Principles Of Organization Management September 16–20

Principles Of Organization Managementweek Of September 16 2019chap

Principles of Organization & Management Week of September 16, 2019 CHAPTER 6 Strategic Management How Exceptional Managers Realize a Grand Design All information in this power point is from Kinicki, A., & Williams, B. K. (2017). Management: A practical approach. McGraw-Hill Education, unless otherwise noted. Major Topics 6.1 Strategic positioning 6.2 The strategic management process? 6.3 The characteristics of good mission, vision, and values statements 6.4 Determining where the organization stands from a competitive point of view 6.5 Porter’s four competitive strategies, diversification strategy, blue ocean strategy, and the BCG matrix 6.6 Effective execution of the strategic-management process 6.1 – EFFECTIVE STRATEGY What Is an Effective Strategy? • Strategic positioning – Developed by famous strategist Michael Porter – Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company – “Performing different activities from rivals, or performing similar activities in different ways†Strategic Positioning and Its Principles Three key principles underlie strategic positioning.

1. Strategy is the creation of a unique and valuable position. • Few needs, many customers • Broad needs, few customers • Broad needs, many customers 2. Strategy requires trade-offs in competing. 3. Strategy involves creating a “fit†among activities.

6.2 – THE STRATEGIC MANAGEMENT PROCESS The Strategic-Management Process Figure 6.1 Jump to Appendix 1 for description 6.3 – ESTABLISHING THE MISSION, VISION, AND VALUES STATEMENTS Establishing the Mission Statement Does your company’s mission statement answer these questions: 1. Who are our customers? 2. What are our major products or services? 3.

In what geographical areas do we compete? 4. What is our basic technology? 5. What is our commitment to economic objectives?

6. What are our basic beliefs, values, aspirations, and philosophical priorities? 7. What are our major strengths and competitive advantages? 8.

What are our public responsibilities, and what image do we wish to project? 9. What is our attitude toward our employees? Establishing the Vision Statement Does your company’s vision statement answer these questions: 1. Is it appropriate for the organization and for the times?

2. Does it set standards of excellence and reflect high ideals? 3. Does it clarify purpose and direction? 4.

Does it inspire enthusiasm and encourage commitment? 5. Is it well articulated and easily understood? 6. Does it reflect the uniqueness of the organization, its distinctive competence, what it stands for, what it’s able to achieve?

7. Is it ambitious? Establishing the Values Statement Does your company’s values statement answer these questions: 1. Does it express the company’s distinctiveness, its view of the world? 2.

Is it intended to guide all the organization’s actions, including how you treat employees, customers, etc.? 3. Is it tough, serving as the foundation on which difficult company decisions can be made? 4. Will it be unchanging, as valid 100 years from now as it is today?

5. Does it reflect the beliefs of those who truly care about the organization—the founders, CEO, and top executives—rather than represent a consensus of all employees? 6. Are the values expressed in the statement limited (five or so) and easy to remember, so that employees will have them top-of-mind when making decisions? 7.

Would you want the organization to continue to hold these values, even if at some point they become a competitive disadvantage? 6.4 – ASSESSING THE CURRENT REALITY Assessing the Current Reality • Assess the current reality – Look at where the organization stands internally and externally, to determine what’s working and what’s not – See what can be changed so as to increase efficiency and effectiveness in achieving the organization’s vision – Tools include competitive intelligence, SWOT analysis, forecasting, benchmarking, Porter’s model for industry analysis Competitive Intelligence • Competitive intelligence – Means gaining information about one’s competitors’ activities so that you can anticipate their moves and react appropriately – Sources of information include public print and advertising, investor information, informal sources SWOT Analysis (1 of 2) • Environmental scanning – Monitoring of an organization’s internal and external environments to detect early signs of opportunities and threats that may influence the firm’s plans – SWOT, process for scanning • Internal Strengths • Internal Weaknesses • External Opportunities • External Threats SWOT Analysis (2 of 2) Figure 6.2 Jump to Appendix 2 for description Example: SWOT Characteristics of a College Campus Table 6.2 S—STRENGTHS (INTERNAL STRENGTHS) W—WEAKNESSES (INTERNAL WEAKNESSES) •Faculty teaching and research abilities •High-ability students •Loyal alumni •Strong interdisciplinary programs •Limited programs in business •High teaching loads •Insufficient racial diversity •Lack of high-technology infrastructure O—OPPORTUNITIES (EXTERNAL OPPORTUNITIES) T—THREATS (EXTERNAL THREATS) •Growth in many local skilled jobs •Many firms give equipment to college •Local minority population increasing •High school students take college classes •Depressed state and national economy •High school enrollments in decline •Increased competition from other colleges •Funding from all sources at risk Forecasting: Predicting the Future • Forecasting – A vision or projection of the future • Trend analysis – Hypothetical extension of a past series of events into the future • Contingency planning – Creation of alternative hypothetical but equally likely future conditions – Also called scenario planning and scenario analysis Benchmarking: Comparing with the Best • Benchmarking – A process by which a company compares its performance with that of high-performing organizations Porter’s Five Competitive Forces Porter contends that business-level strategies originate in five primary competitive forces in the firm’s environment 1. threat of new entrants.

2. bargaining power of suppliers. 3. bargaining power of buyers. 4. threat of substitute products or services. 5. rivalry among competitors. 6.5 – FORMULATING THE GRAND STRATEGY Formulate the Grand Strategy • Grand strategy – Comes after assessing the current reality – Explains how the organization’s mission is to be accomplished Common Grand Strategies • Growth strategy – Involves expansion, as in sales revenues, market share, number of employees, or number of customers • Stability – Involves little or no significant change • Defensive – Involves reduction in the organization’s efforts – Retrenchment How Companies Can Implement a Grand Strategy Table 6.3 GROWTH STRATEGY STABILITY STRATEGY DEFENSIVE STRATEGY It can improve an existing product or service to attract more buyers.

It can go for a no-change strategy (if, for example, it has found that too-fast growth leads to foul-ups with orders and customer complaints). It can reduce costs, as by freezing hiring or tightening expenses. It can increase its promotion and marketing efforts to try to expand its market share. It can go for a little-change strategy (if, for example, the company has been growing at breakneck speed and feels it needs a period of consolidation.) It can sell off (liquidate) assets—land, buildings, inventories, and the like. It can expand its operations, as in taking over distribution or manufacturing previously handled by someone else.

It can gradually phase out product lines or services. It can expand into new products or services. It can divest part of its business, as in selling off entire divisions or subsidiaries. It can acquire similar or complementary businesses. It can declare bankruptcy.

It can merge with another company to form a larger company. It an attempt a turnaround—do some retrenching, with a view toward restoring profitability. Porter’s Four Competitive Strategies (1 of 2) • Cost-leadership strategy – Keep the costs, and hence prices, of a product or service below those of competitors and target a wide market • Cost-focus strategy – Keep the costs of a product below those of competitors and to target a narrow market Porter’s Four Competitive Strategies (2 of 2) • Differentiation strategy – Offers products that are of unique and superior value compared to those of competitors but to target a wide market • Focused-differentiation strategy – Offers products that are of unique and superior value compared to those of competitors and to target a narrow market Single-Product Strategy: Focused but Vulnerable • Single-product strategy – Company makes and sells only one product within its market – Benefit is that a company can focus on just one product – Risk is that you are vulnerable – why?

The Diversification Strategy • Diversification – Operating several businesses in order to spread the risk – Products may be related or unrelated • Vertical integration – Firm expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products The Blue Ocean Strategy • Blue Ocean Strategy – A company creates a new, uncontested market space that makes competitors irrelevant, creates new consumer value, and decreases costs – “Competing in overcrowded industries is no way to sustain high performance,†the authors write. “The real opportunity is to create blue oceans of uncontested market space.†The BCG Matrix Figure 6.3 Jump to Appendix 3 for description 6.6 – IMPLEMENTING AND CONTROLLING STRATEGY: EXECUTION Implementing and Controlling Strategy • Strategy implementation – Putting strategic plans into effect – Means dealing with roadblocks within the organization’s structure and culture and seeing if the right people and control systems are available to execute the plans • Strategic control – Monitoring the execution of strategy and taking corrective action, if necessary – To keep on track, you must (1) engage people, (2) keep it simple, (3) stay focused, and (4) keep moving Execution: Getting Things Done • Execution – Consists of using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve results promised Occupying a sprawling campus in Cary, North Carolina, software maker SAS’s ability to execute effectively has made it highly profitable and the world’s largest privately owned software company.

The Three Core Processes of Business A company’s overall ability to execute is a function of effectively executing according to three processes 1. People – consider who will benefit you in the future 2. Strategy – consider how success will be accomplished 3. Operations – consider what path will be followed What Questions Should a Strong Strategic Plan Address? Table 6..

What is the assessment of the external environment? 2. How well do you understand the existing customers and markets? 3. What is the best way to grow the business profitability, and what are the obstacles to growth?

4. Who is the competition? 5. Can the business execute the strategy? 6.

Are the short term and long term balanced? 7. What are the important milestones for executing the plan? 8. What are the critical issues facing the business?

9. How will the business make money on a sustainable basis? Building a Foundation of Execution • Know your people and your business. • Insist on realism. • Set clear goals and priorities. • Follow through on accountability and results. • Reward the doers. • Expand people’s capabilities. • Know and understand yourself. Jinpeng Du 1 Jinpeng Du 1 Jinpeng Du Becky Burink MGT /9/2019 Strategic Management As the business world continues to go through and adapt to changes consistent with the 21st- century developments, strategic management has become a vital function of every organization. Strategic management denotes the ability of an organization to plan continuously, monitor, analyze, and assess every important area to facilitate the meeting of shareholder goals and objectives.

To remain successful, organizations are now required to think critically and make their decisions strategically amidst of emerging technologies, customer expectations, and fast-paced innovation. As organizations grapple with understanding all of these issues, one thing remains clear, that change is inevitable, especially in the successful management of global businesses and organizational success. In a recent article published by Forbes ( organizational change management is identified as a crucial element and concept in the larger umbrella of strategic management. Every organization in the postmodern era must contend with a change in their immediate environment and externally within their industry and sector.

Ultimately, the article arrives at the conclusion that organizational change management not only defines the success of a firm, but also facilitates better strategical positioning in the wider picture of market leadership. In her article, MacArthur, a contributor at Forbes, discusses organizational designs and management concepts and specifically the role that change plays in the overall management of a firm. MacArthur builds her argument based on the need to rethink organizational change management because it has turned out to be the defining concept of successful and failing firms. MacArthur opines that change and managers of change have a role in reducing their push through discrete projects and focusing on the organizational design in a manner that enables the continued adaptation of the ever-evolving environment.

Conventional organizational change management models have not attained the kind of success they are expected to have. MacArthur attributes this occurrence to the rigidity of traditional management concepts. She compares these outdated models to the Sleeping Beauty fairy tale where a new idea was required to rescue a family out of its misery. Likewise, MacArthur identifies several issues with conventional organizational change management initiatives and models. The first major issue is that traditional models focus on top management as the primary contributor to change and consequent ideas.

Such ideas construe employees as mere auxiliary implementers. As such, employees become secondary and not a primary part of change management. Secondly, employees do not qualify as contributors to change, and they fear that any proposal for better or improved ideas may lead to their labeling as resisters. Lastly, the concept is devoid of a feedback channel because of the exclusion of employees and line management. Only top leadership is involved in the implementation of organizational change and management.

The ensuing reception by employees is inadvertent resistance to change because of the coercive tactics used. The main takeaway from MacArthur’s article is that there are a lot of flaws identified in managing organizational change using the traditional methodologies. She identifies these conventional approaches as symptoms of a more significant issue in the overall management of an organization (MacArthur). She is critical of how many modern firms are unaware of the change and do not exhibit the knowledge to handle agile changes. Most of the conventional tactics heavily rely on risk-avoidance, authority deference, controllability, routinization, stability, and a zero-tolerance policy on errors.

The result is that a firm makes two steps forward and a couple more backward. Cynicism, fatigue, and friction within the ranks become a new culture. MacArthur illustrates the need to change tactic in a way that embraces new technologies and methodological approaches to dealing with change without much concern for resistance. The overall recommendation in the modern era of business is for organizations to adopt fresh tactics by making all employees agents of change. This way, resistance will be avoided by reducing inflexible behavior.

Change management, from a traditional perspective, has become obsolete. As a managerial concept, it is becoming evident by the day that change cannot be managed given the pace and other realities of the world today. Change can only be embraced, and firms made aware and ready for it in a way that adapting to evolution is easier. Modern successful firms such as Apple, Amazon, Google, and Facebook are good examples of organizations that have killed the idea of change management, and rather embraced changes in the business world as a competitive advantage (MacArthur). Because even current shareholders want to deliver results in a more sustainable and quicker manner, the context of operation must adapt to changes while setting these goals and objectives straight.

Fixed boundaries must be replaced with flexible options that not only drive change but allow a firm to shape and bend in whatever direction evolution dictates. For example, the use of artificial intelligence in the workplace will very soon replace many processes, even at the managerial level. Instead of fighting such technological developments, it would be better for organizations to find ways to adapt and incorporate said changes to the corporate culture. After all, such evolutionary developments will not be avoided in the future. In my opinion, the traditional management concepts of planning, organizing, analyzing, and assessing factors relating to an organization are no longer viable in the face of change.

Control and command now cower in the presence of tactical shifts. As a result, military-style organizational cultures will slowly but surely die out. The top-down ideology that dictated the change in the last few centuries no longer applies to the current business environment (MacArthur). There is an excellent departure from these conventional approaches to managing change as more firms realize the futility of managing it using rigid corporate structures. I have also realized that employees are a complete function of change and must, therefore, be treated as such.

Firms that have a more rigid style of change management tend to exclude employee opinion. However, modernity dictates that the decision-making process be inclusive of the opinion, feedback, and ideas of those working at the implementation level. In conclusion, organizational change management is a strategic managerial concept that has brought waves to the global business today. While still being sidelined by corporates and firms using traditional approaches, change, and its deemed management will define success in the present era of fast-paced shifts. Critically, Forbes article breaks down the problems that are associated with conventional approaches.

Like every other sector of life, change management should become a critical component of every organization. This means that outdated methodologies that focus on the top-level management more than predicting shifts in patterns and involving employees in the decision-making process will suffer losses and other negative consequences, because their main focus is tackling challenges associated with resistance and rigidity. Works Cited MacArthur, H.V. “Leading Change Management In The Modern Workplaceâ€. Forbes .

May, 2019. Available at