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Please, checkout the uploaded file below, where you will find information and instructions. mgmt653___wk_2_assignment___student_responses.docx Unformatted Attachment Preview MGMT653 - WK 2 Assignment & Student Responses Before I start, let me explain how things are going for the “Assignment” moving forward: First Instructor’s comments regarding my Week 1 Assignment: Hello ..., Please see the attached grading rubric. This is the rubric that will be used for all papers so use this as your guideline as you are writing your papers along with the specifics of each weeks assignment found in the Weekly Materials for each week. Please see my comments dropped into your paper as well. Let me know if you have questions. First: MGMT 653 - MGMT - WK 2 Assignment. Please, help me with this Management’s (MGMT 653) assignment. Plagiarism is totally prohibited!!! Before I start, let me explain how things are going for the “Discussion” moving forward: First Instructor’s comments regarding my Week 1 Discussion: Hello ..., Your responses to others were about half the word count they needed to be (minimum of 200 - yours were around 100). (-10) Make those necessary adjustments and you should be in great shape. Please let me know if you have any questions. (Responses: 10 out of 20). So, please make sure, it at least 200 words. Otherwise, she will always take point off or disregard my replies if they are not minimum 200 words for each reply. Second: MGMT 653 - MGMT - WK 2 Student Responses. “Two peer responses are required; each must be 200 words or more in length.” Please, no less than 200 words. Student 1 reply (M.S.) {200 words at least}: 1. A company who focuses strongly on employee-employer relations runs the risk of having higher labor expenses compared to companies who may not invest so heavily into their employees. With the additional expense of employee benefits comes a lack of funding available to use towards other valuable expenses such as marketing or design. Still, Herman Miller was able to cut costs in other areas to allow for this priority to ensue while emerging competitive (after a brief dip) with Hons Industries. While it’s common for executive wages to fall upwards of 300 times the lowest wages in a company (Lacmanovic, 2013), Herman Miller kept top salaries to no more than 20 times the average bottom line (Hartley, 2010, p 239). Boat-rocking changes such as these can help maintain competition within their market, as long as it’s understood that the costs need to be redistributed from another area. 2. Herman Miller faced the risk of losing business among their current market due to changing the quality of their products, as well as the risk of entering the mid-range quality/price market where they didn’t have a standing. By making a shift to offer mid-level quality furniture, they also would have needed to increase their marketing costs to publicize this switch, since they had been well known for a number of years as a top-notch office supply company. High end office furniture can be seen as a bit of a niche market, however, and with the slow foreseen growth in demand, it would have been smart to begin branching out to different markets to continue the growth they’d seen in years prior. An option they could have done was continue to offer high end furniture that’s marketed towards businesses as they had been doing and added a division of mid-quality home furniture. This would have opened them up to a second market and would have let them dip their feet into producing mid-quality products without jeopardizing their high-quality office furniture. 3. By restricting the family ties to Herman Miller, it offered a potential for growth among the top executives, some of whom had been members of the company for a multitude of years and could well have done an exceptional job of leading the company. Sharing blood does not always make an individual the most qualified for a position. Hiring an individual who doesn’t have the experience or the skillset to be a leader in an established company faces the risk of running the company into the ground. By opening up the position to the rest of the world, Herman Miller then has the chance to seek out the best fit for growth. Additionally, by cutting ties with the family line, the company has the opportunity to diversify their management and management style. With expenses high and stock prices stagnant in the mid-90s, it was clear that a change needed to happen. People who come from different backgrounds can offer insight or solutions to problems that others may not have thought of. Including the family in those changes could have limited growth due to their bias of how the company was run previously. References Hartley, R. F. (2010) Management Mistakes and Successes: 25th Anniversary Edition. Hoboken, NJ. Wiley Lacomanovic, S. (2013). The Relevance and Effects of the Executive-to-Worker Pay Ratio’ Disclosure. Ekonomska Istrazivanja – Economic Research Special Issue 2013, 26 (1), 165-184. Retrieved from https://search-proquestcom.proxy.davenport.edu/docview/1669848864/fulltext/96684E94729B4ED0PQ/1?acco untid=40195 Student 2 reply (C.S.) {200 words at least}: Evaluate this statement: “A worker-sensitive firm is bound eventually to face a competitive disadvantage. It cannot control its labor costs.” I don’t believe that this is a true statement. I believe that it is entirely possible to control labor costs while still being sensitive to the needs, desires, and expectations of employees; provided that a proper strategy for doing so is implemented. For instance, according to Hartley (2010), Herman Miller decided to limit top executive salary to “no more than 20 times the average wage of line workers in the factory”(p. 235). By placing certain limitations on wages, salaries, benefits and the like from the start, it is entirely possible to control labor costs. Further, a comprehensive survey of publicly traded Korean companies shows that companies that provide various incentives like profit sharing and team incentive plans, and the like, lead to increased productivity – consistently at a rate of no less than 10\% (Kato, Ho Lee, and Ryu, 2010). It is reasonable to conclude that companies that are sensitive to their employees will not only reap loyalty, but increased productivity, which in turn suggests an increase in sales and profit. Additionally, labor costs can be controlled because it is not the only method of compensation. As previously discussed, team incentives, profit sharing, stock options, etc. are all ways in which employees can be compensated. Further, as we learned in our reading about Costco last week, Costco provides its employees with higher wages and benefits than its competitors and as a result, has low employee turnover and higher overall gains. Do you see any risks in Herman Miller lowering its quality and its prices? Do you think it should have done so? I think that Herman Miller was shortsighted in not offering lower quality merchandise at lower prices. I can certainly understand and appreciate the potential risk to the company’s reputation by offering lower quality products and lower prices. As Benjamin Franklin stated, “it takes many good deeds to build a reputation, and only one bad one to lose it.” However, considering the company spent 2-3\% of its sales on design research and development every year, that research should have led them to the conclusion that there was another untapped market they could have breached. And while they attempted to cater to home offices, they did so at unrealistic prices. Perhaps the company thought that their reputation for quality would be severely diminished if they began offering lower quality products and lower prices but given the rise of competitive stores like Office Max and Home Depot offering home office solutions at more affordable prices, Herman Miller lost a substantial chunk of the market. From a personal standpoint, I spend a good 10 hours each day at my computer and when I began hunting for office furniture, I was looking at what I could purchase that would not “break the bank” but would still get me through several years. I imagine that several others with home offices feel the same. What do you think of the enlightened policy announced by Max DePree as he retired that henceforth no DePree will ever work for the firm again, in order that able people can have unimpeded career paths within the company. Discuss as many facets of this policy change as you can. According to Webster’s online dictionary, nepotism is defined as favoritism based on kinship (https://www.merriam-webster.com/dictionary). Prior to Max DePree’s retirement, the DePree family operated Herman Miller for 70 years (Hartley, 2010). His announcement that no DePree would ever work for the company again so as not to stifle the career growth of other able-bodied employees appeared to send the company into a downward spiral. Sales and profits initially suffered under new, non-DePree leadership and the value the DePree family placed on its employees appeared to be inconsequential to new leaders. I don’t necessarily believe it was necessary to say that no family member would ever be allowed to work at the company ever again, however, I do understand DePree’s reasons for not allowing another family member to run the company. Often times, employees who believe that their efforts will not matter in the long run for advanced promotions start to get resentful of the family member(s) who are promoted. This can lead to resentment, decreased productivity, and many times, a decline in quality work by the employee. Today, many employees will not even seek out a job that they know does not offer any real advancement opportunities. I believe it is important that employees know they are valued and for that reason, I think Max did the right thing but in a time when people are desperate for work, it should not matter if the individual is family. A job seeker needing and wanting to earn a living doing a particular job should not be prevented from doing so just because there is some familial connection to the founders of the company. References Hartley, R. (2010). Management Mistakes and Successes 10th Ed.: Herman Miller: A role model in leadership. (pp. 233-245) Wiley Kato, T., Ho Lee, J., & Ryu, J. (2010). The productivity effects of profit sharing, employee ownership, stock option and team incentive plans: Evidence from Korean panel data. (pp. 111-135) Emerald Group Publishing Limited. doi:10.1108/S0885-3339(2010)0000011009 https://www.merriam-webster.com/dictionary/nepotism ... Purchase answer to see full attachment