Description
The ppt is explaining about strategy and management plans.
STRATEGY A strategy is a unified, comprehensive and integrated plan that relates the
strategic advantage of the firm to the challenges of the environment.
It is designed to ensure that the basic objectives of the enterprise are
achieved through proper execution by the organization most effectively in a
changing environment
?A strategy is a means to achieve the ends. ?A strategy is a plan that is unified; it ties all the parts of the enterprise together. ?A strategy is comprehensive; it covers all major aspects of the enterprise. ?A strategy is integrated; all parts of the plan are compatible with each other and fit together well. ?A strategy begins with a concept of how to use the resources of the firm most effectively in a changing environment
It is similar to the concept in sports of a game plan, where competitors past plans, strengths and weaknesses along with teams strengths and weaknesses are looked into. A game plan is oriented against one competitor only and is only for one game. A firm has to deal with a number of competitors simultaneously and with the government, suppliers, owners, labour unions and others. A strategy is oriented toward basic issues like ?What is our business? ?What it should be? ?What are our products, functions, and markets? ?What can our firm do to accomplish objectives?
Strategy Alternatives ?Stability ?Expansion ?Retrenchment ?Combination
Stability Strategies ?Firm continues to serve the public in the same product or service, market, and function sectors as defined in its business definition ?Its main strategic decisions focus is on incremental improvement of functional performance.
?Firm will concentrate its resources where it presently has or can rapidly develop a meaningful competitive advantage in the narrowest possible product-market function ?Scope consistent with its resources and market requirements.
?For a small firm this strategy is frequently used to maintain a comfortable market or profit position
Why?
?The firm is doing well
?A stability strategy is less risky
?Managers prefer action to thought
?No disruption in routines
?Too much expansion can lead to inefficiencies
Expansion strategies ?Firm serves the public in additional product or service, market, and function to its business definition ?Its main strategic decisions focus is on major increases in the pace of activity within its present business definition. ?A firm implements this strategy by redefining the business-either adding to the scope of activity or substantially increasing the efforts of the current business
?Why? ?Volatile industry
?Expansion equated with effectiveness
?Managerial motivation
?Belief in experience curve
?Growth yields monopoly power
?External pressure from stockholders
Retrenchment strategies
?Firm sees the desireability or necessity for reducing its product or service lines, markets, or functions ?It focuses its strategic decisions on functional improvement through the reduction of activities in units with negative cash flows. Why? ?The firm is not doing well or doing poorly ?Internal strengths vis-a-vis environment is not up to the mark ?Better opportunities are seen somewhere else
Combination strategy
Conscious use of several grand strategies simultaneously or sequentially . Why? Periods of economic transition, and during changes in the productservice life cycle
Strategic Business Unit (SBU) A strategic business unit (SBU) is an operating division of a firm which serves a distinct product, market segment or a well defined set of customers or a geographic area. The SBU is given the authority to make its own strategic decisions within corporate guidelines as long it meets corporate objectives. Each SBU sets its own businesses strategies to make best use of its resources given the environment it faces.
The overall corporate strategy sets the long-term objectives of the firm and the broad constraints and resources within which the SBU operates.
The corporate level will help the SBU define its scope of operations. It also limits or enhances the SBU’s operations by means of the resources it assigns to the SBU. At the corporate level in multiple-SBU firms, the strategy focuses on the portfolio of SBUs the firm wishes to put together to accomplish its objectives. ?Corporate strategy---focusing on the mission of the firm ?Business strategy----focusing on how to compete in an industry or strategic sub-group, and achieve competitive advantage ?Functional strategy---focusing on plans and policies to be carried out (marketing, manufacturing, personnel etc.) designed to implement corporate and business strategy.
Strategic decision making in multiple-SBU firms involves interrelationships between corporate-level and business- level planning.
Executives first determine the overall corporate strategy,
Examine the level of achievement of objectives relative to their SBUs and other businesses they could enter Assess how the SBUs are doing relative to each other and potential SBUs and then allocate funds to the SBUs and
Establish policies and objectives with them.
Keeping the guidelines set by the corporate level in back drop, the SBUs analyze how they can create the most effective strategy to achieve their objectives.
Porters’s Competitive Strategies ? Low cost leadership ? Differentiation ? Focus ? Focused low cost ? Focused differentiation Miles And Snow’s Strategy Typology
Managers seek to formulate strategies that will be congruent with the external environment Prospector: innovate, take risk seek out new opportunities and growth Defender :holds on to current customers and is concerned with internal efficiency, high quality products
Analyzer : maintains stable business while innovating on the periphery ? Reactor: repond to environmental threats and opportunities in an adhoc manner Efficiency and control versus learning and flexibility is determined by the contengencies of strategy, environment, size, and lifecycle of the organization. Design must also fit the workflow technology of the organization Assessing Effectiveness The goal approach The resource-based approach The internal process approach
?
Manufacturing firms ?Small-batch and unit production ?Large-batch and mass production ?Continuous process production Different technologies impose different kinds of demands on individuals and organizations and those demands have to be set through an appropriate structure. Flexible manufacturing/computer integrated manufacturing ?Computer-aided design ?Computer-aided manufacturing ?Integrated information network
Lean manufacturing uses highly trained employees at every stage of production process to improve quality, customer service, and cost cutting. FMS ( flexible manufacturing system) can become a competitive burden rather than a competitive advantage unless organizational structures and management processes are redesigned to take advantage of new technology. Service firms ?Intangible output ?Production and consumption simultaneous ?Labour and knowledge intensive ?Customer interaction ?Human element ?Quality of service is perceived and cannot be measured ?Rapid response time is usually necessary ?Site of facility extremely important
Various organizational designs, the interrelationships among units and planning processes can be quite complex in a series of iterative interactions across levels and subunits. Every unit in an organization has production process that consists of distinct technology and has to have a relationship with departmental structure. There are two dimensions ?Task variety ?Analyzability
•Routine technologies •Craft technologies •Engineering technologies •Non routine technologies
Department design ?Formalization ?Decentralization ?Work level skill ?Span of control ?Communication and coordination
Interdependence ?Pooled interdependence (mediating technology) divisional structure ?Sequential interdependence (long linked technology) horizontal mechanisms e.g. task forces, integrators.
?Reciprocal interdependence (intensive technologies )horizontal structure
Job design It includes the assignment of goals and tasks to be accomplished by employees Job rotation Job simplification Job enrichment
Research findings have demonstrated that advanced technologies have enriched rather than simplified jobs, engaging their higher mental capabilities, offering opportunities for learning and growth and providing greater job satisfaction.
Socio technical system Socio portion refers to the people and groups that work in organization and how work is organized and coordinated Technical portion refers to materials, tools, machines, and processes used to transform organizational inputs into outputs. The goal of the socio-technical system is to design the organization for joint optimization which means that an organization functions best only when the social and technical systems are designed to fit the needs of one another.
I T impact on organizational design •Smaller organizations •Decentralized organization structure •Improved horizontal communication •Improved inter-organizational relationships •Enhanced modular structure
doc_550230967.ppt
The ppt is explaining about strategy and management plans.
STRATEGY A strategy is a unified, comprehensive and integrated plan that relates the
strategic advantage of the firm to the challenges of the environment.
It is designed to ensure that the basic objectives of the enterprise are
achieved through proper execution by the organization most effectively in a
changing environment
?A strategy is a means to achieve the ends. ?A strategy is a plan that is unified; it ties all the parts of the enterprise together. ?A strategy is comprehensive; it covers all major aspects of the enterprise. ?A strategy is integrated; all parts of the plan are compatible with each other and fit together well. ?A strategy begins with a concept of how to use the resources of the firm most effectively in a changing environment
It is similar to the concept in sports of a game plan, where competitors past plans, strengths and weaknesses along with teams strengths and weaknesses are looked into. A game plan is oriented against one competitor only and is only for one game. A firm has to deal with a number of competitors simultaneously and with the government, suppliers, owners, labour unions and others. A strategy is oriented toward basic issues like ?What is our business? ?What it should be? ?What are our products, functions, and markets? ?What can our firm do to accomplish objectives?
Strategy Alternatives ?Stability ?Expansion ?Retrenchment ?Combination
Stability Strategies ?Firm continues to serve the public in the same product or service, market, and function sectors as defined in its business definition ?Its main strategic decisions focus is on incremental improvement of functional performance.
?Firm will concentrate its resources where it presently has or can rapidly develop a meaningful competitive advantage in the narrowest possible product-market function ?Scope consistent with its resources and market requirements.
?For a small firm this strategy is frequently used to maintain a comfortable market or profit position
Why?
?The firm is doing well
?A stability strategy is less risky
?Managers prefer action to thought
?No disruption in routines
?Too much expansion can lead to inefficiencies
Expansion strategies ?Firm serves the public in additional product or service, market, and function to its business definition ?Its main strategic decisions focus is on major increases in the pace of activity within its present business definition. ?A firm implements this strategy by redefining the business-either adding to the scope of activity or substantially increasing the efforts of the current business
?Why? ?Volatile industry
?Expansion equated with effectiveness
?Managerial motivation
?Belief in experience curve
?Growth yields monopoly power
?External pressure from stockholders
Retrenchment strategies
?Firm sees the desireability or necessity for reducing its product or service lines, markets, or functions ?It focuses its strategic decisions on functional improvement through the reduction of activities in units with negative cash flows. Why? ?The firm is not doing well or doing poorly ?Internal strengths vis-a-vis environment is not up to the mark ?Better opportunities are seen somewhere else
Combination strategy
Conscious use of several grand strategies simultaneously or sequentially . Why? Periods of economic transition, and during changes in the productservice life cycle
Strategic Business Unit (SBU) A strategic business unit (SBU) is an operating division of a firm which serves a distinct product, market segment or a well defined set of customers or a geographic area. The SBU is given the authority to make its own strategic decisions within corporate guidelines as long it meets corporate objectives. Each SBU sets its own businesses strategies to make best use of its resources given the environment it faces.
The overall corporate strategy sets the long-term objectives of the firm and the broad constraints and resources within which the SBU operates.
The corporate level will help the SBU define its scope of operations. It also limits or enhances the SBU’s operations by means of the resources it assigns to the SBU. At the corporate level in multiple-SBU firms, the strategy focuses on the portfolio of SBUs the firm wishes to put together to accomplish its objectives. ?Corporate strategy---focusing on the mission of the firm ?Business strategy----focusing on how to compete in an industry or strategic sub-group, and achieve competitive advantage ?Functional strategy---focusing on plans and policies to be carried out (marketing, manufacturing, personnel etc.) designed to implement corporate and business strategy.
Strategic decision making in multiple-SBU firms involves interrelationships between corporate-level and business- level planning.
Executives first determine the overall corporate strategy,
Examine the level of achievement of objectives relative to their SBUs and other businesses they could enter Assess how the SBUs are doing relative to each other and potential SBUs and then allocate funds to the SBUs and
Establish policies and objectives with them.
Keeping the guidelines set by the corporate level in back drop, the SBUs analyze how they can create the most effective strategy to achieve their objectives.
Porters’s Competitive Strategies ? Low cost leadership ? Differentiation ? Focus ? Focused low cost ? Focused differentiation Miles And Snow’s Strategy Typology
Managers seek to formulate strategies that will be congruent with the external environment Prospector: innovate, take risk seek out new opportunities and growth Defender :holds on to current customers and is concerned with internal efficiency, high quality products
Analyzer : maintains stable business while innovating on the periphery ? Reactor: repond to environmental threats and opportunities in an adhoc manner Efficiency and control versus learning and flexibility is determined by the contengencies of strategy, environment, size, and lifecycle of the organization. Design must also fit the workflow technology of the organization Assessing Effectiveness The goal approach The resource-based approach The internal process approach
?
Manufacturing firms ?Small-batch and unit production ?Large-batch and mass production ?Continuous process production Different technologies impose different kinds of demands on individuals and organizations and those demands have to be set through an appropriate structure. Flexible manufacturing/computer integrated manufacturing ?Computer-aided design ?Computer-aided manufacturing ?Integrated information network
Lean manufacturing uses highly trained employees at every stage of production process to improve quality, customer service, and cost cutting. FMS ( flexible manufacturing system) can become a competitive burden rather than a competitive advantage unless organizational structures and management processes are redesigned to take advantage of new technology. Service firms ?Intangible output ?Production and consumption simultaneous ?Labour and knowledge intensive ?Customer interaction ?Human element ?Quality of service is perceived and cannot be measured ?Rapid response time is usually necessary ?Site of facility extremely important
Various organizational designs, the interrelationships among units and planning processes can be quite complex in a series of iterative interactions across levels and subunits. Every unit in an organization has production process that consists of distinct technology and has to have a relationship with departmental structure. There are two dimensions ?Task variety ?Analyzability
•Routine technologies •Craft technologies •Engineering technologies •Non routine technologies
Department design ?Formalization ?Decentralization ?Work level skill ?Span of control ?Communication and coordination
Interdependence ?Pooled interdependence (mediating technology) divisional structure ?Sequential interdependence (long linked technology) horizontal mechanisms e.g. task forces, integrators.
?Reciprocal interdependence (intensive technologies )horizontal structure
Job design It includes the assignment of goals and tasks to be accomplished by employees Job rotation Job simplification Job enrichment
Research findings have demonstrated that advanced technologies have enriched rather than simplified jobs, engaging their higher mental capabilities, offering opportunities for learning and growth and providing greater job satisfaction.
Socio technical system Socio portion refers to the people and groups that work in organization and how work is organized and coordinated Technical portion refers to materials, tools, machines, and processes used to transform organizational inputs into outputs. The goal of the socio-technical system is to design the organization for joint optimization which means that an organization functions best only when the social and technical systems are designed to fit the needs of one another.
I T impact on organizational design •Smaller organizations •Decentralized organization structure •Improved horizontal communication •Improved inter-organizational relationships •Enhanced modular structure
doc_550230967.ppt