...S LEGO GROUP: AN OUTSOURCING JOURNEY w 910M94 PhD Fellow Marcus Møller Larsen, Professor Torben Pedersen and Assistant Professor Dmitrij Slepniov wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Richard Ivey School of Business Foundation Version: (A) 2010-11-12 PROLOGUE The last five years’ rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world — the LEGO Group — the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in the company’s roughly 70 years of existence, resulting in a deficit of DKK1.8 billion in 2004, the management had, among many initiatives, decided to offshore and outsource a major chunk of LEGO’s...
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...so hard and needs long time to do it. The set of the robot . The set of the robot . MATERIALS : MATERIALS : Step 1 : First we bring the electric mindstorms NXT motors and add to it the small technic pin . after you add it add the technic axle 8 in the middle to be equal the from the left side add the technic bush (gray). Then push the technic axle 8 inside. Step 1 : First we bring the electric mindstorms NXT motors and add to it the small technic pin . after you add it add the technic axle 8 in the middle to be equal the from the left side add the technic bush (gray). Then push the technic axle 8 inside. Step 2 : Second we bring the technic beam 3 and we put it inside the technic axle then add we add the technic bush (yellow) to the technic beam 3 after that we put the technic pin (small) in the 3 circles put the last two then down the technic bush (gray)add the technic beam 13 and put the technic pin (long ) the last 3 in the right and the first one on the left. Step 2 : Second we bring the technic beam 3 and we put it inside the technic axle then add we add the technic bush (yellow) to the technic beam 3 after that we put the technic pin (small) in the 3 circles put the last two then down the technic bush (gray)add the technic beam 13 and put the...
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...LEGO is one of top toy-making companies established in Denmark. Its core and iconic product is the LEGO brick with its own unique design, interlocking tubes, which can expand building possibilities. In 2004, LEGO started to outsource 80 percent of its production to Flextronics, a large Singaporean manufacturing service provider, but after three years, LEGO had to end this cooperation. Therefore, we are going to do a deeper analysis of this case and have a better understanding of outsourcing. LEGO had two main expectations from the collaboration with Flextronics. The first one was that LEGO intended to run a cost-saving business model by licensing out 80 percent of production to Flextronics. Before outsourcing to Flextronics, LEGO conducted its production mainly in Denmark, the United States, Switzerland and so forth, which are high-cost countries. In order to reduce production cost efficiently and response the global trend that nearly 95 percent toy production went to Asian countries quickly, LEGO chose Flextronics as its partner to accomplish the goal. From 2004 to 2006, some of production capacity in Denmark and Switzerland were moved to Flextronics’ plants in Hungary, LEGO handed over the operational control authority of Kladno site in the Czech Republic to Flextronics, and Flextronics opened a new plant in Mexico; instead, LEGO shut down the factory in the United States. Another expectation that LEGO wanted from the relationship of Flextronics was that the LEGO group would...
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...Leadership Leadership is an act of influencing others towards a goal. We learnt that the leaders are present at different levels in an organization or a company. There are two types of leaders, formal leaders and informal leaders. The formal leaders are those who hold a position of authority and may utilize the power that comes from their position, as well as their personal power to influence others. Whereas the informal leaders are those without a formal position authorities within the organization but demonstrate leadership by influencing those around them through personal forms of power. From the class we came to know Leadership is about articulating visions, embodying values, and creating the environment within which things can be accomplished and it is the process of influencing the activities of an organized group toward goal achievement.We came to know that there are few traits that show relatively strong relations with leadership. And the best example of a trait approach is the charismatic leadership. The important traits are discussed below. 1. Intelligence: Observed general mental ability correlates with leadership, whereas the actual intelligent has smaller correlation. * (Emotional Intelligence): This one will allow predicting leadership beyond the general mental ability. And also people with high EQ demonstrate a high level of self-awareness, motivation, emphathy and social skills. 2. Personality (the Big 5) : It is positively correlated with leader...
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...Introduction This essay will first show how an effective use of language and persuasion, and a good awareness of ethical considerations can contribute to a successful negotiation process by breaking deadlock and achieving a win-win situation. To lead a good business negotiation, there are five key points that one should go through: preparing the negotiation, rehearsing the negotiation, describing our statement and position, making propositions and offers, bargaining and the weight of culture in the negotiation process. The process of negotiation itself requires preparations. If one negotiates in an offhand attitude, then one will never be able to optimize ones efficiency. More the negotiation is important and more it requires preparation. If one does not prepare correctly and efficiently, and if the other part did it well, one will enter in a position of inferiority. One will appear weak and non-professional. The lack of preparation will nearly always cost money. Preparing the negotiation Oral communication, such as discussions and conversations belong (most of the time) to improvisation. Negotiation, which is a particular form of oral communication, also seems to belong to improvisation. But by just reducing it to a simple improvisation, it is underestimating the power of words and language. Negotiation always requires a minimum of preparation. By preparing or building your knowledge (make researches about the products, company mottos and corporate values…), you avoid...
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...In the business world today conflict is one of the biggest problems a company has to deal with when regarding their employees and production. Conflict can come from a number of different scenarios and can cause numerous problems or issues. The Negotiation process is another key element for most businesses to run at maximum efficiency which leads to maximum profitability. Performing proper negotiating tactics helps to reduce conflict in many areas of business and ensures a company can obtain all available beneficial terms. In the following there will be a detailed definition of conflict which will include the differentiation between the traditional, interactionist, and managed-conflict views of conflict; as well as an outline of the conflict process. Finally proper negotiation will be defined as well as a contrast of distributive and integrative bargaining, the five steps of the negotiation process, how individual differences influence negotiations, an assessment of the roles and functions of third-party negotiations, and cultural differences in negotiations. The concept of conflict does not discriminate against a particular portion of society but pulls at the coat strings of many American workers, unfortunately only a portion of society of receive the proper assistance. Women in particular have made enormous strides of breaking barriers and leveling the playing field, once strategically architecture by men. Arguably the barriers of forty years ago are removed and the...
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...Case which deals with cross culture communication in negotiation. Erika, representing DGG, has three options to go to resolve this situation. First, DGG can bring a suit against Global to recover damages. This option is not the best option for DGG because though they will get that one-time fee if they win, their future in expanding in Asia may not go very far and there will be no benefit from shutting down Global. Second, DGG can try to arrange some sort of partnership with Global. This appears to me as the best option because it not only maintains a good relationship; it can also bring in steady income from the partnership. Lastly, DGG can find another company to take on the Luna Pens instead of the partnership with Global. Though this choice can be just as good financially, this will likely create a bad relationship between DGG and Global and stir up inconveniences in the future. DGG’s main aim is to find a way to get them the most benefit for their own company from these pens, now sold by Global. Global, however, just wants to continue using the brand “Luna” to sell their products without any troubles. This is an important brand name to Global, and it is not so much more important to DGG because they had abandoned it years ago. The issue only comes up because of the realization that someone else is receiving benefits from a brand that their own company worked hard to advertise. In the first situation, out of the 4 options I believed that D was the best option. Erika chose...
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...1. Negotiation Trap: I must analyze what type of bargainer I am. Identifying my type helps me avoid fall into the negotiation trap. 2. BATNA: I must analyze what my BATNA is. This is my reference for the negotiation. 3. Focus on Interest: I will approach the negotiation with a focus on interest of the other party. Identifying the possible interest of other party involved in negotiation will help me analyze the possible ways of expanding the pie (creating more value). 4. Integrative Bargaining: Focus more on Integrative bargaining. Analyze multiple issues and interest, creating and claiming value and cooperative problem solving. Consider possible trade-offs to avoid conflicts and have a win-win situation. 5. Bargaining Zone: I must analyze my bargaining Zone. The zone where the buyer’s and supplier’s negotiation ranges overlaps. 6. Reservation Price: I have to write down my reservation price. This determines when to expand the pie create more value and when to walk away from negotiation. 7. Identify the power in negotiation: Identify exactly the type power in negotiation and analyze the persuasive skills required to move from perceived power to realized power. 8. After striking with the initial deal, I will have to keep my options open for re-anchoring. Negotiation Trap: * Identifying the type of bargainer helps to identify the potential traps. * Soft bargainers agree on deals worse than the BATNA and they fail to achieve best...
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...referred to as “win-win” bargaining or distributive bargaining as well known as “win-lose” bargaining. Negotiator knows that there are too many situational and monetary variables for a single strategy to work in this case and often times the negotiator needs to utilize both approaches to effectively conduct negotiations. In this paper I will provide and explain an appropriate approach what situation the negotiator would utilize the technique. Defining Integrative and Distributive Bargaining There are two common approaches to any negotiation situation: distributive and integrative. Each is useful in specific contexts, and the same negotiator may utilize either or both strategies depending upon their desired goal. The largest difference between the two styles is the circumstance in which they are used. Often when we negotiation a one-time situation or purchase we will utilize a distributive bargaining approach and try to gain the best price or outcome where “we” are the winner and those we are negotiating with are the “losers” In these situations we rarely interact with the opposing party on a regular or future basis and are seeking the best possible outcome for this specific negotiation without interest in building a long-term relationship. In contrast, an integrative bargaining situation occurs when it is possible to produce a greater outcome together than either could reach on...
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...Negotiation Closing Deals, Settling Disputes, and Making Team Decisions David S. Hames University of Nevada, Las Vegas @>SAGE Los Angeles | London | New Delhi Singapore | Washington DC • •-*» •• • i ' w ' t * • * 5s" i- . •> - • • y . » " •• is • Acknowledgments Preface PART I: THE FUNDAMENTALS 1 The Nature of Negotiation: What It Is and Why It Matters Intended Benefits of This Chapter The Essence of Negotiation What Is Negotiation? 5 6 6 When Do People Negotiate? Technology 6 4 3 xvii xix 1 3 Why Has Negotiation Become a More Important Skill? The Workplace 7 8 9 10 11 How People Negotiate: The Dual Concerns Model The Pros and Cons of Negotiating The Shadow Negotiation 10 What Does a Negotiation Look Like? Conclusion and Implications for Practice READING 1.1 - ONLINE DISPUTE RESOLUTION: DO YOU KNOW WHERE YOUR CHILDREN ARE?, 8Y DAVID A . LARSON 1 3 19 READING 1.2 - BALANCING ACT: HOW TO MANAGE NEGOTIATION TENSIONS, BY SUSAN HACKLEY Preparation: Building the Foundation for Negotiating Intended Benefits of This Chapter The Essence of Preparation 23 23 23 The Preparation Process, or How to Make I t All Happen Strategic Planning: Establishing the Framework Defining the Situation Setting Goals 29 30 25 25 25 Determining Your Strategy Strategy Implementation: Operationalizing the Plan 30 The Component Parts of the Situation 30 Best Alternative to a Negotiated Agreement (BATNA) Reservation Prices or...
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...Managers must be able to understand if an inadequacy exists, he or she must be able to adapt to change for the better. When managers enter a company, he or she must be able to effectively perform job duties to make the company better. Managers that understand the areas that need work are adaptable to change and further learning. The ability to find an area to strive for improvement is important to managers who wish to succeed. Personally I know that my communication and negotiating skills are not as strong as others, but I am taking steps to learn more productive ways to communicate and negotiate. Learning new skills in communication will allow for better understanding of communication and negotiation procedures to help the company in different situations. The area that I perform negotiations and communicate job duties is in the field areas. I communicate the functions of each individual and negotiate time tables to perform duties during a job. If I could change my abilities to communicate and negotiate, the possibilities of advancement in the company are endless. My job is to oversee the safety and functionality of job performance from a thirteen man crew and negotiate a time table with customers to perform those jobs. Continuing learning and developing new communication skills and negotiating skills could possibly move me into higher positions of management. The competency I need to work on is delivering results. I would have to say that an accurate assessment would be that...
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...An important part of our role as leaders is leading and managing through conflicts. Conflict can arise internally between team members, between a leader and a team member, between two departments, or between two leaders. A conflict can also arise externally between a team member and a customer, between a leader and a customer or between a team member or leader and a supplier or a vendor. Conflicts can have serious consequences including “product delays, increased costs, and dwindling market shares” (Dubrin 2010). Conflict also bars collaboration between departments or between team members. Before we try to resolve conflict, we must first understand conflict. Then, we must consider the five conflict management styles and determine which one to use in the specific situation. We as leaders can also use different approaches to resolving conflicts. This section of the handbook will discuss understanding conflicts, the different conflict management styles, and approaches to use to resolve conflicts. Understanding Conflict We cannot attempt to resolve a conflict until we fully understand conflict. Conflict is a normal and healthy part of relationships. When handled properly, conflicts can actually strength a relationship instead of destroying it. (Segal & Smith 2013) Many different things cause conflicts. Eight common causes of conflict are (Gatlin, Wysocki, & Kepner 2002): 1) Conflicting Needs – In the workplace, these needs could include resources, recognition, or power...
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...you'd prefer to walk; if it's a dollar higher, you'd do the deal. If you're the buyer, it's the maximum price you'd pay, and you'd be indifferent to doing the deal at that price point. Again, if it's a dollar higher, you walk; if a dollar lower, you'd take the deal. ZOPA (ZONE OF POSSIBLE AGREEMENT) = When the parties are "in the same ballpark" with respect to terms and pricing. Final Assignment We're going to analyze a real, albeit slightly older, deal here from the perspective of the main players (and there are several). Hopefully those players (at least their companies) and the property is familiar to you; this deal negotiation took place in 2001. The case in question is on the Harvard Business School Press site; access it (at a cost of $3.95) using this link. Here are the topics I want you to address in your analysis of this deal negotiation; I'm going to introduce into our work here a couple of new-ish concepts (although they were touched on in Getting to Yes) that I want you to explore on your own. I will include a definition for them in RESOURCES, but make sure you understand what they mean before you attempt to address. So here are the...
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...1.0 introduction The Thomas Kilmann Model is simple tool that provides practice scenario of particular methodologies to managing conflict viably. The exploration upheld TKI offers a commonsense approach to launch safe and nonemotional discourse to resolve conflict. That is the reason its perfect for utilization in such a variety of diverse situations. It can additionally enhance organizational profit by helping individuals pick up knowledge into their own particular and others' conduct which thus helps them settle on better decisions about conclusions. The TKI is directed in simple to-utilize online and self-scorable configurations. Conflict is an inescapable part of human relationships. Where responsibility to mission and extended periods with negligible assets converge, not-for-profit work environments might be overflowing with conflict trades. Conflict can go out from administering varying viewpoints and clearly inconsistent concerns. Assuming that we can acknowledge it as a regular part of our zealous scene, it might be simpler to work with than in the event that we need (or wish!) conflict to never resurface. 2.0 Introduction of Thomas Kilmann Models. The Thomas-Kilmann Conflict Mode Instrument is intended to evaluate an individual conduct and behavior in certain scenarios. "Conflict Situations" are the scenarios in which the concerns of two individuals seem, by all accounts, to be incongruent. Conflict is a social culture...
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...Cell Phone Negotiations MGT 557 April 8, 2013 Cell Phone Negotiations In today’s society, cell phones have become and necessitate and also have become a billion dollar business. Distributors of cell phones look for maximum profit by buying from manufactures’ at the cheapest price. Not only does price matter in negotiations, but considerations for individual differences such as cultural differences must occur for the outcome of a negotiation to be successful. In today’s economy, it is not uncommon for companies to go overseas for cheaper manufactures’ cost to increase profits. However, American companies who wish to compete internally in manufacturing products face the high labor costs in the United States compared to foreign countries. In this paper, the author will discuss a negotiation between a Chinese and an American negotiation team over cell phone cost per unit and possible influences that go into the negotiations such as gender difference, personality, culture and perception, cognition, and emotion. Summary of Cell Phone Negotiation The negotiation involves two teams, the all-American negotiating team from the United States and...
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