WarnerBros. Entertainment, Inc.: Integrative Learning Project
Thispaper, as part of an integrative learning program (ILP), is based onWarner Bros. Entertainment, Inc. An American entertainment companybased at Burbank, California. The company produces films, music andtelevision entertainment and is one of the biggest movie productionstudios in the world that has stood the test of time and perennialindustry challenges. This paper undertakes an integrative study ofapplying eight key concepts of operations management to theorganizational setting of the company with an ultimate objective ofenhancing the company’s organizational efficiency. The eightconcepts include Quality Assurance, Total Quality Management (TQM),Benchmarking, Inventory Management, Balanced Scorecard, Strategy Map,Six Sigma and Innovation. The paper adopted a systematic approach inwhich each concept was described and its prospects for the companyelucidated in light of the company’s organizational setting.Moreover, the necessary implementation mechanisms are provided foreach of the selected concepts.
KeyWords: WarnerBros, Operations Management, Implementation, Adoption, Strategy
Company Overview and Organizational Setting 2
Key Concepts 4
Quality Assurance 4
Total Quality Management (TQM) 6
The Six Sigma 10
Balanced Scorecard 12
Strategy Map 16
Inventory Management 18
Annotated Bibliography 21
Appendix 1: Warner Bros. Management Structure 37
Appendix 2: Framework for Implementing Sigma Six at Warner Bros 38
Appendix 3: Implementation of Benchmarking at Warner Bros Inc 39
Appendix 4: An Integrative SCM Structure 40
Appendix 5: Business Competency Domains Structure 41
WarnerBros. Entertainment, Inc.: Integrative Learning Project
INTRODUCTIONCompanyOverview and Organizational Setting
WarnerBrothers, popularly known as Warner Bros (WB), is an Americanentertainment company based at Burbank, California that producesfilms, music and television entertainment. The company is one of thebiggest movie production studios in the world that has stood the testof time and perennial industry challenges. The company operations arein the motion picture industry, which in the United States started inthe 1920s. A subsidiary of the Time Warner, Warner Bros came to thelimelight in the midst of a Supreme Court ruling in 1948 thatrequired production and distribution to be independent of operationand management of theaters. The company was able to thrive under suchconditions since it had the required (substantial) capital andinternational networks required to dominate the production anddistribution segment (p. 2). The company has a hierarchical corporatestructure with Alan Horn as the president, a position currently heldby Kevin Tsujihara. This corporate structure is necessary given thenature of decisions that had to be made (with the president havingthe last say on such a decision) in the company just like is the casein the industry. For instance, the president of the production at thecompany relies on four meetings every week with ten productionexecutives at the company to examine scripts for production. Thecompany is faced with several challenges some of which are beyond thebusiness’ control. For instance, the daily operations of thecompany involve gross uncertainty since there is no recipe for ablockbuster. The company relies on a strategy in which out of the20-25 films produced annually, 3–5 were big-budget event movies. Apreliminary SWOT analysis reveals that Warner Bros faces a majorthreat in the disguise of another studio employing a similarstrategy. The business operations of the company are chronologicalstages entailing activities such as selection and “greenlighting”of movies, pre-production, filming, post-production and release.
Thecustomers are majorly school-going students, which explain why mostmovies are often released during the summer. The company alsoproduces assorted adult content sold in the United States and beyond.Today, Warner Bros is “one of the most creative, flexible,innovative, diverse global entertainment businesses” (Warner Bros,2015, n.p). One of the most effective mechanisms through which thecompany has managed to survive stiff competition in the industry andregistered massive progress in the past few years is growth throughnew and emerging technologies. Moreover, the company has a detailedset of organizational culture anchored on values such as hard work,honest and team commitment. The progressive employee values andmanagerial capabilities are evident in the company’s vast library.According to Warner Bros (2015), the company’s library is “one ofthe most prestigious and valuable in the world” containing over 75,000 hours of programming with several thousands of televisionepisodes. The combination of a motivated workforce, technologicalinnovation and strategic managerial strategies has enabled thecompany to be more profitable even in times of economic slump. At theend of the last summer, the company grossed over $4.73 billion inglobal box office surpassing the international ceiling of $3 billion,making it the first ever studio to achieve this milestone (WarnerBros, 2015, n.p).
Ibelong to the creative team at Warner Bros. Entertainment, Inc. wheretogether with a team of other artists, Aim responsible for writingand scrutinizing scripts that are ultimately transformed into movies.As a gifted analyst, my greatest contribution to the company is inthe intensive and extensive research of scripts since the biggestchallenge in the motion picture industry is that there is no recipefor a blockbuster. Due to this challenge, production studios have toengage constantly in research and development (R&D), facilitateinnovation and re-inventions and build on past successes in a bid toproduce hits. The industry in which Warner Bros. operates is verydynamic and characterized by cutthroat competition. The dailyactivities at the company therefore, involve benchmarking, qualityassurance procedures, innovation, six sigma and inventory managementin the distribution framework. The following section examines theintegration of key concepts of operations management in the companysetting.
Qualityis the first key concept of operations management that applies toWarner Bros. This is because quality has a big impact on the ratingof movies and entertainment programs and ultimately, on the successof the company. Quality management, as an aspect of operationsmanagement, is an important strategic management instrument inachieving business success and as a tool of competition in industriescharacterized by knowledgeable consumers and globalization(Schniederjans& Schniederjans, 2015, p. 1).It is important to note at this point that the design, cost andcustomer satisfaction are the three most important concepts ofquality (ASQ, 2015, n.p), which ought to be adhered to by the WarnerBros. quality assurance team. Quality in most instances iscustomer-derived in the sense that it starts with the customerexperience with a company’s product that might lead to customersatisfaction. Therefore, it is very important for companies to manageand control the quality of their products if they are to besuccessful, especially in the long term. The control and managementof quality in the motion picture industry is a situation that callsfor a delicate balance between standard metrics and allowing forpotential surprise elements that make for ripples in the industry.Owing to this challenge, it is critical for companies not just in themotion picture industry but in all other industries to implement aquality assurance program (QAP) that will assess and guarantee thequality of products.
Qualityassurance refers to all the policies and systematic activities ofevaluating whether the products and services being developed meet thespecified standards (Business Dictionary, 2015, n.p). Existingempirical evidence is replete with the mechanisms through whichquality of products influences customer satisfaction and businesssuccess, a vindication for the tight quality assurance standards atWarner Bros. Entertainment, Inc. After conducting an extensiveliterature review on the impacts of quality on customer loyalty,Jahanshaniet al. (2014) concluded that better quality of products creates andincreases customer satisfaction and customer loyalty (p. 259). Fromempirical studies, it is important for companies to have a robustquality assurance program in order to have a competitive edge in themarket, achieve customer loyalty and ultimately business survival.Since the nature of the business activities of the company relies onthe quality of its human resource, quality assurance policies at thecompany are most evident during recruitment where the company oftenseeks to recruit the best and brightest talent offered by theindustry (WB Careers, 2015, n.p).The emphasis on quality managementpractices at the company is informed by the fact that there exists apositive correlation between quality management and organizationalperformance. Nevertheless, where there is no direct relationshipbetween quality management and quality control, studies have shownthat quality assurance has positive significant spillover effectssuch as innovation. For instance, Schniederjans & Schniederjans(2015) investigated the link between quality management andinnovation and concluded that “quality management increases thelikelihood of organizational innovation through rapid sharing anddissemination of ideas within either a single or between multipleorganizations” (p. 17). In the case of Warner Bros.,it is importantto ensure quality since not only does it result in acceptability ofthe products and customer loyalty but results in innovation duringthe procedural content creation. Essentially, quality comes in handyas an essential concept of operations management at the company sinceit leads to customer satisfaction and brand loyalty and additionallyresults in innovative content creation. Nevertheless, guaranteeingthe quality of the final products ensures that the company maintainsa competitive edge over industry competitors such as Fox GroupEntertainment, Inc. and NBC.
TotalQuality Management (TQM)
Totalquality management (TQM) is the second concept most applicable toWarner Bros. This concept is almost similar to quality assurance onlythat it implies a continuous process of improvement in the quality ofproducts offered by the organization. According to the BusinessDictionary (2015), total quality management is a “holistic approachto long-term success that views continuous improvement in all aspectsof an organization as a process and not as a short-term goal.”Another dimension of this concept of operations management is that itrelies heavily on onthe feedback mechanism, which in mostorganizations, necessitates the creation of a robust monitoring andevaluation (M&E) team. The greatest significance of TQM to WarnerBros. is that as a concept of operations management, it entailsbuilding quality into products and practices, which are what thestages of movie productions at Warner Bros., can be contextualized.TQM is important since it enables organizations to maintain a highlevel of quality in all the production stages and the ultimateproduct outcome. According to Richards (2012), TQM is a significantconcept in strategic business management because it “alwaysrequires the company to check to make sure that product or service isat the standard that both the company and customer wants ismaintained” (p. 37). This organizational concept is applicable atWarner Bros., especially in its organizational culture and practices.For instance, according to the company website, the company“focuses on maximizing current and next-generation distributionscenarios to make the Studio’s content available to audiencesthrough as many channels, platforms and devices as possible. WBHE isalso charged with harnessing the benefits of emerging technologies,as well as managing the risks these technologies pose to the economicvalue of the content” (Warner Bros., 2015, n.p).This is theclearest indication of practices related to TQM as the company has aculture of broadening its distribution network, audience reach, useof technology and sustainability, aspects that collectively work toensure that the quality of the company products is always improved.As evidenced by the comprehensive approach to quality management byWarner Bros, TQM applies to the company setting since it is “atotal look at the quality of the organization” (Richards, 2012, p.41).
TQMcan also be employed as a strategic management tool since itencompasses ensuring sustainability of high quality in alldepartments and processes of an organization. Conceptually, TQM hasseveral dimensions that include ensuring supervision so thatindividuals perform to the best of their abilities, institutingtraining and development programs for employees, understandingchanging needs of society and using cost-effective techniques forproduction (Business Dictionary, 2015, n.p).TQM differs from qualityassurance in that the latter involves evaluating products against apredetermined set of standards while TQM involves a continuousimprovement for which there is no comparative ceiling. For a companylike Warner Bros, which operates in an ever-dynamic industry, it isimportant that TQM is used as an operating element in securing thecompany’s future. In a study investigating the significance of TQMin enhancing business competitiveness, (Herzalla et al, 2014)concluded that for a business to be successful in an industrycharacterized by competition and uncertainty, “managersmust preserve successful TQM implementation, the reduction ofcustomer complaints and must identify customer’s requirements”(p. 16).The Motion Picture Industry faces a host of challenges mostof which are inherent in the abstract and subjective nature ofmoviegoers. More aptly, the greatest challenge in the industry isdeveloping a discernible strategy of producing a blockbuster sincethere is no criterion for such an endeavor. In such an environment,much as every step involves massive risk taking, it is crucial thatTQM is used to ensure that every aspect of the movie productionprocess is of the highest quality possible. Moreover, TQM isapplicable in the daily activities of the company where the companyand industry records are kept concerning the production processes anddetails of blockbusters and other big hits to ensure that currentactivities exceed these levels. Nevertheless, the applicability ofTQM to Warner Bros. is viable given its global presence since the useof TQM has been found to provide businesses with significant growthadvantages over competitors in local and international markets(Richards, 2012, p. 36).
Themotion picture industry is characterized by uncertainty and it is noteasy to predict the kind of movie or genre that the customers willlike and whether trends are likely to change. Competent companies insuch an industry like Warner Bros. need to incorporate a culture ofinnovation in their organizational practices so that it gives them anaspect of product differentiation. More aptly, the organizationalsetting of Warner Bros, together with the nature of the motionpicture industry, requires an innovative culture as an operatingelement of all their production processes. This is necessary becauseinnovation is a complex concept of operations management thatinvolves diffusion and translation of knowledge and production ofmodified products or otherwise, it entails the development of newproduction methods (Bigliardi, 2013, p. 245-256).Additionally,innovation, especially when accompanied by technology can open newbusiness fronts for the company. Venturing into completely new linesof operation becomes viable with innovation since technologicalinnovation has always been the best strategy in instances wherebusiness segmentation and managerial competencies seem to besaturated, it is a business strategy designed to create new frontsand deliver marginal proceeds (Jemielniak& Marks, 2012, n.p).Given that Warner Bros. is already contemplating “how to monetize”the upsurge in consumption of video entertainment on laptops, phonesand tablets, the company can resort to extensive research anddevelopment (R&D) especially as a market leader and find ways inwhich they can provide their contents in phones and tablets.Moreover, the constituted innovation and development team will bebetter positioned to find mechanisms to counter the disruptivechallenges that impinge on the television and radio broadcastingsub-sector.
Innovationis an important concept of operations management that applies toWarner Bros. especially after quality assurance and TQM sinceinnovation is a game-changer that relies on the unique abilities ofan organization. Since 2008, the New Line Cinema, a subsidiary of thecompany, has been tasked with coordinating the development, marketingand distribution as well as the business affairs of the company.Given that New Line Cinema has been very effective in providingsomewhat “outsourced” services to the company, the subsidiary isbetter positioned to create a research and development team that willspearhead the innovation initiatives of the company. In order toimplement innovation at the company, New Line Cinema will be criticalin evaluating the required capital and human resources. Moreover,given the hierarchical corporate structure of the company (seeAppendix 1), the chief creative officer, Geoff Johns, will facilitatethe activities of the creative innovation and R&D team andprovide the necessary link to the Warner Bros. executives tofacilitate feedback mechanisms. A possible problem of implementingtechnological innovation at Warner Bros. is that the procedure isexpensive. However, given that the company is a subsidiary of theTime Warner, it is likely to benefit from the technologicalspillovers resulting from the several technological activities theparent company conducts in the multifaceted motion picture industry.In a nutshell, innovation is a key concept of operations managementthat is applicable at Warner Bros. especially due to the perceivedbenefits that it leads to, technological advances complemented byfinancial innovation creates long-term business success (Laeven etal., 2015, p. 1-24). The implementation process will be successful asit will be facilitated by the company structures and additionalfunding may be obtained from the parent company, the Warner Times.
TheSix Sigma is a concept that applies to Warner Bros. This concept isessentially a strategy that seeks to increase the employee engagementin organizational tasks to achieve the organizational goals andultimately result in customer satisfaction. The nature of theindustry in which the company exists requires that for a company tobe successful, it has to acquire an in-depth understanding ofcustomers and a robust scrutiny of market trends. The reason thisstrategy will increase growth prospects of the company is that it isa “comprehensive and flexible system for achieving, sustaining andmaximizing business success (Psychogions et al., 2012, p. 122-139).Six Sigma is uniquely driven by close understanding of customerneeds, disciplined use of facts, data, and statistical analysis, anddiligent attention to managing, improving, and reinventing businessprocesses” (Meredith& Shafer, 2013, p. 129). The Six Sigma, inits advocating for engagement of employees at setting organizationalgoals, is in itself a motivating employee and goes a long way inenhancing employee job satisfaction. The strategy applies to WarnerBros. Inc. especially together with the total quality management(TQM) since there is a need to sustain quality improvement in thecompany products. While analyzing the improvement procedureprescribed by the strategy, DeMast & Lokkerbol (2012)observed, “besidesits role structure and focus on metrics, Six Sigma’s structuredimprovement procedure is seen as a novel and effective contributionto quality management” (p. 1). The emphasis on quality managementfor the products of Warner Bros. makes the Six Sigma both a necessaryand sufficient condition for its significance in enhancing the roleof employee engagement in quality improvement and sustenance ofperformance standards, a role that complements that played by qualityassurance and TQM.
Theadoption of the Six Sigma by individual organizations has been seenby many as a process that results in more costs than benefits.However, new empirical evidence has emerged confirming that the useof this technique actually results in more growth prospects tocompanies, especially in the long term. The new findings in empiricalstudies further endear the applicability of Six Sigma by Warner Bros.Entertainment, Inc. Swink & Jacobs (2012) conducted a rigorousinvestigation into the operating performance impacts and contextualdrivers of success in Six Sigma adoption. The overall resultsespoused that the benefits of Six Sigma adoption by organizationsexceed the associated costs and investments and that companies thatadopt this approach usually have an increase in return on assets(ROA) of at least 0.2 to 0.3% annually (p. 450).The Six Sigmastrategy, apart from the direct expected benefit that it occasions inorganizations, can also be applied to Warner Bros as a tool forquality management. According to (Psychogioset al., 2012),a planned adoption of the Six Sigma as a concept of operationalmanagement is beneficial since it results in “customersatisfaction, employee involvement and quality-driven organizationalprocesses” (p. 135).
Theimplementation of the Six Sigma at Warner Bros will be successful ifthe reward systems, which form a fundamental organizationalinfrastructure of the company, are employed in motivating the teamtasked with the adoption of the Six Sigma strategy as well asundertaking employee involvement in organizational activities.According to Psychogioset al (2012), the implementation mechanisms of Sigma Six (L6σ)“should provide support for the integration of L6σ with a varietyof management practices and systems likeIT systems, performance andreward management (bonus targets for L6σ project team members),training and development of employees towards L6σ concepts as wellas prioritization towards project management” (p. 135).Therefore,the implementation of Sigma Six at Warner Bros., which holds moregrowth prospects for the company, will necessitate a realignment ofthe organizational goals and management decisions. Nevertheless,since this strategy emphasizes on the role of employees inorganizational success, it is bound to create business success sinceemployees (people) form one of the six core elements of businessprocess management along with governance, strategic alignment,methods, information technology and culture (Rosemann & vomBrocke, 2015, p. 111).
Thisconcept applies to Warner Bros. since the company is growingexponentially therefore, requires a framework to evaluate thesustainability of its growth in light of its future prospects in theindustry. Muthuraman and Jayaraman (2014, p. 2) opine that “BSC canbe used as a change agent, an instrument of strategy design anddeployment, as a system for communicating strategy across theorganization, a methodology for integrating TQM efforts, a mechanismfor unifying organizational work by setting up targets and goals andso on.”The applicability of this concept to Warner Bros. is crucialbecause it takes into account the past and present position of thecompany in the evaluation of the sustainability of businessperformance. The use of the balanced scorecard is recommendablebecause it results in a more calculated approach to organizationalmanagement and provides managers with vital prerequisites of complexdecision-making processes. This approach is further suitable for thecompany because the balanced scorecard is essentially “anaccounting report that includes the firm’s critical success factorsin four areas: financial performance, customer satisfaction, internalprocesses, and learning and growth” (Blocher et al., 2013).
Theapplication of a balanced scorecard for Warner Bros. would beadvantageous in the sense that it will provide the organization witha tool to track the production process of movies from script writingand buying to post filming activities. Additionally, the balancedscorecard will enable the company to determine the most appropriatecompensation for the company writers and creative team who in thepast few years have frequently gone on strike over pay disputes andmore importantly, the tool will provide the company management with ameans to achieve the critical success factors. As a tool that majorlymeasures organizational performance and by extension, employeeperformance, the application of the balanced scorecard is likely toincrease the marginal products of labor for the company. This is sobecause “when the scorecard is adopted, employees become aware thattheir performance will be judged based on these measures and targets”(Werner & Xu, 2012, p. 92). The aspect of the balanced scorecard(in enabling evaluation of factor inputs in the production process oforganizations) makes it a critical instrument for Warner Bros, acompany in a challenging and very competitive industry. More aptly,by enabling the company to achieve its critical success factors, thebalanced scorecard gives the company a competitive edge in its lineof operation while enabling it to maintain high-performancestandards.
Accordingto Gomes & Romão (2014), the balanced scorecard is advantageousin an organizational setting since it enables translation of astrategy into an operational term and links the different functionalareas of an organization. Additionally, the balanced scorecard linksperformance measures with business strategies, highlights thesignificance of internal organizational process in achieving results,it facilitates organizational communication and because it can beapplied to monitor operational efficiency (p. 4). The adoption of thebalanced scorecard and its subsequent use at Warner Bros will involvethe creation of an information management system that provides thefinancial and nonfinancial information concerning the performance ofthe company. Moreover, it will be critical for the management tointroduce individual employee tracking devices that will enable themapping of employee input into the marginal productivity of thecompany. Since the balanced scorecard greatly entails evaluatingemployee performance, it will be necessary that the management trainsemployees on concepts relating to its usage and additionally employhuman resource best practices in the industry in order to smooth anyripples during the organizational change process.
Benchmarkingis a concept of operations management that is aptly applicable toWarner Bros. Entertainment, Inc. This application of this conceptimplies the evaluation of the quality of a business’ products andstrategies in light of the industry standards. Benchmarking isimportant in organizations since it reveals the areas of anorganization that require improvements and provides necessaryinformation on how the identified improvements can be implemented(Dembowski, 2013, p. 6-20). Given that the company operates in themotion picture industry where the success or failure of oneproduction studio can affect the activities of other studiossignificantly, it is important to employ benchmarking in order to beat par with industry trends. In the case of Warner Bros, benchmarkingis likely to succeed since “it is viewed as a continuous process ofevaluation of products, services, processes and performance ofcompetitors in order to obtain competitive advantage, benchmarkingalso involves knowledge of all elements occurring when implementingin practice” (Cruceru et al., 2013, p. 6).The application of thisconcept to the management practices at the company is likely toincrease its competitiveness since the adoption of this concept as astrategy is a challenge for managers at all levels of theorganization to become knowledgeable and analyze the strategiesemployed by competitors in the motion picture industry.
Otherthan as a competitive strategy, benchmarking is useful in comparingthe production processes with the industry ideals, comparing theproducts of two organizations, identification of industry bestpractices to replicate and projecting industry trends to adjustmanagement policies and practices (Meredith& Shafer, 2013, p.133). It is critical that when this concept is applied to thecompany, it follows three distinct steps as prescribed by strategicmanagement best practices. First, a comparison ought to be conductedbetween the main stages of production (pre-filming, filming and postfilming activities). Second, the collection of data is undertaken andthis leads to the third step that involves using the collectedinformation to implement desired changes. The systematic adoption ofbenchmarking in an organization makes it an effective strategy toidentify performance areas in business organizations. Whenimplemented this way, benchmarking allows a business to evaluate andimprove its performance, business processes, increase market shareand profitability. In the case of Warner Bros., an integratedbenchmarking which includes internal benchmarking, productbenchmarking, process benchmarking, generic benchmarking andstrategic benchmarking will be crucial especially given that thestages of movie production and the ultimate product are sointricately related. The implementation of benchmarking at WarnerBros. especially at a time when there is stiff competition in theAmerican entertainment industry will be beneficial because“competitors who focus on benchmarking implementation in managementand marketing activities of the organization will achieve increasedperformance and competitiveness in terms of comparable to the bestcompetitors of time” (Cruceru, 2013, p. 9).
Theimplementation of benchmarking at the company will be spearheaded byJohn Rood, the Warner Bros executive in charge of sales, marketingand business development since the identification of the necessaryperformance areas and development of viable business strategies fallunder his docket. The implementation process will involve surveyingthe production processes and techniques employed by Fox EntertainmentGroup, Paramount Pictures, Disney, Amazon and Redbox. For theeffective implementation and evaluation of the concept, the R&Dteam proposed in the adoption of innovation will be tasked with thismilestone. A more comprehensive and systematic procedure ofimplementing benchmarking at Warner Bros. is more appealing (seeAppendix 3).
Thisconcept of operational management applies to Warner Bros. as astrategic dimension of the balanced scorecard and is analyzedseparately since it focuses on the details of the core businesscompetencies and strategies. This concept is significant toorganizations like Warner Bros. because it serves as an effectivecommunication mechanism of business objectives to employees.According to Meredith & Shafer (2013), a strategy map isimportant for business organizations since it is a “tool that helpsthem better monitor important details of about their strategicbusiness processes, thereby enhancing their employees’understanding of the strategy interactions, which in turn facilitatesimplementing the business strategy” (p. 99).Additionally, thispaper considers the strategy map as distinct from the balancedscorecard because it facilitates the integration of the keyobjectives of the organization into the four dimensions of theBalanced Scorecard, which gives it an instrumental rather than asubstantive conception. The applicability of this concept to WarnerBros. is further justified by the fact that it works to reconcile theoperating activities of the different business units to realize acommon objective. Moreover, “it describes in a clear manner, theprocess of creating values in an organization by indicating a numberof cause and effect relationships between the four perspectives ofthe business and the goals adopted within these perspectives”(Markiewiez, 2013, p. 161-162).
Someof the recent occurrences at Warner Bros. Entertainment, Inc. thatmake this strategy applicable is the recent strike by writers overpay disputes and a perceived lack of a link between the creative teamand top management. If applied to the organizational setting ofWarner Bros., this concept will work because its four tenets willaddress the managerial shortfalls at the organization. The fourperspectives include the learning and growing perspective, internalbusiness perspective, customer perspective and the financialperspective. The strategy map is an important prerequisite fororganizations as it directs all efforts towards the identifiedorganizational goal, which is usually placed at the top of a strategymap and provides conceptual frameworks espousing the mechanismsthrough which the goal will be achieved. The application of thestrategy map at Warner Bros. will enable the managers to analyze andreport progress of ongoing projects in order to meet theorganizational mission and vision. A simple business strategy tool,the strategy map is crucial to the success of organizations as itenables managers to reason logically concerning the constructs oftheir respective strategies, and especially how these strategiesinteract with the broader organizational objectives. The role of thestrategy map as a deliberate and effective communication of anorganization’s strategic goals to employees cannot be mistaken. Itserves to provide employees with the required knowledge oforganizational goals, which enables them to reciprocate by puttingincommensurate effort to achieve the objectives. According to (Gomeset al., 2013), a strategic map is committed to strategic alignment,communication and monitoring of strategy execution at all levels ofthe organization” (p. 1). The extensive usage of a strategy map andits dimensions that lead to the cohesiveness of departmentalstrategies that makes it applicable to Warner Bros.,even more.Additionally, the implementation of this strategy is less costly andtakes a little time especially if the company manages to have theBalanced Scorecard first implemented. Implementing this concept willbegin with a meeting of departmental heads at the company (SeeAppendix 1) who will outline their departmental strategies. Second,he president of DC entertainment, Dianne Nelson will coordinate therespective departmental goals to find out the mechanisms throughwhich they all, individually and collectively lead to the realizationof organizational goals. Finally, the strategic map will be craftedand its implications communicated both conceptually and through therestructuring of the organizational infrastructure.
Thisis the final concept that applies to Warner Bros. Entertainment, Inc.For a company whose activities involve the production of severalmovies and television episodes, there is need to take stock of thecameras, costumes, transport infrastructure and other necessaryinventory. Inventory management is very important for organizationssince maintaining the required inventory level leads to anuninterrupted production process therefore, operational efficiencyespecially in the organizations’ SCM (Ryu et al., 2013, p.316-326). The application of inventory management systems at WarnerBros will improve organizational performance by enabling thedepartmental managers to have effective control and planning ofitems. This concept is aptly applicable to the company becausemonitoring of stock is not only a necessary condition but also asufficient condition for companies that have changing product lifecycles. Moreover, Warner Bros. is an industry leader with some of thelatest information technology systems and this can facilitate theadoption of inventory management since the use of technology ininventory management reduces inaccuracies in inventories (Fan et al.,2014, p. 659-655). In order to conceive the applicability ofinventory management systems at a company like Warner Bros., it isimportant to recognize that inventories encompass raw materials,component parts, work-in-progress and finished goods. This impliesthat inventory management systems can improve the productivity of thecompany by enabling the release of new movies and episodes vis-à-visthe ongoing production work since managers’ decision-makingprocesses are more effective with supplementary objective techniques(Katsikopoulos & Gingerenzer, 2013, p. 3-7).
Accordingto Meredith & Shafer (2013), inventory management preventsrotational delays in the supply chain management, creates space forfurther production and enables organizations to detect defectiveproducts in a manner that enhances accountability (p. 176). Accordingto (Gong et al., 2014 Stadtler,2015, p.3-28),inventory management is a key business strategy since it can reducethe nominal production costs and provide organizations withsignificant muscle in the pricing of their products (p. 2058). Theessence of this statement for Warner Bros. is that inventorymanagement will reduce the perennial risk in the industry, whichconcerns the uncertainty in returns grossed by movies worldwide. Theimplementation of this strategy at the company will require arealignment of the organizational structure to create a departmentunder the supervision of Diane Nelson (see Appendix 1) to oversee theinventory management at the company. This process will be fast andcheaper since the company already has some of the latest informationtechnology systems in the industry. The resulting SCM that will beoccasioned by these changes will be integrative and functional (SeeAppendix 4).
WarnerBros. Entertainment, Inc. is a resourceful company with a flexiblecorporate structure. The respective departmental managers willfacilitate the implementation of the proposed eight concepts. Asubsidiary of the Times Warner, the company is bound to benefitgreatly from the research and technological spillovers from theparent company and harness such proceeds to implement the proposedconcepts. Moreover, the concepts are so intricately related such thatimplementation of one concept sets up a platform for the others. Theresulting managerial framework will lay emphasis on key businessconcepts in a functional integrative model (See Appendix 5).
Walker,P. H., Seuring, P. S., Sarkis, P. J., & Klassen, P. R. (2014).Sustainable operations management: recent trends and futuredirections,International Journal of Operations & Production Management,34(5)<http://www.emeraldinsight.com/doi/full/10.1108/IJOPM-12-2013-0557>Theauthors, who are all professors at distinguished institutions ofhigher learning, undertake an extensive literature review completewith content analysis of empirical works on operations managementtrends in the past 20 years. Using a sequential and systematicapproach, the researchers trace the evolution of operationsmanagement practices elucidating the landmark practices that shapedthe practice. After analyzing the papers appearing inInternationalJournal of Operations and Production Management since 2011, theirfindings show that current practices in operations management areincreasingly informed by concerns of sustainability. However, thestudy concludes that studies on economic stability are rare andmostly exploit the gap between supply chain management and firmpractice.
Jahanshani,A. A., Hajizadeh, G. M. A., Mirdhamadi, S. A., Nawaser, K., &Khaksar, S. M. S. (2014). Study the effects of customer service andproduct quality on customer satisfaction and loyalty. InternationalJournal of Humanities and Social Science Vol. 1 No. 7(SpecialIssue)<http://elibrary.kiu.ac.ug:8080/jspui/bitstream/1/88/1/Study%20the%20Effects%20of%20Customer%20Service%20and%20Product%20Quality%20on%20Customer%20Satisfaction%20and%20Loyalty.pdf>Theresearchers of this paper, who include seasoned researchers atinstitutions of higher learning employ a qualitative research designto investigate the mechanisms through which customer service andproduct quality influences customer satisfaction and customerloyalty. The study investigates the theories on customer servicequality and product quality. Using a well-structured questionnaireconsisting of 53 questions, the researchers collect information fromthe automotive industry. Using a linear regression analysis and ANOVAto analyze the obtained data, the researchers find that there is apositive correlation between the identified constructs of service andproduct quality and customer satisfaction and loyalty. Moreover, theresearchers espouse that the mechanics used to arrive at theconclusions of the study can enable generalization of their findingsto other industries other than the automotive industry.
Schniederjans,D., & Schniederjans, M. (2015) Quality management and innovation:new insights on a structural contingency framework, InternationalJournal of Quality Innovation,1(1),1-20<http://www.jqualityinnovation.com/content/pdf/s40887-015-0004-8.pdf>Theoverriding objective of this paper was to investigate the nature ofthe relationship between technical quality management and innovation.In order to achieve this objective, the researchers undertook asystematic research review (SRR) covering selected empirical works oninnovation, quality management practices and assessed the structuralcontingency factors. The paper used a survey analysis to testempirically the hypotheses of the study generated from the literaturereview. After employing the partial least squares [PLS] (65) foranalyzing 58 responses, they found out that technical and socialquality management enhances innovation. Nevertheless, an interestingoutcome of this study is to the effect that managerial control overemployees hinders innovation.
Herzallah,A. M, Gutiérrez-Gutiérrez, L., & Munoz Rosas, J. F. (2014).Total quality management practices, competitive strategies andfinancial performance: the case of the Palestinian industrial SMEs.TotalQuality Management & Business Excellence,25(5-6),635-649<http://digibug.ugr.es/bitstream/10481/35847/1/TQM%26BE%202014.pdf>Theauthors, all researchers at University of Granada, Spain,investigated the underlying relationship between Total QualityManagement (TQM) practices and firm performance in the context of thePalestinian economy. Using a qualitative study design to achievetheir objective, the researchers employed a questionnaire completewith the measuring tools developed by Saraph et al. (1989) and Kaynak& Hartley (2008) to obtain information from 202 participants inthe Palestinian SMEs. Moreover, they employed a structural equationmodel to test the expected relationships between the study’sresponse variable and the independent variables. The outcomes of theempirical study showed that Total Quality Management (TQM) practiceshave a positive correlation with a firm’s performance through thecompetitive and financial strategies.
Bigliardi,B. (2013). The effect of innovation on financial performance: Aresearch study involving SMEs, Innovation:Management Policy & Practice,15(2):245-256<http://www.tandfonline.com/doi/pdf/10.5172/impp.2013.15.2.245>Thisarticle sought to espouse the impacts of innovation on the financialperformance of SMEs as well as the impact of the firm size oninnovation. Using a mixed method approach, the researcher collecteddata from 98 SMEs operating in the Italian food machinery industry.Using a regression analysis to conduct data analysis, he found outthat innovation is positively related to the financial performance offirms. Moreover, the study established the mechanisms thatfacilitated this positive relationship. First, innovation worked toincrease customer satisfaction and second, it enabled productdifferentiation, which gave the businesses a competitive edge in theindustry.
Richards,J. (2012). Total Quality Management, BusinessManagement & Strategy,3 (2)36-42<http://www.macrothink.org/journal/index.php/bms/article/view/2910/2438>Theauthor, a researcher at Fairmont State University, traces the originsand evolution of total quality management (TQM) and the currentpractices to understand how the practice has changed governmentpractices and approach to delivering services. The paper adopts theinverted pyramid structure by first studying the implementation ofTQM at the firm level and ascertaining its micro-level impacts on theproduct quality before proceeding to augment for the entire economy.Different from most studies investigating the applicability of TQM,the author, in this article, opts to study the use of this concept ofoperations management as a deliberate strategy by firms to gain acompetitive edge in their respective industries. The paper concludesthat TQM indeed gives firms a significant business advantage overtheir competitors. Moreover, the paper found out that it was as muchimportant to restructure the management structure of organizationsduring the implementation of TQM.
Jemielniak,D., & Marks, A, (2012) Managing Dynamic Technology-OrientedBusinesses: High-TechOrganizations<http://s1.downloadmienphi.net/file/downloadfile6/148/1382172.pdf>Jemielniak& Marks (2012) is essentially a case-study approach tocomprehending the changes that technology has occasioned in businesspractice management. The study is informed by the growing researchinterest in understanding how the contemporary high-tech workenvironment differs from the traditional organizational settings. Inorder to test their hypotheses, the authors use studies (most ofwhich are published between 2000 and 2012) on technology and itsperceived impacts on business management to espouse the mechanicsthrough which technology influences business operations especiallythrough its influence on the conventional organizationalinfrastructure. In a nutshell, the authors present cautiouslyselected empirical works in a sequential and structured manner thatshows how technology has not only changed business performance andoperations but also the business professionals.
DeMast, J., & Lokkerbol, J. (2012), An analysis of the Six SigmaDMAIC method from the perspective of problem-solvingInternationalJournal of Production Economics,139(2),604-614.<http://ibisuva.nl/assets/publicaties/artikelen/2012-demast-analysis.pdf>Astudy focusing on the use of the Six Sigma concept as a strategy forproblem-solving, the researchers are more determined to analyze thestrategy especially its methodology of DMAIC (Define, Measure,Analyze, Improve and Control).The paper adopts four key tenets of theSix Sigma concept as prescribed by De Koning & De Mast (2006) toaid in the analysis of DMAIC. The study explores general and domainspecificity and eventually finds out that the Six Sigma’sproblem-solving methodology gives it a significant relevance instrategic business management. The most significant contribution ofthis paper to the current study is that it found out that the SixSigma improves organizational performance through mathematicalanalysis (parametric design), experience (ready-made solutionschemas) and boosting creativity (through brainstorming).
Swink,M., & Jacobs, B. W. (2012). Six Sigma adoption: Operatingperformance impacts and contextual drivers of success. Journalof Operations Management,30(6),437-453.<http://www.researchgate.net/profile/Morgan_Swink/publication/257105440_Six_Sigma_adoption_Operating_performance_impacts_and_contextual_drivers_of_success/links/004635304d0d7cfcab000000.pdf>Thisstudy sought to investigate the adoption of the Six Sigma concept asa strategy of business process management. More aptly, theresearchers decided to investigate the influence of implementing thisstrategy on the operational performance of businesses and elucidatethe contextual drivers of growth in such circumstances. To achievethis milestone, the researchers use an event study methodology tocompare the financial data of 200 firms. It is important to note thatin this study, the 200 firms were construed as treatments against acontrol group of firms that did not adopt the Six Sigma strategy. Thespecific performance metric used to assess marginal effect ofadopting the strategy was the return on assets (ROA) ratio. Theresults of the study revealed that the firms that adopted thestrategy performed much better than the control group. Theresearchers concluded that there is a significant correlation betweenadoption of Six Sigma and financial performance of organizations.
Gomes,J., & Romão, M (2014) Advantages and limitations of performancemeasurement tools: the balancedscorecard<http://www.researchgate.net/profile/Jorge_Gomes3/publication/260479716_ADVANTAGES_AND_LIMITATIONS_OF_PERFORMANCE_MEASUREMENT_TOOLS_THE_BALANCED_SCORECARD/links/0046353163c7e6c1a6000000.pdf>Theauthors, having assessed the complexity of contemporary businessesmanagement especially with intense competition that has madebusinesses want to operate much more efficiently, decided to assessthe competency of the Balanced Scorecard as an instrument used togauge business performance.The paper proceeds to highlight theperceived advantages and limitations of the Balanced Scorecard as amanagerial performance metric especially from empirical studiesinvestigating the tools of evaluating business efficiency. Amongother merits, the study ascertained that the Balanced Scorecardenables the transformation of strategy to operational dimensions andthat it is a performance metric directly linked to organizationalstrategy. However, the study also revealed that as advantageous asthe Balanced Scorecard is, it leads to flaws in the cause-effectrelationship during performance mapping.
Gomes,J., Romão, M., & Caldeira, M. (2013). Linking Benefits toBalanced Scorecard Strategy Map. In Advancesin Information Systems and Technologies(pp. 357-369). Springer BerlinHeidelberg.<http://www.researchgate.net/profile/Jorge_Gomes3/publication/235960206_Linking_Benefits_to_Balanced_Scorecard_Strategy_Map/links/0c960514c9bbc1fa79000000.pdf>Comingjust before Gomes & Romao (2014), this specific paper sought toinvestigate the perceived relationship between the elements of aBalanced Scorecard and management of business performance. Theauthors were more preoccupied with developing an integrativediscernible investment criterion encompassing the strategy map and aBalanced Scorecard that will enable projection of foreseen benefits.In order to develop this framework, the study uses the results of acase study to illustrate how a strategy map can be integrated into aBenefits Dependency Network (BDN). After coming up with a criterion,the researchers observe that expected contribution of the model willresult in investments effectiveness. Moreover, the study concludedthat a reliable criterion of predetermined investments returns willboost investor confidence.
Psychogios,A. G., Atanasovski, J., & Tsironis, L. K. (2012) Lean Six Sigmain a service context: a multi-factor application approach in thetelecommunications industry. InternationalJournal of Quality & Reliability Management,29(1),122-139.<http://www.researchgate.net/profile/Loukas_Tsironis/publication/235261840_Lean_Six_Sigma_in_a_service_context_A_multi-factor_application_approach_in_the_telecommunications_industry/links/54e5bee50cf2cd2e028b2eb7.pdf>Theprimary intention of Psychogios, Atanasovski & Tsironis (2012)was to investigate the intervening factors of adopting the Lean SixSigma in the service industry. To achieve this milestone, theresearchers adopted a case study of service-based firms in thetelecommunications industry to enable them to investigate thecritical success factors that impinge on the adoption of thisstrategy. Using a qualitative research methodology, the researchersanalyzed the financial documents of the selected companies theirquality assurance policies and conducted interviews with strategiccompany managers. The researchers found out that the implementationof the strategy in the organizations was influenced by a variety offactors such as customer satisfaction, quality-driven organizationalfactors and the support and IT systems. However, the applicability ofthese findings is limited by the fact that in the study, only the topmanagers were interviewed.
Laeven,L., Levine, R., & Michalopoulos, S. (2015). Financial innovationand endogenous growth. Journalof Financial Intermediation,24(1),1-24.http://faculty.haas.berkeley.edu/ross_levine/Papers/financial_innovation_13jun2012.pdfLeavren,Levin & Michalopoulos (2015) took a rather bold step by modelingthe decision-making mechanisms of organizational executives usinginnovation (financial and technological innovation). Founding theirstudy on the endogenous theory as proposed in the discrete-timeSchumpeterian model, they provide empirical evidence from studies toshow that the profit surpluses obtained by organizations are afunction of innovation (technology). The model adopted by theresearchers show that technological innovation is indeed veryproductive for organizations especially at its adoption only that theresulting productivity is subject to diminishing marginal returns.Financial innovation comes in handy in the model as critical when thediminishing returns of technology set in.
Dembowski,F. L. (2013). The roles of benchmarking, best practices &innovation in organizational effectiveness. InternationalJournal of Organizational Innovation,5(3),6-20.http://ir.lib.kuas.edu.tw/bitstream/987654321/11341/2/The_Moderating_effects_of_switching_costs_on_satisfaction_commitment_relationship_An_agritourism_approach_in_Taiwan..pdf#page=6Theauthor, a researcher at the International Association ofOrganizational Innovation, Florida, set out to study the significanceof benchmarking, innovation and best practices in enhancingorganizational effectiveness. This paper was specifically relevant tothe current study because the author provides the fundamentalpractices of the concepts of study and makes practicalrecommendations on how these practices can be implemented at anorganizational level. The research paper provides a comprehensive setof empirical studies to show that benchmarking, in particular,requires an organizational restructuring and an understanding of theideal organizational process in an industry. The findings of thisstudy provide support for the premise that the adoption ofbenchmarking, best practices and innovation improves organizationalperformance. Moreover, the study proposes that the adoption of suchpractices is much more successful if the processes are tailored tofit the organizational setting of target firms.
Markiewicz,P. (2013). Methodical Aspects of Applying Strategy Map in anOrganization. Business,Management and Education,(1),153-167.https://scholar.google.com/scholar?hl=en&as_sdt=0,5&q=Markiewicz,+2013,+strategy+mapTheauthor of this article is a researcher at the Department of StrategicAnalyses, Cracow University of Economics, Poland. In this specificpaper, he sought to investigate the intervening factors that impingeon the application of a Strategic Map to the strategic management oforganizations. Studying the Strategic Map as a construct of theBalanced Scorecard, the author elucidates the significance of theStrategy Map as an isolated instrument to channel business goals andmaintain organizational harmony. After augmenting evidence fromempirical studies, the research findings show that the adoption of aStrategy Map by an organization improves business performance byhighlighting the cause-effect relationships in business processes andshowing the level of business performances. This paper was mostuseful for the fact that it presents the framework for implementing aStrategy Map in an organization.
Ryu,K., Moon, I., Oh, S., & Jung, M. (2013). A fractal echelonapproach for inventory management in supply chain networks.InternationalJournal of Production Economics,143(2),316-326.http://scholarworks.unist.ac.kr/bitstream/201301/3557/1/000320287100012.pdfThispaper sought to develop a framework for managing inventory incontemporary supply chain networks. The overriding study objective isinformed by the authors’ belief that the most critical issue insupply chain management is the coordination of inventory managementpolicies adopted by different stakeholders in a single supply chainmanagement. Using what they refer to as a basic fractal unit (BFU),the framework developed in the paper provides a universal approach toadopting inventory management systems that incorporate the policiesdeveloped by all stakeholders in a supply chain management.Additionally, the researchers developed several mathematical modelsin the study of managing different structures of supply chainmanagement thereby considerably increasing the applicability of theirdeveloped framework.
Katsikopoulos,K. V., & Gigerenzer, G. (2013). Behavioral operations management:A blind spot and a research program. Journalof Supply Chain Management,49(1),3-7.http://citrixweb.mpib-berlin.mpg.de/montez/upload/PaperOfTheMonth/KKGerd2013-1.pdfThisarticle differed from all the other empirical studies relied upon bythis paper for the reason that it focused on behavioral operations(Bops), which essentially covers the economic and non-economicfactors that influence managerial decisions.The authors, therefore,relied on empirical knowledge from behavioral psychology, economicsand other social sciences. Essentially, the study is an investigationby the researchers into the organizational significance of heuristicspossessed by managers especially in SCM decision-making programs. Thearticle draws from interdisciplinary empirical evidence to concludethat the heuristics employed by managers in organizationaldecision-making are abstract and subjective in nature making itdifficult to study them objectively. However, the study is repletewith insights on how managerial decision-making in SCM can beinfluenced through the adoption of various strategic managementtools.
Muthuraman,B., & Jayaraman, R. (2014). Driving Business Strategy through BSCin Large Organizations. VIKALPA,39(1),1.Retrievedon October 27, 2015,fromhttp://www.vikalpa.com/pdf/articles/2014/vikalpa-39-1-1-20.pdfMuthuraman& Jayaraman (2014) is an article that employs a case studyapproach to investigate the role played by the BSC methodologyimplementation in reviewing business progress. Using a case study ofTata Steel and Tata Group, the authors investigate the significanceof BSC concept and especially as a strategic tool to influencecustomer comfort. The paper begins be tracing the origin of BSC toestablish its evolution over time and undertakes an extensive reviewof literature on the contemporary uses of BSC. Using the ACQUIPformulation, the authors show how the respective business segments inan organization interact in the context of a BSC towards the reviewof organizational progress. The paper presents useful insightsconcerning alignment of BSC and cascading of strategic initiatives.As comprehensive as the paper is, the authors are however categoricalthat more research work should be done on the perspectives of BSCpreparation.
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Appendix1: Warner Bros. Management Structure
Source:Warner Bros, (2015)
Appendix2: Framework for Implementing Sigma Six at Warner Bros
Adoptedfrom Psychogions et al (2012, p. 35)
Appendix3: Implementation of Benchmarking at Warner Bros Inc.Appendix4: An Integrative SCM StructureAppendix5: Business Competency Domains Structure