BMOM5203 Assignment Part1 (8nov10) Draft

Master of Project Management
Faculty of Science & Technology

13
th
November 2010
Organization
and
Business
Management
[BMOM5203]
Assignment (Part 1)
Name : Neoh Wen Wan

Student ID : CGS00528817
BMOM5203 Organizationa and Business Management
Neoh Wen Wan CGS00528817 Page 1 of 29
Table of Contents

PART 1

Question 1 ....................................................................................................2 - 7

Question 2 ..................................................................................................8 - 18

Question 3 ............................................................................................... 19 - 29

PART 1 (Total 25 Marks)
Question 1
In a short essay, describe the three main types of managerial skills identified by Robert
Katz. Which skills are most important to each level of management, and why?
[6 marks]

There are three main types if skills as identified by Robert Katz, they are technical
skills, human skills and conceptual skills. There is a need for the right combination of
skills at the required management level so that managers can discharge the function of
management necessary to their job effectively, perform their roles correctly and become
more managerial self-efficacious [Peterson and Fleet, 2004]. Gary [2005] also states that
from his experience most managers do not behave rationally nor do members of
organizations all the time respond or behave rationally. These reflect the uniqueness and
complexity of people / human and the dosage of skills required to manage them are
different at different level. Different industry, organization needs, behaviour, etc do have
impact to the major activities that relates to task, people and change that a manager
perform at their level.

In general, technical skills are the specialised skills or knowledge in a specified
field such as engineering design and construction methodology. Whereas human skills
involve interpersonal skills such as abilities to communicate with people effectively,
positive attitudes and behaviour and ability to interact and influence others to achieve the
required objective. Conceptual skills are the abilities to understand the whole organization
and interact with the external environment, generate vision, mission, goals and
organization culture, and able to understands and determine how the organization progress
in long term. These skills are further discussed in detail by Peterson and Fleet [2004].

Two perspective of views can be used to explain this, one is at different
management levels within the same organization (top management such as chairman and
managing director; middle management such as operation manager and departmental
heads; and line management such as managers or assistance managers) while the other is at
same position but different level of organization (i.e. project manager for developers, main
contractors and sub-contractors), for both the degree of needs for each skills (technical,
human and conceptual) varies at different level. These variations of skills requirement in
different management level is further supported by Kraut, et al. [2005] and Qiao and Wang
[2008].

In top management such as chairman or managing director of an organization, their
primary functions involve mostly on planning and organising at high level. They do not
spend most of their time merely solving problems, rather they create the platform or
platforms that set the rules, behavioural expectations, quality control, tone, and customer
service ethic as well as the overall identity of the organization [Rubenstein, 2005]. In short
they have to set the mission, generate vision and goals for their organization. Therefore
they need to be very strong in conceptual skills, followed by human skills to handle
external parties and middle management. Approach in human skills towards external
parties and internally are different. A balance of firm and soft approach together
influencing power are required to handle external parties whereas the ability in
commanding and leadership qualities are required in handling its own organization.
Technical skills are stills required at the level by not to the extend of detailing. Some
successful top management may not even have their technical education related to the
current business they are involve in. Sometimes their decisions are base on commercial
context point of view such as guanxi-driven or market-driven [Liu, 2006].

A middle management such and departmental heads will need a balance of the
conceptual, human and technical skills as their main function is to implement the mission,
vision and goals set by the top management. Here they need to ensure that all their
managers in the respective departments are aligned with the mission, vision and goals of
the organization. With this they need to have a balance of strength in all the skills in order
to blend and transfer them to implementation stage by their respective line management.

In a line management such as managers or assistant managers, where their primary
function is directing [Plachy, 2009] and controlling the daily operations of the
organization, they need to be strong in technical skills with human skills in order to
communicate and manage their subordinate. They need to be strong in technical skills so
that they can resolve technical problems arising from their daily production activities and
their strength in technical skills will help in making a more accurate technical decision and
judgement. This is because in the line management level their focus would mainly be on
the output of the services and/or products. Conceptual skills are the least required here as
their ability to understand and be aligned with the organization mission and goals are
sufficient at this level.

There are various sizes of organization from huge to small organization. Malaysia
as a country can be also considered an organization what have different levels of
management such as Prime Minister, respective Ministers at national levels and Chief
Ministers at state level. Another perspective example is that in construction and
development industry for a same position (i.e. Project Manager) but in different level of
organization, the needs of each skills are different.

A project manager in a development company may be in this case considered top
level where there is a need for more conceptual skills followed and human skills with less
technical skills. This is because to develop a new township there is a need to generate
ideas, concept and vision for that township. Here again conceptual skills is highly required.

Whereas a project manager in a main contractor will need a balance of technical,
conceptual and human skills. This is because can be considered the middle management
and will be managing their sub contractors to move towards the direction of the concept
for the said township. There are quite an extend of co-ordinating works among the
respective specialised trades.

However when it comes to a project manager for a sub contractor, he would highly
be dependent on his technical skills and human skills to complete their respective scope of
work which relates to his specialised trades. This is because he will be focusing on
directing their supervisors and skill workers to complete their trades in the required
schedule and quality. At this level his involvement shall be to the context of his trades and
achieving the objective at this level.
`
According to Peterson and Fleet [2004], the skills identified by Robert Katz still
appear in 80% of the management text books. This reflects the recognition of skills
identified by Robert Katz eventhough there are other skills identified by various authors in
the modern management context. Karp and Helgo [2009] also supported Robert Kartzs by
stating that top level management and middle level management have different point of
view on hange. They [Karp and Helgo,2009] states that change to top level
management is seen as opportunity to strengthen, innovate and renew organization while
to middle management it is a neither sought nor welcome matter as it disrupt and upset the
organization balance. It can be concluded that there are needs of different degree and
combination of skills to different level of management.

1150 words

Reference
Gary, H. [2005], The dark side of organizations : forensic management an emerging
theoretical perspective. ; Development and Learning in Organizations, Vol. 19, No.
5, pp. 4-6.
Karp, T. and Helgo, T. I. T. [2009], Reality revisited : leading people in chaotic change. ;
Journal of Management Development, Vol. 28, No. 2, pp. 81-93.
Kraut, A.I., Pedigo, P.R., McKenna, D.D. and Dunnette, M.D. [2005], The role of the
manager: Whats really important in different management jobs. ; Academy of
Management Executive, Vol. 19, No. 4, pp. 122-129 (Reprinted from 1989, Vol.3
No 4).
Liu, H. [2006], Managing strategic planning paradigms in China. ; Marketing Intelligence
& Planning. ; Vol. 24, No. 5, pp. 432-445.
Peterson, T.O. and Fleet, D.D.V. [2004], The ongoing legacy of R.L. Katz : An Update
typology of management skills. ; Management Decision, Vol. 42, No. 10, pp. 1297
1308.
Plachy, R.J. [2009], When to lead? When to manage? ; T+D, Dec, 63,12,pp.52.
Qiao, J.X. and Wang, W. [2009], Managerial competencies for middle managers : some
empirical findings from China ; Journal of European Industrial Training, Vol. 33,
No. 1, pp. 69-80.
Rubenstein, H. [2005], Handbook of business strategy. ; Emerald Group publishing
Limited, pp. 189-192.

Question 2
Describe FOUR (4) popular variables established by the contingency approach. Explain
how each variable might affect management approaches in different organizations.
Provide an example of each.
[9 marks]

INTRODUCTION
Contingency approach to management as define in Certo and Certo [2009] as an
approach base on premise that, although there is probably no one best way to solve a
management problem in all organizations, there probably is one best way to solve any
given management problem in any one organization. This is because every organization, is
affected by the input of variables such as monetary, people, external environment and
technology.
These variables can be divided into two categories, that is uncontrollable variables
and variables within controlling circumstances. Uncontrollable variables are variables that
is beyond any person control such as external environment factor which involves global
crisis, government policies etc. Variables within controlling circumstances to certain
extend are technology used and it is also in different in every organization. Both monetary
and people have their distribution in both control and uncontrolled variables as the degree
of exposure very much depends on the industry and trade they are involve in.
All variables will have certain degree of effect to management approaches in
different organization. It may ranges from minor to major effect depending on the
organization behaviour, planning, influencing and controlling factor. Therefore these
variables must be considered, address and blended in management approaches to be able to
suite the organization in order to be effective. In short the planning, organizing,
influencing and controlling approaches need to be blended together with variables inputs.

MONETARY VARIABLES
Money is an important factor that have affect on every part of an organization such
as culture, planning, human resources management, motivation benefits and technology
expansion. There are many types of organization ranging from quality orientated
organization to quantity orientated organization in monetary perspective. Quality oriented
organization such as clean room contractors will normally have a higher percentage of
profits while quantity oriented organization such as budget hotel and electronic industry
depends on volume to achieve the organizations goal.
There are three areas to look at for monetary factor that is limitation of money,
constant input of money and inconsistent input of money.
Dell [1994] empower their employees to make fixes and do special things for their
customer to address customers satisfaction and by doing so it will help the employees to
understand the companys agenda and are energized about helping customers which is a
huge competitive advantage in the competitive business environment. This empowerment
will involve extra money and time to be spend and if an organization have limitation of
such extra spending, it will affect the organization as a whole because customer
satisfaction is essential to ensure continuity business in the competitive environment.
Other advantages with such empowerment are it provides indirect training to the
employees in making better judgement and decision, it motivates employees as the
organization trust them and promote a healthy culture within the organization.
Dell [Lowther, 2006] introduces flexible working and a womens network to help
retain key employees. For flexible working there is a need of extensive Information
Technology facilities such as notebook for its employees, while have a womens network
it need to have good benefits and maternity benefits. All these involve money of which any
limitation and inconsistency will affect its implementation.
Budget hotel (i.e. Tune Hotel) will have a constant monetary input as their client
consist of various people such as constant budget business travellers, budget travellers and
family travellers. Therefore their planning, forecasting, and scheduling in all aspect are
more on standardized level or daily routine.
However a clean room contractor will depends on factories requiring these services
as there are limitation of demand since not many factories in Malaysia do have clean room
facilities. Therefore the monetary input for this category of contractors are usually
unstable, hence they required high profit to survive the inconsistency of monetary input
due to limitation of demand. This type of organization will normally keep their overhead
low by outsourcing, adopt partnering and supply chain approaches and may diversify their
business during economic downturn. Normally this type of organization will maintain a
strong core team that have multi tasking abilities ranging from management to technical
expertise. Hence they are able to expand immediately when required by recruiting
seconded employees for supporting roles from other organization such as their partnered
organization.
If a companys mission essentially is to make a lot of money, then run away, not
many employees will be inspired, rather they may stay because they need their jobs but
they will not be confident that they are doing the right thing [Dell,1994]. This type of
organization will not promote a good culture and motivation to its employees as the
fundamental is just to make money and show no other consideration.

HUMAN VARIABLES
Human factor is another factor where sometimes can be control but mostly is
beyond control. Each individual are unique itself, ranging from different education
background, culture, behaviour, race, age, country, etc. Gary [2005] stress that an
important factor in good management is the ability to recognize the dark side (human
behaviour : interdependent, self-contained, commitment, loyalty and essential pathology)
and deal with it. Kraut [2005] regards managers at all levels as the ambassador, as their
leadership qualities will influence the motivation of employees, organization culture and
productivity. Zeffane [1994] further shows that there are significant relation between
people / employees and organization structure / culture and management style.
Within an organization, human factor can be control to certain extend by having in
place the procedures such as adopting a standard operating procedure and/or quality
assurance procedure. However it needs training, monitoring, coaching, inspection and
motivation to ensure the control are in place and meets the required objective. There also
corporate decision that may sometimes be beyond the context of standard procedures such
are commercial decisions. Among example are the elements of Guanxi such as mutual
obligations and mutual trust in Chinas business environment [Liu, 2006]. Guanxi do
have significant impact and liabilities to an organization [Liu, 2006] as it affects the
organization culture, controlling, authority and delegation of authorization. Guanxi in
certain places cannot be avoided as it do have its advantages and disadvantages but it will
be very unhealthy to the organization culture if the organization are over expose to it. Say
for example in the process of tendering, where certain bidder do have better opportunity
due to their strong guanxi elements, it will affect the employees in the organization (both
sides) in terms of motivation and improvements as on one side employees may not be
satisfied as lack of transparency and fairness while the other side employees may act
arrogant, believing the strong support they have. If an organization is highly involve in
guanxi is many levels, there will be limitation to their expansion as there will be concern
on the delegation of authority by the stake holders. However guanxi are very much
useful in emergencies where time are limited such as supplies of food to a disaster affected
area.
Gray [2005] states that all organizations have problems that are inherently a
combination of collective behaviour and the individual psychological dispositions people
bring with them. In labour intensive industry such as the construction industry where it
still relies mainly on labourers for works, human factor is one of the factors that is difficult
to control. Managing the cultural differences of varies nationality in the same construction
site is also crucial as any slight racial sentiments will spark quarrels among them and affect
the productivity. In this context and level the a flat organization structure according their
nationality with narrow span of management will help in the management approaches.

EXTERNAL ENVIONMENT VARIABLES
External environment do have impact on planning of an organization. The planning
approach need to be able to accommodate changes, hence its best for plans to be divided
into three categories, short term (say achieve objective in a year), intermediate term (say
achieve objective between one to five years) and long term (say achieve objective of more
than five years).
Take for example, development of a new township may range from easily five to
ten year depending on the size. Here the main objective is to complete the new township
within the required period, however there are external environment factors such as market
demand, government policies, trend etc., that may affect the development. Therefore the
development is developed in phases in order to achieve the main objective. Development
in phases (e.g. Phase 1, Phase 2 and Phase 3) can be considered intermediate term planning
with the ability to address external factors such as new government policies, authority
requirement, market demand and design trend. Short term planning will involve
availability of the material supply, resources, sourcing of long lead/delivery equipments
and achieving the required progress in a specific period of time.
In the construction industry, there is no one construction fragmentation is exactly
the same as the other even though the exterior design is the same but other factors such as
soil conditions, location and traffic access or congestion are different. In this type of
organization where it involves constant changing of site the organization structure are
more towards decentralization and more delegation of authority to individual projects.
Tescos strategy of entering the Northern Ireland market is influenced by the
external environment of the organization that is the pressure from Irish government that
Tesco must undertake contracts with local suppliers and the sensitive market culture as
Irish customer are sensitive to change and loyal to what they use to[Vignali, 2001]. This
situation does not only leads to the initial high cost and risk of acquiring Quinnsworth,
Crazy and Stewarts stores in Ireland but it also mark a complex entry into Ireland as it
consists of varies entity of organizations. These indeed is the birth Tesco Ireland which is
not associated with Tesco UK, hence they are separate entity with different control,
marketing and organization structure as Tesco Ireland consist numbers different
organizations while Tesco UK consist of one standard organization.

TECHNOLOGY VARIABLES
Incorporating the advance technology available will helps to reduce the
dependency on labour intensive industry. As an example our government is currently
providing incentives for those construction projects that adopted prefabricated or precast
approach towards construction. The prefabricated or precast approached towards
construction does not only increase speed but also improves its control of quality and
reduce the massive requirement of labours. This shift will reduce the massive labour
requirement and indirectly reduce the organization size, structure and complexity.
Organization size, structures and complexity varies from one to another, the more
involvement of people the more complex the organization. This will leads to increases of
levels and policies involve. In short, size and structure increases along with the
complexity, fragmentation and involvement of people, while it is in contrast to control. As
an example for a large organization there are procedures for approval expenditure. When
the approval procedures is centralise, much more time are spend through various levels of
approval. With the various levels of approval in both branches and head office, the risk of
a single person or party in control are reduce, hence it is more transparent. However when
the approval procedures are decentralise, the approval process would be much faster but
there will be more risk involve as less control from the central organization, more
dependent on branches level to monitor and control the expenditure and more authority to
the branches.
According to Cartwright [2003], organizations are increasingly reconsidering their
approaches to organizing and embracing the potential offered by modern technology to
change the work environment such as enabling people to work at times and in places of
their own choosing or required. Technology also create an environment where it increases
team work among its members and within its organization the wide usage video
conferencing, emails, networking etc for communication and sharing for information.
Technology can also be perceived as intrusive and controlling in providing organizations
with capability to more closely monitor employee performance [Cartwright, 2003]. An
extensive application of technology and networking can be use to monitor accounting
matters of branches in other countries. This can increase the controlling factor for a
decentralized organization and may reduce the fall of the Barings Bank of which one of the
factor involves control [Drummond, 2002].
Dell Corporation as an example of company that uses extensive technology for its
organization. Dell [1994] states the Dell Corporation adopted and grown their strategy
based on the evolution of the business and industrys technologies, of which they uses
technology to focus on its customer service and support with high extreme level of
responsiveness in both timeliness and quality replies to customers and feedback system in
every area of the business such as manufacturing, finance, products, sales and customers.
Dell also utilized advance technology such as notebook with fully integrated 3.5G
technology that allows remote video messaging and conferencing in order to introduce
flexible working and to embrace and manage diversity [Lowther, 2006].

CONCLUSION
The notion of a contingency approach to management is not novel as it have
become a popular discussion topic for contemporary management thinkers [Certo and
Certo, 2009]. This may be because in the fragmentation of the business world and much
extend of variables for consideration; hence there are fix approaches but the best
approaches for success for that specific situation and period of time. Some of the
application of contingency approached are identified by Svensson [2005] for Leadership in
performance in Total Quality Management, Raymond [2005] for operation management
and advanced manufacturing technologies in small to medium enterprise and Kiem and
Zeithaml [1986] for corporate political strategy and legislative decision making.

2180 words

Reference

Cartwright, S. [2003], New forms of work organization : issues and challenges. ;
Leadeship & Organization Development Journal, Vol. 24, No. 3, pp. 121-122.
Certo, S. C. and Certo, S. T. [2009], Modern Management : Concepts and Skills. ; 11
th

Edition, Pearson Prentice Hall.
Dell, M. S.[1994], Making the Right Choices for the New Consumer. ; Managing Service
Quality, Vol. 4. No. 2, pp. 22-25.
Drummond, H.[2002], Living in a fools paradise : the collapse of BaringsBank. ;
Management Decision, 40/3, pp. 232-238.
Gary, H. [2005], The dark side of organizations : forensic management an emerging
theoretical perspective. ; Development and Learning in Organizations, Vol. 19, No.
5, pp. 4-6.
Keim, G. D. and Zeithaml, C. P. [1986], Corporate Political Strategy and Legislative
Decision Making : A review and Contingency Approach. ; Academy of Management
Review, Vol. 11, No. 4, pp. 828-843.
Kraut, A.I., Pedigo, P.R., McKenna, D.D. and Dunnette, M.D. [2005], The role of the
manager: Whats really important in different management jobs. ; Academy of
Management Executive, Vol. 19, No. 4, pp. 122-129 (Reprinted from 1989, Vol.3
No 4).
Liu, H. [2006], Managing strategic planning paradigms in China. ; Marketing Intelligence
& Planning. ; Vol. 24, No. 5, pp. 432-445.
Lowther, R. [2006], Embracing and managing diversity at Dell. ; Strategic HR Review,
Vol. 5, Issue 6, Septerber/October, pp. 16-19.
Raymond, L. [2005], Operation management and advanced manufacturing technologies in
SMEs ; Journal of Manufacturing Technology Management, Vol. 16, No. 8, pp. 936-
955.
Svensson, G. [2005], Leadership performance in TQM : a contingency approach. ; The
TQM Magazine, Vol. 17, No. 6, pp. 527-536.
Vignali, C. [2001], Tescos adaptation to the Irish market. ; British Food Jounal, Vol. 103,
No.2, pp146-163.
Zeffane, R.M. [1994], Understanding Employee Turnove : The Need for a Contingency
Approach. ; International Hournal of Manpower, Vo.15, No.9/10, pp. 22-37.

Question 3
Please read the following article The High-Intensity Entrepreneur and discuss how
entrepreneurs can effectively plan when the external environment is continually
changing.
[10 marks]

Certo and Certo [2009] define entrepreneurs as those individual who identify,
evaluate and exploit opportunities. There are three steps of process that an entrepreneurs
take for establish an entrepreneurship that is opportunity identification, opportunity
evaluation and opportunity exploitation.
In todays business world, opportunities are available every places throughout the
world and can be categorized into five categories such as new products (i.e. new car
model), new geographical markets (i.e. small to medium scale new housing developments
is outskirt location such as Jitra, Kedah and Qanawat a telecommunication company
serving rural areas in Saudi Arania [Habiby and Coyle, 2010]), new materials (i.e. light
weight concrete), new production technology (i.e. advance filtering technology for
drinking water) and new organizing (i.e. social internet platform such as facebook for
networking, promotion and selling products). The ability to establish a good opportunity
identification relies upon the entrepreneurial alertness such as individual capabilities to
identify potential opportunities that an individual may acquire via vast exposure; ability to
source for fast and reliable information e.g. market demand; extend of social networks
with influencing abilities; and ability to understand customers needs. The identification
of opportunity is important as it is the platform to create the Visibility Economics.
According to Habiby and Coyle [2010] this visibility can give high potential companies
many of the benefits of going public and without it they will stall out in small size.
Once these are identified then a direction can be establish to proceed further to
evaluate the opportunity. The process to evaluate the opportunity is an important process
to decide if this opportunity is good to proceed or not. This process may either be a simple
straight forward process or using a combination of various tools such as feasibility study,
risk evaluation, data collection survey, cost plan, decision tree, probability theory,
conceptual tools to address change and conceptual strategic planning to derive the
decision.
The opportunity exploitation stage involve activities to gain returns from the new
product or services and are affected by factors such as customer value of product or
service, level of stake holders support and abilities of existing management team. In
todays business world where distance is not a boundary, there will be ongoing external
environment that affects the product in either advantages or disadvantages environment.
Therefore there is a need for the opportunity exploitation to be ongoing until the end of the
lifecycle of the product with careful strategic planning and change management to address
the constant changing external environment. The extend of such process requirement
varies and depending on factors such as type of product, industry, market force,
technology. For example in the medical environment, new products may take a longer time
to be available in the market as it involves heavily in research, testing and certification
process before it can be available to the public, whereas the mobile technology such as
mobile phone have new models being constantly introduced to the market in short period
of time (i.e. every half yearly) even though there are research, testing and certification.
Strategic planning and management will assist the entrepreneur to establish a
direction to reach its objective in long term. While tactical planning can be used to address
the ongoing changing and influences of external environment such as market demand,
crisis and political policies.
For a start towards strategic planning and management, Critical Question Analysis
can be use to assist and generate the vision, mission and objective of the organization or
product. This process will provide a conceptual view of the overall organization or its
product and the direction. Brainstorming can be a tool associated to the Critical Question
Analysis.
Environmental analysis will enable the entrepreneur to formulate contingency
approach in the process of reaching its objective in view of the ongoing changes of
external environment. Environmental analysis is actually dividing the environment factors
into three parts. The general environment (i.e. political, social economic, technology and
legal) shall form the outer ring while the operation environment (i.e. supplier, international
environment, labour, customer and competition) is the middle ring and the smallest ring
shall be the internal environment (i.e. internal aspects of planning, organizing, influencing
and controlling). The environmental analysis will help the entrepreneur to achieve better
understanding on how the various environments will have impact on their product and
organization. For example the world is moving towards green technology and inventing of
new non-biodegradable disposal product may be for short term only as people are
becoming environmental conscious; inventing of new biodegradable disposal product may
strategically be more beneficial in return in consideration of the investment made. In
support of this Lagrosen [2003] states that companies cannot develop an organization
culture that differs substantially from the prevailing culture factors of the country in which
it operates.
The Five Forces Model by Porter [1980] can be used by entrepreneur to analyse the
industry environment and helps them in their planning and adaptable to the changing
global economy. The five forces are :
1) Treat of New Entrants : this refers to the ability of new firm or product entering
the market and the timing it takes for the new firm or product to emerge. As an
example the Windows operating system in computer which is still taking the
leading roles as new entrants are still not that successful to be a stive
competitor. Sometimes government policies to have influence over the
emergence of new entrants (e.g. Astro is currently the only organization that
hold the license to operate satellite channel hence their competitor of new
entrants will only the there if the government allows another operating licence).
The more opportunity the of a new entrants especially in a short period of time
will decrease the attractiveness.
2) Buyer Power : this refers to the buying power that customer have over the firm
or product. For example mobile phones may be only a luxury gadget ten years
ago but it is now a necessity for everyone included to the extend that some
primary school children do own one. This involves around the demand factors
where people made their decision base on good to have or a must have item.
The more people need the product the more attractive the product is.
3) Suppliers Powers : this refers to the suppliers power that the supplier have over
the firm or product. For example the in festive seasons, raw food such as
vegetable, meat and fish are scare; the price usually increases due to shortage
however the demand is still there as people still requires it. However in cases
where it involves raw material such copper or steel; when it increases those
manufacturers or contractors have no other alternative but to bare with the
situation. This situation is disadvantages to both the manufacturer and
customer. Business that involves in high suppliers powers will normally be less
attractive as most situation are normally beyond their control. Here supply
chain, partnering, own production and Guanxi may help to reduce the impact
on attractiveness. Eye 2 Eye Optical (from article in question 3) new venture
into lens-manufacturing plant do helps in reducing their reliability to lens
manufacturing and therefore increases the attractiveness to its optical business.
4) Threat of substitute products : this refers to the availability of substitutional
products in the market. For example when the electronic clock was invented it
actually have massive impact on mechanical clock. Today electronic clock are
available in every places capturing the market while mechanical clock only
concentrate of it being a luxury piece for its competitive edge.
5) Intensity of rivalry : this refers to the intensity of competition among the firm
or products. For example the intense promotion of budget airline such as
Airasia, Firefly and Jetstar do have significant impact to other normal
airlines such as Malaysian Airline - MAS, Singapore Airline - SIA and
Australia Airline - Quantas. Here people with cost perspective being majority
of the people will be more attracted to the budget airline, hence having the
attractiveness of being able to capture the market share of the aerospace
industry. Before the emergence of budget airline, normal airlines are competing
each other on quality of service and some extend only on cost. However with
the emergence of budget airline it have significant impact on the normal
airlines as even businessman, professional and managers travel on budget
airlines to reduce the expenditure of their organization in view of the
competitiveness of business world.
SWOT analysis (Strength, Weaknesses, Opportunity and Threats) can be use by
entrepreneur to analyse its internal strength and weakness in facing the external
environment. The more understanding that one have on its organization and product the
more prepared they are in facing the market. As an example (from the article in question 3)
SecuTronic have a flat management structure comprising of many entrepreneurs working
together and have no boss; these type of organization is of high risk as they are all working
in silos. There must be a common understanding of vision, mission and direction by all the
entrepreneurs as it would be a disaster if some are having their own ideas or direction.
Here the strength would the having the energy of many managers to perform their duties,
however these managers must be united. The challenge here is the ability of its
organization to function and excel without a leader to all the entrepreneurs in facing the
changing environment. Therefore the organization need to be strong, motivated, have good
internal communication, understanding and teamwork to excel.
Business portfolio analysis can be used by entrepreneurs to analyse the market and
investment portfolios. This analysis also helps the entrepreneurs to make certain degree of
financial planning if they do required to source for additional funds and their focus on high
growth and return area. There are two popular tools that is the BCG Growth-Share Matrix
which analyse base on the market share and growth of business with the aim of generating
future business or revenue; and GE Multifactor Portfolio Matrix which analyse base on
market attractiveness and business strength. The two models may only be part and parcel
of a complete analysis system. They need to work together with other tools addressing
factors that are not considered in this tool. For example the BCG Growth-Share Matrix
does not consider risk associated to product development, risk of inflations, future
economic condition and external environment pressures; while GE Multifactor Portfolio
Matrix requires sound managerial judgement, exposure and experience.
Quality Function Development (QFD) can also be used as a strategic planning tool
as it involves two key steps that is development of customer strategies and development of
enabling strategies. Strategic QFD systematically translate vision into action in a series of
logical steps such as researching customers outcomes, analysing segments, targeting
opportunities and creating innovative strategies that are stable in fast changing
environments [Killen et al, 2005]. By providing a comprehensive understanding of the
customer and stakeholders, it will be able to tap into previous unknown segments and
targets critical opportunity.
Upon establishment of the long term strategic plan there need a short term plan that
is the Tactical Plans to complements its Strategic Plan. Both Strategic Plan and Tactical
Plans needs to be interrelated and closely coordinated to ensure successful results. The
reason Tactical Plans are required because the ongoing change of environment and factors.
Tactical Plans may be of numerous single use plan designed specifically to the needs of a
particular change environment or crisis.
Combination of tools and skills such as the Program Evaluation and Review
Technique (PERT), Functional Analysis [see Green and Connaughton, 1996 and Seeley,
1997], Function Analysis System Technique (FAST) Diagram [see Haji Che Mat, 2002],
SWOT, Porters model of competitiveness, Maslows hierarchy of needs [see Dye, et al,
2005], Pareto Law [see Craft and Leake 2002], Quality Function Deployment analysis,
ability to sense and adapt change at early stage, ability of reliable market information,
experience, advance information technology and understanding of cultural differences will
help in generating a good Tactical Plan to address the continuity changing of external
environment. These combinations do indeed address some of the concerns highlight by
Helms and Nixon [2010] as SWOT tool alone may be an oversimplification of a business
situation that is in reality more complex, hence does not represent the complete analysis
that may lead to inaccurate results.
Even though an entrepreneur can be well verse with the above tools, one also need
to be equipped basic skills [see Addis, 2003]; networking power to draw the reliable
market information [Uzzi and Dunlap, 2005]; business sense to make judgement or
commercial decision; continuous learning to have the required exposure; and leadership
skills to lead, have the visionary ability to foresee and the determination power to make to
overcome and address obstacles from changes of external environment. Therefore in view
of the complexity and fragmentation of the business world today there is no one straight
forward successful solution for effective planning as a plan may be effective in a particular
situation and time but ineffective at another situation or time. Here time or timely is
another factor for consideration [Hui, 2004].
The twenty-first century is more and more competitive as knowledge as a resource
has no natural home base and can be transferred easily in comparison to natural resources
[Pillania, 2009]. Therefore ability to address and monitor ongoing change is an important
factor for an entrepreneur to succeed.
2180 words
References

Addis, M. [2003], Basic skills and small business competitiveness : some conceptual
considerations. ; Education + Training, Vol . 45, No. 3, pp. 152 161.
Craft, R. C. and Leake, C. [2002], The Pareto principle in organizational decision making.
; Management Decision, Vol. 40, No. 8, pp. 729-733.
Certo, S. C. and Certo, S. T. [2009], Modern Management : Concepts and Skills. ; 11
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Edition, Pearson Prentice Hall.
Dye, K., Mills, A. J. and Weatherbee, T. [2005], Maslow : man interrupted : reading
management theory in context. ; Management Decision, Vol. 43, No. 10, pp. 1375
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Green S.D. and Connaughton J.N. [1996], Value Management in construction : A clients
guide. ; CIRIA.
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Edition, Pearson Malaysia, pp. 43-50.
Helms, M. M. And Nixon, J. [2010], Exploring SWOT analysis where are we now? A
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Management, Vol. 3, No. 3, pp. 215 251.
Hui, L. T. [2004], Business timeliness : the intersections of strategy and operations
management. ; International Journal of Operations & Production Management, Vol. 24,
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Killen, C. P., Walker, M. and Hunt R. A. [2005], Strategic planning using QFD. ;
International Journal of Quality & Reliability Management, Vol. 22, No. 1, pp. 17 29.
Lagrosen, S. [2003], Exploring the impact of culture on quality management. ;
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487.
Seeley, I. H. [1997], Quantity Surveying Practice. ; MacMilan.
Pillania, R. K. [2009], Competitiveness and emerging markets. ; Business Strategy Series,
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Porter, M. E. [1980], Competitive Strategy : Techniques for Analyzing Industries and
Competitors ; Free Press, New York, republish in 1998.
Uzzi, B. and Dunlap, S. [2005], How to build Your Network. ; Harvard Business Review,
Dec, pp. 53 60.
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