Example Report 3

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BEHAVIOUR, POWER & THE
TECHNOLOGY INDUSTRY
Shauna Dowling
WEEK 9 INDUSTRY LEARNING JOURNAL - 5th April 2017 – Word Count: 736
Table of Contents
1.
Best Practice Analysis ............................................................................................................ 2
2.
Industry and Company Analysis.............................................................................................. 2
3.
Best Practice Application ....................................................................................................... 3
4.
Recommendations for the Company....................................................................................... 3
References .................................................................................................................................. 4
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BEHAVIOUR, POWER & THE TECHNOLOGY INDUSTRY: Behaviour management advice for Dell
1. Best Practice Analysis
Within all supply chains (SC) buyer-supplier collaborations have identifiable influences that
impact on the depth and purpose of relationships (Nyaga et al., 2013; Kähkönen, 2014).
Although buyer-supplier relationships with balanced power are ideal, it is more common for a
collaboration to be power asymmetric (Nyaga et al., 2013; Kähkönen, 2014). A buyer or
supplier’s exact location within a network influences their level of power, their ability to form
strong relationships and the depth of collaborations with other network members (Kähkönen,
2014). The operating depth of collaborations is minimal if a power balance of positions does not
exist in the relationship (Kähkönen, 2014). An alternative to viewing relationships as a
collaboration network is as dyadic interactions that take place between buyers and suppliers
(Nyaga et al., 2013). Displays of power can correlate with arbitrary operational performance
and changes of partner behaviour (Nyaga et al., 2013).
2. Industry and Company Analysis
Out of the three types of buyer-supplier relationships (transactional, alliance and collaborative),
Michael Dell, founder of Dell, believes “collaboration is the new imperative” (Mariotti, 1999).
Dell are continuously reaffirming their dedication to collaborative relationships with their
suppliers through deploying software such as i2 Supply Chain (Dell, 2011). Technological
advances such as virtual integration are used to further SC opportunities and better
relationships with their strategic partners (Magretta, 1998). A build-to-order strategy requires
Dell to assert their power during negotiations and place pressures on their suppliers by
contractually forcing them to situate in close proximity to Dell manufacturing sites and carry
high levels of inventory (Magretta, 1998). This type of dominant behaviour is not encouraging
for suppliers even though Dell speaks highly of collaborative relationships. (Hill, Cronk &
Wickramasekera, 2011). Acer is an example of an old Dell supplier, and in 1987 Acer realised
although they were meeting every rising demand from Dell, they were not being acknowledged
financially or contractually in return (Lee, 2016). Acer recognised that by having a strong,
recognisable brand name them power, particularly in negotiations, and in 2016 Acer had a
market share of 6.8% (IDC, 2016; Lee, 2016).
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3. Best Practice Application
It is advised that businesses choose a dyadic analytical method over a power network to
progressively analyse relationships with continuity. With over reliance on technology in SCs,
collaborative relationships are harder to implement due to a lack of understanding with whom
a business is trying to collaborate (Barratt, 2004). The apparent lack of trust between buyers
and suppliers requires a heightened segmentation approach based on the reputation and ability
of their partners (Barratt, 2004). There are a variety of factors that contribute to collaborative
relationships, including culture, company strategies and implementation methods (Barratt,
2004). It is advised that both businesses entering a new relationship review these factors in
specific relation to their collaborative partner. Through increased analysis and communication
with Acer, Dell could have understood their aspirations better and increased Acer’s satisfaction
gained from the relationship. It is advised that Dell increase their awareness of the effects of
power on the nature of relationships, depths of collaboration and the influence it has on the
behaviour of partners.
4. Recommendations for the Company
Dell is lacking in research and consideration for power and collaboration influences on their
relationships which is affecting their competitive ability in a slowing PC industry (Kähkönen,
2014; IDC, 2016). It is suggested that Dell conduct a dyadic survey of their relationships and
then use hierarchical regression to analyse the data compiled to get a better understanding of
their buyer-supplier relationships (Nyaga et al., 2013). A thorough analysis will show the level of
reliance on each of their suppliers. A survey should also be sent to current suppliers to gather
information regarding their level of satisfaction upstream from Dell (Fuller, O’Connor, &
Rawlinson, 1993). This survey will help Dell identify further suppliers that are aspiring to
alternating from a supplier status to that of a competitor. The survey will also highlight
suppliers that are pining for further collaboration and require increased investment of either
monetary, acknowledgement or information sharing means (Fuller, O’Connor, & Rawlinson,
1993).
It is seen as extremely ironic that Dell professes their dedication to collaborative relationships
yet their past acknowledges otherwise. More constructive communication and encouraging an
increase in power-balance are encouraged. SC exchanges have important transactional and
relational factors that mediate the effect of power imbalance which is the main point of
recognition required by Dell (Nyaga et al., 2013).
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References
Barratt, M. (2004). Understanding the meaning of collaboration in the supply chain. Supply
Chain Management: An International journal, 9(1), pp.30-42.
Dell. (2011). Strengthening The Supply Chain. Available:
http://www.dell.com/content/topics/global.aspx/power/en/ps1q01_i2?c=us&l=en. Last
accessed 3rd April 2017.
Fuller, J., O’Conor, J., Rawlinson, R. (May 1993), Tailored Logistics: The Next Advantage, Harvard
Business Review
Hill CWL, Cronk T, Wickramasekera R. (2011), Restoring Dell's Competitive Advantage'. Global
Business Today: Asia-Pacific Edition, pp 531-34, McGraw-Hill, Sydney
IDC. (2016). PC Shipments Beat Expectations. Available:
http://www.idc.com/getdoc.jsp?containerId=prUS41584116. Last accessed 4th April
2017.
Kähkönen, A.K. (2014). The influence of power position on the depth of collaboration. Supply
Chain Management: An International Journal, 19(1), pp.17-30.
Lee, P.S. (2016) Strategic Coupling: East Asian Industrial Transformation in the New Global
Economy. International Relations of the Asia-Pacific.
Magretta, J. (1998). The Power of Virtual Integration: An Interview with Dell Computer’s
Michael Dell. Harvard Business Review. (2), pp.17-30.
Mariotti, L. J. (1999). Collaboration Is the Way to Go. Supply Chain Management Review, p. 75.
Nyaga, G.N., Lynch, D.F., Marshall, D. and Ambrose, E. (2013). Power asymmetry, adaptation
and collaboration in dyadic relationships involving a powerful partner. Journal of Supply
Chain Management, 49(3), pp.42-65.
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