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World-Class Organizations: Operational Strategies Essay

Companies that are in the center of the industry are on a continuous path towards becoming a world-class organization. Becoming world-class is linked to the operational excellence, which implies the process of improvements to identify and eliminate main issues that interfere with the performance of the company. A company that wishes to become world-class has to put a major focus on the following strategies: minimization of costs and increases in production through risk management, performance measuring, and culture changing (Rigdon 2014, p. 1).

A world-class company is the one that has developed a unified manufacturing strategy as well as improved its manufacturing capabilities, designed a set approach towards management, as well as the one that employs the measurement of its technological and performance assets (Muda & Hendry 2002, p. 355). Nowadays, in a constantly changing competitive market, the application of technology has become of the most important elements of a company’s operation plan since it reduces the costs of labor and material, improves the quality and the features of products, lowers inventories, and increases the variety of products (Laureate Education 2015, p. 1).

The technological approach has been implemented by Fiat not only to measure its performance on a number of operational levels but also to reach the set technological target. For instance, in 1980s-90s, the company’s management worked with the computer-integrated manufacturing system that implied completely automised factories without worker’s involvement (Chiarini & Vagnoni 2015, p. 599). Such an approach helped to reduce operational and labor costs as well as control the quality of manufactured products, putting Fiat a step forward to become a world-class organization.

To acquire competitive advantage on the market, a company has to develop a strategy that will become a guide for showing the competencies of the company as well as its ability to withstand the negative factors that come from the external environment. Thus, to gain competitive advantage, it is critical to employ as the strategy that defines the uniqueness of the company in comparison to its competitors (Zekiri & Nedelea 2011, p. 72).

For example, to sustain its competitive advantage in the market, the Swedish corporation IKEA has employed a strategy of balancing responsibility with low costs, a strategy that concentrated on low prices and environmental sustainability, setting the company apart from its competitors. Therefore, IKEA can be considered a world-class firm that not only offers affordable products to its clients but also supports the environmental sustainability (Elg & Hultman 2011, p. 454).

Thus, the most valuable operational strategies for becoming a world-class organization revolve around the elements of measuring performance, managing risk, and changing culture. Performance measurement helps the company identify the gap between actual and top performance, outlining some risks associated with costs and production.

Risk management starts with the identification of a strategic objective, for instance, employing a technology-oriented approach towards manufacturing as implemented by Fiat, proceeds with the identification of issues that interfere with performance and ends with the creation of an action plan to eliminate the identified issues (Rigdon 2014, p. 1). The element of changing culture has been implemented by IKEA after accusations in child labor (Elg & Hultman 2011, p. 454). The company has developed a code of conduct that addressed the issues of social and environmental sustainability, making a step towards becoming a world-class organization.

Reference List

Chiarini, A & Vagnoni, E 2015, ‘World-class manufacturing by Fiat. Comparison with Toyota production system from a strategic management, management accounting, operations management and performance measurement dimension’, International Journal of Production Research, vol. 53, no. 2, pp. 590-606.

Elg, U & Hultman, J 2011, ‘Retailers’ management of corporate social responsibility (CSR) in their supplier relationships – does practice follow best practice?’ The International Review of Retail, Distribution and Consumer Research, vol. 21, no. 5, pp. 445-460.

Laureate Education 2015, Strategic thinking and making it all work, Laureate Education Inc., Baltimore.

Muda, S & Hendry, L 2002, ‘Proposing a world-class manufacturing concept for the make-to-order sector’, International Journal of Production Research, vol. 40, no. 2, pp. 353-373.

Rigdon, M 2014, The path toward becoming a world-class organization. Web.

Zekiri, J & Nedelea, A 2011, ‘Stratefgies for achieving competitive advantage’, The Annals of The “Ştefan cel Mare” University of Suceava. Fascicle of The Faculty of Economics and Public Administration, vol. 11, no. 2, pp. 63-73.

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