last three years, concerns about racism and race relations has sharply risen to 47% in the United States (Swift Gallop, Inc., 2017). One of the underlying factors that researchers have found contributing to this increase is the number of highly publicized shootings of unarmed Black individuals (Swift Gallop, Inc., 2017). In response, current literature has looked to examine the possible underlying factors that are impacting this rise in shootings. Implicit bias has been considered as one of these elements of influence on these incidents. As previously mentioned, implicit biases are unconscious prejudices that individuals hold, typically toward another person and behaviors associated in response are often negative and discriminatory toward the object of these biases (Selmi, 2018). As an example of implicit bias at work, Eberhardt, Goff, Purdie, Davies (2004) found that the sight of a Black face could generate notions of crime, with the inverse true as well. If the mere thought of, or visual cue of a Black individuals presence could lead to this thought process, how much more so could it escalate a situation? These consequences of implicit bias are being addressed by researchers by seeking to counteract the biases themselves. Some have suggested embracing a colorblind ideology as a means to counteracting racism, and racial bias. Colorblind ideology, at its core seeks to remove color from the equation, and present itself as egalitarian and just, contributing acts of perceived racism to outlying factors. However, as Bonilla-Silva (2014) has discovered, it has simply enabled a new form of racism, allowing for the continuation of systemic racism, including in the realm of policing. While research provides varied means of treatment to reduce or neutralize implicit bias, current literature suggests that the most successful reductions occur with a combination of treatment approaches, namely cognitive-behavioral based training coupled with exposure-based training (Plant Peruche, 2005; Kawakami et al.,2000; Lai et al., 2014). Cognitive-Behavioral Based Training Cognitive-behavioral therapy became popular in the 1970s in response to recognition of limitations found within strict behavioral therapy, specifically the identification of the role that thoughts, attitudes and feelings had on behavior. This awareness brought about an integrative model of the current behavioral practices with more cognitive approaches. This integration recognized the importance of not only the observable outward behavior, but that of the inner workings of thought processes and emotions. Based upon principles of learning and the workings of experimental psychology, cognitive-behavioral therapy recognizes the function of behavior being influenced by thoughts, attitudes and feelings (Plante, 2011). With this understanding, researchers have sought to implement treatments based in this approach to reduce an individuals implicit bias, which should therefore reduce the behaviors associated with said bias. Exposure based training. An area of exploration in seeking to reduce implicit bias is through the avenue of exposure. Exposure based therapy can be a gradual process; slowly exposing an individual to something they fear, or it can occur all at once (Plante, 2011). In the case of implicit bias and policing, an officer may not be outright ?afraid of a person of color, yet, their underlying biases may manifest in rapidness to fire their weapon when encountering them in a high stress situation. One of the least risky forms of exposure found within the literature was that of a computer-based program. Within this study, officers were presented with images of Black and White men with either a weapon or a neutral object. Initially officers were more likely to fire their weapon in response to a Black face, regardless of the presence of weapon or not. Over time was found that over time, with repeated exposure to images of Black men and a neutral object, officer shootings decreased, and accuracy increased. Authors of the study correlated repeated non-threating exposure to Black men and lack of shooting by officers with a reduction in bias. (Plant Peruche, 2005). Exposure through intergroup contract has been suggested as way to reduce implicit bias in officers. Allport (1954) speculated that in order to reduce biases four criteria should be met. Individuals of the ingroup, in this instance, police, would meet with the outgroup, regularly, and were considered as holding equal status as humans, while seeking the same goal, in this case peace and reduced incidents, and this effort was supported by those in authority, then prejudice and bias could be reduced. Community based police programs, (Gill, Weisburd, Telep, Vitter, 2014) and collaboration with those considered to be the outgroup, in this case, those that are on the receiving end of bias, example of implementation of these elements A meta-analysis of intergroup contact found that with increased contact, prejudice decreased. It was also found that the removal of choice for participation in intergroup contact within some studies found an actual greater decrease in prejudice than in studies where participants were given a choice. Results were found to be generalized outside of the specific members of the intergroup to members of the entire outgroup as well, even having had zero prior contact. While Allports (1954) four conditions for intergroup exposure strengthened the response, that is, prejudice was reduced, it was found that even apart from all requirements being met, that intergroup contact reduced prejudice (Pettigrew, Troup, 2006). By interacting regularly with individuals outside of their group, in a positive manner, implicit bias is reduced. Counter-prejudicial training. Using counter-prejudicial training to change the response and action (excessive force and or shooting) outcomes in reaction to the presence of minority suspects. The focus of this training seeks to change the stereotypical narrative that invokes a negative response and replace it with a counter one. For example, if the stereotype is Black men are gangbangers who wear low riding pants and oversized shirts, dealing drugs in the streets, the narrative would replace it with a helpful Samaritan, who happened to be a Black man, intervening in a crime that is occurring. This is a simplistic example, however the idea behind it remains. Calanchini, Gonsalkorale, Sherman, Klauer (2013) conducted a study implementing counter-prejudicial narratives postulating the idea that if an individual could be trained to respond to images of Black men in a counter-prejudicial way, they could reduce the persons implicit biases, as well as reinforce the mental process that aid in diminishing the impact of biased associations. Participants were trained in either a counter-prejudicial manner or a pro-prejudicial manner, a control was not trained in either direction. Using images of neutral faced expressions of Black and White men, participants were primed with relating either a negative or positive word to the image. Following this training, they were given an Implicit Association Test linking Black and White with either pleasant or unpleasant words. Results showed that training individuals in a counter-prejudicial manner showed less triggering of biased responses. However, they found that there was not an increase or decrease in bi ased responses from those trained in the pro-prejudicial manner. Calanchini et al.s (2013) findings are supported by current literature. Lai et al. (2014) conducted a comparative study of seventeen interventions for reducing implicit bias; one of these interventions was presenting a counter-prejudicial (counter-stereotypical) narrative. Within this vein, four different studies were conducted; a counter-narrative story, a counter-narrative story that places the participant within the story, images pairing the word ?good with the image of Black man and ?bad with a White man, and then only images of a Black man with the word good. Results showed involving the participant in the counter-stereotypic narrative greatly reduced implicit bias. It has been suggested that by re-training associations, there is an ability to negate stereotypes and prejudicial attitudes; in so doing, there is a reduction in implicit bias (Kawakami et al., 2000). Criticism and Counter Solutions. While there are numerous studies supporting the reduction of implicit bias through cognitive-behavioral training; specifically using a counter-stereotypic presentation, there are suggestions within the literature that it (counter-stereotypic presentation) may not be the most effective means due to concerns about the longevity of effect (Burns, Monteith, Parker, 2017). An alternative proposition is found in motivation, by either internal or external influence, and its relation to self-regulation in the reduction or suppression of implicit bias (Devine, Plant, Amodio, Harmong-Jones, Vance, 2002; Hausmann, Ryan, 2004). The source of motivation for individuals to not express prejudicial attitudes may be more effective is the source is an internal motivation. The desire to not appear prejudice due to external pressure, i.e. it is not acceptable, may not be strong enough to control those attitudes privately. However, an internal desire to consciously not act or appear prejudice may strengthen the ability to overcome implicit bias (Butz Plant, 2009). Studies have found, those with higher levels of internal motivation were able to regulate prejudicial attitudes in a variety of situations and varying levels of pressure. Whereas those whos motivation was strictly external were unable to manage prejudicial attitudes in situations that placed them in a position with higher pressure and little control (Burns et al., 2017; Butz Plant, 2009). Furthermore, when individuals were made aware of their biased behaviors, thoughts or actions, and these actions were not in alignment with their personal convictions, it created feelings of guilt. These incongruencies between actions and personal convictions led to a greater reduction in implicit bias (Butz Plant, 2009; Lai, Hoffman, Nosek, 2013).

The Ethics Of Corporate Ethics Programs - 1568 Words

Corporate Ethics programs are a tactic to promote ethical awareness amongst all employees within an organization at all ranks from entry level employees up to the executives. They provide great educational tools, providing employee knowledge on how to resolve ethical issues in any ethical dilemma they may encounter in their day to day activities or long term projects. They also assist organizations with increasing their performance therefore improving prosperity and making profits. Ethics programs help avoid scandals, by ensuring the organization abide by the laws in place, know how to respond when faced with a questionable situation, and how to report unethical actions they discover. Organizations must have a formal ethic plan in place to†¦show more content†¦Ã¯Æ'Ëœ An ethics program can also support the organization in dealing with regulation and technology changes. Organizations without ethical programs in place it will support management competing globally and set a new standard for organizations. The following elements are key to guarantee a strong ethics program and clearly state expectations for all individuals involved in the organizations doings no matter the ranking of the individual; employees, managers, or even members of the board of directors for the organization. All individuals being held to the same standard ensures no one can say they are being treated unfairly. Risk Assessments Every year the organization should complete a risk assessment to identify any high risk factors. Upon the completion of the risk assessment actions will be taken to alleviate any risks identified. A detailed report will then be provided to all members of the board of directors to ensure they are knowledgeable of what is happening. Internal and External Communication Communication must be clear and concise among all employees of the organization to prevent potential miscommunications and confusion. Managers should send personalized communication regularly. Senior managers should take initiative, if the need arises, to direct appropriate methods for employees to implement and follow. Consistent Appraisal and Enforcement The organization culture should beShow MoreRelatedEssay about Corporate Ethics Program3992 Words   |  16 Pagescontinued to grow. Consumers increasingly look to support and buy from companies that make ethical decisions. The government has also created new legislation that requires a certain level of ethics and creates encouragement for companies to go as far as to create ethics programs. The idea of â€Å"business ethics† is not new, but there is more pressure now than ever before on companies to prove they are making an honest effort to be ethical. 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