Product Process Matrix

Watch the two videos below:

• https://www.youtube.com/watch?v=m62whN6CWBM (Product Process Matrix (from MHl) Case)
• Process Choice at King Soopers Bakery Case (17:35)

Go to your favorite grocery store (i.e., Walmart, Whole Foods, Publix, Winn Dixie, etc.):

1) Find a product, attach a picture, and name the type of process (ex. continuous flow process or repetitive process or batch process, or job shop process) the product was manufactured?

2) Find a product and attach a picture of the product whose company uses CSR (e.g., Corporate Social Responsibility):

• Where CSR is depicted on or within the product?
• Is this product or process innovation?
• Why?

Use the CSR explanation provided in the page 2 to help find your CSR product/service example and distinguish between product or process innovation.

3) Explain in a paragraph what you believe the company is attempting to achieve through its use of CSR.

Corporate Social Responsibility (CSR)

Definition provided by the Financial Times {http://lexicon.ft.com/Term?term=corporate-socialresponsibility–(CSR)}

Movement aimed at encouraging companies to be more aware of the impact of their business on the rest of society, including their own stakeholders and the environment. Corporate social responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social, and environmental benefits for all stakeholders. CSR is a concept with many definitions and practices. The way it is understood and implemented differs greatly for each company and country. Moreover, CSR is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.

Link between CSR and Product/Process Innovation (Williams & Siegel, 2000)

Some firms will produce goods or services with attributes or characteristics that signal to the consumer that the company is concerned about certain social issues. Also, many companies will try to establish a socially responsible corporate image. Both of these strategies will encourage consumers to believe that, by consuming the product, they are directly or indirectly supporting a cause.

These strategies are effective with those consumers who wish to champion firms that devote resources to CSR. Consequently, many products have labels that indicate the use of certain ingredients and production methods that promote CSR. For example, natural food companies place labels on their products signifying the use of organic, pesticide-free ingredients; cosmetic firms boast of animal-free testing; manufacturing companies display “made in the USA” stickers; and radio and television commercials tell us to “look for the union label.” Labels that refer to CSR attributes also create new (socially responsible) product categories in the perception of consumers.

The examples above apply to process and product innovations, both of which are valued by some consumers. For instance, the “organic, pesticide-free” label simultaneously indicates the use of organic methods, which constitutes a process innovation by the farmer, and the creation of a new product category, or a product innovation by the natural foods retailer. If the natural foods company is vertically integrated, it engages in both CSR-related process and product innovation simultaneously. Each of these examples under-scores the point that some consumers want the goods they purchase to have certain socially responsible attributes (product innovation), while some also value knowing that the goods they purchase are produced in a socially responsible manner (process innovation).

Consumer-oriented CSR may also involve intangible attributes such as a reputation for quality or reliability. The presumption is that firms that actively support CSR are more reliable and their products are of higher quality. This is especially important for food products. For example, some restaurants serve “free range” chicken and beef. “Free range” meat products are perceived to be of higher quality than conventional meat products. Presumably, this is because they have a more natural taste, due perhaps to their closer proximity to a natural state (in the sense that the animals roam more freely) or because they are not injected with hormones or antibiotics. By promoting their use of “free range” chicken and beef, restaurants signify to their patrons that they are concerned about product quality (use of the finest ingredients) and also about more humane treatment of animals.

There is strong evidence that many (but certainly not all) consumers value CSR attributes. Therefore, an increasing number of companies incorporate CSR into their marketing strategies, to exploit the appeal of CSR to key segments of the market, such as “baby-boomers” or “generation X” shoppers. We need only look at the rapid growth of such socially responsible companies as Ben & Jerry’s, the Body Shop, and Health Valley to confirm the importance of CSR in marketing.

Support of CSR may also be used to create a reputation that a firm is reliable and honest, and some consumers may assume that the products of a reliable and honest firm will be of high quality. Therefore, advertising that provides information about CSR attributes may be used to create a reputation for quality or reliability or honesty-all attributes that are important but may be difficult for consumers to determine. Such advertising makes consumers aware of product differentiation (quality) based on CSR attributes.

For example, New United Motor Manufacturing, Inc., or NUMMI, the innovative joint venture between Toyota and General Motors, was established in Fremont, California in 1984 to build small cars for both companies. The NUMMI plant implemented many of the latest Japanese “lean manufacturing” methods (process innovation), and produced the Geo Prism, the prototype for GM’s new generation of small cars (product innovation). Furthermore, through its unique partnership with the United Auto Workers (UAW), NUMMI also implemented a number of progressive workplace practices, such as a strong emphasis on teamwork and employee empowerment. The bottom line is that some consumers perceived that NUMMI cars, such as the Geo Prism, were superior to traditional, American-made cars, in terms of quality and reliability. More germanely, many customers also believed that by purchasing these cars, they were demonstrating their support of progressive human resource management practices and the UAW.

Williams, Abagail and Siegel, Donald, 2000. CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE: CORRELATION OR MISSPECIFICATION, Strategic Management Journal, 21, 603 – 609

2. ASSIGNMENT 2 (from page 4-5)

Create a discussion post in 1-2 pages to discuss:

It is the new reality for leaders today to be diversity promoters. Do you think leaders today in businesses are adapting to this new reality? Explain which stage of diversity awareness you think most leaders are and where you are?