27. June 2009 by admin.

Micromanagement is an exciting new term widely used in the fields of game theory and private enterprise alike. Micromanagement, or micro for short, refers to the explicit control of small details in order to achieve goals or standards that are otherwise impossible by laissez-faire management alone. By changing many variables of lesser importance slightly, a company executive can significantly improve the quality of service and ultimately profit margins.

This phenomenon can be observed in real-time strategy (RTS) games where a player is charged with the task of capturing enemy territories. Like a game of chess, players are given a set amount of starting pieces and economic resources, and usually equivalent. Normally, there would be no way for players to gain an advantage over another except by sheer superiority in numbers. However, by putting special detail on both the positions and actions of every individual unit (or employee), the function of the group is optimized. Simple actions such as manually setting tasks and priorities and making two different units or individuals reinforce each other’s strengths and weaknesses can change the nature of the outcome.

The ultimate drawback to this kind of approach in business management, is that micro-oriented control is very time consuming and difficult to perform. Moreover, an inappropriate amount of attention can backfire. Thus, to properly micro requires great speed. An executive must work twice as hard as previously and delegate tasks individually. At the same time, he or she must offer great rewards for the mutual trust his companions give for what would seem unessential, until knowledge of how well the company performs is unveiled.

Beginning with every division of the company, from functional aspects, such as research to manufacturing to marketing, to formal aspects, such interior design and attire, which can boost worker morale, the executive can improve the form and function of the company as a whole, so much that each individual change does not constitute a large improvement, but as a whole, gives the company a competitive advantage in the business world.

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16. May 2008 by admin.

The height of capitalism has already been reached. We are now in the days of decline for capitalism as we know it. Adam Smith and Karl Marx both foresaw the inevitable effects of accumulating capital.

“A capitals increase in any country, the profits which can be made by employing them necessarily diminish. It becomes gradually more and more difficult to find within the country a profitable method of employing any new capital.”

Adam Smith: Wealth of Nations, Volume I

A natural law is present, as the corporation accumulates capital, less capital is available to accumulate from the market. Although technically business is not a zero-sum game, and if anything, a two-way exchange, there is a tendency for profits to level off and diminish. Check the stocks of any major corporation and one will see this to effect. In order to increase profits, corporations must find “new spheres of production and channels of trade.” [1] A top electronics company can increase their production through research and development and their sales by broadening their product selections (moving into new fields of innovation such as GPS Units, Digital Photo Frames, Business Cell Phones), but even that in itself runs into natural barriers.

Competition also increases as time passes, given that the company does not have a monopoly over a certain industry. A double-bladed axe is present: If the company stays a monopoly, profits will decrease over time due to decreased effectiveness and competitiveness. If the company experiences competition, then part of the market profits will go to its competitors.

Nature truly takes away from the full and gives it to the empty, saws down the tall and mighty trees and gives chance for new saplings to grow, breaks down the hardest and the most rigid, and spares the soft and flexible, and smooths the sharp edges of massive canyons and mountains, while carving new crevices into the smooth.

The other alternative to capitalism seems to be government control of certain industries. Government control is different from a monopoly because there are subject to social approval. Sometimes government control is more flexible when dealing with consumers rather than a hard-pressed capitalist CEO. Also, the changing demands of the people and legislation subjects government industries to change. Thus it seems at this point, a mixed market is most desirable, compared to the robber-barons of the late 19th century or the large dot-com giants of the early 21st century. Privatized sectors of most industries, and government ownership of certain industries.

[1] Giovanni Arrighi: Adam Smith in Beijing

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6. May 2008 by admin.

Deriving from the insight in Adam Smith in Beijing: Lineages of the Twenty-First Century by Giovanni Arrighi, I have formulated a general set of ideas for economic development.

The Western economic model for development is resource and capital intensive, whereas the Eastern model is labor intensive. However, if an emphasis on labor is going to be used, then generalization, not specialization, of labor should be employed. Thus, an alternate form of industrialization will completely develop in the distant future. Division of labor, then, is harmful towards growth of human potential.

“The man whose entire life is spent in performing a few simple operations, generally becomes as stupid and ignorant as it is possible for a human creature to become … [loses] the extensive interests of his country … incapable of vigor and perseverance”

It is a myth that Adam Smith encouraged the notion of division of labor, taking from the example he gave of the pin factory; Smith also indicated the negative effects of specialization. Coincidentally, American society as well as most international societies are geared towards a specialized focus in education. The competitiveness of the global economy demands the knowledge and skills required to make advances in biotechnology, microprocessor design, material science, and artificial intelligence. These are cutting-edge fields and skills, but they are difficult to use out-of-context. Thus, a comprehensive education is required.

An effective CEO is able to oversee production on all stages and participate with many talents and abilities. Likewise, the role of top advisors to the chief executive. On a smaller scale, family heads and members are expected to perform many tasks and require an all-encompassing knowledge of the industry. Generalization, not specialization, creates the flexibility needed to survive and adapt to changing conditions in the 21st century economy.

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8. April 2008 by admin.

The proper solution to inconsistencies in employee work habits in identical occupations, is a variable pay rate, that takes into account the amount of work spent in a certain location. Some places have few customers, which require less work. Some places have many customers, which require much more work. Those who work harder should be paid more, and those who do not should be given the lowest wage permitted by law or fired. Not all identical jobs are equal. Additional compensation, not including overtime, should range up to double the starting salary.

We will take the wisdom of John Smith into accord.

“[Those that] will not worke, shall not eate.”

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