DEVELOPING STRATEGIES

Developing Strategies:
It is generally believed that there are three types of strategies which ought to be followed by enterprises. These include; A. Corporate level strategies B. Business Unite strategy C. Functional strategy

A. CORPORATE LEVEL STRATEGY

Internal growth Horizontal Dimensions Restructuring Stability Strategy Financial Restructuring Portfolio Restructuring

BCG Growth Share Matrix:

It is based on the observations that a companys business unit can be classified into four categories called: 1. 2. 3. 4. Star Question Marks Cash Cows Dogs

Cost Reduction Strategy:

Do not wait until you are in trouble to cut costs, cautions Margo Lovero, President of the entrepreneurial Center, Inc, in the entrepreneur cost. She suggested following six areas for review: 1. 2. 3. 4. 5. 6. Review your production methods monthly Eliminate marginally profitable products and markets Sell excess inventory Watch petty cash expenses Select few suppliers Outsource whenever possible

The Turned on Organization:

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Generally turned on organizations implement the following strategies; 1. 2. 3. 4. 5. Build a strong foundation Make every customer feel special Have the courage to set bold goals Simplify, Simplify, Simplify Lead with care

B. BUSINESS UNIT STRATEGIES

Sometime the business has many segment of work. Accordingly business unite strategies are developed for each segment of the business. The famous example is that of Philips Company which established three functional sub units namely: Lighting, TV and items of personal use. Business unit strengths are evaluated across the following criteria; 1. 2. 3. 4. 5. 6. 7. Brand reputation Product quality Market share growth Technology know-how Factory capacity utilization Managerial talent Market share

C. FUNCTIONAL STRATEGIES
Functional strategies will include the following: 1. 2. 3. 4. 5. Procurement Personal Marketing Production Finance

1. PROCUREMENT

Strategic Areas:
1. 2. 3. 4. Purchases Vs. Production Procurement and sales coordination Selecting Vendors Process to be Selected

2. PERSONAL POLICIES
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Strategic areas are as under; Manpower Planning Selection Training Compensation Arrangements for Work Employee Services Industrial Relations

CBA Constituents:
Collective Bargaining Agreements are negotiated between labour and management. It has been generally experienced that the trade unions continue to be demanding and the matters to be agreed continue to show rising trend. Besides adding worries to management this trend has consequential effect in the form of cost-push inflation.

Approaches to Compensation:
The word is trying to strongly link productivity with compensation to employees. Developing countries, by and large, are continuing with monthly wage/salary system.Search for a change must continue. There can be no improvement except through change. Consequently the world is struggling to develop alternate systems of compensation to employees based on increase in productivity. So far the following four approaches.

Achieving Productivity:
Four stages exist for achieving productivity. The first one relates to awareness. The second one is known as understanding it. We will focus on the other two.

Operationalizing Productivity:
A strategy for operationalizing productivity and three phases for implementing the program for productivity are suggested below; 1) Analytical Phase 2 Planning and control phase at operational levels 3) Planning and control at the financial levels

MOTIVATION

Concept of Motivation:
The performance of the person can be judged by two factors namely: ability to perform and motivation of the person to perform the job. In real life solutions, these two factors are to be multiplied with each other to compute the level of performance. Motivation is an inner drive resulting in doing job. The inner drive is affected by various human needs.

Characteristics of Motivation:
Characteristics of Motivation are briefly listed below; 1. It is an internal feeling 2. Feeling of need is continuous process. 3. Motivation is calculated as under: Motivation=Valence x Expectancy.

Importance of Motivation:
Supportive climate must exist in an organization for persons. Careful attention should be given to it. A motivated team is an organization can achieve the following objectives; 1. The performance level will be high. 2. Employee turn-over will be low. 3. Profitability of an organization can be improved. 4. Quantum of absentees will be negligible.

Primary Factors of Motivation:

Primary factors of motivation which include monetary and non monetary aspects are listed below; 1. Higher salary. 2. Respect and social status. 3. Job security. 4. Interesting work. 5. Undertaking worthwhile activities. 6. Enjoying Power and influence.

Maslows Hierarchy of Needs:

A.H Maslow, a famous social scientist, has categorized needs as under; 1. Physiological needs. 2. Safety needs. 3. Love needs 4. Esteem needs.

Herzberg Hygiene Theory:

A study was conducted by Fredrick Herzberg, based on a comprehensive analysis of experiences and feelings of 200 engineers and accountants in nine different companies in U.S.A. According to Herzberg, there are ten hygiene factors. These are as under; 1. Company policy and administration 2. Technical supervision 3. Salary 4

4. Job security 5. Personal life.

McGregors Theory X and Theory Y:

McGregors has generalized assumptions relating to motivating human beings under two categories, namely: Theory X and Theory Y Theory X: It assumes; Employess inherently dislikes work and whenever possible will attempt to avoid it. Since employees dislike work and whenever possible will attempt to avoid it Employees will shrink responsibilities and seek formal direction whenever possible

Theory Y: These assumptions are; Good is mans inherent nature Average individual learns to accept and even seek responsibility Expectancy Theory: Simplified expectancy theory model suggests that individual makes extra effort to perform well.

Motivators for Executives:

The following order of their importance: 1. 2. 3. 4. Challenge of work Rising curve of status Competitive spirit Money

Perception:
Perception means: how one views or looks at a particular thing. Various factors which determine perception are as under: 1. 2. 3. 4. 5. 6. Attitude Values Culture Education Experience Supervisor

PIM Survey:
Pakistan institute of management, Karachi undertook a survey on motivation relating to business executives in Pakistan in 2005. Employees of Pakistan Organizations consider Compensation to be the most important.

Results:
The outcome of the study revealed that the top five motivators for employees in Pakistani organizations are:

1. 2. 3. 4. 5.

Organizational image Job security Compensation Good relationships Team work

RISK MANAGEMENT
In todays world the pronounced role of a decision maker is to keep the risk level as low as possible. There are no decisions without risk.

Concept of Risk:
Risk can be defined as: 1. Lower yield on an investment than expected 2. Loss of part or all of the actual

Peter Drucker:
Peter Drucker on risk is quoted below: While it is futile to try to eliminate risk and questionable tot ry to misuse it; it is essential that the risk taken be the right risk.

Characteristics of Risk:
Essentially there are two characteristics of risk. These include; uncertainty loss.

Catagories of Risk:
There are two categories of risk namely: general and specific. General category of risks consists of three aspects namely; known predictable unpredictable

Types of Risk:
It is difficult to develop an all encompassing and fully comprehensive chart identifying all types of risks.

Process of managing Risks:

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There are three stages which are involved in the process of managing risks. These include: risk identification, visualizing and quantifying the impact of risk and finally the art and craft of handling risk.

RMMM Plan:
Risk Mitigation, Monitoring and Management plan is generally referred to as RMMM Plan. This plan deals with the following strategic issues: Risk avoidance Risk monitoring Risk management and contingency planning

Conclusion:
All decision makers should undertake extensive reading gain field experience and sell the idea of Risk management as their business territory of work.

RESEARCH AND DEVELOPMENT (R&D)

Some areas of strategic interest are listed below; Belief to be developed Practice to be reflected Financial commitment to be mad Services area critical Successful International Practices o USA o JAPAN o NICs o Developing Countries Pakistans Position o Institutional Level-Future Agenda o Sectoral Level-Growing trend o Public Sector-Being pushed to develop o Private Sector-Enlightened ones are pursuing o Small business-Difficult position

COMPUTER
Computer provides efficient ways of processing data and they are a part of an information system.

Generations of Computer:
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So far there have been five generations of computer in the world. Each generation had different ages and different applications. The range of the generations has been 5 years to 26 years.

Stages of development upto Computers:

The following stages have been covered until the arrival of computer in the world: Adding machines Calculators Main Frames Mini Computers Micro Computers PCs Laptop Palmtop

MANAGERIAL FUNCTION AND INFORMATION TECHNOLOGY

Some aspects in this respect are stated below:

Procurement:
World wide websites now enable quick selection of vendors. The time of processing purchase order has significantly reduced due to use email and active server pages.

Personal:
Human Resource Management has undergone a spectacular change.

Production/Operations:
Production Operations Management is responsible for processes that transform inputs into outputs.

In-house logistics and material management:

Inventory management is streamlined. Decisions include cost, objective and major decisions to make. The cost of ordering is determined through it an appropriate level and therefore substantial reduction is ensured through ordering.

Planning Production Operations:

Material planning is supported by IT in many ways as is explained below: Material Requisition Planning The software that facilitates the plan for acquiring or producing parts, sub-assemblies or material in case of inter-dependence items is called MRP. 8

Project Management Project is usually a one-time effort composed of many inter-related activities costing substantiated money and lasting for weeks and years. Troubleshooting Traditional approach of finding what is wrong in a factory can be a lengthy and expensive procedure.

Computerized Integrated Manufacturing (CIM):

CIM is a concept that provides the integration of various computerized factory systems.

Simplification of all manufacturing technologies and techniques Automation

Product Lifestyle Management (PLM):

PLM is a business strategy that enables manufacturers to control and share products related data as part of product design and development efforts and in support Supply Chain Operations

MARKETING
The initial study of marketing includes: a) b) c) d) Legal aspects of marketing Cost of marketing Functions of marketing Institutional aspects of marketing

FINANCE
E-Commerce applications of financial transactions can be vividly seen. Example includes,Global Stock Exchange is moving towards global 24 hours. Distribution electronic stock exchanges functioning with the use of internet for both transactions and multi-costing of real time stock pricing.

Virtual Close:
Preparation of quarterly financial statements is mandatory including Pakistan to meet regulatory requirements of listed companies.

Investment Management:
Investment management is a difficult task. There are hundreds of companies in Stock Exchange. Investment decisions are based on economic and financial forecasts and various multiple and conflicting objectives.

Computer technology and Business:

Technology is a process by which inputs converts into outputs. PCs help mangers to obtain, retain and analyze data for decision making. Information is the processed shape of data.

IT Companies and Global Brands:

Business Week, in its issue of September 29, 2009 (pp. 56 - 60) has released 100 Global Brands. Ranking of the companies is based on having best built their images and made them stick.

Country Spreads:
Captures country spread of IT Companies and Global Brands.

Brand Valuation:
Figuring out what percentage of a companys revenues can be credited to a brand. Five years of earnings and sales for the brand are projected. Sources include reports from analysis: 1. 2. 3. 4. J.P.Morgan Citigroup Morgan Stanley Inter brand

Developing MIS:
a) b) c) d) e) General Guidelines From where to start Modus Operandi Analogy to MIS

Guidelines for Affective Communication:

Management communication weakness often lies is its wishful thought that is easy to get ideas across to other people. In practice, few things are more difficult. The following five communication essential are ; 1. 2. 3. 4. 5. Motivated Inform Stimulate Questions Check up Invite participation ---------------------------------------------------------------------------------------------------

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