Quality Systems Of Tesco Plc And Waitrose Marketing Essay

Quality Systems Of Tesco Plc And Waitrose Marketing Essay Operations management encompasses all activities in an organisation that transform its inputs into desired outputs. Operation Managements activities consist of planning, designing, implementing and controlling the firms operation through an efficient and effective use of its resources to produce and deliver goods and services so as to satisfy its customers needs (Slack, Chambers, Johnston, 2004). Quality is very important in the mind of the customer because it influences the choice in purchasing that product. A quality product is one which satisfies customer demand completely and which is done right the first time itself. The quality of a product can be classified in two categories, which is firstly the design quality and secondly the performance quality of a product. Design quality involves the purpose of a good or facility. A shopper usually classifies the quality of a product through its look, process and dependability. Furthermore, performance quality involves the extent to which products and services correspond to the plan of the design. Quality management is essential to effective operations management, particularly continuous management. More recent advancements in quality, such as benchmarking and Total Quality Management, have resulted in advancements to operations management as well. Quality management ensures that there is quality in a products and services. Although there are different approaches to solve quality issues, all the goal are the same which is to create a high quality, high performing product or services which is in conformity with customers expectations. Quality management is very important in companies for various reasons. It ensures product quality in the sense that product can be produced as per stated promise, which is durability, performance and reliability. Customer satisfaction where surveys can be conducted to understand the qualities customers want from the product, as well as how it can be improved. Increased revenues as quality products and services give the company a spotless reputation in the industry and this can lead to new customers and also selling additional products and services to existing customers. Moreover unnecessary processes can be eliminated and the employee can do the same job in less time thus decreasing the additional salary paid him. Quality management also helps to reduce wastage as companies that house inventory has to incur the holding costs and also tracking of the inventory which ultimately will be included in the price. Therefore, to keep inventory at a low level without incurring any waste, manuf acturers can work closely with suppliers using a Just-In-Time philosophy and thus becoming more responsive to customers. RESEARCH METHODOLOGY Research methodology is a system of collecting data for a research project which provide critical insight into the subject matter of the research. The basis upon which the research approach is selected depends upon the requirement of the research topic and its main objectives. (Fraenkel and Wallen. 1993). According to Saunders et al the two main types of research approaches are quantitative and qualitative research. For the purpose of collecting data on the quality aspect of the operational management, the researcher has adopted both qualitative and quantitative approach. Primary data was obtained from Tesco branch of Thornton Heath which was selected for this purpose and was compared with the Waitrose branch of Croydon. Research techniques such as face to face interviews using open ended questions with the store managers of both supermarkets were used. In addition observation of the processes across various branches of Tesco and Waitrose was done for a period of two weeks. These two particular research techniques were chosen because it enables the researcher to get more detail and additional information which could not have been obtained otherwise if another research methodology for example questionnaire was used. Moreover it enables the researcher to have an insight in the quality problems existing in the operation management. The information obtained during the interviews and through physical observation is used to generalise the quality system and philosophies adopted across all branches as Tesco and Waitrose because as a franchisee these supermar kets are much known for standardisation across all their levels of area of business. Secondary data is another method of obtaining data which is readily available at relatively no cost from sources such as the company website, books, and academic journals at relatively no cost. Some of the limitations of the research techniques used for this research were that the store managers refused to answer some of the questions. HISTORY OF BUSINESS TESCO Supermarkets giant Tesco was founded in 1919 after the First World War by Jack Cohen when he started selling surplus groceries from a stall in the East London and made  £1 profit from  £4 sales. Tesco got its name from the initials of TE Stockwell where he was a partner in the firm of tea suppliers and CO from his surname. He managed to cope with adverse economic conditions and subsequently with rapid changing technology, increasingly sophisticated consumers and competitions. The first official store was opened in 1929 and the company kept flourishing throughout the twentieth century. In 1992 the company launched its slogan ; every little helps, followed by Tesco value in 1993 and in 1995 it overtook Sainsburys and became the UKs largest food retailer. . It managed to become the first British trader with a companys loyalty card when the Tesco Clubcard was introduced, and has also developed many innovative products and services to make more profit. Today, Tesco has 2482 stores in the U.K and 2329 stores in other countries, with an overall staff number of 472,000 worldwide. WAITROSE Waitrose is the UK leading chain of quality food retailer and is part of John Lewis Partnership since 1937.Founded in 1904 by William Waite, Arthur Rose and David Taylor in a small town called Acton in West London, today Waitrose is the country most successful, innovative and largest chain of supermarkets differentiating itself from its competitors by providing high quality products and excellent customer services. It mainly targets the high income earners. As to date, Waitrose has 228 branches across the United Kingdom and a 4.3% share of the market, making it the 6th largest grocery retailer in the UK. Waitrose has been expanding in the domestic market by adopting a strategy of growth by acquisition and very recently it has started to franchise its licence. Its first overseas store was opened in Dubai in April 2008 and its plans to focus more on its overseas market in the near future. The main competitors of the chain of supermarket are Marks and Spencer, Tesco, Sainsbury and many more. COMPARISION OF TESCO AND WAITROSE Quality Philosophy Tesco quality philosophy is to deliver the best possible service to the customers by providing high quality products at cheaper price. Its target market is the middle income with young children. Waitrose is committed to bring the best quality of food. Its price is at a premium. It has built its reputation on its quality and the freshness of the food. Its targeted market is the high income earners and compared to Tesco, its stores are located in affluent areas. Quality systems Quality systems Even though Tesco and Waitrose cater to different segments of income group customer both the store stress on quality. They take different aspects into consideration while choosing the products that need to be displayed on their shelves. Below are the various methods that both the stores consider Tesco Tesco takes regular feedback from their customers regarding the quality of the products and the service they received from the stores. Based on the feedback, the Quality control team ensures that the products that reach the stores are of high quality. This ensures the product consistency and good value for the customers, every time. Tescos quality and life of the products are constantly monitored and sample checked across various steps in supply chain from production to the stores. According to Tesco Would I buy it strategy is employed which empowers anyone involved with the production, packaging and shelving. The persons involved in these stages have the right to reject the product which below the specification. Apart from the above methodology, the products are also tested independently every month. This ensures that the delivered product is up to the quality. They also have a technical standard guideline which has to be followed by everyone involved in the supply chain. They consult industry bodies, environmental experts and food safety experts to advise on production aspects. Tesco over the past few years has effectively introduced six sigma methodology across various departments and has successfully reduced the carbon di oxide emissions and also saving energy. Waitrose Similar to the approach taken by Tesco, Waitrose also takes the customer feedback into consideration while doing quality testing. Waitrose looks for producers who can offer quality products and sets very high standards while preparation of the food products. According to Waitrose they uphold high standards of food safety and hygiene, by the usage of latest farming techniques. These include HACCP (Hazard analysis and critical Control Points) systems, ICM (Integrated crop management) system and LIFE (Linking Environment and farming). HACCP is used in food production to identify potential hazards and to control the risks in future. ICM is used to ensure that best horticulture practices are followed and LEAF is independent charitable organisation that helps farmers to reduce the environmental impacts. Recently Waitrose have successfully implemented SAS software to improve the stockholding and cut wastes. This helps them in forecasting customer demand and ensures right product is shelved at the right time. According to Waitrose, this has helped them to reduce stockholding by 8% and wastage by 4%, thus increasing the customer satisfaction through high product availability. Quality Approaches The quality approaches of Tesco and Waitrose will be compared and contrast as follows: Quality of product Compare Quality of products depends on the requirement and satisfaction of customer. Much focus is being placed on quality of products by most of the organisation and Tesco and Waitrose are no different. Both companies offer the range of organic foods which are becoming more and more popular nowadays. The Bags for life scheme is becoming popular in supermarkets so as to cut down the number of traditional carrier bags and therefore, reducing the number ending up in landfill sites. Once the Bag for life is worn out customers can replace it free of charge. Tescos front line initiative if there is more than one person queuing at a single check out then another one is open and also customers are encouraged to give instant feedback on the service thus helping in improving the offer and the service. On the other hand, Waitrose has the quick check method where customers can scan their items and pack them as they are shopping and when finished, they pay at the quick check till without having to unpack and repack their goods. For any business to grow or to compete with others it has become mandatory to use the latest technologies across various levels. Tesco can launch an application with barcode reader integrated with Tesco club card and mobile number. The customer can select the items and scan it through the barcode reader app. At the end of the shopping he/she just scans her app on the till or enter the reference number (could be registered mobile number) provided by the app. This is automatically updated on to the customers club card. This way queues can be reduced by large at the tills. There by increasing the customer satisfaction. Also, Tesco can implement Drive-Thru shopping; where in customer shops online and pays for it online if necessary. The customer just drives at the specified time with the reference number and picks up his goods at the counter just like the Mc Donalds drive thru.

Essay --

During the Meiji Restoration, Japan transformed into a strong industrialized nation by adopting the Western political, cultural, and technological ideas. Japan was the â€Å"only non-Western country to industrialize in the nineteenth century and that, moreover, she did so in an extremely short time† (Sugiyama 1). Japan’s social, political, and economic aspects were all affected by the Western technologies to transform Japan into an industrialized nation (Wittner 1). By adopting the Western ideas during the Meiji Restoration, Japan has turned into a powerful industrialized nation by becoming an â€Å"international political player in the 1880s† (Wittner 1). Prior to the Meiji Restoration, the Western powers viewed Japan as the backward nation because â€Å"in terms of military strength and economic development, Japan was indeed far behind the Western nations† (Hane and Perez 84). The Meiji government feared that Western nations would colonize Japan because they had already done it to other Asian countries by using military forces (Hane and Perez 84). The Meiji government’s fear came out to be true when the Western powers imposed unequal commercial treaties on Japan. Because of these unequal treaties Japan was â€Å"deprived of the right to regulate tariffs, and Western residents in the treaty ports were granted the privilege of extraterritoriality† (Hane and Perez 84). However, these unequal treaties were significant to the Meiji Restoration because they became the foundation of Japan’s industrial revolution by providing Japan with the access not only to Western technologies but also to political, cultural, and social ideas (Hane and Perez 82). Moreover, the treaties were important to Japan’s economic future because they increased the Japan’s econom... ...Restoration was the telephone. Iwadare Kunihiko established Nihon Denki (Nippon Electric Co., also known as NEC) by teaming up with the Western Electric (WE) of the United States (Odagiri and Goto 161). Kunihiko and NEC adopted WE’s technology and communication equipment, which helped expand the production of telephones (Odagiri and Goto 162). The telephone production was important for Japan’s industrialization because communication became easier. Many people were able to keep in touch with their friends and families who live far away by simply calling them. The telephone was also important for business because it sped up the commercial transactions. As more people are using the telephone, more private owned telephone companies were operated to raise profits. The American telephone technology brought industrialization in Japan by increasing the telephone production.

Around the World in a Heart Shaped Balloon :: Personal Narrative Writing

Around the World in a Heart Shaped Balloon When I was a little girl I adored going to the movies. I especially loved movies with a romantic plot, and a happy ending. As a child, I remember sitting in the theatre and being mesmerized by everything that was happening on the screen. Films like The Little Mermaid, Aladdin, and Beauty and the Beast made a concrete impression on my mind. Even at such a young age I loved the romance of these stories. The thought of one day being carried off by a handsome prince was a very fascinating concept for me as a little girl. Beauty and the Beast was my favorite. My grandparents took me to see it for the first time. After that, I was hooked. I got anyone I could think of to take me to the movie theatre. That year for my birthday I received everything Beauty and the Beast. I received a comforter, sheets, pillowcases, posters, a Beauty and the Beast lamp, even a night light! I was in heaven. Now that I think about it, my family may have gone a bit over the top, but at the time I was the happies t kid on the entire block. That year we painted my walls light pink, and I had a white bunk bed, and white furniture, and everything else was Beauty and the Beast. This was just the beginning of my love affair with fairy tale romance. In the years following my Beauty and the Beast craze I went through a number of different phases. Each one very different, but all of them centered around romance. There was a period of time where I loved movies like Disney's Robin Hood, and Ever After. All the different tellings of the mystical King Arthur story, which we’d been studying in school, captivated me. And, for a brief time I became mildly obsessed with the Medieval Times, and magical romance. The Shakespearian play â€Å"A Mid Summer Night’s Dream† is filled with magic and romance. It became the inspiration for me to plan out a mural on an entire wall of my room. I took a pencil, and began to sketch out my vision. A forrest scene with brightly colored fairies surrounding the marriage of the beautiful Fairy Queen to a half man half donkey creature. On the opposite side I wanted to paint the two love sick couples in the play sleeping in the grass beneath the trees.

Fortinbras, Laertes and Horatio, as Foils to Hamlet Essay -- GCSE Cour

Fortinbras, Laertes and Horatio, as Foils to Hamlet  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   "What a piece of work is a man!" (II, 2, 305). In his statement Prince Hamlet, in his role as the star character in William Shakespeare's Hamlet, acknowledges the complexity of man; as "infinite in faculties. . . express and admirable. . . like an angel [or] like a god. . . and yet. . . [a] quintessence of dust" (II, 2, 307) is man described. Shakespeare emphasizes the observation by casting Hamlet as "a man," exposing his strengths and weaknesses through the contrast provided by Fortinbras, Laertes and Horatio, as foils to the tragic hero.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   At his first appearance, young Fortinbras is shown to be inferior to Hamlet; being "of unimproved metal, hot and full" (I, 1, 96) unreasonably "[sharking] up a list of landless resolutes" (I, 1, 98), he is in sharp contrast to the "sweet and commendable" (I, 2, 87) Hamlet introduced in the next scene. As the play develops, however, Hamlet's weakness are highlighted as Fortinbras works to earn his name, "which seems to symbolize the strong arm of the soldier" (xxvii). Fortinbras' uncomplicated, simple-minded determination towards final revenge of this father's death contrasts with Hamlet's intermittent efforts towards the same goal. The Norwegian's first appearance in the play, which does not occur until act IV, scene 4, is conveniently placed as Hamlet is on another of his "lows." Fortinbras' triumphant and majestic entry into Denmark evidences his ability to plan and act, circumventing obstacles in his plan as they arise, which contrasts with Hamlet's inability to do the same. Hamlet condemns himself and exposes one of his weaknesses -- his inability to act when required or possible -- by questioning "Wh... ... the deadly duel in the final scene. The scholar's strong code of honour and ethics, which pushes him to commit suicide at Hamlet's death, contrasts with Hamlet's lack of morals, sending his old acquaintances Rosencrantz and Guildenstern to their deaths in England and mercilessly "wringing [his mother's] heart" (III, 4, 35) during the closet scene.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   By exposing and emphasizing Hamlet's many strengths and weaknesses as they appear throughout the play, Fortinbras, Laertes and Horatio act as foils to the tragic hero. Although they assist in the understanding of Hamlet, they do not completely dissect the inner workings of the main character, thus testifying to the complexity of an individual. Indeed, what a piece of work is a man!    Works Cited Shakespeare, William. Hamlet. Ed. Betty Bealy. Toronto: Canadian School Book Exchange, 1996.   

Marine Phytoplankton Essay

Phytoplankton From Wikipedia, the free encyclopedia Jump to: navigation, search Diatoms are one of the most common types of phytoplankton. Phytoplankton are the autotrophic component of the plankton community. The name comes from the Greek words cpur?v (phyton), meaning â€Å"plant†, and TIXay? «?q (planktos), meaning â€Å"wanderer† or â€Å"drifter†. [l] Most phytoplankton are too small to be individually seen with the unaided eye. However, when present in high enough numbers, they may appear as a green discoloration of the water due to the presence f chlorophyll within their cells (although the actual color may vary with the species of phytoplankton present due to varying levels of chlorophyll or the presence of accessory pigments such as phycobiliproteins, xanthophylls, etc. ). Contents [hide] * 1 Ecology * 2 Aquaculture * 3 Blooms * 4 See also * 5 References * 6 External links [edit] Ecology Phytoplankton are the foundation of the oceanic food chain. Of these, the best known are dinoflagellate genera such as Noctiluca and Dinophysis, that obtain organic carbon by ingesting other organisms or detrital material. The term phytoplankton encompasses all photoautotrophic microorganisms in quatic food webs. Phytoplankton serve as the base of the aquatic food web, providing an essential ecological function for all aquatic life. However, unlike terrestrial communities, where most autotrophs are plants, phytoplankton are a diverse group, incorporating protistan eukaryotes and both eubacterial and archaebacterial prokaryotes. There are about 5,000 species of marine phytoplankton. [8] There is uncertainty in how such diversity has evolved in an environment where competition for only a few resources would suggest limited potential for niche differentiation. [9] In terms of numbers, the most important groups of phytoplankton include the diatoms, cyanobacteria and dinoflagellates, although many other groups of algae are represented. One group, the coccolithophorids, is responsible (in part) for the release of significant amounts of dimethyl sulfide (DMS) into the atmosphere. DMS is converted to sulfate and these sulfate molecules act as cloud condensation nuclei, increasing general cloud cover. In oligotrophic oceanic regions such as the Sargasso Sea or the South Pacific Gyre, phytoplankton is dominated by the small sized cells, alled picoplankton, mostly composed of cyanobacteria (Prochlorococcus, Synechococcus) and picoeucaryotes such as Micromonas. [edit] Aquaculture Diagrams of some typical phytoplankton. Main article: Algaculture Phytoplankton are a key food item in both aquaculture and mariculture. Both utilize phytoplankton for the feeding of the animals being farmed. In mariculture, the phytoplankton is naturally occurring and is introduced into enclosures with the normal circulation of seawater. In aquaculture, phytoplankton must be obtained and introduced directly. The plankton can either be collected from a body of water or foodstock for the production of rotifers[10], which are in turn used to feed other organisms. Phytoplankton is also used to feed many varieties of aquacultured molluscs, including pearl oysters and giant clams. The production of phytoplankton under artificial conditions is itself a form of aquaculture. Phytoplankton is cultured for a variety of purposes, including foodstock for other aquacultured organisms[10], a nutritional supplement for captive invertebrates in aquaria. Culture sizes range from small-scale laboratory cultures of ess than 1 L to several tens of thousands of liters for commercial aquaculture[10]. Regardless of the size of the culture, certain conditions must be provided for efficient growth of plankton. The majority of cultured plankton is marine, and seawater of a specific gravity of 1. 010 to 1. 026 may be used as a culture medium. This water must be sterilized, usually by either high temperatures in an autoclave or by exposure to ultraviolet radiation, to prevent biological contamination of the culture. Various fertilizers are added to the culture medium to facilitate the growth of plankton. A culture must be aerated or agitated in some way to keep plankton suspended, as well as to provide dissolved carbon dioxide for photosynthesis. In addition to constant aeration, most cultures are manually mixed or stirred on a regular basis. Light must be provided for the growth of phytoplankton. The colour temperature of illumination should be approximately 6,500 K, but values from 4,000 K to upwards of 20,000 K have been used successfully. The duration of light exposure should be approximately 16 hours daily; this is the most efficient artificial day length[10]

The Breakfast Club – Analysis Essay

The Breakfast Club – Analysis Essay This past weekend I set out to accomplish this extra credit assignment. I viewed the task as just another mediocre film from the 80’s to watch for school. However, I can now say that I am utterly delighted to have viewed the Breakfast Club. This film eloquently covered every serious topic that a high school student has ever pondered: sex, social stratification, tobacco use, parental frustration, marijuana and even suicide.The film begins by an unlikely group of teenagers bound together by collegiate authority in Saturday detention. Each member of the circle brings a different aspect of high school life to light. The â€Å"Breakfast Club† is composed of five members: the athlete, the brain, the princess, the basket case, and the criminal. Although very distinctive character traits, I feel that every high school student could relate to certain aspects of at least one character. Initially, the five students act very typical to the ir assigned social class.The jock boasts, the princess talks about how popular she is, the brain actually begins the assigned 1,000 word essay. The basket case, well acts like she belongs in a home for the mentally insane, and the criminal smokes a cigarette inside. Almost an hour into the film, the characters social guard begins to falter. The group is able to find common ground on certain topics, specifically how all of their parents aren’t perfect, and how they all secretly hate their lives.Even though all of the adolescents come from different backgrounds, they are all going through the same struggles. I felt that this central message speaks to anyone who has ever been in a similar situation, undergoing the process of a changing life and struggling for social acceptance. The most notable aspect of the film was the transformation and unification of the students. They engaged in discussions about sex, suicide and pressures placed on them by their parents, all while under th e influence of marijuana.The gothic â€Å"basket case† emerged into a beautiful woman with the help of the â€Å"princess†. She was once a very shy, compulsive liar but with her new â€Å"preppy† makeover she exuded confidence and ultimately kissed the â€Å"athlete†. Additionally, the divide between the â€Å"criminal† character and â€Å"princess† was completely bridged. The two actually kissed in the school’s parking lot and Princess gave him one of her diamond earrings. Perhaps oversimplified, I still felt that the film called out very important issues for teenagers.I feel that although this film may have included teens, parents should take note of the film’s underlying meaning. What was brought to light in The Breakfast Club could only be interrogated out of teenagers under any other circumstances. This film illuminates the keyhole into the secret lives of teenagers. Personally, I was touched by the transparency of the cha racters and could heavily relate to the frustration they experienced when being forced to deal with their misguided disciplinarian principal. I would most definitely recommend this movie to anyone, especially parents.

The liberalization of the international financial system Essay

The age of globalization has ensured that businesses are focusing more and more on international trade as the primary means of enhancing their competitiveness. For example businesses en masse are moving their operations offshore to China and India to take advantage of the low cost of operation in those countries. The liberalization of the international financial system has also facilitated the growth of this trend for foreign direct investment. However this investment takes place in more than one form. It can be in the form of money or it can also be in the form of employees. When it comes to relocating employees, the human resource department of the company which is sending its employees abroad must take into account as to how they are going to determine the international compensation system. The scenario under analysis is of that an US national going to Japan to work there as an expatriate. In order to determine what the compensation of the US national should be, the parent company based in the US must take several issues into account. Of course there are some cost categories that will have go into the calculations such as allowances for goods and services, housing, income taxes and reserve. Under the heading of goods and services are the basic needs such as food, clothing, transportation, furniture, recreation etc. An important part of the calculations is also the cost category associated with housing in the host country. There are differences between the income taxes in the parent country and those in the host country and these differences the international pay system will have to take into account. Last but not the least, the parent company has to make significant contributions in the form of reserve such as pension funds, benefits schemes, education taxes, social security taxes etc. So these are the four major elements that will have to go into determining the pay for Robert Lords in Japan. The human resource department of Riordan Manufacturing does not have problems determining what the components of the international pay system will be as they are all specified in the company policy. Usually companies sending their employees abroad in the form of expatriates have to decide between the going rate approach and the balance sheet approach (http://www. rocw. raifoundation. org/management/bba/IHRM/lecture-notes/lecture-21. pdf). According to the going rate approach, the parent company conducts a survey in the host country and develops a grasp of the cost of living in the host country. The approach is basically to match the pay of the parent country national to the host country national. If Riordan Manufacturing were to follow the going rate approach, then it would probably have to hire an international consulting firm to conduct a survey in Japan that would determine what the salary of a Japanese national would be. This is a Japanese national working in the same position with similar duties and responsibilities to those addressed by Robert Lords. However Riordan Manufacturing does not follow the going rate approach. The going rate approach has several disadvantages. For example, managerial salaries in the US are the highest in the world. Therefore, according to the going rate approach, expatriates to China from the US would be given a much lower level of compensation. The nature of the assignment also varies from one country to another. The going rate approach would not take those differences into account but the employees are very sensitive to these differences. In such cases, the application of the going rate approach in structuring an international pay system can result in loss of employee morale. In fact, if the management of Riordan Manufacturing were to follow the going rate approach, it would have a hard time persuading any of its employees to take off to China because Chinese managerial salaries are much lower than they are in the US. The approach followed is the balance sheet approach. The result therefore is one of equity in the international pay system at Riordan. However this equity exists from the perspective of the employees of the company and not from the perspective of the host country nationals. As a result Robert Lords’ pay would not be equitable with the pay of a Japanese national. The balance sheet approach is the exact opposite of the going rate approach in that the company does not have to undertake surveys in the host country to determine what the pay of nationals in that country in similar positions is. Under this system the pay that Lords is going to receive in Japan is going to be exactly the one that he was receiving in the US. Of course there would be a few adjustments to take into account the differences of living in the host country. For example, if the cost of housing in the host country is higher than it is in the parent country, then Riordan Manufacturing would pay for the difference in the compensation to the parent country national. Under this approach therefore, the pay that Lords is going to receive will not be equitable with that of a Japanese national in a similar position. However when Lords comes back to the states, his salary will be readjusted back to its former level and the element of equity will be maintained. What determines equitable pay is a valid question in this respect. Maintaining purchasing power of the expatriate is one measure of maintaining equity. The purchasing power that the expatriate used to enjoy in the parent country remains the same when he moves to the host country. Therefore, the employee enjoys the same level of compensation regardless of the national compensation system of the country he moves to. Managerial salaries in Japan are lower than they are in the US. As a result, Japanese nationals working in a position with duties and responsibilities similar to those relevant to Lords’ position will have lower pay. Previously businesses used to perform within the confines of their own national boundaries. But now, because of globalization, they are operating across national borders. For example, Riordan Manufacturing performs production activities in China. However strategic flexibility still remains the most important concept in achieving a sustainable competitive advantage. In fact it has grown in importance inasmuch as different marketplaces internationally have different factors driving supply and demand. Therefore, the organizational culture of a multinational company must develop passion for strategic flexibility. This is the duty of the human resource department. The human resource department is responsible for motivating employees to behave in a way that will contribute to overall organizational effectiveness. The most effective means of doing that is to design a compensation system that values employee behavior that values strategic flexibility (http://digitalcommons. ilr. cornell. edu/cgi/viewcontent. cgi? article=1164&context=cahrswp). As mentioned before, strategic human resource management has the two options of the going rate approach and the balance sheet approach in designing an international pay system. However none of these approaches are appropriate for promoting strategic flexibility or, in other words, for promoting business practices tailored to the cultural and economic values of the country it is operating in. On the one hand, there is the going rate approach which in Lords’ case would simply calculate the pay of a Japanese national in a similar position and on the other hand there is the balance sheet approach which would simply calculate pay based on what Lords would earn in a similar position in his home country. Both follow national characteristics. The going rate approach follows the Japanese national system while the balance sheet approach follows the US national system. As a result neither of these approaches is geared towards promoting strategic flexibility. If the objective of the management is to develop the kind of compensation system that would emphasize certain characteristics of the national culture that are better aligned with the organizational strategic map, then it would have to develop different compensation systems for different countries. In this respect, the management of Riordan Manufacturing must study the social contract in the Japanese national system and design the international compensation system in a way that stimulates aspects of Japanese culture in employee behavior most suitable for organizational effectiveness. The age of globalization means that a multinational company like Riordan Manufacturing must take into account the different cultural attributes of the country it is operating in. This is because demand is greatly influenced by cultural expectations. Therefore the product that the multinational company is producing must conform to the cultural expectations of the country in which it is selling the product. If it is important for product development to conform to cultural expectations around the world, then it is vital for the compensation system to conform in the same manner. The compensation system lies at the core of the employee motivation system. Previously, compensation consisted of solely financial gains. However financial gain can be easily matched by other companies. In a globalized system of free trade where money can flow from one country to another without friction, merely financial gains are no longer sufficient to motivate the employees to stay with the company. As a result, modern compensation systems emphasize the development of relationship between the employer and the employees. If Riordan Manufacturing is going to move to Japan with its operations, then it must develop that relationship between the employer and the employee and developing that relationship means that the management must carefully study the social contract that governs the organizational culture in Japan. International compensation systems have multiplied in complexities precisely because the measures of organizational effectiveness must inevitably vary from one country to another. The measures of organizational effectiveness have changed. In today’s business world, availability of information is the most important competitive advantage that a company might have. An example of the value of information in enhancing organizational competitiveness is the process of internal benchmarking that has recently been gaining popular support. Internal benchmarking compares the different organizational procedures across operations around the world and prepares a lit of best practices which might be applicable organization wide. A critical aspect in successfully performing internal benchmarking is the tacit knowledge that lies hidden in employees. This is valuable intellectual capital that an organization would lose if the compensation system were to emphasize solely financial gains. In the interests of organizational effectiveness, the management of that organization must make sure that practices are undertaken so that there is minimal turnover in the company. As a result, particularly in developing an international pay system, the management in multinational companies has been introducing an element of choice in their compensation systems. The international pay systems have three levels of pay: one is core which includes cash and basic benefits. Then there are crafted choices such as training, flexible scheduling, base/bonus mix and stock options and finally there are the choices given employees such as assignments, tax deferrals, stock purchases etc. It is in the aspect of crafted choices that we must consider the role that the social contract plays in the Japanese national compensation system. Designing a compensation system in the US and in Japan must necessarily include differing challenges because the cultures in the US and in Japan are greatly different. The Japanese system values the collectivist approach more. Therefore the performance-based or the ability-based approach followed in the US emphasizing individual risk-taking is not very effective in Japan. Group based policies have greater value in Japan. Status is an important aspect of the social contract in Japan. Therefore if the element of strategic flexibility means motivating employees to think and act in the best interests of organizational effectiveness as applicable to the host country, then an American company must design the compensation system applicable to its operations in Japan in a way that maintains employees’ group status. This is an example of the role that the social contract in Japan plays in designing international pay systems. From the above it will be clear enough that designing an international pay system is no longer so simple as selecting between the going rate approach or the balance sheet approach. If Riordan Manufacturing is moving to Japan with its operations then blindly following the balance sheet approach is no longer a feasible approach. The management of the company must do the additional homework of studying the social contract in Japan. An important feature of the social contract in Japan is the lifetime employment contract in Japan where the management ensures job security for the employees. Any American company attempting to design a pay system that is in alignment with the strategic map in Japan must necessarily take the lifetime employment guarantee into consideration. The Japanese management system follows this system because it is an effective means of developing company loyalty. Both the employees and the management have a sense of ownership in the long term performance of the company. As a result, the Japanese compensation system emphasizes the long term rather than the short term in offering bonuses. Rewarding systems in Japan are tied to the long term maximization of market share. The Japanese system also values bonuses more because they are not taxed to the same extent that regular salary is. Trade unions have always had a strong effect on employee benefits. In the US, unionized workers enjoy a greater level of employee benefits than non-unionized workers. However the trade union system in Japan is different because unlike the US, trade unions are formed not industry-wide but on the basis of organizations that the workers are tied to (http://japanhop. com/prosper/070-japanese-labor-unions. html). For example, Toyota employees will form a corporate trade union that is specific to the company itself. In the US, the employees from the auto manufacturers would form a trade union that represents the entire industry. In that respect the social contract in Japan is different. Because trade unions in Japan are company specific, there is a greater level of cooperation between the employees represented by the trade union and the management of that organization. Trade union strikes are rare in Japan and when they do occur, the management and the union cooperate on finding a solution that minimizes negative consequences to the company. Therefore pay systems are not adversely affected by the presence of trade unions formed along corporate lines. There is a minimum wage regulation in Japan that must be taken into account in structuring the international pay system. Mostly importantly, the management of an organization and the trade union of that organization collaborate in designing the salary system of that organization. Such a salary system emphasizes the role of overtime pay which in Japan represents a large percentage of the annual pay. Allowances also are a strong feature of the Japanese national compensation system. 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