Appliation_of_Theories

Application of Theories BUSN300-1204A-40: Lower Capstone Division Kandyce Livingston American Intercontinental University Application of Theories Employee Empowerment Employee empowerment is defined as giving employees the permission and ability to make decisions and act autonomously for the good of a company (HRrates.com, 2008). It is also an overall philosophy of handing responsibility and decision making to employees lower down in a company (emeraldinsight.com, n.d.). Ford is an example of a company that uses employee empowerment. Low employee morale and satisfaction, poor company performance, and a strong union presence are all issues that prompted Ford to put employee empowerment in place. In addition to these issues, the Automobile Workers Union was putting extreme pressure on Ford to implement this theory (White, 2011). In response to the issues at hand, Ford was prompted to give its employees different parts of the company’s decision making processes. Another name for the theory of employee empowerment is participative management. Even though there were a multitude of mixed feelings among management in regards to employee empowerment, Ford still applies this theory today among its employees and management. Like anything else, this move created both positive and negative results. One positive result was that Ford’s employee morale saw a tremendous increase. In addition, employees seemed to be more open to changes because they were given a voice and their opinions counted in regards to the changes. On the other hand, negative results of employee empowerment included time-consuming decisions made by employees as well as the creation of some developing tension between various company groups. In my opinion, as a senior manager at Ford, I would have required some kind of decision-making training for employees before implementing the theory of employee empowerment. This would have been to ensure that employees understood that decision making is a complex process. Employees would need to understand that company decisions must be carefully thought out and made responsibly for the greater good of the company and they should be prepared for the consequences of their decisions (Spreitzer, n.d.) Penetration Pricing Penetration pricing is defined as a marketing strategy used by firms to attract customers to a new product or service (Investopedia.com, 2012). It is also the practice of offering a low price for a new product of service during its initial offering in order to attract customers away from competitors. Investopedia.com (2012) states that “the reasoning behind this strategy is that customers will buy and become aware of the new product due to its lower price in the marketplace relative to rivals.” Apple is a company that has recently used this marketing strategy in introducing the 3G iPhone to the market. Older versions of the iPhone were priced around $600 to $700 when released; however, upon release of the 3G iPhone, the sale price was between $200 and $300. Since Apple was not consider a large player in the market of Smart Phones, they used penetration pricing to bring their new product to the market. By using this strategy, Apple achieved maximum positive results. Due to the high rate of success using penetration pricing, Apple has gone on to introduce other, newer versions of the iPhone at even lower prices. Simply, they used the theory of penetration pricing to increase their market shares in the area of Smart Phones. In a management position at Apple, I would have, in my opinion, focused more of my attention to the dissatisfied customers that were created from this decision. This was a decision that did not please customers who purchased the original iPhone at prices of $600 to $700 (Muller, 2007). References Muller, T. (2007). Positive aspects to Apple’s iPhone price cut. Retrieved on July 1, 2012, from website: http://financial-alchemist.blogspt.com/2007/09/apple-benefits-from-high-initial-iphone.html Spreitzer, G. (n.d.). The road the empowerment. Retrieved on July 1, 2012 from website: http://ceo.edu/pdf/G973315.pdf White, B. (2011). How quality became job #1 at Ford. Retrieved on July 1, 2012, from website: http://www.accessmylibrary.com/article-1G1-81862881/quality-became-job-1.html Employee Empowerment. (2008). HR Glossary. Retrieved on July 1, 2012, from HRrates.com website: http://www.hrrates.com/cms/showContent/20/7.html Employee Empowerment. (n.d.). Retrieved on July 1, 2012 from website: http://emeraldinsight.com/journals.htm'articleid=849082&show-html Penetration Pricing. (2012). Investopedia.com. Retrieved on July 1, 2012 from website: http://www.investopedia.com/terms/p/penetration-pricing.asp#axzz1zQulOZYb