it assists in the evaluation as it identifies the objectives; McDonalds scrapped a technology upgrade because it could not deliver at the cost of $170 million
one year or less
three or more years in the future
long term directions for the organization
Clarifies the purpose-and hopes for the future-there is often a vision statement in a strategic plan.
implement strategic plans
Forms of functional plans
Production, Financial, Facilities, Logistics, Marketing and Human Resource Plans
short term activities to implement strategic plans
a standing plan that communicates broad guidelines for decisions and actions.
rule describing actions taken in specific situations.
allocates resources as if each budget were brand new; start from scratch; forces the review of how the money is being spent-elimination of waste.
Allocates a stated amount of resources for a specific purpose, such as $50,000 for equipment purchases in a given year.
Allows resources to vary in proportion with various levels of activity, such as having extra money available to hire temporary workers when workloads exceed certain levels.
predicting what will happen in the future
Mathematical models and statistical analysis.
What happens if? Identifies alternative courses of action to take when things go wrong.
Identifies alternative future scenarios and makes plans to deal with each.
Uses external and internal comparisons to plan for future improvements; often looks at successes and measures against them; looks for best practices which allow for superior performance.
Sharing one another's best practices
Looking at companies with best practices in a specific area.
Hierarchy of goals and objectives; one set of goals is required to accomplish a higher level one.
Pyramid in text
Mission and purpose; Top management objective; senior management objective; middle management objective; supervisory objective - specific and skills based.
Goal alignment between team leader and member
Jointly plan; individually set jointly control; essentially a team approach with the individual responsibility in the middle.
Can goals be quantified?
Yes; work activities as goals; specific objectives; flexibility and reassessment.
goals and roles; includes the persons who will be affected by plans and/or those who will implement them.
the ability to do something so well that one outperforms competitors.
Sustainable competitive advantage
do so in such a way that it is difficult or costly to imitate.
is a comprehensive plan guiding resource allocation to achieve long-term organizational goals.
this is where the direction is set and level and type of competition is identified.
the strategy for a single business unit (of a large corporation). The SBU will have a strategy within the corporate strategy.
Finance: Human Resources: Manufacturing and Marketing; These are the supports for the business strategy; guides the activities within one specific area of operations.
formulating and implementing strategies.
process of reviewing the organization, the environment, and the competitive position as well as current strategies.
crafting strategies to guide the allocation of resources
putting the strategies into action
Basic mission in the organization
Peter Drucker; Business mission; customers; customers value; results; plan.
Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
strategic constituencies in the organization's mission statement. Employees; communities; customers; suppliers; shareholders
broad beliefs about what is or is not appropriate behavior.
strengths, weaknesses, opportunities and threats
strengths and weaknesses
opportunities and threats.
Five Forces Analysis of industry attractiveness
Michael Porter; Industry competition; new entrants; substitute products or services; bargaining power of suppliers; bargaining power of customers.
GE portfolio planning model
dominant position, growing industry.
poor position in a growing industry; may be due to newness or recent entry
dominant position-low growth industry
poor position-low growth industry; divest the dogs
may be growth through concentration in the same business area; growth through diversification moving to new and different business area.
when a business acquires the suppliers or distributers.
Retrenchment or restructuring
Downsizing; Bankruptcy-protects from most creditors while management reorganizes-through the courts. Divestiture-selling or parts or products.
Adopts standardized products and advertising to use worldwide.
Customizes products and advertising to best fit local needs; McDonalds
Efficiencies of global operations with attention to local markets; Ford strategy - however, sales are different in Germany
Strategic Alliances; Co-option-working with competitors (United Airlines and Lufthansa- the Star Alliance
Competitive Strategies; Uniqueness Focused differentiation - unique product in a "niche" market - Rolex watches
Formal Organization structure
Division of work; supervisory relationships; formal communication channels; major subunits; levels of management.
Informal Organization structure
Social Network Analysis - informal structures and embedded social relationships that are active in an organization.
Similar skills and similar tasks are laced together; economies of scale; task assignments; high quality technical problem solving; in-depth training and skill development within functions; clear career paths within functions.
a lack of communication and coordination across functions; also called functional silos; has resulted in teams.
groups together people working on the same product, in the same area, with similar customers, or on the same processes.
groups together people and jobs focused on a single product of service; problem is the group ownership of the product.
Americas; Europe; Asia; the US Nike has a similar model
Banks are big ones along with retails; people and jobs which serve the same customers or clients.
Advantages to customer structure
flexibility, coordination, points of responsibility, expertise, ease in changing; Question as to the economy of scale
combination of functional and divisional structures
team structures may use either permanent or temporary teams.
think NASA and various projects - Permanent team Advantages - break down barriers; shared knowledge; common goals; focus Negatives - may take longer; relationships become important; meeting times - ability to work together; reliance on each other.
Central core of full time employees surrounded by outside contractors and partners.
cooperation with another organization to pursue mutual activities.
Eliminates internal boundaries amount subsystems and external boundaries with external environment; GE
Working for home - uses IT and the internet to engage shifting network of strategic alliances. Advantage not paying for big office.
Efficiency versus red tape; mechanistic design; rules, regulations, procedures; tight design-pyramid form.
continuous adaptation through problem solving, innovation and learning.
Levels of authority
Tall versus flat; each level increases the hierarchy and increases the pay level at the top. However, the leader may need to delegate and that is the issue of the span of control
more managers, more costly, less flexible and may be less customer friendly.
have fewer levels-but there is more responsibility for control with the person on the top.
delegation, empowerment and horizontal structures-especially in the high tech and information technology areas.
system of shared beliefs and values that guides behavior in organizations. British Airways - like working for the FBI General Mills - Patrician culture of conflict avoidance Accidental Petroleum - Autocratic Environment Oracle - a company full of men who would walk over their mothers to the to the top.
respect for members, customer driven and performance oriented; Zappos.com and Disney
process through which new members learn the culture of the organization; strong influence on the new member-the mentor and the first supervisor are very important.
when walking around-visible actions and events; Heroes-pictures of past employees on wall Ceremonies-having lunch once a month Rites and Rituals-how people are dealt with Legends and Stories-who did well and where they went. Metaphors and Symbols
consists of core values-which are the underlying assumptions. Innovation and risk taking - Apple, Twitter Ethics and Integrity Social Responsibility - Wholefoods, Target Customer Service - Nordstrom Performance - only top 10% survive Teamwork-some organization want you to be part of a team.
Alan Mulally and Ford
Came out of the financial crisis unlike the other auto companies; changed the culture; transparency, eliminated bureaucracy, made the company more open.
Meaningful purpose; trust and respect; honesty and openness; personal growth and development
Spirituality is not associated with religion-but rather a shared belief.
Inclusiveness, pluralism and respect for diversity.
different cultures influential in setting key values and policies
well represented at all levels
mentoring and support
Absence of prejudice and discrimination
training and task activities
Minimum intergroup conflict
diversity not leading to destructive conflicts between cultures.
people who share similar beliefs and values based on work and personal experiences
belief that one's membership group or subculture is superior to all others
Diversity; reach a point beyond which promotion is difficult.
Harassment and Discrimination
Pay; pregnancy; biculturalism-adopt characteristics of majority cultures in order to succeed.
comes from Executive Order 11246 and not from legislation; legislation was in the late 60's and 11375 which brought women under the umbrella came shortly later.
EEO (Equal employment opportunity
came from the Civil Rights Act of 1964 (Title 9)
this act referred to equality in employment.
Top Down Change
from management and management involvement
Bottom Down change
comes from all levels (often when new groups of employees are hired and grow into the management positions in the organization)
Kurt Lewin; Concept of Unfreezing; changing; refreezing; make change slowly.
continual adjustments as changes are being implemented.
Legitimacy-rewards punishment - my way or the highway.
Expertise - know what you are talking about.
Reference-personal values and commitments; change agent shares power by recognizing that people have varied needs and complex motivations.