Outputs of Skype and How the Company Categorizes Them
Skype as an online communication service company enables users make voice calls, video calls, chats, instant messaging, file transfer and video conferencing over the Internet (Stadler, 2009). Video calling allow users to see each other in real time as they speak prior to sending messages via the internet. There are two categories of services offered by Skype and this include free services and fee based services. When users make call between themselves they get free services, however when making calls to both traditional landline telephones and mobile phones, users pay a fee via debit based user account system.
Skype also sell a variety of products such as certified hardware. Its business model includes an electronic commerce website through which the company sells its certified VoIP hardware directly to its end users. Example of these products includes VoIP phones, headsets and webcams.
How the measures its organizational performance (e.g., sales, net profit, return on sales, return on assets, market share, customer satisfaction, etc.) Provide some specific performance data.
Sales and Customer Satisfaction
In its organizational performance regarding its sale the company calculates the increased number of users. For instance the Company determines the increased number of users per every country and the increased number of user languages. For instance when Skype employed the Crown Peak SaaS-based Content Management System it was able to grow its international business from 19countries to sixty six countries. Consequently the number of languages that were used in Skype increased from eight to twelve. This showed that the organizational performance of Skype was growing. Consequently increased number of customers for skype indicates that there is a high level of customer satisfaction which attracts potential customers
(Malik, 2010).
For the first six months of 2010, Skype reported revenue of $406 million, and net income of $13.2 million. During 2009, Skype had sales of $719 million and a loss of $99 million.
Measuring organizational performance in terms of net profit
This is usually determine by calculating the overall expenses incurred in a company from the total revenue which illustrates how much the company ha earned or lost within a given period of timed (Weiss, 2008).To measure organizational performance a company includes direct contributions that consists of net revenue from external customers less direct costs. Direct costs include specific costs of net revenues, sales marketing expenses and general and administrative expenses over which the segment managers have discretionary control. This includes advertising and marketing program, customer support expenses, bank charges, product development expenses, provision for doubtful accounts authorized credits and transaction losses (Wolf 2008) The graph below shows Skype attempt to measure profitability in the year 2007.
(Wolf,2008)This shows that Skype had a 15percent contribution compared to the previous revenue in the last quarter and illustrate that there will be increased profitability for Skype
Return on Sales
When analyzing organizational performance Skype may also use return on sales which is the extent of profit acquisition from sales. Through return on sales the company is able to measure its profitably after payment for variable costs of production such as wages, raw materials among others. The ROS also known as the operating profit margin enable the company to compare its current performance in relation to the past.
(Dignan,2009).
The number of registered users represents the cumulative number of unique user accounts which include, among other things, users who may have registered via non Skype based websites and other users that have more than that account. Skype to Skype minutes are estimated.
In determining organization performance through return on sales the company uses the following formula
(Net income (before interest and tax))/sales
Market Share
Skype measures its market share to compare its performance in relation to its competitors. The company conducts this on a regular basis as part internal reporting on an annual basis. The company’s analyst develop much obtain the maximum information possible then consequently proceed to calculate market share with the relevant statistics through various methods. For example the first calculations are based on amount of products secondly there is determination of revenue. Generally products are measured based on units and services are measured based on revenues.
(Hamiliton, 2011)
What are some ways the company identifies groups? For example, are there geographic groups (or divisions), functional groups, etc. What are the outputs of these groups? How does it (or how might it) measure performance of these groups?
Skype identifies its groups in terms of functional performances however a small percentage of groups are identified in the geographical aspect. Example of functional groups include customer care and support, engineers and dev elopers, human resource sections finance section and sections responsible for legal operations among others. On the geographical aspect there are groups which deal with global products and consumers while there is another section responsible for regional markets in America Asia pacific and other various regions.
Each division is responsible for various outputs in the organization for instance the customer care and support group are responsible for attending to the needs of consumers such complaints are inquiries. The general output of this category is to ensure that there is high level of response to the customers needs and improved quality of customer service in the organization. The performance of this group can be measured through interviewing the customers in order to obtain feedback. The human resource division is responsible for recruiting, managing and providing direction for employees in the organization. There core duties are planning; directing, staffing, controlling and organizing employees (Price, 2007).Skype might measure the performance of this group by analyzing how well the human resources are communicating, their level of productivity commitment and motivation. The engineering and development group in responsible for maintenance of the system and ensuring continues improvement and innovation within the technological environment of Skype. The performance of this group is measured through the level of consistency in the company and system efficiency.
The finance division is responsible for managing funds within Skype. The functions of this division include planning, organizing auditing, accounting and controlling the company’s finances (Griffin, 2011). They ensure that the funds of Skype are well managed. The performance is determined by the accuracy in the timely financial statements. The legal department ensures that an operation of the company meets the requirement in the legal environment through which the company is operating. Looking at the geographical groups, global groups are responsible for ensuring overall well functioning of the organization in the global environment. Consequently the regional groups monitor the operation of the company’s activities in a given area such as continent of country. The effectiveness of various geographical groups is determined by the efficiency of operations of Skype in specific regions.
What are some of the key individual functions, and what are their outputs? How do these outputs contribute to the group outputs? How do they measure individual performance?
Scott Durschlag is the head of operation s in Skype. He is responsible for oversee how well products and are doing globally. Consequently he oversees the regional markets in parts such as America, Asia pacific and United Arab Emirates among other regions. Scott also oversees the function of customer care and support division (Lang 2012). Operation is a very crucial element in the overall success of a business. The magnificent success of Skype would not have been possible without proper effective outs from Scott. He has lead Skype to acquire a greater market share through dedication and commitment. There has been a high level of operation which has enabled the company to attain larger competitive advantage. Individual outputs have successfully integrated both regional and global markets goals together with customer care and support to establish a well functioning operation system. The company measures individual performance by measuring the level of congruence of their outs with the company’s goals and objective. When there is poor or lack of congruence for instance the compare will regard the performance as poor.
Dan Berg is responsible for monitoring the technological environment of Skype. His individual function s as a manger to oversee overall technological function within the system of Skype. His overall outputs are a well functioning VoIP technology in Skype (Williams, 2011).
Through this technology the company has been able to acquire large competitive advantage over its competitor. His individual outputs have resulted to a well functioning technological system in Skype. Skype has been able to deliver high quality video services, instance messaging and voice call than other traditional voice call companies. Individual performance can be measured through the level of technological improvement sustainability within the system.
Evaluate how the outputs at the different levels interact with each other. Determine if you think the congruence of the outputs is high, medium, or low. Then Make a strong Case. It is very important that you support your position with evidence and information that you have discussed earlier in the report.
Congruence regarding interaction of outputs in different level is generally high since Skype has been able to perform very well in global market. However there has been various aspects which have undermined the level of congruence. Skype as a peer to peer chat and communication company enables users to make voice and video calls and chats over the internet, instant messaging services, file transfer and video conferencing. The company has been able to attain a very magnificent competitive advantage. This illustrates that there has been a high level of congruence between interaction of units, individual and the system with the company. The outputs of operational and technological managers have lead to increased efficiency and effectiveness. This means that there is high congruence in various outputs of Skype.
However the quality of customer service and support at Skype undermines congruence between interaction of systems and units. The level of customer care and support does not align with the company goals and objectives. Skype does not have a well established information system that is adequately responsive to the customer’s queries. Skype’s customer service only attends Customer who acquires hardware products such as webcams or head sets. However it does not assists it users. This indicates low congruence between interactions of the company’s outputs.
Reference
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Griffin, R. W. (2011). Fundamentals of Management. Stamford: Cengage Learning
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