Adam Memon MGMT Portfolio March 19th 2012 Ch. 1 1. Describe the firm. How old is it?

What industry (or industries) is the firm active in? What products or services does it sell? Who are its principal competitors? Is it active internationally? How many employees does it have? What are its sales and profits? Dell Inc. is one of the largest computer companies in the world and offers personal computers, data storage and servers, networking products, mobility products, software and services. Dell Inc. was founded in 1984 and currently operates in the United States, Europe, the Middle East, Africa and Japan. Dell Inc. employs about 103,300 people. Dell Inc. generates $61,494 million in sales per year with a $3,433 million profit. The principal competitors to Dell Inc. are Acer, Hewlett-Packard, IBM and Lenovo Inc. 2. How well has the firm performed recently compared to rivals? Has it outperformed rivals or underperformed them? Why? Dell Inc. is the third largest computer company in the world. In 2006 Dell Inc. lost its position as number one to Hewlett-Packard. Hewlett-Packard generates almost twice the annual revenue as Dell Inc. 3. Who is the CEO? How long has she or he been in this position? What has been the career track of the CEO? Michael Dell held the position of Chief Executive Officer at Dell Inc. from 1984 to 2004 and then 2007 to present. Michael Dell is Chairman of the Board at Dell Inc. and has served on the Foundation Board of the World Economic Forum, the International Business Council, the U.S. Presidents Council of Advisors on Science and Technology and the Indian School of Business in Hyderabad. While running Dell Inc. Michael Dell has literally revolutionized an industry and has created a new business model. Michael Dell is also one of the most successful business men his age. Four years after the companys founding Michael Dell had increased Dell Inc.s market capital from $1,000 to $85,000,000 (3). In 1992 Michael Dell became the youngest Chief Executive Officer with a Fortune 500 company. 4. Can you find examples of how the CEO has performed the basic tasks of management strategizing, planning, organizing, controlling, developing and leading his or her organization? Michael Dell created a reputation for great customer service and great products to increase his consumer base and consumer loyalty. Michael wanted to build his a business on the consumers and not on cost alone (3). During a period of distress for Dell Inc. in 1993 Michael Dell made concrete goals to grow his company. Dell created a new Profit & Loss (P&L) plan whereby a set of metrics could be used to identify performance opportunities and accelerate growth in certain areas (3). In 1993 Michael Dell decided to reorganize Dell Inc. by taking outside consultants. In 1993 Michael Dell implemented a new P&L plan that allowed him more

control of his company. At Dell Inc. engineers have been encouraged to work with sales representatives to understand customers needs and then incorporate that into design (3). In order to communicate goals more clearly to his company Michael Dell set up The Great Dell Torch Event where a casual environment was used to stimulate communication and morale.

Ch. 2 1. Describe the nature of the task environment the firm is facing. What are the opportunities here, and what are the threats? Hewlett-Packard and Apple are the two largest competitors to Dell Inc. Suppliers to Dell Inc. include Intel, IBM, Western Digital, Hitachi and Logitech. Dell bypasses the electronics stores by selling directly to the consumer through www.dell.com. Selling directly to consumers allows Dell Inc. to maintain a low inventory and a low product price. The major suppliers to Dell Inc. include IBM, Intel, Sanyo and Hitachi. 2. Has the task environment been influenced by trends in the general environment over the last decade? If so, what are these trends and how have they changed things? Dell Inc. maintains a strong market position but has suffered major profit losses over the last decade. In 2006,. Analysts believe Dell Inc.s lack of willingness to expand is a major reason for its profit losses. The portion of Dell Inc.s sales generated from small consumer sales may have been affected by the changing demand for new technology. 3. What are the sources of uncertainty in the task environment confronting the firm? What strategies have managers at the firm adopted to try and cope with this uncertainty? Uncertainties can include changing technology and product obsolescence, changing technological standards and weak economies. Corporate segmentation is an effective way to maximize monetary efficiency by only investing money into the most promising and productive parts of the company3. 4. What are the strengths of the organization? What are the weaknesses?

Dell Inc. maintains a strong market position and a strong brand value. Strong market position and brand value allow Dell Inc. to sustain cyclical profit losses. Dell Inc. can sufficiently generate cash flow needed to support growth. Dell Inc.s shift into computer enterprise solutions and Information Technology support has allowed for higher profit margins and growth (3). Dell Inc. has a balance of investments in its core markets and growth areas. Dell Inc. has acquired companies that will drive its growth. Dell Inc. is at a competitive disadvantage because it allocates few resources to Research and Development (R&D). HewlettPackard devotes 2.4% of revenue to R&D and IBM devotes 6% of revenue to R&D (3). Lower profit margins compared to peers puts Dell Inc. at a competitive disadvantage. Dell Inc. has a 5.6% profit margin compared to 7% for Hewlett-Packard and 15% for IBM.

Ch. 4

1. Is it satisfying the claims of key stakeholders, including employees, customers, shareholders, and the general public? If so, how? If not, why not? Employees at Dell Inc. are generally happy working for the company. The direct model and Michael Dells desire to foster innovation increase motivation among employees. Shareholders have felt that Michael Dell has missed corporate opportunities that could have increased stock value. Since 2007 shares of Dell Inc. have declined 38% while IBM stock has risen 89% and Hewlett-Packard has gained 1%.7Transparency has always been a prominent theme at Dell Inc. In 2006 a video of a Dell computer was shown bursting into flames but Dell Inc. quickly presented information to its consumers about the problem and the steps being taken to address it on its corporate internet blog. 2. How would you characterize the ethical climate of the organization you have chosen to follow? What evidence is there to support your conclusion? Dell Inc. was investigated for illegal stock trading during Michael Dells leave of absence from the company from 2004 to 2007. No other significant breaches of ethics have been reported by media sources. 3. Find out if the organization has been the focus of any adverse ethical issues in recent years (look at historic news reports). If it has, try to determine whether this was due to the isolated actions of rogue managers or to more systemic, organization-wide problems. Dell Inc. was involved in illicit stock trading among corporate leadership. This activity was due to the actions of a small group of people and did not have company-wide effects. Over the last several years Dell Inc. has been subjected to inquiries regarded fraudulent advertising and other problems.8 4. Does the organization undertake social investments that go beyond its narrow economic self-interest? If so, what kind of investments has it made? Whom do these investments benefit? Do you approve of these investments? Dell Inc. invests significant resources into consumer relationships and enjoys a high brand value.3 Dell Inc. executes environmentally sustainable business practices and was named among the top five greenest companies in America in 2011.10 CEO Michael Dell has donated over $700 million to help improve the lives of children around the world.9

Ch. 5 1. Find out as much as you can about the mission, vision, values, and major goals of the organization. Dell Inc. aims to provide its customers with the highest satisfaction from the highest quality products delivered at the lowest cost in the least amount of time. Dell Inc. wants to maintain its position as one of the leading PC manufacturers in the world. Dell Inc. will evolve and grow with the industry to achieve this goal. Dell Inc. strives to be a responsible global

corporate citizen. Dell Inc. wants to provide affordable and accessible technology and deliver the best customer experience possible. 2. Evaluate the firms mission, vision, values and goals. What are the positive aspects of these statements? Is there anything you would criticize? Dell Inc. desires to makes technology affordable and accessible to global markets. Technology is an important tool in the business world. All of Dell Inc.s company goals and values are positive. 3. Do you think the firm is living up to its mission, vision, values and goals? What evidence do you have to support your conclusion? Dell Inc. has earned a reputation for poor customer service in the last several years but it has shown to be making concerted efforts to change that. Dell Inc. also is recognized as one of the best values in the PC market. 4. Can you find any evidence that managers at the organization might have made any significant strategic errors over the last decade? If they have, what role did poor planning, a lack of planning, or decision-making traps play in these errors? Michael Dell has been criticized as being an over cautious manager who is not willing to take risks to expand. Dell Inc.s former CEO Kevin Rollins urged Michael Dell to expand the company by acquiring the storage company EMC but Michael Dell declined in favor of creating organic growth by entering the mobile devices market. Michael Dell admitted that he should have expanded his company sooner. Ch.8 1. Describe the basic organization structure of the enterprise.

Dell Inc.s board of directors is composed of teams in management planning and oversight, strategic and operational oversight, major corporate actions, financial reporting, governance compliance and risk management and general advice to management.11 2. Does the structure match the strategy of the enterprise? If it does, explain how. If it does not, explain why not, and outline what should be changed to bring strategy and structure into alignment. This corporate structure is conducive to Dell Inc.s goals. This corporate structure allows Dell Inc. to try to bring affordable technology to mass markets around the world. 3. Does the organization have a tall or flat management hierarchy? Is the number of levels in the hierarchy appropriate? Dell Inc. has a flat management hierarchy. Dell Inc.s management hierarchy is appropriate to the type of business Dell Inc. is. 4. What is the span of control of the CEO? In your judgment is this span too narrow, too wide, or just right?

Michael Dell has ten managers report to him. This number seems to be just right for the structure of the company. 5. What decisions within this organization are centralized at the head office? What decisions are decentralized to subunits? Does the approach toward centralization and decentralization make sense? All significant corporate structural changes are routed through the CEO. Decisions within corporate teams can be made by team managers if they have the authority to do so. It makes sense to allow team managers the level of authority to complete their goals. Ch. 9 1. Try to discover all you can about the main methods top managers use to control the organization. Dell Inc. managers are expected to know everything about the production they work with. Dell Inc. is efficiently and effectively run and all members are related to as managers. Michael Dell focuses resources on producing products that will be profitable with the least amount of resources and he encourages input from all levels of the company.12 Part of the reason Dell Inc. has been so successful is Michael Dells desire to minimize operating margin. 2. Do these control methods make sense given the structure and strategy of the enterprise? How? Operating methods at Dell Inc. make perfect sense because of the direct model. The company is resources in all aspects of its organizational culture. 3. Would you suggest any changes in control methods for the organization? If so, what?

I would not recommend any changes to control methods at Dell Inc. because the company is currently doing so well and has done well in the past.

Ch. 10 1. Scan through the companys Web site to find any explicit statements made about the companys culture. Does the company explain how long it has held these cultural values or how they were formed? To whom are these espoused values directed on the web site? Prospective employees? Customers? Dell Inc.s corporate governance explains the following about ethics and values: The Board and management are jointly responsible for managing and operating Dells business with the highest standards of responsibility, ethics and integrity. In that regard, the Board expects each director, as well as each member of senior management, to lead by example in a culture that emphasizes trust, integrity, honesty, judgment, respect, managerial courage and responsibility. Furthermore, the Board expects each director and

each member of senior management to act ethically at all times and to adhere to the policies, as well as the spirit, expressed in Dells Code of Conduct. 11 These espoused values are aimed at the board of directors and senior managers. The company does not explain how long it has held these values but Michael Dell presents his corporate ethics in his autobiography.3 2. Look through a recent company annual report and search for recent news stories about the company (from either Internet searches or full-text newspaper sources available through your college librarys online portal). Are these stories generally consistent with or contrary to the companys espoused culture (what it says it values)? Dell Inc. has demoted managers for not producing enough growth in their divisions. Dell Inc. has implemented measures that foster intra-company communication and openness.12

Ch. 11 1. Review the basic structure you described in Chapter 8 for the organization you are studying. To what extent does that structure organize people into teams? Corporate governance at Dell Inc. divides the board of directors into the seven teams of management planning and oversight, strategic and operational oversight, major corporate actions, financial reporting, governance compliance and risk management and general advice to management. 2. Does this organization group employees into self-directed teams? Describe the structure and responsibilities of those teams. 3. Virtual teams are more common in some companies and industries than in others. To. What extent does the company you are studying rely on virtual teams, and in what areas of the organization? Why do these virtual teams exist here rather than elsewhere in the organization? 4. What conflicts in this organization have come to the publics knowledge? What caused those conflicts? How would you resolve them?

Ch. 12 1. Based on available information, does it appear that the company will have a sufficient supply of staff in various job groups over the next five years? Why or why not? What environmental conditions, if any, make it easier or more difficult for this company to estimate its future supply of and demand for employees? 2. To what extent does this organization actively create and maintain a diverse workforce? Does the company Web site, annual report, or other literature suggest why this organization wants a diverse workforce? What else could or should this company do to improve its diversity?

3. How strong and favorable is the employer brand of this company? If you were hired as an employer brand consultant, what would you recommend to strengthen this companys image as an employer? 4. To what extent does this organization provide employee training? Do its training programs seem to be above or below average for this industry? Thinking about production or service jobs, what training methods seem to be most widely used in this organization?

Ch. 13 1. Find out what you can (from the Web site, news reports, annual reports, and so on) about the companys practices for motivating and supporting employees. Does the organization sufficiently support each of the drives identified in four-drive theory? Does the organization seem to keep the four drives in balance, in your opinion? 2. Look back at the mission, vision, values, and goals for this organization that you identified in Chapter 5. Now document some of the performance goals this organization would most likely assign to employees in (a) production or service jobs and (b) sales or support jobs. 3. Organizations vary in their emphasis on the four types of rewards: membership/seniority, job status, competencies, and performance. Based on your investigation of this organization, which of these four categories in emphasized the most? Which category seems to receive the least emphasis? 4. Do you think this organization has an empowered workforce relative to other companies in this industry? Why or why not?

Bibliography 1. Gale Company Profile. (2012, February 03). Dell inc. (dell). Retrieved from http://galenet.galegroup.com.zeus.tarleton.edu:81/servlet/BCRC?rsic=PK&rcp=CO&vrsn =unknown&locID=txshracd2559&srchtp=cmp&cc=1&c=1&mode=c&ste=60&tab=1&tb st=tsCM&ccmp=Dell Inc.&tcp=dell&docNum=DC322938&bConts=3 2. Michael Dell. (2012). In Encyclopdia Britannica. Retrieved from http://www.britannica.com/EBchecked/topic/1089869/Michael-Dell 3. Dell, M. S. (1998). Direct from dell: strategies that revolutionized an industry . New York: HarperCollins Publishers, Inc. 4. Staff. (2011). Largest u.s. largest computer hardware companies overall, 2010. Forbes 2000, annual, doi: I2501278383 5. http://content.dell.com/us/en/gen/d/corp-comm/cr-ca-list-suppliers 6. Staff. (2011). Company profile. DATAMONITOR, Retrieved from http://web.ebscohost.com.zeus.tarleton.edu:81/ehost/detail?vid=14&hid=24&sid=82ac89 39-9e6c-4934-91c4-0a1c76c657@sessionmgr4&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ== 7. Benner, K. (2011, JUNE1 06). Michael dell. Fortune, 163(8), 41-44. 8. Shah, A. (2009). Dell Settles Lawsuit Alleging Misleading Practices. PC World, 27(3), 16. 9. Savitz, E. (2012). Giving Back: How Every Startup Can Be Philanthropic. Forbes.Com, 4. 10. Consumer Electronics Association, (. (10). CEA Celebrates Tech Industrys Prominence in Newsweeks Green Rankings. Business Wire (English). 11. Corporate governance principles. (n.d.). Retrieved from http://content.dell.com/us/en/corp/d/corp-comm/leadership-governance-principles 12. Park, A., & Burrows, P. (2003). WHAT YOU DON'T KNOW ABOUT DELL. (cover story). Businessweek, (3856), 76-84.