Prose of a Pol

The material in this post is another discussion assignment from my Principles of Management class at Umass-Amherst. The two classes I’m currently taking are in finals week right now, so I likely won’t have much time to post new original content here this week but will try to write a post or two unrelated to this series of discussion posts to break up the flow a bit and keep you all interested. Regardless, it’s my opinion that many of the topics covered in the Principles of Management class are timeless and still relevant to today’s world. Tonight’s post especially displays this relevance, as it confronts the differences between Fair Trade and the interests of global corporations.

Before I read the material for this session, I was personally very interested in the debate of the pros and cons of globalization. I was well aware of why critics claimed the World Trade Organization, International Monetary Fund, and World Bank were inefficient and actually hindered the economic growth of poor countries and contributed to the poor conditions many workers still faced across the globe.

It seems Robbins and Coulter take the optimistic view of Globalization, that it unites the world and helps all economies to prosper. Robbins and Coulter believe that globalization opens up new customers for third-world countries and allows them to enrich themselves by finally being able to trade with the rich countries of the world. Whereas the textbook credits the World Trade Organization for isolating the Asian financial crisis of the ’90’s and keeping the rest of the world economy from plummeting into depression, the New York Times article (and by the tone of the Fair trade and Equal Exchange web-sites I’m sure they would agree) cites the IMF’s (the WTO & IMF are very closely interrelated) pressure to free up capital markets as a catalyst for the crisis.

I found this quote in the book "Although a number of vocal critics have staged visible protest and lambasted the WTO, claiming that it destroys jobs and the natural environment, the WTO appears to play an important role in monitoring and promoting global trade." (Robbins and Coulter, 84) to be quite funny. In particular the use of "vocal" and "visible" to describe the critics and protests of the WTO clearly show that Robbins and Coulter are defendants of the old guard of the global economy. Using such light language to describe the massive protests that have occurred world-wide at almost every recent WTO meeting (Seattle in 1999 for instance, well before this book was published) clearly shows Robbins & Coulter’s bias on the topic. Robbins & Coulter use this chapter in the book to show that "Global trade isn’t new. Countries and organizations have been trading with each other for centuries." (81) in order to make a claim that globalization is inevitable and then they go on to describe how we as managers should adapt to the increasingly smaller and more intertwined economic environment.

Right in the same paragraph as the last quote Robbins & Coulter state "When trade is allowed to flow freely, countries benefit from economic growth and productivity gains because they specialize in producing the goods they’re best at and importing goods that are more efficiently produced elsewhere." Ideally, this is how globalization would work. In reality, the IMF, World Bank, and WTO constrain emerging markets by forcing them to adhere to their rules in order to receive loans. Without loans from these organizations, third-world countries have little hope of catching up to the developed countries of the world. However, by accepting the rules and cashing in the loans, these countries’ economies are further degraded by the rules; ironically enough many of the rules the WTO attempts to institute on these third-world countries contrast sharply with how many of the rich countries of the world have gained their wealth. It is a vicious cycle and I wish Robbins and Coulter would have delved more deeply into this portion of globalization. In short, Robbins and Coulter believe in the principles of globalization and that ideally all participants would benefit.

In contrast, the Free Trade and Equal Exchange organizations attempt to remedy many of the problems caused by these global financial regulatory organizations. These two organizations accomplish this by instituting their own rules "By requiring companies to pay above market prices, Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their lot and have more control over their lives.(Fairtrade)" By forcing companies to pay more for goods (in order to obtain the very in-demand FAIR TRADE mark), Fair Trade is giving the poor of the world more freedom. Robbins & Coulter would argue that by providing the poor of the world with opportunities, the WTO and similar organizations, are enabling the poor to enrich their lives.

Unfortunately, the only opportunities these third-world countries are routinely offered are those undesired or unprofitable to maintain in a "rich" country. As the New York Times article points out, Mexico receives car manufacturing jobs, but not the knowledge to manufacture their own jobs. Whereas Fair Trade and Equal Exchange attempt to actually free up the economy, by connecting buyers willing to pay higher prices with producers willing to put in that extra effort to obtain the higher price; the global economy discussed in the textbook is one which only works for the medium to large corporations and in effect keeps the playing field uneven by restricting how developing countries can improve their economies. Fairtrade and Equal Exchange attempt to fix the inefficiencies caused by globalization, they deal with the reality of the situation, rather than citing the benefits the theory of globalization "proves".

This discussion post, for a Principles of Management class at Umass-Amherst, was in response to an article in the Wall Street Journal, entitled “In Name Only: For Richard Thibeault, Being a `Manager’ Is a Blue-Collar Life — Grueling Hours, No Respect Make Low-Tier Bosses Feel Tired and Troubled — `Factory Work Was Easier‘”, written by Jonathan Kauffman. The first paragraph may seem irrelevant (as it is out of context), however the classmate who posted before me wrote that Theo Epstein originated the use of unusual, marginal statistics, to discover great baseball players; any self-respecting baseball fan will tell you Bill James is considered the founder of this statistical discipline.

Quick side-note on Theo Epstein, he did not come up with the idea of using these "unusual" statistics (Bill James did), nor, as the book Moneyball proves, was he the first baseball general manager to evaluate players this way (Billy Beane of the Oakland A’s was); the real reason for Theo’s success was a higher budget than the A’s and the brilliant move of hiring Bill James as a Red Sox consultant [plus Theo already had the 'Greek God of Walks', Kevin Youkilis, who Billy Beane has been coveting and trying to acquire for YEARS). I had to get that off my chest, go Red Sox! Now onto my post...

The overriding control structure in place at Mr. Thibeault's Au Bon Pain [that Pain is very ironic considering the details of Mr. Thibeault's work-life] is a bureaucratic market scheme. Mr. Thibeault receives constant sales and cost projections from his bosses who are far removed from the daily struggle to keep the restaurant afloat. Towards the end of the Wall Street Journal article, Mr. Thibeault receives another new form that he must fill out reporting on a few factors four times a day. The corporate headquarters don’t realize that these forms will only impede the success of the store even further, and instead of pointing this out to upper management, Mr. Thibeault decides to go ahead and comply with the form because "…if it’s the rule, I will do it." (Wall Street Journal, Oct 1, 1966 For Richard Thibeault, Being ‘Manager Is a Blue-Collar Life, 4).

The structure in place directly impacts the types of controls Mr. Thibeault has to exert on his employees, himself, and all the other resources needed to run the Au Bon Pain restaurant. This is one of the times Mr. Thibeault has to measure the performance of his store; however, Richard also has to analyze reports that come in over the computer and compare them to his store’s performance. Many of the times, his store deviates from the projections by not meeting sales targets. When this happens he must take corrective actions to help bring performance in line with the corporate goals, but as he is already overwhelmed with his job as it is, the steps he takes are usually less effective immediate corrective actions, such as telling his employees to pick up the pace or stepping in himself and doing many of the tasks he is supposed to be managing. If Mr. Thibeault had more time to actually manage, he might be able to take basic corrective actions such as analyzing bottlenecks, predicting peak demand better and be able to schedule resources, both human and food, to match peak demand. Revising the standard is not an option for Richard as his targets come from the detached corporate headquarters via his computer.

Thibeault attempts to use some feedforward control, such as hiring more employees to match demand to speed up the service or offering special sales discounts to increase his customer base but is always denied from above via computer printout. Instead Thibeault relies heavily on concurrent controls, such as encouraging employees and by performing tasks, such as baking muffins, picking up croissants, and handling customers, himself to ensure they are done properly. In this instance, Thibeault is both exerting control and being controlled (albeit by himself and indirectly by the corporate headquarters). Richard also uses feedback control, for instance when he puts up notes stating that taking items without paying for them will not be tolerated and by firing inefficient workers.

Mr. Thibeault is also heavily pressured by financial controls, which I’ve discussed above, are the printouts from his corporate headquarters demanding a certain level of sales while keeping costs below a certain threshold. The pressure to match these levels ends up damaging the ethical environment of Au Bon Pain, as Richard tampers with the earnings of the store by replacing missing cash with money out of his pocket. It seems odd to describe this behavior as unethical, as Richard is helping an employee out, but in essence he is lying about where that money is coming from and in a way is "managing earnings".

As noted above, Thibeault mainly uses feedback and concurrent controls, even though they are less effective than feedforward controls. This problem starts at the top though, as Richard himself only receives feedback and concurrent controls. Upper management denies him a bonus when he fails to reach a sales goal (negative feedback) and constantly provides him projections and up to the minute sales data to show how he is failing at achieving corporate goals. I did not observe any evidence of feedforward control being provided to Mr. Thibeault to help him achieve his goals. Instead upper management constantly tells him he is falling short and then sets him up for more failure by impeding him from working on improvements by asking for even more reporting.

I never thought my decision between Au Bon Pain and Dunkin Donuts (or any other fast food place) might have such a negative impact on the people inside those stores. It’s readily apparent that there are inefficient and ineffective controls in place at this restaurant and that causes many of the issues the book discussed, employee theft, workplace violence (the door slamming in Thibeault’s face, screaming in the food locker), emotionally troubled employees and so on an so forth. Mr. Thibeault is truly imprisoned in this unreasonable world and in turn he has no choice but to take it out on his employees and even friends and family outside of work (for instance when his beeper interrupts time with his parents). This article is a prime example of how micro-management, and especially the wrong type of micro-management, can lead to problems that can only be resolved by loosening the old ball and chain.