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The SAS Institute, a software organization with principles that are both unique and revolutionary in regard to the style of management, employee compensation and reward systems. There are four principles that make the management practices for the SAS Institute unique. They include treating everyone fairly and equally, emphasizing intrinsic motivation, which refers to trusting people to do a good job, always thinking long term and finally making decisions from the bottom up.
Treating everyone fairly originated with the SAS institute. When the organization was founded, there were four people who served as employees and principles; they decided to treat everyone who joined the company, as they would have wanted to be treated themselves. For example, they wanted to have an attractive work place; therefore assumed that everyone else did as well, so everyone at SAS has their own office rather than a cubicle. This led directly into their second principle of using intrinsic motivation and trusting everyone to do a good job. They believe that treating people well will allow for everything else to just work itself out. The focus of the organization is on mentoring and coaching rather than controlling people. This is evident in the lack of formal performance evaluations, the ability for managers to make decisions on bonus's and employees all receiving the same benefits as well as compensation regardless of location, (US or abroad). The third principle that SAS utilizes is long-term planning for all decisions. The key to being able to think long term is how SAS chooses to remain a private organization. For example, by remaining private, the corporation was able to invest large sums of money three years in a row, which enables them to relocate the software from large mainframe computers to personal computers. This was an essential aspect, which led to their success. There were many firms in their market that were unable to make the switch from mainframes to personal computers due to their requirements in creating quarterly earnings for their shareholders. A long-term approach is required at SAS due to the fact that all projects take about one to three years to terminate. A final principle that makes the SAS institute unique is their bottom up decision making skill. CEO Goodnight believes that people should not be managed to death; therefore allows employees freedoms that other firms cannot.
The sales force does not have aggressive goals; most of the new ideas for products derive from customer feedback. Every year, SAS holds a conference instituted for the customers where employees are present and able to mingle with those customers in order to extract feedback. This feedback is designed to assist in the product development process. It is done by bringing the consumer's responses back to the organization in efforts to formulate merchandise improvements. The institute also uses cross functional teams that are able to make nearly all decisions for themselves since each team has a member from every department. The institute sends each customer an annual card to get their feedback as well as to notify the corporation features they would like to see in the coming years for the software.
The relationship between employee and customer retention at the institute is basic. To ensure that customers are happy and well taken care of, the institute relies on their basic four principles. Given that the customers work directly with the sales team, the institute doesn't set number goals for employees. Doing so ensures they can be more focused on taking care of the customer rather than making their numbers. The institute does not list the sales data by individual names; therefore encouraging employees to make an effort as a group to meet their goals. This confirms the notion that no one is singled out, and that employees can remain attentive on customers. The institute focus's employee bonuses as well as other compensations' as a group rather than on an individual basis. Completing all of these characteristics, SAS limits the stress that their employees undergo, and allows them to cultivate without putting pressure on numbers, which allows the employees to please the customers well. For example, many customers have called and said they did not want to lose their account executive. Although the company has an extremely low turnover of employees, they move employees around extensively within the organization.
The SAS is able to remain diverse from the Silicon Valley competitors. Firstly, SAS is a private company. They are also able to do this due to the fact of how they treat their employees. SAS provides their employees with a 35 hour work week, medical facilities, day care, dining services with live music, picnic areas and several other remarkable benefits all on site. This allows for the institute to have less absenteeism as well as for employees to remain with the institute longer. Overall, the main reason for the institute being able to remain different from employees is their ability to take care of their employees, which in turn allows the employees to take care of the customers. Furthermore, a large part is their emphasis on teamwork rather than individualism. This is evident in their reward systems, their feedback and how the facility is set up. (Campus setting allows everyone to feel as if they belong to their part of the facility).
Looking forward, some of the possible challenges SAS will face in expanding globally are limited. This is so because SAS already has facilities in other countries, for example, in London. In the London facility, SAS is able to accommodate to the different cultural needs of its employees as well as able to equally provide adequate facilities in comparison to Cary. If SAS was to face any challenges, it would be in connecting all their employees at the various facilities as well as being able to maintain a private company status while trying to match the quality of facilities of its existing locations. This is especially true of the foreign locations since many more costs are subsidized in comparison with the facility at Cary, where everything is provided in the campus.
The teams that are used at Rubbermaid, Inc. are called cross functional teams. The team structure includes employees from each specific department. The team leader is a representative from the marketing department called a Group Project Manager, (GPM). The remaining members of the teams include one employee from finance, research and development, manufacturing as well as sales. These divisions are considered the "Core Team" and work under sponsors comprised of a General Manager and the Vice presidents of each division of the company. The activities that the business teams are responsible for focusing on are contingent on their division. They are responsible for all functions of a product. Each member of the team works on the area that pertains to their division of the company to increase the quality of new product development ideas as well as increase the speed in which products are available to the market. This is essential because of the ability for competitors to copy a model and introduce the product before Rubbermaid.
These teams were introduced at Rubbermaid to allow the company to generate product ideas that are of a higher quality and more quickly though bypassing the normal development process. Rather than a product being designed in research and development as well as moving from division to division until it is deemed completed, the teams are comprised of members from each, so that products can be evaluated from every possible division simultaneously. This is very important for Rubbermaid because it allows for the company to remain current and continue innovating in a market where copying product molds is common. The ability to remain current and innovative is the reason the teams are of such importance to the company. Since the introduction of the teams, Rubbermaid is generating more products than in previous years; the ideas are of higher quality.
Each team has their own strengths and weaknesses as well as challenges they face in implementing the use of teams. The Food Storage team was strong in their ability to generate revenue and comprised nearly one half of Rubbermaid's revenue. However, the products created by the Food Storage team were easily copied by other companies; therefore it is challenging for the team to remain innovative. The Juvenile and Infant Sports team was effective at making high quality products, which is critical in the market for children's toys. Although the products were of high quality, the team took more time to develop the products, which is a weakness. The team faces challenges with team autonomy. The sport and Automotive team was remarkable in their attention to details and in creating difficult and skillful products. However, they were also the smallest division and employees were promoted from their division more than any other, so the team has a constant struggle with their level of experience. Having this, makes the company face challenges dealing with team cohesiveness. The lessons that are able to be learned from these teams is that remaining innovative and current is done more easily when the challenges along with the ideas are divided on a basis of job specialization. The ability for teams to focus on problems pertinent to their division of the company while receiving input simultaneously from all other divisions is fundamental.
Google and the SAS institute have things in common. They both allocate and even promote employees to spend some of their time working on projects and in divisions of their preference. Google allows employees to spend up to 20 percent of their time on projects they decipher; at SAS, employees are permitted to work on innovative products even if the market for the products is not immediately in demand. This allows SAS to be the first corporation into a market without competition. Both companies are still controlled by their original founders; however, SAS is a private company while Google is a publically traded corporation. Google and SAS were both started by visionaries. These are people who have innovative ideas that control the direction of the companies. This is a trait that is natural and cannot be learned or taught.
Yahoo is competing on the basis of search engine and advertisement while Microsoft is competing on the basis of documents between Google Documents and Microsoft Word. Ebay is competing with Google's new checkout system. Other competitors of Google include mail services that compete with Google Mail (Gmail) and services for finance as well as being a direct competitor with PayPal.
Google.com's revenues is deciphered and exclusively based on licensing the search technology to Yahoo.com as well as other key search engines. This occurred December of 1999. At first, there was no amount of advertising for Google. Doing so, avoided the depth of various thresholds. At this time, it presented viewers with just the possible answers to their questions. Including a variety of add-ons, promotes the viewers to remain on the website for a longer period of time, rather than obtaining the results and exiting out. Incorporating the add-ons increases the amount of views per page as well as advertising revenue. Unfortunately, at the start of Google.com, it failed to utilize this approach. Google concentrated solely on its search component. A majority of websites use paid listings. Paid listings are succinct text advertisements that are identified as "Sponsored Links." These specific links emerge contiguous to or spread throughout the search results. The advertisers attempt to contest for keywords. This is a process referred to as 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.
Initially, Google.com did not have faith in the paid listings. It continued to have the order of the search results chosen is an equitable neutral way. Constructing the search results in an unbiased manner assisted in maturing their website's recognition pending 1999. In that year, Google implemented a variation of the cost per click (CPC) on advertisements. During the year of 2003, Google inserted contextual paid listings. As the years went by, Google expanded its capability beyond search results. In more recent years, Google attached Google Mail, Google Maps, Google Books, Google Finance, Google Docs, Google calendar, Google Checkout and etc.
Inserting these aspects increased Google's revenue's and the amount that people utilize the website. Google's focal point was based on becoming the most efficient and paramount search engine using a minute amount of advertising. As the years went by, Google adjoined various ports and advertisements to aid in its development. The founders of Google are inventive creative thinkers who desire to manage the direction it will go. They did this by having the company remain private. After it became a privately traded corporation, the founders congealed the engine's dominance 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. Simulating the fact that Brin, Page, and Schmidt preserved their Class B shares whereas VCs and other Class B shareholders, (examples: additional Google supervisors by way of stock alternatives) ultimately sold theirs, the top three administrators for Google posses an estimated amount of one-third of shares, but dominate over 80 percent of votes. Doing so, vaccinated Brin, Page and Schmidt from substitution by financiers second guessing Google's approach.