Italians do it better (the MBA)

Tuesday, April 25, 2006


Operations Strategy. Prof. M Sachon was introducing Vilfredo Pareto and his law. Knowing that Enrico is Italia he asks him "Enrico, who is Pareto?" and Enrico ".. well.. i don't know.. but i think I heard his name before".. so Sachon insists "Enrico what have you studied?" and Enrico "Economics!" (said as if it was an excuse for it) and Sachon "Pareto was one of the most famous Italian economists!"
In 1906, Italian economist and sociologist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth.
As an MBA student i've learnt that this rules applies almost everywhere!
You know 20 percent of you stock takes up 80 percent of your warehouse space and that 80 percent of your stock comes from 20 percent of your suppliers. 20 percent of the girls you hook up in Barcelona provides 80 percent of your sexual satisfaction. Also 80 percent of your sales will come from 20 percent of your sales staff. 20 percent of your customers provides 80 percent of your profits and so on. Useful, isn't it? So your job as a manager is to focus on this 20 percent. I think the problem is to understand which is this 20 percent.
Actually in italy 80 percent of the wealth is in the hands of one man.


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