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MANAGING PROJECTS

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Projects represent nonroutine business activities that often have long-term strategic ramifications for a firm. In this chapter, we examined how projects differ from routine business activities and discussed the major phases of projects. We noted how environmental changes have resulted in increased attention being paid to projects and project management over the past decade. In the second half of the chapter, we introduced some basic tools that businesses can use when planning for and controlling projects. Both Gantt charts and network diagrams give managers a visual picture of how a project is going. Network diagrams have the added advantage of showing the precedence between activities, as well as the critical path(s). We wrapped up the chapter by showing how these concepts are embedded in inexpensive yet powerful software packages such as Microsoft Project. If you want to learn more about project management, we encourage you to take a look at the Web site for the Proj...
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Income and Social Class

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Our confidence in our future, as well as in the overall economy, determines how freely we spend and the types of products we buy.
The field of behavioral economics studies how consumers decide what to do with their money. Consumer confidence—the state of mind consumers have about their own personal situation, as well as their feelings about their overall economic prospects—helps to determine whether they will purchase goods and services, take on debt, or save their money.
We group consumers into social classes that say a lot about where they stand in society.
A consumer’s social class refers to his or her standing in society. Factors including education, occupation, and income determine the class to which we belong. Virtually all groups make distinctions among members in terms of relative superiority, power, and access to valued resources. This social stratification creates a status hierarchy in which consumers prefer some goods to others.
Although income is an important indicator of social class, the relationship is far from perfect. Factors such as place of residence, cultural interests, and worldview also determine social class. As income distributions change around the world, it is getting more difficult to distinguish among members of social classes; many products succeed because they appeal to a newly emerging group that marketers call the mass class (people with incomes high enough to purchase luxury items, at least on a small scale).
Individuals’ desires to make a statement about their social class, or the class to which they hope to belong, influence the products they like and dislike.
Conspicuous consumption, when a person flaunts his status by deliberately using up valuable resources, is one way to “buy up” to a higher social class. Nouveau riches, whose relatively recent acquisition of income rather than ancestry or breeding accounts for their enhanced social mobility, are the most likely to do this. We use status symbols (usually scarce goods or services) to communicate our standing to others. Parody display occurs when we seek status by deliberately avoiding fashionable products.

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OPERATIONS AND SUPPLY CHAIN STRATEGIES

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