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Out of the Crisis

Out of the Crisis

The book Out of the Crisis by Deming contains the author’s position on the responsible, effective management and organization. Two articles “The 5 Requirements of a Truly Innovative Company” and “More Light with Less Energy: How Energy Efficiency Can Fast-Track Energy Access Goals” are closely connected with this book and its theme, so it will be interesting to look into them. These articles provide answers to many management and innovation questions in business and energy saving sector that actually touch all spheres of life. The paper provides analysis of the two articles and the book, reflecting necessity in innovative approach to the quality improvement in business products and process.

Out of the Crisis by William Edwards Deming

The book Out of the Crisis was published fifteen years ago, and despite the fact that many things have changed in business, the author’s thoughts in its majority are actual. Deming briefly explains that misguided and irrational management led to economic fault in the United States in the last few decades. As general evidence, Deming (2000) proclaims, “The greatest waste in America is failure to use the abilities of people” (p. 53). The positive aspect of the book is public recognition of the management theory where the top management of the company or any other structure rules the process. Thus, when the management has low quality, there is no productivity and result, and vice versa. Therefore, teaching new managers is a panacea for business complications.

One should pay attention to the fourteen points of management that Deming outlines. As the first point, the author recommends providing clear strategic purpose of the business and constantly improving the quality of products and services that would increase incomes. This idea is almost identical to his fifth point dedicated to the improved quality and productivity in the background of constantly decreased costs. The second author’s point tells about new approach to philosophy of business and taking on leadership for change according to the actual economic age. The third and eleventh points are common in its meaning. Deming objectively promotes elimination of the work standards and management by substituting old inspections with improvement of the products’ quality. The fourth and tenth points are ones of the most important both in the book and in the real business surrounding. The author’s idea is that minimization of the total cost and application of trusting partnership with the single supplier is more beneficial to business than the old price tags. In addition, competitiveness in advertisement is too expensive, but it does not provide better quality of the production. The author’s new approach indeed may establish new culture of business relations and increase mutual tolerance and benefits. Hence, the sixth, seventh and thirteenth points reflect similar goals – education, training and supervision of the staff members, leaders, and managers, and institutional approach to self-development motivation. In addition, Deming includes three aspects concerning mental and philosophy approach and removing barriers that drive out fear, doubts about success and eliminate any kind of conflicts. The rest of the recommendations predict success in management and quality improvement in terms of personal and collective transformation.

However, Deming’s points are too general and have lack of accounting conclusions as banking and accounting systems, credit policy and assets should not be neglected. Without including those facts into organizational innovations and quality, planning any strategy will be too abstract because the cash flow lies in more simple things. The advantage of the book is in author’s personal experience and analytical talent; however, the book still provokes more questions than gives answers.

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Gary Hamel and Nancy Tennant: “The 5 Requirements of a Truly Innovative Company”

The article “The 5 Requirements of a Truly Innovative Company” by Gary Hamel and Nancy Tennant can be surely named a guideline for business reformation and improvement. It consists of six blocks, and each one is dedicated to the separate issue that touches quality problems and possible innovations to implement. The introduction reflects the general supervision over the benefits innovational approach may bring. Hamel and Tennant (2015) rely on dividends brought by the new policy of process and approach to every employee: “Think of the long strides many businesses have made in reengineering their supply chains, boosting product quality, and rolling out lean six sigma”. The first block is dedicated to the issue of human resources and the role it plays in the process of business improvement. The authors suppose that the key to success is in the outlook model of each team member. The specific educating, communication and process management will lead to conscious requalification of the staff members according to the needs of separate company. The second part relates to the definition of innovation in general, discussing its influences on quality; it also tries to answer the question whether “the prod­ucts that got rated as highly ‘innovative’ actually yield above-average returns?” (Hamel & Tennant, 2015). The quality of innovations based on defined criteria is separated into third section of the article. It explains the components of effective comprehensive dashboard, which are: “inputs”, “throughputs”, “outputs”, “leadership”, “competence”, “climate”, “efficiency”, and “balance” (Hamel & Tennant, 2015). The fourth and fifth blocks are dedicated to the quality of leadership and management. The authors believe that proper training of the leadership members and evaluation of their competency in the process of producing management will allow stabilizing reforms. It is obvious that the criteria mentioned are valuable aspects for introducing innovations and improving producing quality of the business structures. However, there are a few irrational statements, such as the one concerning increasing leadership amount, which may lead to conflicts and overestimated ambitions of individuals, hence, destroy team spirit.

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The World Bank’s “More Light with Less Energy: How Energy Efficiency Can Fast-Track Energy Access Goals”

The article “More Light with Less Energy: How Energy Efficiency Can Fast-Track Energy Access Goals” contains interpretation of The World Bank’s program on energy supplies. According to The World Bank (2015), “Currently, about 1.1 billion people globally don’t have access to electricity”. However, the article contains interpretation of the quality improving measures as a necessary contribution to the process of electricity supplies with no negative consequences for nature. For example, the authors concretely mention possible ways of and approaches to the resolution of energy supply and quality challenges. Among them are the “solar home systems, small wind turbine systems and renewable mini- and micro-grids” (The World Bank, 2015). The advantage of the article is that it has simple explanation of the sense of all measures that The World Bank suggests taking. The idea is to arrange proper microclimate for investments and modernization of the energy consuming tools so that the private households and businesses could use less energy. Another advantage of the article is in Bangladesh example of elevated quality and, consequently, access to the solar electricity kits. The light emitting diodes (LEDs) are one of the prerogative tools, and the authors prove that “the easy-to-use solar kits led to longer, more reliable periods of electricity supply at a much lower cost” (The World Bank, 2015).

The disadvantage of the article is in poorly convincing background for statistical analysis of energy saving benefits and comparing quality data. Another disadvantage is that the article has no expanding explanation of the CLASP (Collaborative Labelling and Standards Partnership) institution, which is mentioned only in one sentence. However, it is related to the “eight energy access operations and issue a report on how energy efficiency can help achieve better outcomes in access-related initiatives” (The World Bank, 2015). This omission neglected attempts of the authors to maintain the entire idea of energy saving and quality measures properly.

Conclusion

The book Out of the Crisis and the two represented articles depict similar challenges and resolutions connected with innovational approach to business management and organization of the working process. The articles objectively reflect the business management peculiarities and challenges in small area (like energy saving). However, the analysis shows that the Deming’s statements published rather long time ago are still actual today; hence, people learn proper business management too slowly.