OBS chapter 11 PDF

Preview

Summary

MANAGER AS PLANNER AND STRATEGISTPlanning and Strategy Planning​ =is a process managers use to identify and select appropriate goals and courses of action for an organisation. A strategy​= is a cluster of related managerial decisions and actions to help an organisation attain one of its goals.Missio...

Description

MANAGER AS PLANNER AND STRATEGIST Planning and Strategy Planning =is a process managers use to identify and select appropriate goals and courses of action for an organisation. A strategy=  is a cluster of related managerial decisions and actions to help an organisation attain one of its goals.

Mission statement=  a brand declaration of an organization's purpose that identifies its products and customers and distinguishes it from competitors. Nature of planning process=  task managers establish where business is at present time, determine where it will be in a desired future state, and lastly decide how to move it to future plan.better predictions more effective strategies.

WHY IS PLANNING IMPORTANT 1. Necessary to give business a sense  of direction and purpose=so  can use resources effectively and efficiently. 2. Useful way of getting managers  to participate in decision making about the appropriate goals/strategies for a business. 3. Plan helps to coordinate  different functions and divisions of business to ensure all pull towards the same  direction to achieve desired future state. 4. A plan used as a device for controlling managers within business=held accountable for attaining a goal, motivate them more. Henri Fayol of model of management that effective plans should be: ● Unity= at all times 1 plan is in operation to meet goals.

● Continuity= planning ongoing process, build and refine plans and modify at all levels. ● Accuracy= collect all information. ● Flexibility= altered due to situations, not too static.

LEVELS OF PLANNING

LEVELS AND TYPES OF PLANNING Corporate-level strategy specifies  in which industries and national markets an organisation intends to compete and why. Corporate level plan is top management's decisions pertaining to organizations mission, overall strategy and structure. Business-level-strategy outlines the specific methods a division, a business unit, or an organization will use to compete effectively against its rivals in an industry. Business level plan is divisional managers decisions pertaining to divisions long-term goals, overall structure and strategy. Functional-level strategy is a plan of action that managers of individual functions (such as manufacturing or marketing) can follow to improve the ability of each function to perform its task-specific activities in ways that add value to an organisation’s goods and services and thereby increase the value customers receive. Functional level plan is functional managers decisions pertaining to the goals that they propose to pursue to help the division attain its business level goals.

TIME HORIZONS OF PLANS Is the intended duration of a plan. Long term plan=  five years or more. Intermediate plan=  between one and five years. Short term plan=  a year or less. A rolling plan=  plan updated and amended every year to account for changing conditions in external environment. Standing plans used in situations in which programmed decision making is appropriate, same situations reccour repeatedly, managers develop policies( general guide to action) and rules and standard operating procedures (SOPs, instruction series of action followed to specific situation) to control the way employees control tasks. Single-use plans To handle non-programmed decision making in unusual situations, include programs( set of plans for achieving certain goals) and projects( specific action plans created to complete various aspects of a program). Scenario planning is the generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions.

DETERMINING ORGANIZATIONS MISSION AND GOALS Defining the business ● Who are our customers? ● What needs are being satisfied?

● How are we satisfying needs. Establishing major goals ● To give purpose and direction. ● Strategic leadership=  ability of CEO and top management to convey compelling vision of what they want business to achieve to subordinates.

FORMULATING STRATEGY Strategy formulation=  development of a set of corporate, business and functional strategies that allow an organization to accomplish mission and achieve its goals. SWOT analysis ● is a planning exercise in which managers identify internal organisational strengths, weaknesses, and external environmental opportunities and threats. ● Managers at the different levels of the organisation select the corporate, business, and functional strategies to best position the organisation to achieve its mission and goals. Porter's five forces model

Hypercompetition=applies to industries that are characterized by permanent, ongoing, intense competition brought about by advancing technology or changing customer tastes and fads and fashions.

FORMULATING BUSINESS-LEVEL STRATEGIES Competitive advantage=  A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities. Low cost strategy • Focuses on driving the company’s costs down below the costs of its industry rivals. • This strategy requires managers to: ü Search for new ways to reduce production costs ü focus on research and developing new products or services that can be delivered more cheaply ü to lower the costs of attracting customers. • companies pursuing a low-cost strategy can sell a product for less than their rivals sell it and yet still make a good profit because of their lower costs. • such organisations enjoy a competitive advantage based on their low prices Differentiation Strategy • Focuses on the organisation’s functions to distinguish its products from those of competitors on one or more important dimensions, such as product design, quality, or after-sales service and support. • Requires managers to increase spending on product design or R&D to differentiate products, and costs rise as a result. • Organisations then charge a premium price for their products. Focused-Low cost Strategy • Also described as best cost leadership • serveoneorafew segmentsoftheoverall marketandaimto make their organisation the lowest-cost company serving that segment. Focused Differentiation Strategy • Serves just one or a few segments of the market and aim to make their organisation the most differentiated company serving that segment • Generally focus on a niche market, lamborghini.

FORMULATING CORPORATE LEVEL STRATEGIES ● Market share: A  percentage of total sales volume in a market captured by a brand, product, or company. ● Market leader: brand, product, or firm that has the largest percentage of total sales revenue (the market share) of a market. A market leader often

dominates its competitors in customer loyalty, distribution coverage, image, perceived value, price, profit, and promotional spending. Concentration in a single industry: Reinvesting company profits to strengthen its competitive position in the industry in which they are currently operating. Diversification: A corporate-level strategy of expanding a company’s business operations into a new industry in order to produce new kinds of valuable goods or services. Related diversification: Entering a new business or industry to create competitive advantage in one or more existing divisions or business, can add value if company has synergy( performance gains that result when individuals and departments coordinate their actions). Unrelated Diversification: Entering a new industry or buying a company in a new industry that is not related to the current business, to engage in portfolio  strategy( apportioning financial resources to increase returns or spread risks among different businesses. Vertical Integration A strategy in which a company expands its business operations either backward into a new industry that produces inputs for the company’s products (backward vertical integration) or forward into a new industry that uses, distributes, or sells the company’s products (forward vertical integration).

INTERNATIONAL EXPANSION There is an opportunity for organisations that expand globally to open new markets, reach more customers, and gain access to new sources of raw materials and to low-cost suppliers of inputs.

Global strategy=selling  the same standardized product and using the same basic marketing approach in each national market.

Multidomestic strategy=  customizing products and marketing strategies to specific national conditions. Exporting= making products at home and selling them abroad. Importing= selling products at home that made abroad. licensing= allowing foriegn organization to take charge of manufacturing and distributing a product in its country or world region in return for negotiated fee. Franchising= selling to foreign organization the rights to use a brand name and operating know-how in return for lump-sum payment and a share of profits. Strategic alliance=  agreement in which manager pool to share organization resources and know-how with foregin companies and the two organizations share the rewards and risks of starting a new venture. Joint venture=  a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business. Wholly owned foreign subsidiary=  production operations established in a foreign country independent of any local direct involvement.

PLANNING AND IMPLEMENTING STRATEGY 1) Allocating responsibility for implementation to the appropriate individuals or groups 2) Drafting detailed action plans that specify how a strategy is to be implemented 3) Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan 4) Allocating appropriate resources to the responsible individuals or groups 5) Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals

MANAGING ORGANISATIONAL STRUCTURE AND CULTURE Organisational architecture=  The combination of organisational structure, culture, control systems, and human resource management (HRM) systems that determines how efficiently and effectively organisational resources are used. Organisational structure=  a formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organisational goals. Organizational design=  the process by which managers make specific organizing choices that result in a particular kind of organizational structure. Companies design culture and structure that: 1) Motivates managers and employees to work hard and have supportive attitudes. 2) Coordinate actions of employees, groups and decisions.

Organisational environment=  The nature of the business environment influences how a manager’s organising choices, stable environment vs rapid changing environment. Strategy=The selected business and corporate level strategy will inform the type of structure that a manager choses. A differentiation strategy requires innovation across business units and flexibility for employees. Technology =Technology refers to the level of complexity involved in the operational tasks. Examples of routine technology include typical mass production or assembly operations, where workers perform the same task repeatedly and where managers have already identified the programmed solutions necessary to perform a task efficiently. Human Resources=The  more highly skilled its workforce, and the greater the number of employees who work together in groups or teams, the more likely an

organisation is to use a flexible, decentralized structure and a professional culture based on values and norms that foster employee autonomy and self-control.

GROUPING TASKS INTO JOBS: JOB DESIGN Job design=  the process by which managers decide who to divide tasks into specific jobs. Job simplification=  process of reducing number of tasks that each worker performs, too much can reduce efficiency and jobs become boring and employees demotivated. Job enlargement=  increasing number of different tasks in a given job by changing the division of labor, will reduce boredom and fatigue, can increase performance. Job enrichment=  increasing the degree of responsibility a worker has over his or her job, can do this by empowering employees to experiment, encourage them to develop new skills, allow them to decide how to do the work, allowing them to monitor and measure their own performance. The job characteristics model 1) Skill variety=  extent job requires a wide variety of skills from workers. 2) Task identity=  requires worker performs all tasks necessary to complete the job, from beginning to end. 3) Task significance=  degree to which worker feels job is meaningful because of its effect on people isde the organization. 4) Autonomy= degree which job gives worker freedom and discretion needed to schedule tasks and decide how to carry them out. 5) Feedback= extent to which one doing a job provides workers with direct information about how well performing the job. Hackman and Oldman argue that these 5 steps affect motivation cause they affects following psychological states: employees feel work is meaningful, they are responsible for outcomes, and know outcomes affect others.

GROUPING JOBS INTO FUNCTIONS AND DIVISIONS

Functional structure -A functional structure is an organisational structure composed of all the departments that an organisation requires to produce its goods or services. -Adopted for organisations that produce limited range of products/services. • Advantages: – employees who perform similar jobs are grouped together, they can learn from observing one another and thus become more specialized and can perform at a higher level – Higher levels of cooperation within functions – easier for managers to monitor and evaluate their performance • Disadvantages: – Cross functional communication may be difficult to achieve – Limits integrated thinking Divisional structure • A divisional structure is chosen when a business decides to diversify its products/service. • Divisions are a series of business units to produce a specific kind of product for a specific kind of customer. Product structure=  Managers organise divisions according to the type of good or service they provide. Designed when a business diversifies into new industries or expands its range of products. Allows functional managers to specialize in one product area. Managers become experts in the industry helping them choose and develop appropriate business-level strategies. Market structure=  Divisions organised according to the type of customer the business targets. Managers respond to the needs of their customers and allows them to act flexibly in making decisions in response to customers’ changing needs.

Geographic structure=  Divisions are organised according to the area of the country or world a business operates. Provides retail regional managers the flexibility to choose the range of products that best meets the needs of regional customers Commonly used when pursuing a multidomestic strategy.

MATRIX AND PRODUCT TEAM DESIGNS Matrix structure • Adopted in environments with high changes in IT or customer needs to allow flexibility • Managers group people and resources in two ways simultaneously: by function and by product. • Employees are grouped by functions to allow them to learn from one another and become more skilled and productive. • In addition, employees are grouped into product teams in which members of different functions work together to develop a specific product. Product team structure ● An organizational structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or one of her direct subordinates. ● Differ from matrix structure: does away with dual reporting relationships and two-boss employees, functional employees are permanently assigned to a cross-functional team that's empowered to bring new products to market. Cross - functional team=  group of managers brought together from different departments to perform organizational tasks.

ALLOCATING AUTHORITY Authority= power to hold people accountable for their actions and to make decisions concerning the use of organizational resources. Hierarchy of authority =is an organisation’s chain of command, the relative authority that each manager has, extending from the CEO at the top, down through the middle managers and first-line managers, to the nonmanagerial employees who actually make goods or provide services. Span of control=  number of subordinates who report directly to the manager. Line manager=  someone in the direct line, has a chain of command and formal authority over people and resources at lower levels. Staff manager=  someone responsible for managing a specialist function, finance etc.

Decentralization • Giving lower-level managers and nonmanagerial employees the right to make important decisions about how to use organisational resources. • Focuses on empowering employees, creating self-managed work teams, establishing cross-functional teams. • Allows an organisation to be flexible way even as the organisation grows and becomes taller. • responsive to complex task and general environments, complex technologies, and complex strategies. If too much teams may start to pursue own goals and lose focus.

INTEGRATING AND COORDINATING MECHANISMS Integrating mechanisms=  organizing tools that managers can use to increase communication and coordination among functions and divisions.

Task force=  meet to solve a mutual problem, also called ad hoc committee.

ORGANIZATIONAL CULTURE The shared set of beliefs, expectations, values, norms and work routines that influence how individuals, groups and other teams interact with one another and cooperate to achieve organizational goals. Values = shared standards that members use to evaluate whether they've helped company achieve goals. Norms = prescribe kind of shared beliefs, attitudes and behaviours that its members should observe and follow, helps achieve values, informal.

WHERE DOES ORGANIZATIONAL CULTURE COME FROM?

Characteristics of organizational members=  they attract and retain certain members, people in business become similar as people attracted to an organization that has the same values. Organizational ethics=  the guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders, determine how members will manage situations and make decisions. The employment relationship=via  employees and human resources policies and practices, how they promote etc. Organizational structure=  different structures give rise to different cultures.tall structures are different from flat structures. Adaptive cultures=  whose values and norms helps company to build momentum and to grow and change as needed to achieve goals and be effective. Inert cultures=  values and norms fail to motivate or inspire employees, leads to stagnation and failure overtime....