SM 4th &5th PDF

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Building Resource Strengths and Organizational Capabilities Implementing and executing strategy involves technology organization, resource acquisition, people organization, staffing, management of people and business processes. The managerial emphasis is on converting strategic plans into actions and good results. The starting point for managers to start in implementing and executing a new or different strategy is a list of activities which the organization has to do differently from now onwards to achieve the strategic goals in the time frame envisaged. Then, the necessary steps to make the internal changes have to be instituted as early as possible. Top-level managers have to rely on the middle and lower managers to understand and develop their unit levels plans to support strategy and explain strategy changes and related business process changes to department members and see that the organization actually operates in accordance with the strategy at department levels. Every step in the organization has certain people questioning it and the middle and lower managers must have the understanding to explain and persuade people to follow strategy. A Framework for Executing Strategy 1. Implementing and executing strategy entails figuring out all the hows – the specific techniques, actions, and behaviors – that are needed for a smooth strategy-supportive operation – and then following through to get things done and deliver results. 2. The first step in implementing strategic changes is for management to communicate the case for organizational changes so clearly and persuasively to organizational members that a determined commitment takes hold throughout the ranks to find ways to put the strategy into place, make it work, and meet performance targets. 3. Management’s handling of the strategy implementation process can be considered successful if and when the company achieves the targeted strategic and financial performance and shows good progress in making its strategic vision a reality. 4. There is no definitive 10-step checklist or managerial recipe for successful strategy execution. Strategy execution varies according to individual company situations and circumstances, the strategy implementer’s best judgment, and the implementer’s ability to use particular organizational change techniques effectively.

The Principal Management Components of the Strategy Executing Process The eight managerial tasks that crop up repeatedly in company efforts to execute strategy include:

a. Building an organization with the competences, capabilities, and resource strengths to execute strategy successfully b. Marshaling resources to support the strategy execution effort c. Instituting policies and procedures that facilitate strategy execution d. Adopting best practices and striving for continuous improvement e. Installing information and operating systems that enable company personnel to carry out their strategic roles proficiently f.

Tying rewards and incentives directly to the achievement of strategic and financial targets and to good strategy execution

g. Shaping the work environment and corporate culture to fit the strategy h. Exerting the internal leadership needed to drive implementation forward and keep improving on how the strategy is being executed. Building a Capable Organization Successful strategy execution depends on competent personnel, better than adequate customer satisfying and competitive capabilities, and effective internal organization that facilitates communication and control. Building an organization capable of good strategy execution involves three dimensions: (1) Acquiring adequate Resources and Staff: Appropriate infrastructure, adequate equipment and a talented, can-do team with the needed experience, technical skills, and intellectual capital; (2) Building core competencies and competitive capabilities (3)Structuring the organization and work effort - Organizing value chain activities and business processes and developing communication and authority delegation lines that complete the tasks assigned to them after required operational planning with effectiveness and efficiency.

Staffing the Organization Assembling a capable senior management team is a cornerstone of the organisation - building task. The personal chemistry among the members of the team needs to be right, and the competencies of the need to be appropriate for the chosen strategy. People of the senior management team have to be persons who can be counted on to get things done. Sometimes the existing management team is suitable; at other times it may requires changes. Even at other levels, the organization must have a recruitment and selection procedure that gives best of the available persons to the organization. The organization must have training and development processes that convert the average performers into competent persons.

Building Core Competencies and Competitive Capabilities Building core competencies and competitive capabilities is a time-consuming development activity that involves three stages:

(1) Developing the ability to do something as novice act as a team. (2) Learning from the initial performances, and developing methods to perform the activity consistently well at marketable and profitable costs, setting the stage to transform the ability into a tried-and-true business getting competence or capability; and (3) Continuing to polish and refine the organization's know-how and otherwise sharpen performance such that it becomes better than competitors at performing the activity, and make efforts to raise it to the core competence level (or capability) or to the rank of a distinctive competence (or competitively superior capability) thus opening an avenue to competitive advantage. Many companies manage to get through stages 1 and 2 but comparatively few achieve sufficient proficiency to qualify for the third stage. The idea of top three in any industry illustrates this idea of many not being able to develop that superiority in competitive scenario. Four ideas regarding the process of developing core competencies or capabilities 1. Core competencies grow out of combined efforts of many in the department. Core capabilities grow out of the combined efforts of cross-functional work groups. 2. A core competence and capability emerges incrementally out of company efforts to strengthen skills that contributed to successful customer related outcomes. 3. Only by concentrating more effort and talent than rivals in deepening the knowledge and skills that a company develops core competence and capability. 4. Evolving changes in customer needs and competitor successes demand changes in competencies and the organization has to recognize the change in the environment and determine the new competencies required and start taking steps to put into motion the three steps - Do as novice - Make it market acceptable - Develop it into competency and then into core competency. Competitive Advantage While competitors can readily duplicate some strategy features, core competencies and capabilities are very difficult or costly for imitations and they give durable competitive edge. They become difficult to imitate when they are based on research and development inside an organization.

Developing Organization Structure Matched to Strategy Outsourcing of Value Chain Activities Partnering for Value Chain Activities Pure functional departments are impeding strategy execution. Determining the Degree of Authority and Independence to Give Each Unit and Each Employee Contingency theory of management is applicable here. Providing for Internal Cross-Unit Coordination

Supply Chain Development based Partnership Model

Organizational Structures of the Future Five new ideas are being emphasized in organization: 1. Empowered managers and workers. 2. Reengineering of work processes. 3.Self directed work teams 4. Rapid incorporation of internet. 5. Networking with outsiders to improve existing organization capabilities.

Sustainability and Strategic Management

Sustainability in an organization is defined by its commitment to economic factors, environmental factors, and factors of social commitment in a firm. A framework is used to develop a strategic or long-term justification for the concept of sustainability. Sustainable management takes the concepts from sustainability and synthesizes them with the concepts of management. Sustainability has three branches: the environment, the needs of present and future generations, and the economy. Using these branches, it creates the ability of a system to thrive by maintaining economic viability and also nourishing the needs of the present and future generations by limiting resource depletion. From this definition, sustainable management has been created to be defined as the application of sustainable practices in the categories of businesses, agriculture, society, environment, and personal life by managing them in a way that will benefit current generations and future generations. Sustainable management is needed because it is an important part of the ability to successfully maintain the quality of life on our planet. Sustainable management can be applied to all aspects of our lives. For example, the practices of a business should be sustainable if they wish to stay in businesses, because if the business is unsustainable, then by the definition of sustainability they will cease to be able to be in competition. Communities are in a need of sustainable management, because if the community is to prosper, then the management must be sustainable. Forest and natural resources need to have sustainable management if they are to be able to be continually used by our generation and future generations. Our personal lives also need to be managed sustainably. This can be by making decisions that will help sustain our immediate surroundings and environment, or it can be by managing our emotional and physical well-being. Sustainable management can be applied to many things, as it can be applied as a literal and an abstract concept. Meaning, depending on what they are applied to the meaning of what it is can change.

The triple bottom line (or otherwise noted as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and financial. Some organizations have adopted the TBL framework to evaluate their performance in a broader perspective to create greater business value. In traditional business accounting and common usage, the " bottom line" refers to either the "profit" or "loss", which is usually recorded at the very bottom line on a statement of revenue and expenses. Over the last 50 years, environmentalists and social justice advocates have struggled to bring a broader definition of bottom line into public consciousness by introducing full cost accounting. For example, if a corporation shows a monetary profit, but their asbestos mine causes thousands of deaths from asbestosis, and their copper mine pollutes a river, and the government ends up spending taxpayer money on health care and river clean-up, how do we perform a full societal cost benefit analysis? The triple bottom line adds two more "bottom lines": social and environmental (ecological) concerns. [4] With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007, [5] this became the dominant approach to public sector full cost accounting. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the EcoBudget standard for reporting ecological footprint. Use of the TBL is fairly widespread in South African media, as found in a 1990–2008 study of worldwide national newspapers.[6] An example of an organization seeking a triple bottom line would be a social enterprise run as a non-profit, but earning income by offering opportunities for handicapped people who have been labelled "unemployable", to earn a living by recycling. The organization earns a profit, which is controlled by a volunteer Board, and ploughed back into the community. The social benefit is the meaningful employment of disadvantaged citizens, and the reduction in the society's welfare or disability costs. The environmental benefit comes from the recycling accomplished. In the private sector, a commitment to corporate social responsibility (CSR) implies an obligation to public reporting about the business' substantial impact for the better of the environment and people. Triple bottom line is one framework for reporting this material impact. This is distinct from the more limited changes required to deal only with ecological issues. The triple bottom line has also been extended to encompass four pillars, known as the quadruple bottom line (QBL). The fourth pillar denotes a future-oriented approach (future generations, intergenerational equity, etc.). It is a long-term outlook that sets sustainable development and sustainability concerns apart from previous social, environmental, and economic considerations. The challenges of putting the TBL into practice relate to the measurement of social and ecological categories. Despite this, the TBL framework enables organizations to take a longerterm perspective and thus evaluate the future consequences of decisions.

Definition Sustainable development was defined by the Brundtland Commission of the United Nations in 1987.[8] Triple bottom line (TBL) accounting expands the traditional reporting framework to take into account social and environmental performance in addition to financial performance. In 1981, Freer Spreckley first articulated the triple bottom line in a publication called 'Social Audit - A Management Tool for Co-operative Working'. [9] In this work, he argued that enterprises should measure and report on financial performance, social wealth creation, and environmental responsibility. The phrase "triple bottom line" was articulated more fully by John Elkington in his 1997 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business'.'[10] A Triple Bottom Line Investing group advocating and publicizing these principles was founded in 1998 by Robert J. Rubinstein.[11] For reporting their efforts companies may demonstrate their commitment to corporate social responsibility (CSR) through the following: 

Top-level involvement (CEO, Board of Directors)

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Policy Investments

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Programs

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Signatories to voluntary standards

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Principles (UN Global Compact-Ceres Principles)

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Reporting (Global Reporting Initiative)

The concept of TBL demands that a company's responsibility lies with stakeholders rather than shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. Examples of stakeholders include employees, customers, suppliers, local residents, government agencies, and creditors. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit. A growing number of financial institutions incorporate a triple bottom line approach in their work. It is at the core of the business of banks in the Global Alliance for Banking on Values, for example. The Detroit-based Avalon International Breads interprets the triple bottom line as consisting of "Earth", "Community", and "Employees". The triple bottom line consists of social equity, economic, and environmental factors. The phrase, "people, planet, and profit" to describe the triple bottom line and the goal of sustainability, was coined by John Elkington in 1994 while at SustainAbility, and was later used as the title of the

Anglo-Dutch oil company Shell's first sustainability report in 1997. As a result, one country in which the 3P concept took deep root was The Netherlands. People, the social equity bottom line The people, social equity, or human capital bottom line pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business. A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests are interdependent. An enterprise dedicated to the triple bottom line seeks to provide benefit to many constituencies and not to exploit or endanger any group of them. The "upstreaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, for example, a farmer in fair trade agricultural practice, is a common feature. In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education. Quantifying this bottom line is relatively new, problematic and often subjective. The Global Reporting Initiative (GRI) has developed guidelines to enable corporations and NGOs alike to comparably report on the social impact of a business. Planet, the environmental bottom line The planet, environmental bottom line, or natural capital bottom line refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and minimize environmental impact. A TBL endeavour reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. " Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses, which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. Currently, the cost of disposing of non-degradable or toxic products is born financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal. Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more

profitable course for a business in the long run. Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting institutes and registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and others. The ecological bottom line is akin to the concept of eco-capitalism. Profit, the economic bottom line The profit or economic bottom line deals with the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL ap...