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CHARACTERISTICS OF WELL RUN COMPANIES: LONG TERM DIRECTION

 Us definition 10-15yrs  Different from countries: minimum 10 years but up to more than 100 years ENTRAPRENEURIAL ATTITUDE

 Increase revenue decrease cost PLANNING\HANDS ON MANAGEMENT

 vertical communication – takes long to get to the top Karatsu – a business entity where all of them are family CONTINUOUS IMPROVEMENT

 American Model TQM (Total Quality Management – Continuous improvement) cut down big things  Japanese Model Kaizen (Continuous Incremental Improvement) reduce little and big things CUSTOMER INPUT

 Who you want to get your input from SUPPLIER AS PARTNERS

 Way we work with suppliers, treat them as adversary relationships. To Suppliers, play them off to get the best possible deals (Not with partners) To Supplier partners, find out, negotiate where both wins. PROCESS NOT FUNCTION

 Each department (HR, Marketing, Finance…) promotions and loyalties come from their own department. Does not work each other.  Functional management - Nobody is looking at the whole picture unless you are the CEO and taking control of the whole company  Process Management – Not easy to implement. Be careful. Set of activities that we accomplish. (Process Management > functional management)  When changing to functional to process management it is difficult to change but starting up with process management is okay.

USE DATA

 Making decisions based on data. (Facts) INVOLVED BOARD OF DIRECTORS

“Involved”  Rubber stamped boards: They only do exactly what CEO says  Involved Board of directors: provide guides. Challenge the CEO. This will lead to success of the company. Be actively involved in the company’s management. DEFINITION OF STRATEGIC MANAGEMENT HAS FIVE COMPONENTS/ELEMENTS

I.

STRATEGIC VISION AND MISSION STATEMENT

Present VS Future (Vision 10~ yrs from now / mission is what defines the company now/today). DO NOT PUT IN OBJECTIVES IN VISION/MISSION STATEMENT How to…Global? local? Domestic? Related? Unrelated? Start-up? Venture?  Will be in mission/vision statement.  Mission/Vision Statement is Written by the CEO THREE ELEMENTS: 1. WHAT BUSINESS WE ARE IN:

(Products or services / Industries we are going to be in) 2. WHO ARE OUR CUSTOMERS

How to define customers (3 level) 1. consumer 2. industrial 3. government/ non-profit 3. HOW WILL WE ACCOMPLISH IT

BENEFITS OF A GOOD VISION STATEMENT: 1. 2. 3. 4. 5.

II.

LOOK TO THE FUTURE MIDDLE LEVEL MANAGEMENT EMPLOYEE PERSPECTIVE AVOIDS MISMANAGEMENT INVESTMENT COMMUNITY SIGNAL

GOALS AND OBJECTIVES(Financial goals and strategic objectives)

AREAS OF BUSINESS NEEDING GOALS

       

MARKET GROWTH PROFITABILITY- not revenue/ how much you get to keep after cost INNOVATION MANAGEMENT PERFORMANCE NON-MANAGEMENT PERFORMANCE PRODUCTIVITY PHYSICAL RESOURCES SOCIAL RESPONSIBILITY

CHARACTERISTICS OF GOOD GOALS/ OBJECTIVES: SMART-C: Specificity Measurable attainable relevant time-bound Congruency

Help to find characteristics of good goals or objectives

III.

DEVELOP STRATEGIES   

THREE HIGH LEVEL STRATEGIES GROWTH IS MOST CRITICAL FOUR GROWTH STRATEGIES

LEVELS IN A DIVERSIFIED COMPANY:

1. CORPORATE 1) get to diversification 2) manage diversification 3) develop synergies 4) allocate resources 2. LOB/SBU/BUSINESS develop and sustain and be competitive in market places 3. FUNCTIONAL – do whatever it takes to be successful in business 4. OPERATIONAL - do whatever it takes to be successful in business LEVELS IN A SINGLE ENTERPRISE COMPANY:

1. LOB/SBU/BUSINESS 2. FUNCTIONAL 3. OPERATIONAL

Diversified Company Definition: company that has multiple product lines, but any of them can have significant contribution to the business. Single Enterprise Definition: 1) One product or one product line, 2) company with multiple product lines or product units (But only one of them (main product = engine) drives the company)...