There are three fundamental management models that organizations can take: the low cost competitor model, the high-involvement approach or the global competitor model. Each of these can be financially viable, so it is not always necessary to defer immediately to the low-cost approach as the model of choice.
- In the low-cost competitor model, companies compete by offering low-cost goods and services and by offering low wages and limited benefits to their employees.
- In the high-involvement approach, businesses include employees in the work and provide them with business information and incentives.
- In the global competitor model, companies export a majority of their goods.
- Although American managers tend to zero in on the low-cost competitor model, any of the three models can be successful in most businesses - and indeed may be more appropriate.
- Make a list of the pros and cons of each of the three management models suggested by Mr Lawler, and then provide examples for each. Identify the model and companies with which the current business is most compatible. Determine why the current business leans toward or away from the current trend and whether a change might be necessary.
- Identify which of the three management models the company uses, and then identify which models the top five competitors use. Initiate a discussion among senior managers to determine whether the current model is the most effective and what can be learned from the competition.
- As a business that follows the low-cost competitor model, identify other companies in the industry that are successfully using a different model. Determine the key factors in their success and create a list of those items that might be appropriate to implement in the current business.
- By using the list created in the preceding Lesson Action, test the viability of a different management model. Create a test case for one product or service that follows the new model for six months. At the end of six months, reassess whether the new model could be successful on a larger scale. Try additional test cases as needed.