of employee turnover, beyond the normal erosion caused by retirements. A high turnover is often synonymous with social problems, dissatisfaction; it is a source of instability. Managing a business means, among other things, mastering all of these flows.
Figure 1.5. The enterprise and its flows
1.6. The two operating modes of the enterprise: operational and entrepreneurial
The enterprise lives at the rate of two different modes by their nature, their time constant, and the people involved.
The operational mode amounts to managing the daily, the existing, managing the workshops and plants as they are at a given time, in accordance with the values of the company and its governance (see section 1.7). This role is primarily assigned to plant directors, production managers, and to the manufacturing function in general.
The entrepreneurial mode consists of managing the portfolio of projects generated by the strategic plan as defined above. This is the privileged field of research, design offices, engineering, and project managers. People belonging to these entities must ensure changes that result from a strategic plan.
A major investment or reengineering can shake up a plant or system beyond reason. It is up to the executives to ensure the necessary balance. Many asset managers forget everyday life because they are attracted by the “brilliance” and novelty of investment projects.
1.7. Governance
Governance is not governing, which consists of making people do what one wants them to do and which falls within the scope of management; governance is a set of values. Management can be defined as running a household. The components of management are: planning, organizing, activating, controlling (Dal Pont 2012, p. 54). The concept of corporate governance is relatively recent and is derived from taking into account the concept of sustainable development in its operation.
Governance can be defined as a set of good practices, of procedures that will make it possible to manage a company in accordance with ethics, with a set of core values. The main governance tools relate to:
1 – quality, i.e. customer satisfaction;
2 – health, safety, and environment (HSE).
The IS0 26000 standard deals with this notion, which obliges large companies to be more transparent, in particular, in their annual report (see Figure 1.6).
Figure 1.6. Schema of the ISO 26000 standard
NOTE.- Corporate social responsibility, or CSR, is described by the ISO 26000 standard. CSR is defined as the voluntary contribution of companies to the challenges of sustainable development, both in their activities and in their interactions with their stakeholders.
It concerns three areas: environmental, social, and societal. This last domain concerns the relations of the company with its partners, in particular commercial, seen from the angle of sustainable development.
1.8. Operations abroad
Trade has existed for millennia: the Phoenicians crossed the Mediterranean; the Silk Road is still something to aspire to. European and American companies have invested outside their borders for more than two centuries, creating imposing infrastructures (the Panama Canal).
Globalization supported by the Internet, containerization of transport, oil and coal flows, to name a few, and the rise of China, which is on the way to becoming the world’s leading economic power in a few decades, have been game-changing. Surprisingly enough, little is said about India, soon to be the most populous country in the world.
Large companies have had to invest massively in production facilities abroad, taking advantage of their technological advance in certain fields, supporting the economic development of their local partners with whom they now compete. Recently, China has been investing abroad, not only in French vineyards, but also in technological companies: should this be seen as a fair return?
These changes, in the context of our work, give rise to reflections concerning the establishment of a company abroad, its mode of technology transfer, and the expatriation of its employees. We will return to this in Chapter 4 of the second volume.
1.9. References
1 Appleby, J. (2010). The Relentless Revolution: A History of Capitalism. W.W. Norton & Company, New York.
2 Dal Pont, J.-P. (2012). Process Engineering and Industrial Management. ISTE Ltd, London and John Wiley & Sons, New York.
3 Hammer, M., Champy, J. (1993). Reengineering the Corporation: A Manifesto for Business Revolution. Harper Business, New York.
4 Peters, T. (1992). Liberation Management: Necessary Disorganization for the Nanosecond Nineties. A.A. Knopf, New York.
Notes
1 Chapter written by Jean-Pierre DAL PONT.
2 1 Strategic Business Unit. It is an activity; glues, paints, organic products, etc. It is often a company within a company, because it has its own resources.
3 2 In some countries, large multinationals have a representative who facilitates contacts, informs the parent company, etc.
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