Critical Review: The dynamics of organizational identity

The article is authored by two scholars of critical management studies (CMS) and seeks to proclaim the relevance of CMS and the need for a concerted effort to increase the accessibility of CMS practices in order to facilitate their use in developing or analysing organisational practices from that beyond a merely theoretical level. The authors herein enumerate the main ideals and aims of CMS and the means of enhancing its accessibility. In doing so, they provide a constructive argument for CMS while maintaining an objective outlook by counter-balancing propositions with limitations like the paradox of emancipation and aspects of the impracticality of CMS, ultimately focussing on organizational power practices as an area of relevance by “CMS-inspired analyses of primary power”.

Critical Management Studies - A diverse group of work that has adopted a critical or questioning approach to the traditional concerns of management studies[1]

Secondary power - The exercise of power in the conventional sense - the ability to get one’s goals met.

Emancipation - The process of separation from constraining modes of thinking or acting that limit perception of and action toward realizing alternative possibilities

Organisational Power Practices - The taken-for-granted social practices that are seen by the analyst as expressive of those aspects of primary power that are most central to the creation, sustaining, and perpetuation of various - frequently unnoticed -hierarchies.

Critical Review: The dynamics of organizational identity

The article provides a well-rounded introduction to CMS to the novice, elaborating on its advent and the divergent streams of critical theory and postmodernism. By specific application to the study of power from an organisational perspective, they succeed in proving at least the analytical worth of CMS in managerial research and convincingly extend the same arguments to the possibility of transformative redefinition aided by CMS, in spite of the limitations they do credit to elucidate on such as paradox of emancipation and the problem of practicality of CMS.

Interestingly, in citing the “rules of thumb” about OPPs, the authors’ reference to the strict rules that workers used for controlling and sanctioning one another’s behaviour[2] and restricting over or under performance in a piece rate incentive system is a matter of considerable study and application of the sciences of operations management, human resources management and behavioural economics. In avoiding ‘ratebusters’ and ‘chiselers’, the workers display the fundamental attributes of arriving at a Pareto efficient solution in a characteristic Prisoner’s Dilemma. Drawing on the works of welfare economists and game theory, we can define such Pareto efficiency with the help of utility as such - A distribution of utility

is said to be Pareto dominant over another distribution

just in case from state

there is a possible redistribution of utility to

such that at least one player is better off in

than in

and no player is worse off. Failure to move to a Pareto-dominant redistribution is inefficient because the existence of

as a logical possibility shows that in

some utility is being wasted. Given Gintis’s statement that Game theory is a universal language for the unification of the behavioral sciences"[3] this reviewer’s comparison is not significant in itself but borrows credence from the implied elucidation of the relevance of CMS in analyzing management problems which are already plaguing other management sciences, thereby agreeing with and putting forth the arguments of the authors with respect to the applicability of CMS, if not its practicality, in spite of such limitations as the paradox of emancipation.

With regard to the authors’ note on the formation of hierarchies resulting from conflicting or mutually exclusive OPPs, where they say that “As individuals perform more OPPs demanded by one group and fewer demanded by others, some hierarchies are strengthened whereas others are weakened”, one could argue that it is not the quantity of a group’s demanded OPPs that are performed, but their relative impact on the resultant dimension that acts as the source of establishing hierarchy. One hastens to add however, that this refraction from the text can be easily accommodated within the authors’ contentions and as such does not detract from their arguments.

In conclusion, the authors have provided credible argument in favour of enhancing the appeal and accessibility of CMS through the enumeration of guidelines and references to its applicability to the study of OPPs, and thus have made a commendable effort in fulfilling the twofold objective stated in their opening.

(Hatch, M.J. & Schultz, M. 2002)

The article seeks to expand upon the established literature’s analysis of Mead’s theory of social identity[4] in the organisational perspective. The author’s Hatch and Schultz present a model of organisational identity dynamics based on the processes of mirroring, impressing, reflecting and expressing and their consequent effects and counter-effects with respect to organisational identity and culture, specifically in regard with narcissism and the loss of culture.

Reflecting - The process by which identity is embedded in cultural understandings

Expressing – The process by which culture makes itself known through identity claims

Impressing - The process by which expressions of identity leave impressions on others

Identity – A social process with two distinguishable phases, the ‘I’ (the response of the organism to the attitudes of the others) and the ‘me’ (the organized set of attitudes of others which one himself assumes). (N.B. – when compared with culture, appears to be more textual, explicit and instrumental whereas culture is relatively more easily placed in the conceptual domains of the contextual, tacit and emergent)

Organisational identity – An organisation’s distinctive attributes as constituted by a dynamic set of processes that interrelate organisational image and culture

Organisational image – The set of views on the organization held by those who act as the organization’s ‘others’.

Organisational culture – The tacit organizational understandings (e.g. assumptions, beliefs and values) that contextualize efforts to make meaning including internal self-definition.

Critical Review: From Blame Gossip to Praise Gossip?

The article has made a bold attempt to generalise organizational phenomena from individual-level theory and correlate Mead’s theory of social identity with the organisational equivalent in the development of their framework. In assessing their competence in doing so, it is necessary first to look at what identity in the original sense is referred to be social scientists. Identity is an umbrella term used throughout the social sciences for an individual's comprehension of him or herself as a discrete, separate entity. In cognitive psychology, for example, ‘identity’ refers to the capacity for self-reflection and the awareness of self. The identity which the article talks about is closer to the concept of ‘personal identity’ as defined in the works of Erik Erkinson in his elaboration on the identity crisis. In ignoring this distinction, an important aspect of ‘identity’ is left out which may expand the works of the authors to encompass, i.e. that part of the identity which is unknown to the self or to others, thus not affected by the mirroring, reflecting, expressing and impressing dynamics which form the suggested framework. This black box or ‘unknown’[5] is better understood with reference to the works of Joseph Luft and Harry Ingham in their development of the Johari window as a heuristic exercise. The inclusion of this aspect may make more wholesome the findings of the article.

In their elaboration on how identity expresses cultural understandings, the authors lend assent to the assertion that organizational expressions draw stakeholders to them by ‘emotional contagion or by their aesthetic appeal’, and argue that “when stakeholders are in sympathy with expressions of organizational identity, their sympathy connects them with the organizational culture that is carried in the traces of identity claims.” This contention is preceded in the article by a likening of corporate communication to artistic expression that “invites us into its orbit”[6]. While this metaphoric extension that seeks to bridge the literature on aesthetics in music with that of organisational strategy is in itself arguably a bold one that would do proud the bastions of creative expression in the corridors of the advertising world, it is also needlessly restrictive in its understanding of stakeholders unlike other researchers[7], ignoring both the predominantly rational and quantitative outlook that draws the likes of shareholders and promoters by means of sufficient financial incentives for investment, as well as the general public and environmental stakeholders who may become such by no volition of their own, being affected by the actions of the organisation without necessarily having been drawn into its orbit by the aesthetic beauty of its corporate communication. The authors have however, sought to partially remedy this by incorporating in their analysis of “expressed identity” the theory that “projection of organizational identity can be unintentional”[8].

Additionally, in their brief mention of the role of power in the dynamism of organisational identity, the authors attribute to the ‘powerful’ the ability to disrupt or enhance organisational identity dynamics, and in doing so seemingly seek to delineate between the interests of the ‘stakeholders’ and the ‘powerful’, whereas the wielders of that power must necessarily be stakeholders themselves. As the very definition of ‘power’ necessitates disequilibrium in the ability to affect change[9] or at the least “the ability to get things done the way one wants them to be done”[10] one could argue that the effects of power and the implications of its influences are intrinsic to the model and its dynamism, thus making this short note redundant.

There is also a certain degree of ambiguity in the relationship between the author’s reference to hyper-adaptation in their elaboration of ‘the stages of the evolution of images’[11] as defined by Baudrillard and the ‘hyper-reality’[12] spoken of by Eco in citing the Disneyland example. Disneyland’s assurance of “seeing alligators every time” is in keeping with the expression of their own organisational identity irrespective of the unlikelihood of such an occurrence on the real Mississippi. As such, Disneyland’s claim is more likely to draw customers by such a promotion, to the benefit of the organisation, quite contrary to the process of hyper-adaptation which if not addressed as a dysfunction of organisational identity dynamics would spell doom for the organisation.

However, while the limitations cited herein may be indicative of a bias in the said article and advise caution to its application, this critique does not attempt to detract from the authors’ fundamental proposition regarding the interplay of image and culture in shaping an organisational identity. The reviewer simply seeks to elaborate on their model by suggesting improvements by means of the incorporation of alternative literatures in their model, in order that the process defined in the article may be made more comprehensive in its application and understanding to the body of research on organisational behaviour. In conclusion, this reviewer expresses agreement with the general principle that dysfunctions of organisational identity dynamics, resulting in narcissism or hyper-adaptation as defined by the authors, must be taken serious consideration of in lieu of the significant risk to the long-term stability of the organisation.

Gender, Leadership and Organizational Change

(Ernst, S. 2003)

The article observes gender relations in contemporary corporate life as well as academic life from a predominantly social democratic German perspective, though attempting to generalise the findings, in the hope to decipher the nature of such relations and the degree and underlying causes of their metamorphosis into the prevailing work atmosphere and leadership styles of today. In doing so she consults sociological research and works on power politics, with specific reference to the role of seemingly subliminal ‘propaganda’ in the form of ‘praise gossip’ and ‘rejecting gossip’ as elaborated in an earlier study of community problems[13]. The author draws on traditional etiquette books and modern career guides as credible references to provide material for analysis of cross-gender work relations and then traces the evolution of gender relations from the 18^th century onwards to illustrate her arguments. In conclusion, she finds that the power equations have taken new forms of rhetoric and what she terms as a struggle between the Established and the Outsiders has been elevated to a more subtle play or praise and blame gossip centred around both the popularity of people-oriented leadership styles (which the author assumes to be being naturally more feminine) and the socially constructed cultural ideology of unequal hierarchical power relations with regard to outlooks on motherhood and the responsibilities and division of household care.

Praise Gossip – A social technique of superiority and subordination with positive connotations directed at ones’ self or group members (the established) to inspire members to feel superior, more qualified and ‘better’

Rejecting Gossip - A social technique of superiority and subordination with negative connotations directed at ‘outsiders’ to inspire in them a lower self-confidence

Critical Review: Understanding the Emotional Experience of Organizational Change: Evidence from a Merger

At the onset, Figure 1 is an interesting interpretation of the ‘Geschlechterkreig’ and a noteworthy break from the traditional format of introductions to works propounded as academic literature, but as an insertion to the text does little to substantiate the author’s claim or lend any credibility to the statistics cited, and as such is quite redundant from a purely academic perspective, though perhaps it is this reviewer’s limited appreciation of art that is wanting. From then on, the article itself makes considerable advancement in form, argument and content but renders minimal modification to the singular impression already proclaimed. The author seems intent on characterising the gender relations prevalent in corporate and academic circles of note to be pessimistically comprised of almost antagonistic factions acting with dubious and concerted effort to overcome the other in a power struggle that seems to offer limited benefit to its individual proponents, going so far as to liken the Established and the Outsiders of Elias’s and Scotson’s work respectively with male and female leaders of ‘bourgeois academic professions and the modern western order’. Of course, one cannot find fault with this analogy for the similarity in nature to those promulgated in the works of other leading researchers in the study of racial and social class relations, and to extend the theory to gender relations would not be too far fetched. In doing so however, Mastenbroek’s systems model[14] is rendered irrelevant as these warring factions bent on the conscious use of subliminal propaganda to achieve their ends ignore the functional requirements of their professions. In the long term, one would find that assuming minimal differentiation in the abilities of the genders to perform in such professional capacity (as has been suggested by most recent research and empirically proven in the corporate arena and academic circles), such a stand would also prove against the self-interests of the sub groups which are stated predominant in the parties model and would thus necessitate the lack of sustainability of such prolonged prejudice.

The historical drive that the author takes us through in exploring gender relations through the imagery of etiquette books, selected caricatures and quotations is a noteworthy compilation reflecting the prejudices of many, but contributes little to a novel understanding of the conclusions derived with respect to the motivations behind the so-called praise and blame gossip, or in providing empirical attestation to the alleged impetus behind the popularity of people-oriented vs. task oriented leadership styles. Moreover, the underlying assumption that people-oriented leadership is “female”, as the author seems to suggest in the conclusion, is an ill-placed one reflecting considerable prejudice in itself in the differential abilities of the genders, and more so has insufficient justification in contemporary literature on human psychology and corporate leadership.

(Kiefer, T. 2002)

In analysing the emotions of employees in the HR department of organisations in the process of a merger, the author has sought to remedy what she states to be a limited and superficial understanding of the role of emotions in change literature. In doing so, the article endeavours to advance the study of emotions in organisational change by propagating the vitality of emotion in the change experience, not restricted to a destructive element or in conflict with the dictates of rationality. In addition, the article provides a framework to analyse emotional experiences of stakeholders affected by organisational change on the basis of their division into the four categories of work task (W), personal situation (P), social relationship (S) and relationship with the organisation (O) and their respective sub-dimensions, exemplified by qualitative feedback from the concerned stakeholders.

Emotional experience - The emotions and related cognitions and behaviours surrounding events during change.

Change - A collective shared interpretation of events; something which is unexpected or which affects the ability to carry out plans.

Interruptions - Events that are perceived and interpreted as being sufficiently different from usual or salient events in such as way as to act as a trigger for sense making or a search for meaning.

Critical Review: Facilitating and Undermining Organisational Change

The basis of this article is in the authors assertion that emotional experience of change processes is often equalled with “being irrational”[15], a view she rightly terms unfortunate from a psychological perspective. From here, she goes on to clarify and discuss the importance of studying emotions, especially in the context of organisational change. However, it is this reviewer’s premise that the study of these emotions themselves are a rational process, as rationality from a philosophical perspective[16] is with reason the key method used to treat data gathered through empiricism, which stands for the experiences, the observations which our senses are used to collect. Thus a truly rational perspective, which the author seems herself to follow by implication, would incorporate such a study of emotions instead of ignoring them. As inferred by prior works[17] in economics, sociology, and political science, a decision or situation is often called rational if it is in some sense optimal, and individuals or organizations are often called rational if they tend to act somehow optimally in pursuit of their goals[18]. Thus one speaks, for example, of a rational allocation of resources, or of a rational corporate strategy. Any study of emotions which leads to an optimal solution would form part of the rational process, as suggested by Samuels, Stich and Faucher who examine the broad field of reason and rationality from the descriptive, normative, and evaluative points of view; and not be equated with “irrationality” as Fineman (1993) suggests.

The article does however provide sufficient reference to established literature in propounding the author’s arguments with regard to the role of emotions during change. It first cites the groups of literature regarding organisational change summarily under three categories – those looking at stress and fear as mainly negative reactions; those interested in the emotional effects of lay-offs on survivors; and those focussing on resistance to change expressing irrational emotions. It goes on to elaborate on the limitations of this literature with regard to its focus on pathologized emotions; its focus on negative emotions; the managerial focus on recipients of change; and its focus on specific aspects of change (such as such as job insecurity, workload, or downsizing). Thus the current literature ignores the positive aspects of negative emotions, does not substantially highlight positive emotions, has a restricted objective and ignores largely the multiplicity of simultaneous changes. The author suggest an alternative theoretical approach to understanding emotions during change, exploring the processes of emotions as an important component of construction of meaning during change; as an integral part of adaptation and motivation; and as a social phenomenon.

The author however tends to fall prey to one of her own criticisms of the established literature on emotions during change, that of focussing on pathologized emotions, though not by ignoring the positive outcomes of negative emotions as she mentions of her predecessors, but by glazing over the possible negative outcomes of positive emotions. In overplaying the positive aspects of emotions and the existence of positive outcomes to negative emotions, the article ignores the possibility of negative consequences to positive emotions as cited in the research conducted and illustrated in the framework for understanding the emotional experience of organisational change, such as the emotions of confidence, happiness and relief which may result in outcomes such as complacency, a lack of intrinsic motivation and the positive aspects of stress in acting as a performance initiator.

In elaborating on the study and forming the framework, the article contrasts the suggested alternative approach with the ‘traditional’ approaches linking emotions and the implications on change management under the categories of assumption about emotions, those about the inter-relationship of emotions with change, about their role and about the implications for dealing with such emotions. While the alternative approach seems more ‘rational’ (for lack of a more expressive word), there is potential to question the veracity of the claims based solely on the study of the organisation in the chemical industry cited, specially as the limited number and homogeneity of the respondents (9 HR managers in the same team) in serving as an adequate sample of the population on statistical grounds. For instance, in the contrasting of “assumptions about emotion and change” where the author mentions the ‘traditional approach’ as citing that “fear and stress dominate change”, no substantiation is made possible to the alternative approach by virtue of the absence of significant statistical data. On the contrary, of the 45 statements highlighted in the “Framework for Understanding the Emotional Experience of Organizational Change”, 29 express negative emotions indicating stress, and the word ‘fear’ and its derivatives themselves appear multiple times, indicating the dominance of these emotions in the said example, though to the author’s credit they are admittedly not the only emotions displayed.

In conclusion, the article provides a handy enabler in the process of demarcating the categories of emotional experiences during change, though the comprehensiveness of these categories is arguable, as they are seemingly based largely on a single and limited study. While the framework does indeed facilitate the mapping of different emotional aspects as contended by the author, it is only indicative as to the applicability of this mapping in the conclusion of the article. As a seminal work however, the effort is commendable and one hope’s that the approach outlined will be built upon further, as though in itself the work provides only a means to an end, its incorporation in a larger study may provide beneficial to organisation’s in the throes of change, as all successful and growing organisations are apt to be nowadays.

(Kahn, W.A. 2003)

The article is a case study of the researcher at the social service agency, where the author is interestingly a player in the case study himself, and thus provides insight from an internal perspective as well as attempts to analyse the covert dynamics of his role as a researcher and change agent by distancing himself and using an external perspective. He uses this as an illustration of the interdependency of observers and players of a system and how they may develop into dysfunctional patterns.

Holding Environment – A setting where system members can safely discuss and reclaim their projections about one another

Caregiving System – An organization that exports care to clients via personal relationships between caregivers and care seekers

Transference – The inappropriate repetition in the present of a relationship that was important in a person's childhood[19]

Change agent – Someone who engages either deliberately or whose behavior results in social, cultural or behavioral change.

Critical Review: Relationships among TPL Providers and

This case provides an interesting perspective on how group dynamics are shaped and how dysfunctional patterns of relationships can be formed covertly and without conscious thought by researchers and change agents. The author takes us through his study of a social service agency involved in caregiving and how he inadvertently involves himself in system dynamics which intrude on his objectivity as a neutral observer, by undermining the holding environment necessitated to manage disruptions. The author alternately involves himself in the environment or distances himself to an extent of abandon which negates its affectivity.

Additionally, the article admirably illustrates how the objectivity of a research project may be undermined, as well as that of seemingly accurate findings by the lack of neutrality in the framing of the original null and alternate hypotheses. As the hypotheses themselves reflect bias, in spite of an objective study and analysis of the data, the interpretation would prove faulty as even a discriminate analysis or regression can prove only the degree but not the nature of correlation that forms the hypothesis. More so, the involvement of the researcher and his bias towards a particular hypothesis would bias the collection of data and could well unintentionally skew the results in a self-defining flaw of collection methodology, as in the case of the author when he reflects his being draw to the truth of the hypothesis that the “director’s inability to hold onto the emotional as well as rational components of the work was undermining the social workers’ experience of feeling held by the system and encouraging the administrator/social worker gulf.”

The author’s analogy of the agency and the family system with the covert and implicit roles played by system members and the researcher himself reflects a Freudian interpretation of the research findings, specially with regard to the author’s declared need to ‘replace’ the father figure, i.e. the Director in his paternalistic role. Moreover, the description of the author’s translation of his own sub-consciousness onto the system is illustrative of a self-serving bias that has been noted by many psychologists in the past, while the issues raised in concern with the possibility of system members creation of gender and racial stereotypes is a prime example of the fundamental attribution error typified in interpersonal group dynamics. As such, the article illustrates how best to cope with transference to act as an affective change agent in a dynamic system, as cited originally Jung in The Psychology of the Transference where he states that “within the transference dyad both participants typically experience a variety of opposites, that in love and in psychological growth, the key to success is the ability to endure the tension of the opposites without abandoning the process, and that this tension allows one to grow and to transform.”[20]

Altogether, the authors case study reveals many similarities to the Heisenberg indeterminacy principle, which states that when measuring conjugate quantities, which are pairs of observables of a single elementary particle, increasing the accuracy of the measurement of one quantity increases the uncertainty of the simultaneous measurement of the other quantity. A parallel can be drawn when one sees that the study of the social service agency resembles the sometimes erroneously explained phenomenon of claiming that the measurement of position necessarily disturbs a particle's momentum, i.e. that by the act of studying the agency, he automatically became a part of the study and could not remain a neutral observer. However, like the EPR paradox[21], Kahn makes a formidable conclusion in that it is possible and hence should be endeavored by social scientists to observe neutrality and avoid biasing the object of study, though he calls for a balance the act of being immersed in the system dynamics without being taken in.

Members of Supply Chains - A Strategic Perspective

(Bask, A. 2001)

There has been a movement of growing importance for TPL providers to provide logistics strategy solutions for their customers in a more efficient way. Though TPL services see to have a bright future, there is no doubt that they have not faced all the challenges that relationships for strategic purposes have presented. The paper looks at the strategic perspectives in the relationships between Third party logistics providers and different participants in a supply chain, from a TPL provider’s point of view. The aim is to suggest and successfully implement formative strategies and thereafter widen the scope of relationship which the logistics provider shares with the supply chain.

Third Party Logistics - A relationship between a shipper and a third party which, when compared with basic services, has more customized offerings, encompasses a broader number of service functions and is characterized by a longer-term, more mutually beneficial relationship. (Murphy and Poist, 1998, p. 26)

Routine services - Simple services which do not employ any special arrangements and are chiefly volume based services utilizing economies of scale. Dell is a good example which employs routine TPL services.

Standard services – Those which use some simple customized service over and above the routine service. This ranges from simple functions like sorting/packaging of goods according to the preferences of the consumer. This requires closer co-operation and co-ordination of operations with the TPL provider. FedEx distributes the orders of netgrocers.com, an internet based grocery store on this principle.

Customized services - TPL activities where the relationships are in their closest form. The rationale is economies of scope and open sharing of information is absolutely essential between the parties involved.

Critical Review: How to Choose an Effective

The author’s perspective is that TPL providers are seen as supportive supply chain members who complement the activities of the primary members of the supply chain. Benefits that supply chains accrue from TPL providers are that they can concentrate on core competencies, capabilities and logistics management so as to improve overall performance which is measured as a function of customer satisfaction, flexibility in operations and cost effectiveness. The term Third Party Logistics has its foundation on the triadic relationship between buyers, sellers and TPL providers. However these are often reduced to a dyadic relationship between the two. Thus, a major argument is made in favour of triadic relationships. This is that dyadic relationships might lead to conflicts and sub-optimization.

The initial days were marked with lots of confusion as the role of the TPL providers was not clearly chalked out. So as to circumvent this, the authors have suggested the use of a matrix advocated by Makelin & Vepsalainen, based on the dimensions of customer relationship and complexity of service. Three different types of efficient service relationships were distinguished from the service matrix viz. routine TPL service, standard TPL service and customized TPL service. Having identified the possible options in TPL providers, these are matched with the generic supply-chain strategies identified by Pagh & Cooper viz. direct strategy, stop-over strategy and assembled stop-over strategy. These strategies are based on a combination of four possible strategies; a manufacturer can make use of i.e. full-speculation, manufacturing postponement, logistics postponement and full postponement strategy.

The theme of the paper is appropriate in modern management context to a great extent and the scope is both applicable and vast. The TPL services listed by Makelin & Vepsalainen have been aptly correlated to the supply-chain strategies listed by Pagh & Cooper. However there are certain limitations which must be highlighted. Primarily, the scope and significance of appropriate IT infrastructure in the successful implementation of TPL has been undermined in this discussion. The supply chain strategies have been formed by Pagh & Cooper without taking into account the extent of IT tools being used in the supply chain. While deciding onto the apt TPL service, the nature and extent of existing IT infrastructure in the supply-chain needs to be considered, for this might make the use of customized TPL service more efficient, both in terms of cost efficiency as well as customer satisfaction. Secondly, the techniques such as VMI are being implemented at a great pace in current supply chains. This changes the very dynamics of the entire supply chain because the locus of responsibility shifts towards the vendor i.e. the supplier in this case. This might necessitate the use of customized TPL services so as to focus on core functions of manufacturing as well as vendor management and use the information sharing to efficiently and optimally service orders at the retailer’s end. Additionally, no consideration has been given to the nature of network which is in use for a particular client. This could vary from a single direct run network, a multiple direct run network, hub and spoke network or a hub and spoke model with mil runs enabled. The requirement and feasibility of operations from the TPL provider’s side would drastically differ from network to network. Finally, the use of multiple TPL services in the same supply chain has been completely overlooked. This would result from the different relationships between various participants of a supply chain, wherein a customized TPL may be suited for a distributor-wholesaler network, while a routine TPL service may be required for a manufacturer-distributor link.

In conclusion, the paper does manage to capture the essence of relationships and their strategic significance between TPL providers and supply chain participants. However, there are certain nuances which have not been given due consideration. This has happened primarily because the paper involves the correlation of the findings of one research article with those of another. Moreover the technological advancement in terms of IT practices has been tremendous and unprecedented, and therefore not taken into account. Barring these limitations, the model prescribed above is a perfect fit for application purposes.

Third Party Logistics Provider

(Aghazadeh, S.M. 2003)

The article elucidates the many benefits to using TPL - offering expertise and cost advantages to the company. Some of the benefits include reduced need for personnel, reduced transportation and distribution cost, improved customer service, improved cycle time and freed up capital in manufacturers and marketers non-core areas. Advantages also include market knowledge, and data access. TPL also improves operational efficiency, provides an ability to focus on core business objectives and provides greater flexibility. Today, more than ever it is essential for a company to create a competitive advantage either locally or globally. Most TPL facilities have brought together materials handling equipment and systems to be able to handle many operational goods such as high throughput, picking efficiency, rapid order processing, and efficient use of space and efficient processing of value-added services.

Logistics - The process of strategically managing movement and storage of material or products and related information from any point in the manufacturing process through consumer fulfillment. The three core functions of the logistics include transportation management, inventory management and value added services. When a third party is brought in to help manage these functions, it’s called a third party logistics.

Critical Review: Is the glass half full or half empty?

The goal of TPL providers is to customise operations to supplement their transport and warehousing services. TPL often uses the customised activities as entry into the distribution channel. This article lays out a Five Step Process by which to go about these activities in a structured manner.

Step 1 (Making the Decision) consists of the company needing to decide if they need a TPL. A team of individuals representing all departments within a company should make the decision i.e. manufacturing, sales, marketing, finance and quality control. Step 2 (Developing Criteria and Objectives) is where the company needs to come up with the objectives it is trying to achieve and the criteria that the company believes the provider should meet. This can be done by discussing them with all of the different departments involved in the decision making process. In addition, the company should make a ‘Top 10 List’ of TPL that most closely fit the company. Step 3 – (The Weeding out Process) follows this. After the company has made a list of possible TPL companies, letters of interest should be sent to each one. The letter should include the proposition, i.e. that the company is exploring a possible relationship with them, information about the company and the specifics of the logistics needs, and ask the TPL companies for a company profile and its capabilities. The TPL companies should respond within a month. If there is no response within a month, the company should follow up with a phone call. Based on the response the company should be able to narrow the list down to a ‘Top 2 List’ or ‘Top 3 List’. The company should prepare a request for proposal (RFP) to be sent to the ‘Top 2 List’ or ‘Top 3 List’. The RFP is the most time-consuming of all the steps. The last two steps described in the article consist of the final short listing of the partner and the culmination of the relationship. Step 4 (Determining Your Top Prospect) is where the company needs to meet the potential TPL companies. First, the company sets up appointments to meet management to do ‘walk-through’ of their facilities, and learn all about the TPL. Members of the decision making team should go together to the site-visits. To help make the relationship with the TPL successful the key areas considered are that the TPL has similar value/objectives as the company, the TPL has information technology systems that are up-to-date, the TPL key management is trustworthy/not difficult to work with, the company and the TPL have a mutual respect for one another and that both have a shared willingness to make the relationship work. After considering everything, the decision-making team should know enough about the TPL to decide which one is the best for the company. Step 5 (Beginning the New Partnership) is where the company begins a new partnership with the ‘Chosen TPL’ just as in the selection process. Collect details, ask questions, and feel them out to ensure that both companies are on the same level. Communicate on a regular basis, which includes internal, external, and customer communication.

An examination of user and provider perspectives towards third-party logistics relationships

(Knemeye, A.M. & Murphy, P.R. 2003)

This paper provides a comparison of users and providers of third-party logistics (3PL) services with respect to relationship marketing elements, such as trust and communication, as well as relationship marketing outcomes, such as retention and recovery.

Third Party Logistics - A situation where a company utilizes the services of an external supplier to perform some or all of a firm’s logistics functions. (Sink and Langley, 1997, p. 170)

Relationship Marketing – marketing activities directed at establishing, developing, and maintaining successful relational exchanges. (Morgan and Hunt, 1994, p. 22)

Attachment - Genuine feelings toward the other company or that company’s employees. With respect to third-party logistics arrangements, attachment can be enhanced if buyers and sellers have similar corporate cultures

Communication - The formal as well as informal sharing of meaningful and timely information between firms.

Dependence - Refers to a situation in which - (1) A relationship provides greater benefits than either party could achieve alone; or (2) Relationship outcomes are greater than those that can be achieved from other business arrangements

Investment - Resources that are specialized to a particular arrangement, are not easily re-deployable, and would have minimal value in other arrangements.

Reputation - Recognition by other parties of some characteristic or ability, drawn from reliable and consistent performance over time.

Critical Review: ST Logistics –

With regard to relationship marketing outcomes, there are several concepts the article elaborates on. Customer referrals, for instance, have several aspects including whether a customer is willing to become an advocate for a service provider; promote a service provider to others; and defend a service provider from detractors. Customer retention is generally agreed to be less costly than customer acquisition and a common rule of thumb is that it costs five times as much to acquire a new customer as to retain an existing customer. Performance improvements (unlike most other constructs in this paper which are measurable from a user and a provider perspective) in relational exchanges tend to be measured from a buyer (user) perspective. As such, this study adopts a user perspective with respect to performance improvements. Mistakes are virtually unavoidable, particularly in service oriented businesses such as third-party logistics. Satisfactory service recovery is thus cited to be very important in the context of relational exchanges.

The data discussed in this paper are derived from separate surveys of users and providers of third-party logistics services. However, the survey content for the two parties was coordinated in the fact that the surveys had consistent items that differed only with respect to perspective. A total of 388 usable surveys were received from 3PL users. The five most commonly outsourced logistics functions are outbound traffic control (47.2 percent of respondents), inbound traffic control (37.9 percent), carrier negotiating and contracting (30.2 percent), freight consolidation (27.1 percent), and transportation planning/ management (26.0 percent). A total of 31 usable surveys were received from 3PL providers. According to the 3PL providers, the most commonly provided logistics services are product returns (cited by 74 percent of the respondents), outbound traffic control (71 percent), cross docking (65 percent), order fulfilment (61 percent), and inventory management (58 percent).

Comparisons between the two parties indicate that they are in general agreement on the communication construct (a relationship marketing element); moreover, each party has a relatively positive assessment of the other party’s communication abilities. The remaining comparisons point towards a strong disconnect between 3PL users and providers. This disconnect between 3PL users and providers offer a marked contrast to previous research (Murphy and Poist, 2000). The findings also point towards an inverse relationship between a particular party’s assessment of relationship marketing elements and its assessment of relationship marketing outcomes. To this end, while 3PL providers appear to have a more guarded or cautious approach than 3PL users towards relationship marketing elements, providers tend to have a more favourable evaluation of relationship marketing outcomes. Alternatively, although 3PL users are more favourably disposed towards relationship marketing elements, they are more guarded or cautious in terms of relationship marketing outcomes. One limitation of the present research is that the data came from separate surveys of 3PL users and providers; therefore, the 3PL users may not be current customers of the providers and vice-versa. In addition, the findings from the present research potentially represent a ‘best case’ scenario in the sense that the data were based on 3PL arrangements characterized by longer-term, mutually beneficial relationships – two cornerstones of relationship marketing.

Distributing consumer goods in China

(Chen, F.Y.; Goh, M.; Lee, J.; Ou, J.; Sharafali, M.; Teo, C.P.;

Goh, P.G. & Sivanathan, P. 2002)

The paper describes the experience of developing a marketing and strategic planning software tool to enhance third party logistics in

China

. Until 1980’s the Chinese economy operated on an entirely state controlled three-tier rigid distribution system. This changed in 1986 when factories where allowed to sell direct to end users. Most Chinese wholesalers and retailers continue to sell within regions, while only multinationals/JV’s are involved in any kind of national distribution. The article takes the strategic perspective of STA Logistics, one such joint venture.

Replenishment Lead Time – Set of potential customers that can be served from each RDC.

Critical Review: The Role of Networks in Fundamental

To put this article into context, we must understand first that he Chinese market has a number of peculiarities: It is not a homogenous market with the interiors vastly different from the coastal regions, distribution systems must be adopted to suit the region (e.g. In Ulmuqi large shipments are a must as it receives heavy snow in winters and delivery is possible only in summers), informal provincial barriers exist, the number of cities and types of activities that foreign companies can serve and carry out are restricted and two-third of distribution cost comes from product loss due to pilferage and damage.

The problem to be addresses by the SCM tool which the article describes is that given demand forecast over entire country and location of production facilities, STA would like to takeover the task of distribution to end customers. This must be achieved with the three pronged objective of Competitive price, Satisfactory Service Level and Defined Delivery Time Window.

From the modeling perspective the problem is similar to the classical facility location problem. A Mixed Integer programming approach was used to develop the model. The issues that arose while developing the model where the time at which shipment is delivered was a primary concern (It wanted to guarantee its customers a two day delivery window. This would be done by augmenting the current system and placing strategically located RDCs), demand forecasting as demand for 3PL’s changes drastically with inclusion of a new client, customers are charged on a linear basis while costs are mainly non linear (This is true because distribution costs depend on lot sizes, equipment used and service requirement), fixed Cost for new RDC was not available and the RDCs were confined to major cities in which their customers operate (As tithes is where purchasing customers are mainly concentrated)

The various parameters and costs were calculated as follows - Distance Estimation was done through a pre defined formula, with wiggle factor added to the ‘as the crow flies’ distance. Rail Transportation Cost is a sum of dispatch fee = rail freight + arrival fee. Trucking Cost was based on point of origin and distance traveled. Warehouse Cost is annualized fixed cost + average Variable Cost (depends on stock turns, inventory control policy). Service Levels meant to prioritize customers based on demand and provide the top 80% with a two day service time.

In conclusion, the model developed by the authors was an interactive one that helped show the benefit from using a 3PL, through a cost comparison. Thus it was able to meet the customer need and address concerns of the management.

Organizational Change - A Grounded Analysis

(Mohrman, S.A.; Tenkasi, R.V. & Mohrman Jr., A.M. 2002)

The authors study 8 organizations using a grounded-theory approach, examining social networks in the organisation and how they impact the ability to enforce fundamental organizational change. They find that the existence of adaptable and local learning networks is more easily prone to implementing change, whereas a hierarchical change implementation is impending in nature.

Grounded Theory - A systematic generation of theory from data that contains both inductive and deductive thinking. One goal of a GT is to formulate hypotheses based on conceptual ideas. Others may try to verify the hypotheses that are generated by constantly comparing conceptualized data on different levels of abstraction, and these comparisons contain deductive steps. Another goal of a GT is to discover the participants’ main concern and how they continually try to resolve it.[22]

Social Networks - A social network is a map of the relationships between individuals, indicating ways in which they are connected through various social familiarities ranging from casual acquaintance to close familial bonds. The analysis of social networks (called network theory) has emerged as a key technique in modern sociology, anthropology and organizational studies, as well as a popular topic of speculation and study. [23]

External Networks – Those that link the organization or the unit to entities in the organization’s environment.

Cross-level Networks - Networks that span levels of hierarchical authority in the organization or unit; they may or may not also reflect the crossing of systemic levels.