Integrated Case Report Of The Sas Institute Business Essay


The SAS Institute is a software organization that uses unique styles of management, employee compensation and reward systems. The principles that make the management practices of SAS unique are treating everyone fairly and equally, emphasizing intrinsic motivation (trusting people to do a good job), always thinking long term and making decisions from the bottom up. The SAS institute really focuses on equal treatment. The founders decided to treat everyone who joined the company, as they would have wanted to be treated as an employee. For example, as an employee they would have preferred an office so they gave all their employees offices instead on the traditional method of cubicles. The second principle of using intrinsic motivation and trust is used to motivate employees to do a good job. They believe that trust will make the workers motivate themselves. SAS is also different because it mentors people instead of coaching them. SAS has a lack of formal performance evaluations and instead give managers the authority to make decisions on bonuses. Sometimes departments will get a bonus if the manager thinks they did a good job even if they don't necessarily do well fiscally.  The third principle that SAS utilizes is long-term planning for all decisions. SAS is able to think long term without outside influence by remaining a private company. By remaining private, SAS was able to invest large sums of money three years in a row, relocating the software from large mainframe computers to personal computers. This would have been almost impossible to do if the company was publically traded because the CEO would have received a lot of pressure from investors due to poor quarterly earnings. It was for that exact reason that other companies weren't able to adapt and would eventually fail. This move was what ultimately lead to their success. This long-term approach is needed at SAS because all projects take about one to three years to terminate. The last principle is their bottom up decision making. Management believes that people should not be managed and be allowed freedom to create allowing freedoms that other firms couldn't dream of.

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            Most ideas for new products come from the customer feedback and idea's that expand on existing ones. To get this feedback SAS holds a conference for customers so the employees can interact and get to know what is working and what isn't. They also send annual cards to get feedback and ideas on features they would like to see in the future. The feedback is used in the development process to make improvements on the software and for new software. SAS uses cross functional teams that are independent to virtually every decision is made within the group without outside assistance. Customer and employee retention are essential to the survival of the company. The four principles help with keeping both. Since customers work with the sales team with little to no outside interference the upper management doesn't need to set goals for employees, giving them more freedom. This makes them more focused on taking care of the customer rather than making their "numbers," which helps make better products. By not releasing sales data by names it ensures that no one is singled out, and that employees can continue to focus on customers and not worry about repercussions of a little failure.

            The SAS is able to remain diverse from the Silicon Valley competitors. As I have already mentioned they are a private company. They also differ in how they treat their employees. At SAS you only have a thirty five hour work week and get access to medical facilities, day care, dining services (with live music), picnic areas and more (available on site). The Campus feel of everything being on site helps employees feel more invested in the company. This lowered absenteeism and in the article is actually says how employees even work a little in their off time, above the thirty five required hours. The reward system mentioned above is also very different from most because there is no direct formula for compensation it's just a judgment call from management.

            Some possible challenges for SAS are keeping up with the growth while retaining its management structure. SAS already has facilities in other countries. In the London facility, SAS had to accommodate to different cultural needs and then had to provide facilities similar to those in Cary, NC. At some locations they aren't able to put everything on site but they still try to pay for outside amenities to create a fair environment no matter where u work at SAS. A major challenge is for SAS to keep its company connected at its different locations while still maintaining its small management structure.

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            The teams that are used at Rubbermaid, like SAS, are cross functional teams. This means that team members are from different departments. The team leader from the marketing department and is called a group project manager. The rest of the teams are made up of employees from finance, research and development, manufacturing and sales. The activities that the business teams are focused on are dependent on their division. This means that they are responsible for all functions of a product and work autonomously. Each member of the team works on the area that pertains to their division. This helps them come up with new ideas and release them to the market in rapid succession. This is essential because Rubbermaid doesn't want its competitors to release a similar or copied idea to the market first. The teams are set up at Rubbermaid to generate new ideas and get them developed into a reality bypassing the normal development process. Instead of being designed in R&D and then moving from division to division until the product is finished, the teams are able to complete all task within itself because they have members from each department. This is very important for Rubbermaid because it allows for the company to release new products first before its competitors can copy their product. These fast, self sustaining teams are what keep Rubbermaid current and help them stay ahead of competitors. The teams have their own strengths and weaknesses within the company. The Food Storage team was strong in their ability to generate revenue, accounting for about half of Rubbermaid's sales. But, these products are easily copied by other companies, making innovation a top priority. The Juvenile and Infant Sports team was effective at making high quality products (toys), but even though the products were high in quality, the teams take longer in development. The sport and Automotive team had great attention to detail when creating difficult and skillful products, however, they are the smallest division and employees are constantly promoted leaving teams with a level of inexperience. These fast, self sustaining teams are what keep Rubbermaid current and help them stay ahead of competitors.

            Google and the SAS institute are very similar. They both encourage employees to think of new unique ideas by letting them work on projects of their own choice. Google allows employees to spend up to twenty percent of their time on projects of their choice. At SAS, employees are permitted to work on innovative products even if the market for the products is not "immediately in demand." This helps SAS lead the way and be the first to hit the market and capture the demographic without competition. Both companies are still controlled by their original founders, but Google recently went public while SAS remains a private company. Google and SAS were both started by visionaries. These people for the most part are still in control of the direction of both companies today.

             Google has many competitors on different "markets." Yahoo and Bing are obvious competitors and compete in search engines and advertisement while Microsoft is competing on the basis of documents between Google Documents and Microsoft Word(Google Doc is free and in my opinion will eventually surpass Microsoft's severally overpriced Word). EBay and Google compete in the online sales market. Google even has recently released Google checkout which is competing with PayPal. Don't forget Google mail is in competition with all the highest email providers like Yahoo, AOL, MIX, etc.           

Until December 1999 Google's only revenues came from licensing the search technology to and others. While providing the algorithms and tech to other companies Google still ran its own search engine but unlike others, it had no advertising and didn't allow bias in its results. Google focused on just answering searches while its competition had website with multiple ports that encouraged users to stay longer. These ports were a variety of add-ons such as entertainment and news. By incorporating these add-ons they increased the amount of views per page making advertising more profitable. A majority of websites use paid listings, Google didn't do this either. Paid listings are succinct text advertisements that are identified as "Sponsored Links." Advertisers would bid on keywords to try and maximize what they got out of the sponsored links. This is called bidding. The process of bidding decides the order of ads that are located on the search result pages. The order is in a top-to-bottom manner. All of this seems logical until u take into account that it was kind of compromising your search results, which everyone except Google was doing. As time went on Google became more and more popular and with each search it became more powerful until it was the most widely used search engine. Then it was time to figure out how to make Google profitable. Other companies that have taken similar approaches would be Microsoft in how word use to come free on computers till they built a following and how Facebook was exclusive till it gained its following and sold out.

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In 1999 Google finally caved and added advertising but didn't use the traditional cost per click. Google used a variation of the cost per click (CPC) on advertisements. During the year of 2003, Google also added contextual paid listings. As the years went by Google expanded beyond search results and created Google Mail, Google Maps, Google Books, Google Finance, Google Docs, Google calendar, Google Checkout and more. This increased its usage even more increasing revenue. At first Google focused on being the best search engine and as years passed they added various ports and advertisements to aid in its development. The founders of Google had a vision and wanted to control this vision. They did this by having the company remain private. When it eventually became a publically traded corporation, the founders cemented their dominance over the direction of the company by utilizing dual-class equity, providing 10 votes per share to holders of Class B stock opposed to only one vote per Class A share. This allows the top three administrators of Google to own about one-third of the shares, but have 80 percent of votes. In doing so they can have control of their company and not have to worry about investors overpowering them and corrupting the vision and direction of the company. When looking forward I don't know what advice I would give to Google, I think they are doing just fine taking over the internet all by itself.