Management Information System - Essay Example

Management Information System Name University Affiliation Management Information System Samsung group is a Korean based company that deals with the manufacture and sales of electronic products such as Samsung mobile phones, LCD screens, LED screens, cameras, and laptop among other products. Samsung houses about 83 affiliate companies incorporated in Korea and the rest of the world. In a nutshell, the company represents over 1000 business entities located worldwide. As such, this retrospect paper seeks to showcase Samsung’s analysis through various management dimensions. Samsung employs about 190,000 employees and about 800,000 globally through affiliated subcontracts. The bets placed have successfully propelled it as a giant electronic leader in the production of DRAM chips, otherwise known as Dynamic Random Access Memory. The next decade would experience greater improvement in the creation of innovative products as they seek to branch to investing on Solar panels, light-Emitting Diode Lighting, biotech drugs, batteries for cars and medical devices. Although these products may seem dissimilar to each other, Samsung believes that the products are two crucial aspects that are common. Due to changing in environmental policies and increased demand in a dynamic market, the company is compelled to embrace such changes as it grows. More often than not, companies benefit greatly with improved investments. As such, Samsung will substantially benefit through its steady injection of capital that will ultimately facilitate large scale product manufacturing. By 2020, predicted sales suggest a C$ 45 billion in profits from their investment in new investment. In 2011, however, Samsung’s sales exceeded an amount totaling to C$ 145 billion, resulting to a 7 percent increased sales over 2010. Business Focus Cost Leadership Samsung understands and follows cost leadership, in addition to the differentiation strategy, through its development in the Smartphone. Thus, they focused entirely on meeting their quantitative targets. Through innovative leadership process, they met their market demand. The company followed this strategy as they reduced every cost in their value chain analysis (Nonaka, 1995). Differentiation Samsung has provided services for its customers through the provision of wide service network, online complaints, online technical support and phone support. Each year the company invests about 9 percent of revenue sales in affiliated R & D activities (Kahn, 1977). Innovative products coupled with quality products have immensely contributed to the success of the company. Focus Samsung has expansively centered on an innovative product since they seek to introduce improved environmental friendly. Typified by dynamic technological changes, Samsung constantly improves its products to maintain its competitive edge (Robbins, 1990). Major Divisions at Samsung Through its consolidated subsidiaries, the company is one of the largest groups in Korea. As such, Samsung works under three major core divisions namely; i. Device Solutions, which forms a business to business division, entitled to handle semiconductors, chips and LCDs. ii. Samsung Advanced Institute of Technology that successfully handles the company’s research power for innovative systems. iii. Digital media and Communication, otherwise known as DM & C; which is fundamentally a Business to Consumer Company ultimately deals with mobile phone production, televisions, and other affiliated electronic platform. Affiliated companies such as Apple and Nokia fundamentally use the information management systems in increasing the organization’s decision-making process. The function of these systems is to assist the managers in undertaking the right actions. Obi suggests that MIS is an indispensable factor in decision making; given its monitoring capabilities (Kahn, 1977). All the same, MIS assist the managers decide on the right course of actions while performing different decision-making process. The frequently used management system in Nokia is called ACM-MIS. As such, it is considered as a powerful system that functions to suit the company’s needs. Nevertheless, its association is regarded as the largest educational computer society that serves in diverse departments at the company. The system collects and evaluates data such as customer purchase, campaign participations, which is imperative in making decisive changes in the company. The information considerably presents the customer’s experience regarding different products. The company thus understands the consumer behavior towards the different products. On the other hand, the systems are cost effective since it cuts down the costs that would have otherwise been incurred in hiring telemarketers to conducts surveys. The collected information is an important facet in the decision-making process. Green Management Information System Initially created in 1998, the company used intranet technology in primarily supporting the work environment and the company’s safety. The system has effectively systemized important information in enhancing a supportive and competitive advantage. Additionally, the systems manage the pollution rates, since it discourages the discharge of the same. The system prompts the manager to make a decision that pertains to the consumer experience (Kahn, 1977). Accordingly, through the information management policies such as influence evaluation, specific purpose and policy; it keeps OHSAS 18001 and ISO 14001 in maintaining the safety of the work. Organizational Performance Measuring an organization’s efficiency Measuring an organization’s efficiency dispels the relationship of output production to the organization’s input (Nunamaker, 1985). An efficient organization would be typified by maximum possible output, with minimum input. As such, a measurement of a company’s efficiency is imperative in showcasing its competitive advantages and various weaknesses. In order to guarantee reliable results, the organization’s input and output need to be defined. Certainly, Samsung sells its output in a competitive market therefore; an aggregate of different outputs will be used in obtaining the company’s output. With a significant set of input and output, the succeeding task entails the definition of the set of inputs and outputs (Nunamaker, 1985). Therefore, Samsung would ideally be compared to a comparator constructed from information from other organizations. In addition, controlling environmental differences will be difficult in this regard. In examining the Samsung’s efficiency, stochastic frontier analysis would be used. Stochastic frontier analysis This analysis uses the statistical method in fitting the frontier such as the frontier curve. Essentially, the relationship between the inputs and the output should be allowed given the two types of deviations from the relationship (Nunamaker, 1985). The first deviation is statistical noise, otherwise known as, random variations caused by inaccurate measurement of outputs. Consider the following graph representing Samsung’s Output and input. The dots are a representative of the observable inputs and output. The line sets are frontier that shows the maximum attainable production (Nunamaker, 1985). Secondly, the measure of inefficiency is the second deviation. The more inefficient an organization is, the more negative the results. As such, the deviations are shown through letters D and E. Accordingly, when the originations are placed on the frontier curve, it simply implies that the organization is efficient (Nunamaker, 1985). This analysis necessitates for a great deal of understanding in frontier and the distribution of various types of deviation. The decision resulting from the shape of the frontier together with the deviation distribution has a significant impact on the efficiency rankings (Nunamaker, 1985). The choice may in most cases be much arbitrary. Measuring of organizational effectiveness Organizational effective is important for managers in understanding work outcomes and assesses the achievement of the organization. Kahn defines OE as a measurement of the organizational success in achieving the missions as the core strategies (Kahn, 1977). A continuous measure of Samsung’s operations through strategic monitoring and evaluations systems can sustainably track and monitor the effectiveness of the operation. Successful goal accomplishment may present the professional judgment of the staff, but it may not ideally show the degree of success in improving the conditions of the customer base (Robbins, 1990). Application of the Development Outcome Tracking system (DOTS) will be fundamental in measuring the positive outcomes attained by the organization. The outcomes are measured against the targets of the projects; defined at the start of the project. Through the use of the standard indicators, the results can be aggregated, present the development impact and showcase comparison with other players (Nonaka, 1995). Through multiple support projects, their resultant impacts can be created. This can be realized through the customer’s satisfaction and demand. Accordingly, the use of a comprehensive evaluations system would come in handy in presenting the significant of the company’s works to the organization (Stone, 2002). i. Value Chain Analysis The company’s value chain rests solely on Oracle Value Chains, crucial for hi-tech industries. In addition to the affiliated logistics, value chains are indispensable for companies such as Samsung Electronics. a) R&D Value Chain Structure Since its creation in the 1990s, the company has championed through innovative leadership in designing the memory chip. Consequently, its advancement in the LED technologies has created new frontiers such as integrated technologies and product design at every step. The corporation’s R&D is typified by three indispensable levels, with its first two layers being the core if the technological development and product planning. They are; i. Samsung Advanced Institute of Technology (SAIT). This layer is imperative as it oversees the company’s competitive advantage in core business aspects; identification of efficient growth engines for future markets and presents the management and securing of the technologies. ii. The R&D centers primarily emphasize on the technologies that would significantly present the most promising results for the company. Nevertheless, each of SEC divisions have their research, but can effectively outsource SAIT related projects too competitive third parties. iii. Divisional products. Teams in this layer efficiently corporate with the design centers; that are responsible for the commercialization of new entry products that would sell within one to two years. Through a mixture of initiatives, the company has spent well over US $ 10 billion per annum in maintaining effective penetration of new products. b) Procurement Samsung maintains the creation of the procurement processes seen in the following ways; i. Creation for opportunity for both local and Global Procurement. ii. Opportunities in global procurement will create useful competitive advantage in securing the companies for good supplies. iii. Through the establishment of accurately managed functions in the maintenance of fruitful working relationships with the partners and suppliers. This is achieved through; a) Efficient sourcing of all collaborative partnerships b) Offering great support for the infrastructure that seeks to improve the capabilities of the partnering companies c) Creation of Cost saving innovations processes. Partners present in all pertinent departments are involved in the development of cost saving initiatives. Procurement within the company is dissimilar to other competing companies such as Dell and Apple. This is fundamentally attributed to the intra-firm nature of various components; where most companies are not engaged in manufacturing parts. Conversely, since the firm’s activities are intra-firm, as opposed to external procurement processes, they majorly replicate intra-firm procurement processes. In maintaining their robust procurement process the company seeks only to form a family of accredited suppliers, nevertheless, the firm selectively advertises the opportunities to the accredited firms. Once the procurement firms are inside the family, opportunities for new horizons would emerge. Sourcing and Decision-making Criteria (mobile devices) In preference to development of the product, the present predilection is the Chinese based sourcing companies. About semiconductors manufacture, most of the company’s affiliated manufacturing companies are based in China. However, components will be externally sourced in the areas where they are not available in this channel. Samsung sources most of its components through the various established plants. Usually, Samsung will majorly consider firms that have an excellent track record. C) Logistics Samsung Company uses reinvented logistics firms typified by comprehensive system that caters for Samsung’ cantering; i. Samsung is typified by logistics companies that act as its subsidiary ii. The company has a significant subsidiary that accommodates its logistics service which is known as “Samsung Electronic Logitech.” iii. In addition, Samsung has a classified principal subsidiary known as Samsung Electronic Europe logistics. Primarily, logistics is handled uniquely so as to undertake all administrative processes. It is comparatively complicated as described in the value chain analysis. Core building components for the devices, in addition to combined internal and external source companies, are shipped to assembly points. The assembly points are majorly fund in Korea and directly to overseas affiliated companies. Samsung Electronics Logitech, on the other hand, primarily handles both outbound and inbound logistics. Additionally, it furthers in handling the processes and payments of various companies. Product and technological Development (Mobile devices) With respect to mobile devices, product and technological development solely rely on the starting point as to whether it is R & D or business division. In most cases, the R & D process is internally conducted with respect to the business unit as there is no room for external processes. d) Assembly Equipment manufacturing is done throughout the world, as a result of the distributed assembly points. Factories are majorly centered in China, Indonesia and Korea. Some of the countries are involved in a reduction of specific goods. Samsung’s various divisions are involved in the assembly of the company’s products since it avoids outsourcing. In a nutshell, outsourcing products will result to higher manufacturing cost. Sustainability is an important factor to the company’s value chain. Since its a technologically sensitive industry, it is vital that the company maintains the quality of product and effectiveness in assembling the products. Distribution of the assembly points exclusively lies on the company’s capability to handle the productions. Mobile Devices Mobile devices are majorly assembled in Gumi at Korea. Other assembly facilities are located China and Vietnam. This will fundamentally be true for its consumer products. e) Trading Support Service In order to substantially maintain an efficient distribution process, the company employs inbound logistics m through Samsung Logitech. The principal role dispensed by Samsung Logitech is its performance in logistics analysis for international B2B cooperation and international logistics. Succinctly, Samsung Electronic Logitech is a skillful organization that seeks to analyze a range of trade support functions together with the company’s logistics in various factions. It is stacked with negotiation of the company’s export products in addition to performing insurance claims that sustain the appropriate aliasing criteria with Samsung Insurance Company. f) Marketing and Sales Distinct difference is evidenced between two divisions in the company; DM & C division, which comprises of operations that are globally based. B2B business, on the other hand, is a different structure that is typified by divergent structures in this regard. Therefore, each major market has been characterized by DM & C sales, in addition to marketing subsidiary. In essence, they work in partnering the sales of the organization. Mobile Devices Patently, most of Samsung’s markets are characterized by marketing and sales company. With respect to North America, Samsung USA links with affiliate marketing arrangement in selling their products. Major marketing companies provide feedback design and product ideas in making the product provision. g) After Sales Korean companies have been a success with respect to the after sales because they are generally reliable, as they produce products that have high returns and rare defects. Replacements are always made with the case of defective products. It primarily serves to present the reliability of their products to its consumers. Mobile Devices As discussed earlier the after services are contracted through the logistics partners who maintain the design feedback loop for its customers. h) Support Activities Samsung cooperation has been one of the first rated organizations that offer a professional structure through their criteria of doing business. With respect to financial support, handling finance, investor relations and investment, depict the prowess of the company in effectively realizing its goals in the intended trade purpose. This furthers in the creation of venture funds and fostering of potential suppliers. Accordingly, through the company’s investment corporation, known as Samsung Venture Investment Corporation, the company offers start-up financial resources to companies majoring in areas of communication, information technology, electronics and semiconductors. i) Product Lifecycle Management Through an environmental initiative, the company has established the Eco-Design Assessment System that furthers in supporting various business divisions. This system guarantees that the company functions in compliance to the global environmental regulations. Nonetheless, in 2009 the company changed this division into Eco-rating system for its products. Fundamentally, it consists of three scale of measures namely; premium Eco-Product, Good Eco-product and Eco-Product. Through the environmental friendly initiative, the company seeks to propel an environmental friendly awareness among its users, as well as, garner assistance from external companies. Samsung’s recycling process has seen it partner with major recycling plants. Samsung has partnered with the following companies in the US region; i. SIMS Group Limited ii. CRT Processing LLC iii. International LLC In order to maintain the opportunities presented in these value chains, Samsung has set regulations that that governs its recycling initiatives. Companies should adhere to Samsung’s Waste Electrical and Electronic Equipment Management Policy, in order to have a partnering relationship. ii. Porter’s Five Force Analysis Threat of new entry The overall threat presented in the mobile phone market, is comparatively low as opposed to other markets. The capital requirement is substantially high, since more money is needed in attaining the economies of scale; in the case giant companies thrive and dominate over 80 percent of the market (Kahn, 1977). Moreover, mobile phone industry is capital intensive as more money is needed in conducting research, technology, development and production facilities for the startup. The easiest ways in which the companies can enter the market would be through earlier involvement in similar operations and diversification into mobile production. Primarily a reduction in spreading the assets would stabilize the structure tables. Samsung and Apple have employed this strategy in exploring new markets. Economies of scale play an imperative role in top companies in the mobile market industry. Nokia largely leveraged its economies in having more share in the industry profits. Dependable strategies seeking to present alliances with the producers can help in sharing the economies of scale, hence reducing the costs of both companies, and effectively reducing the threat of new entrants (Keller,1998). On the other hand, patent is one absolute strategy that can reduce incurred cost. Supplier Power In a nutshell, the hardware preferences have extensively reduced the value of the mobile phone and its subsequent development in the smartphone trends. Major emphases have been made over user applications, software and content service providers. Most manufacturers have shifted their focus from hardware to subsequent implementation of user-friendly softwares. Applications stores, moreover, have increasingly become more popular in recent times. Application stores are a business strategy for the manufacturers to make more money. Consequently, manufacturers can use their software packages in creation of a high barrier of entry. Contrastingly, industry distribution is not a deterrent factor in the mobile phone industry. The majorly used channels include the shipping of mobile devices from the manufacturing sites. In Europe for instance, the network providers are in constant competition of the spectrum licenses; presently auctioned by the government. Chipsets used in phones are processed by many manufacturing companies that do not manufacture exclusively for a given phone company. Nevertheless, Apple has started to manufacture in-house processors for their units (Keller, 1998). Buyer Power Mobile handset Buyers’ fall into two categories: third party distributors and mobile carriers. Verizon and AT&T are competing neck to neck in dominating the US market. Verizon wireless leads with 96.2 million users to AT & T having 90 million users. Both companies have struggled in maintaining their data power and meeting the demands of smartphone users. Buyer power is considerably low with respect to switching between different manufacturers. The industry does not limit mobile phone switching, as such, suggesting the consumers have reduced bargaining power on the same. Very little profit is attained in the initial purchase of the handset, however, in the case of a scheduled release; buyers must pay the increased cost of the manufacturer. Supplier power Suppliers in the mobile phone industry are classified under those that provide technology and those involved in the provision of equipment and parts. Suppliers in the past had little to choose from given Nokia’s Symbian Operating System. With the advent of open source software, Android has created an increased platform where the suppliers have a selection of products to choose from. A recent survey has shown the increased growth in the use of Android software globally. Unlike hardware, software offers a broad range of uses for mobile phones; they include Qualcomm, Infineon among others. Substitutes Separate technologies have brought about diverse capabilities and benefits for its users, but it has never been exploited as the Smartphone market is dynamic. Fixed lines are substitutes to the cell phones; however, life has changed in the 21st century. Advent of Ipads has revolutionized the smart phone industry as more consumer preferences rest on these devices. Rivalry Mobile phone industry has been dominated by various companies. Samsung mobile is seen to dominate the mobile phone market as they can produce user-friendly mobile devices characterized by its multiple functions. Nokia’s Windows phone has been dominated by superior companies such as Apple’s i OS and Samsung’s Android (Kahn, 1977). Nevertheless, all mobile players strive in improving the smart phone capabilities. Conclusively, Samsung Corporation has successfully implemented management strategies as one of giant electronics companies the world. Through various moderated efforts, the company has achieved an effective management practice that has played a great deal in attaining its success. In its various management actions, Samsung Electronics has championed in the effective use of management information Systems. Realized through its green initiatives and various divisions, it has managed to maintain its competitive edge in the electronics industry. The company’s value chain analysis has showcased its R & D policies, procurement strategies and market sales that ultimately determine the success of any company (Nonaka, 1995). Conversely, the measure of a company’s effectiveness and efficiency is a key aspect in determining the progress of the company. Stochastic frontier analysis is seen to measure the efficiency of the company ideally while aggregated strategies have been employed in measuring Samsung effectiveness. References Kahn, R.L. (1977). Organizational effectiveness: An overview New Perspectives on Organizational Effectiveness (pp. 235-248). San Francisco, Jossey-Bass. Keller, G., and Thomas, T. (1998). SAP R/3 Process-Oriented Implementation. New York, NY: Addison Wesley Longman. Nonaka, I., & Takeuchi, H. (1995). The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation. New York, NY: Oxford University. Robbins, S.P. (1990). Organizational theory: Structure, design and applications (3rd Ed.), Englewood Cliffs: Prentice Hall. Stone, M. (2002). How not to measure the efficiency of public services (and how one might). Journal of the Royal Statistical Society, 165 (3), 405–34. Nunamaker, T. (1985). Using data envelopment analysis to measure the efficiency of non-profit organizations: A critical evaluation – reply. Managerial and Decision Economics, (6), 50–8. Read More