Competitiveness, Strategy, and Productivity

GROUP 03

FULL NAME STUDENT ID

1 Lê Thị Hoài An 31221021520
2 Đặng Quỳnh Giang 31221025500
3 Lê Bích Lê 31221020077
4 Trần Thị Tú Anh 31221021242
5 Tô Thị Ngọc An 31221021521
6 Trần Thị Thu Phương 31221025593
7 Trần Nguyễn Khánh Vy 31221021330

1. Who needs to be involved in formulating organizational strategy?

Involving everyone within an organization, regardless of their career level or experience,
is crucial for successful strategic planning. Leaders and board members execute strategic
planning by tying it to their organization’s vision. Managers, individual contributors,
and stakeholders also play pivotal roles in decision-making as businesses strive to
increase employee engagement.

2. Name some of the competitive trade-offs that might arise in a fast-food restaurant.
In the context of a fast-food restaurant, here are some examples of competitive trade-
offs:
- Speed versus Customization: fast-food restaurants aim to provide quick service to meet
customers’ need for speed. However, customization of orders can slow down the
process.
- Price versus Quality: fast-food restaurants often compete on price to attract price-
sensitive customers. However, this can lead to a compromise in the quality of the food.
- Convenience versus Healthiness: fast-food restaurants excel in providing convenience
and accessibility. However, this can come at the cost of offering healthy food options.
 3. a. How can technology improve competitiveness:
Technology can be a powerful tool for businesses to gain a competitive edge in several
ways:
- Data Analytics: data analytics can help businesses gain insights into customer behavior,
market trends, and operational inefficiencies. This information can be used to make
data-driven decisions and improve business processes (Lipovich, I. , 2020).
- Customer Relationship Management (CRM): CRM systems help businesses manage
customer interactions, track customer preferences, and personalize marketing efforts.
This leads to improved customer satisfaction, loyalty, and the ability to tailor products or
services to meet specific customer needs.
- Supply Chain Management: technology can optimize supply chain processes by
providing real-time visibility into inventory levels, improving demand forecasting, and
enhancing communication with suppliers. This results in reduced lead times, lower
costs, and improved overall supply chain efficiency.
- Digital Marketing: leveraging digital marketing strategies, such as social media
marketing, search engine optimization (SEO), and online advertising, can enhance brand
visibility, attract new customers, and drive sales.

b. How can technology improve productivity?

- Artificial intelligence and Machine Learning: AI and machine learning technologies
can automate and optimize processes, making them more efficient. Predictive analytics
and intelligent algorithms can enhance decision-making and reduce the need for manual
intervention.
- Mobile Technologies: mobile devices and applications enable employees to work on the
go. This flexibility increases productivity by allowing individuals to stay connected and
complete tasks from remote locations.
- Automation can help businesses reduce costs and increase efficiency by automating
repetitive tasks, such as data entry, inventory management, and customer service.
4. In the past, there was concern about a “productivity paradox” related to IT services.
More recently, there have been few references to this phenomenon. Using the internet,
explain the term productivity paradox. Why do you think that the discussion of that
topic has faded?
The term "productivity paradox" refers to the observed phenomenon where, despite
significant investments in Information Technology (IT) and information systems, the
expected gains in productivity and overall business performance were not immediately
evident. Productivity paradox is an observation according to which massive investment
in Information Technology lowers worker productivity instead of increasing it.
According to MacDonald, the paradox began to take place in the early 1970s and
progressed through 5 stages (Ethan Dreyfuss, Andrew Gadson, Tyler Riding & Arthur
Wang - The IT Productivity Paradox).
- Stage 1: these were the early days, when not much was known about the implications of
IT investment and expectations were huge. The idea of IT investment was so novel that
there was a broad notion that IT was going to displace labor entirely. Ever since this
early period of investment in IT, it was assumed that labor productivity was the correct
way to measure the impact IT had.
- Stage 2: this stage started in the late 1970s and marked the first indications that the
result of IT investment was less than expected. Even though this was the case,
companies continued to funnel huge amounts of capitol into computing. Most
companies didn't even bother to try and evaluate their IT investment. Those that did
usually only used return on investment calculations.
- Stage 3: this stage, which spanned the early 1980s, was marked by the realization
that IT was only to be used in terms of productivity. Instead, companies began to use
IT strategy. Several companies (American Airlines, American Hospital Supplies, and
Citibank) strategically used IT to create a competitive advantage over their
competitors.
- Stage 4: by the late 1980s IT investments migrated to management information
systems. In this new area IT was no longer expected to be directly productive. It was
also during this time that numerous explanations for the productivity paradox
 emerged. Although none of them individually provided a concrete explanation,
collectively they hinted at a larger problem.
- Stage 5: after the late 1980s, most of the investment in IT has been in
telecommunications. With this new area of investment, expectations of productivity
increases were further lowered.
Over time, discussion on the productivity paradox has faded. Many theories emerged to
explain the observation but they failed to provide hard evidence to support the fact of
paradox. Many theories proved that large increases in productivity in companies
invested heavily in IT which is contrary to paradox

5. While it is true that increases in efficiency generate productivity increases, it is

possible to get caught in an “efficiency improvement trap.” Explain what this means.
Efficiency is primarily concerned with attaining desired outcomes while minimizing the
waste of materials, time, money, energy, and efforts. It encompasses considerations of
both the quantity and quality of a product and the methods employed in achieving goals.
On the other hand, productivity assesses the effectiveness of individuals, machines,
systems, etc., in transforming inputs into valuable outputs.
While it is true that increasing in efficiency or using the most efficient ways or ideas to
obtain any organizational goal in each operation system will increase the productivity of
goods and services, concentrating on efficiency improvement many organizations can
get caught in an efficiency improvement trap. The efficiency improvement trap occurs
when organizations overly prioritize cost-cutting measures to enhance efficiency without
considering the broader picture of productivity and overlooking potential long-term
consequences. Each organization has unique methods for enhancing productivity, so
these ways may not be successful at all in each operations system and the organization
would not be focusing on the use of different resources when it comes to doing things in
a better way. In such cases, organizations risk lagging behind competitors in terms of
productivity, incurring higher costs in the long run.
Therefore, it's significant to note that organizations should seek ways to optimize the use
of their resources to achieve production goals effectively instead of solely concentrating
 on cutting costs. To avoid falling into the efficiency improvement trap, organizations
should strike a balance between optimizing current processes and maintaining flexibility
to adapt to changing circumstances. It's essential to regularly reassess goals, encourage
innovation, and ensure that efficiency measures align with broader strategic objectives.
This way, organizations can achieve sustainable productivity gains without sacrificing
long-term success.

Case
Your Garden Gloves
Joseph Murray, Grand Valley State University
“Your Garden Gloves” is a small gardening business located in Michigan. The company plants
and maintains flower gardens for both commercial and residential clients. The company was
founded about five years ago, and has since grown substantially, averaging about 10 new clients
and one new employee a year. The company currently employs eight seasonal employees who are
responsible for a certain number of clients.
Each morning crews are assigned to jobs by the owner. Crew sizes range from two to four
workers. Crew size and composition are a function of the square footage of the garden and
requirements of the job. The owner feels that large jobs should be assigned to crews of four
workers in order to complete the job in a reasonable amount of time.
From time to time, the owner noticed that some jobs, especially the largest ones, took longer
than she had estimated, based on the square footage of the garden space involved. The owner’s son,
Joe, decided to investigate. He kept records of job times and crew sizes, and then used those
records to compute labor productivity. The results were:
Crew Size Average productivity per
crew
2 4,234 square feet per day
3 5,352 square feet per day
4 7,860 square feet per day
The company operates on a small profit margin, so it is especially important to take worker
productivity into account.
1.Which crew size had the highest productivity per worker? Which crew size had the lowest
productivity per worker? What are some possible explanations for these results?

Productivity crew Size (2) = 𝑂𝑢𝑡𝑝𝑢𝑡 / 𝐼𝑛𝑝𝑢𝑡 = 4 ,234 / 2 = 2,117

Productivity crew Size (3) = 𝑂𝑢𝑡𝑝𝑢𝑡 / 𝐼𝑛𝑝𝑢𝑡 = 5,352 / 3 = 1,784
-

Productivity crew Size (4) = 𝑂𝑢𝑡𝑝𝑢𝑡 / 𝐼𝑛𝑝𝑢𝑡 = 7,960 / 4 = 1,965

-
-

=> In this situation, we can observe that the number of crew size (4) achieves the
highest productivity at 1,965, whereas the number of crew size (2) shows the lowest
productivity at 2,117.

2.After a recent storm, a customer called in a panic, saying that she had planned a garden
party for the upcoming weekend and her garden was in shambles. The owner decided to
send a crew of four workers, even though a two-worker crew would have a higher
productivity. Explain the rationale for this decision.
- The two person crew has the highest productivity per worker, however, the four
person crew produces the highest productivity overall, of 7860 square feet per day.
- Given the urgent situation due to the time constraints, the owner wanted to increase
the likelihood of the job being completed.

3.What is a possible qualitative issue that may very well influence productivity levels that
the productivity ratios fail to take into account?
- Qualitative Issues
 Worker loyalty: the company has only been operation for 5 years, so employees may not
feel obligated to work their hardest.
• Seasonal work: the company only hires employees during specific seasons, so the
employees may be inclined to find other work during off seasons, causing them to find
better long-term jobs.
• Quality of tools: as a new company making minimal profits, the quality of the tools used
may be lower than average, causing less productivity.
- Conclusion
• Depending on the job requirements, employee experience, and the company's history,
the level of productivity produced by workers varies.
• As a new company, Your Garden Gloves' productivity per worker is average and likely
to increase.
 REFERENCE
1. Myers, K. (n.d.). MGMT 3320 case study. prezi.com.

https://prezi.com/p/nsfz2brfxp49/mgmt-3320-case-study/

2. Productivity paradox: background. (n.d.).

https://cs.stanford.edu/people/eroberts/cs201/projects/productivity-paradox/

background.html

3. Lipovich, I. (2020, October 6). How to use technology to gain a sustainable competitive
advantage. Forbes.
https://www.forbes.com/sites/forbesbusinesscouncil/2020/10/06/how-to-use-technology-

to-gain-a-sustainable-competitive-advantage/?sh=3b5169b8328c