management lecture
DESCRIPTION
MGT lecture from Stephen P. Robbin's book.TRANSCRIPT
![Page 1: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/1.jpg)
Management- Theories and Practices
Week 5
![Page 2: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/2.jpg)
Strategic Management and Planning
![Page 3: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/3.jpg)
As chairman of Arab’s leading real estate development company, Mohammed Ali Alabbar has a goal of meeting the demand for quality houses and other properties in the region. As the company continues to expand rapidly , the greatest challenge is strategy implementation. One of his top managers says, “we have the vision and the strategy. The question is do we have skills across the organization to execute?” What do you think here?
![Page 4: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/4.jpg)
The discount retail industry is good place to see what strategic management is about
Walmart and Kmart – 1962
What’s the difference?
![Page 5: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/5.jpg)
When it comes to strategic management there are two types of planning included
• Synoptic
• Incremental
![Page 6: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/6.jpg)
What is strategic management?
![Page 7: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/7.jpg)
Encompasses all management functions
Organization strategies– what’s this?
Business model - will customer value what is being offered, will the company make money doing so?
Dell - sell through internet instead of retailers
![Page 8: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/8.jpg)
Why is strategic management important?
Lets see….
![Page 9: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/9.jpg)
Link between performance and SM – remember walmart and kmart
Dealing with uncertainty – how?
Organizations are big and complex – to coordinate
![Page 10: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/10.jpg)
The SM process
Six steps and the diagram
![Page 11: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/11.jpg)
The corporate strategies
![Page 12: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/12.jpg)
Specifies where a business wants to be or businesses
Based on mission and goals
Role each business unit will play
![Page 13: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/13.jpg)
Three main types of corporate strategy
Growth Stability Renewal
Lets see each of these ….
![Page 14: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/14.jpg)
Growth:
Organization expand the number of markers / products offered either through current business or new businesses
Organizations grow by using concentration, vertical integration, horizontal integration, diversification
Concentration: increases markets or products offered Vertical integration: supplier/ seller e.g. ebay / apple retail stores Horizontal integration – taking competitor Diversification – related or unrelated business
![Page 15: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/15.jpg)
Stability:
Corporate strategy in which an organization continues to do what it is currently doing.
Continue to serve same clients same product or service , maintaining market share, sustaining business operations
Org does not grow but does not fall behind either
e.g sales of candy and chocolate go down – cadbury maintaining things as they are (market share)
![Page 16: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/16.jpg)
Renewal Strategies:
Incase of declining performance
Two main types – retrenchment and turn around
Retrenchment - short tem renewal strategy used for minor performance problems – stabilizing operations, revitalizing org resources, and prepare to compete again
Turnaround – more serious problems , more drastic action needed, cutting costs and restructuring org
![Page 17: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/17.jpg)
How corporate strategies are managed?
![Page 18: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/18.jpg)
What is SWOT Analysis?
Careful assessment – external and internal information
External – customers, govt reports, journals, suppliers, bankers, friends in other org, consultants, professional association
Internal – budgets, financial ratios, attitude surveys
![Page 19: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/19.jpg)
Management and Organization
Marketing Human Resource
Management Quality Distribution Channels Employee Experience
Staff Quality Market share Education
Degree of centralization
Advertising efficiency Union Status
Organization charts Customer satisfaction Turnover, absenteeism
Planning information, Product Quality Work satisfaction
Control systems Service reputation Grievances
Sales force turnover
Finance ProductionResearch andDevelopment
Profit margin Plant location Basic applies research
Debt-equity ratio Machinery obsolescence Laboratory capabilities
Inventory ratio Purchasing System Research programs
Return on investment Quality control New-product innovations
Credit rating Productivity efficiency Technology innovations
![Page 20: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/20.jpg)
• When org corporate strategy encompasses a number of businesses, managers can manage this collection or portfolio of businesses using a tool called a corporate portfolio mix.
• The first corporate portfolio mix – BCG matrix - was developed by BCG
• Idea was businesses could be evaluated using 2x2 matrix to identify which ones offered high potential and which were draining org resources
• Business unit is evaluated using SWOT analysis and placed in one of four categories
![Page 21: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/21.jpg)
STARS QUESTION MARKS
CASH COWS DOGS
Anticipated growth rate
Low
High
Low High Market Share
![Page 22: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/22.jpg)
Dogs – should be sold off or liquidated as they have low market share and potential
Milk cash cows – as much as they cab, limit new investment and use cash to invest in stars and questions marks
Stars- heavy investment because of high potential and market share
Question marks - hardest decision, sell or turn into stars
![Page 23: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/23.jpg)
Lets do some class exercise
![Page 24: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/24.jpg)
Class exercise:
Do a personal SWOT analysis. Assess your personal strengths and weaknesses (skills, talents, abilities). What are you good at? What are you not good at? What do you enjoy doing? What you don’t enjoy doing? Then, identify career opportunities and threats by looking at job prospects. Write a clear career action plan. Outline five year goals and what you need to do to achieve these goals
![Page 25: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/25.jpg)
Competitive Strategies
![Page 26: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/26.jpg)
How the organization will compete in its businesses
Small org – one business
Large org – businesses , primary or main market (in case of one business)
For each business , independence and formulation of competitive strategies for SBUs
![Page 27: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/27.jpg)
What is competitive advantage ?
What factors can become CA?
• Examples
![Page 28: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/28.jpg)
Ability to sustain CA
Why?
External environment …..
![Page 29: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/29.jpg)
The porters five forces model
![Page 30: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/30.jpg)
Potential of new entrants : capital requirement, economies of scale (industry differences why?)
Bargaining power of buyers: internet made shopping easy?
Bargaining power of suppliers: access to information
Threat of substitutes: low calorie sugar
Rivalry among competitors:
![Page 31: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/31.jpg)
What to do now?
![Page 32: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/32.jpg)
Differentiation:
Attempt to distinguish the firm’s products or services from others in the industry
The organization may use creative advertising, product features, exceptional service or technology to achieve a product perceived as unique
• It can reduce rivalry with competitors – loyalty • Reduce bargaining power of buyers because other products are
less attractive • Fight off threats of substitute • Create entry barriers
![Page 33: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/33.jpg)
Cost leadership:
The organization aggressively seeks efficiency Pursues cost reductions Uses tight controls
Meaning thereby that company can undercut competitor’s prices and still offer same quality and earn profit too – the hotels
Low price as entry barrier Substitute and competition – better positioned
![Page 34: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/34.jpg)
Focus:
Concentration on specific regional buyer or market
Can use differentiation or cost leadership but for narrow target market only
![Page 35: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/35.jpg)
Use these strategies intelligently
Link to company’s overall mission
Few companies found that shifting to low cost strategy didn’t work out since their buyers loved them
for innovation thus differentiation
Two of them can be managed together too like cocacola did
![Page 36: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/36.jpg)
What type of org characteristics you would see?
![Page 37: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/37.jpg)
Strategy Organizational Characteristics
Differentiation Acts in a flexible, loosely knit way, with strong coordination among departments,Strong capability in basic researchCreative flair, thinks ”out of the box”Strong marketing abilities Rewards employee innovationCorporate reputation for quality or technological leadership
Cost Leadership
Strong central authority; tight cost controlsMaintains standard operating proceduresEasy-to-use manufacturing technologiesHighly efficient procurement and distribution systemsClose supervision, finite employee empowerment
Focus Frequent, detailed control reportsMay use combination of above policies directed at particular strategic targetValues and rewards flexibility and customer intimacyMeasure cost of providing service and maintaining customer loyaltyPushes empowerment to employee with customer contact
![Page 38: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/38.jpg)
Functional Strategies
![Page 39: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/39.jpg)
What is this?
At departmental/ functional level
![Page 40: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/40.jpg)
New trends in Strategy
![Page 41: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/41.jpg)
1. Strategic Flexibility
Why?
How?
![Page 42: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/42.jpg)
2. Strategic Partnerships
What is this ?
Examples?
![Page 43: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/43.jpg)
The Global Strategy
![Page 44: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/44.jpg)
Globalization Strategy
• Treats world as a single global market• Standardizes global product / advertising strategies
Transnational Strategy
• Seeks to balance global efficiencies and local responsiveness• Combines standardization and customization for product / advertising strategies
MultidomesticStrategy
• Handles markets independently for each country• Adapts product/ advertising to local tastes and needs
ExportStrategy
• Domestically focused• Exports a few domestically produced products to selected countries
High
LowLow
High
Nee
d fo
r Glo
bal I
nteg
ratio
n
Need for National Responsiveness
![Page 45: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/45.jpg)
Global Strategy: reap efficiencies by standard product design and manufacturing, common suppliers, eliminating overlapping facilities e.g. Gillette razors
Multidomestic: activities tailored to needs of market, reject the ideal of world as single market
Transnational: benefits of standardization, and tailoring to local needs e.g. cocacola version of traditional kvas in Russia has become fastest growing soft drink
Export:
![Page 46: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/46.jpg)
Strategy Execution
![Page 47: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/47.jpg)
Strategy formulation is easy, Execution is difficult
![Page 48: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/48.jpg)
Six Silent Killers
Lets see diagram
![Page 49: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/49.jpg)
Strategy
Top-down or laissez-faire senior management style
Unclear strategy and conflicting
priorities
An ineffective senior management
team
Poor vertical communication
Poor coordination across
functions, business, or borders
Inadequate down-the-line
leadership skills and development
![Page 50: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/50.jpg)
Visible Leadership• Motivate people• Shape culture and values• Model desired behaviors
Candid Communication• Open lines of communication• Encourage debate• Be honest
Clear Roles and Accountability• Delegate authority and responsibility• Create teams• Define roles
Human Resources• Recruit employees• Manage transfers and promotions• Provide training
PerformanceStrategy
![Page 51: Management Lecture](https://reader034.vdocuments.site/reader034/viewer/2022042522/563dd2b255034635058b50de/html5/thumbnails/51.jpg)
Class exercise :
Living large