Beruflich Dokumente
Kultur Dokumente
Dr. V K Arora
https://www.linkedin.com/in/vkarora/
2
S.No. Topics to be covered
1. Environmental Analysis: Challenges for Top Management
Known-unknown…..History, Surprises, Mega, Macro and Micro, Power Sector – Global, National and your
Discom, General / Immediate-nature of external environment, Environmental scanning – frame work,
Profile of the environment, SAP / ETOP, CORE COMPETENCY / KSFs
4. Strategy Implementation
Organisational Structure and Design, Resource allocation and control
5. Strategic Leadership for Managing Change
Understanding Leadership, Leadership Effectiveness, Leadership through spiritual intelligence, Strategic
for managing dynamic change, Group Exercise – Strategic thinking
6. Benchmarking
Types of benchmarking, Identifying relevant benchmarking practices – case study
7. Balanced Scorecard
Importance of BSC in the changing scenario Preparation of BSC – Group exercise
Performance Management System
4
SMART Goal (adding FIVE to Goal)
Objective(s) and Mission(s) are SMART Goal
Goal Objective
(SMART Goal)
Increase Profitability Increase profit by 10 %
6
VMO Formulation and Impact of Values/ Commitments
Vision Mission
Values
Objective (s)
7
Main Components of Strategic Intent
It contains,
1. Who are we?
2. What we do?
3. What we like to become?
8
Vision
• Miller and Dess defined vision as the “ category of intentions that are
broad, all inclusive and forward thinking”
9
Mission
11
Note: Values
M Values
12
VMO and Placement of Strategies/ Policies and Plans
Vision Mission
Values
Objective (s)
Commitment(s)
Strategies
Policies
Plan
13
Starting of Strategy and How it supports Objectives
Starting of Strategy
______________________
14
Strategy ………………….. from WAR to ECONOMY
Note:
15
Art of War Plan of Action
17
Strategic Management
18
Other definitions
19
Note: Strategic management is set of managerial decisions and actions
that determines the long-run performance of an organization.
It is Important because,
20
Strategic Intent (VMO and Business Model)
21
Note: Difference between Strategy and Policy
Strategy
Policy
22
Benefits of Strategic Management
23
Remember!!! Key attributes of strategic management
24
Environment Analysis is required
Due to
CHANGE
Change in ? ? ?
Before we proceed,
25
Population Ecology: Change with new environment is the requirement
otherwise
other company with suited environment will have an edge.
Strategic Choice Perspective: Not only adapts but reshapes their environment.
Flexibility Responsibility
Experimental No Criticism
27
Important Note
1. Political/ legal
2. Economy/ financials
3. Social/ culture
4. Technologies/ R&D
5. Local Environment
6. Foreign Environment
28
Environment Concern for a firm
International Environment
29
PEST Environment for International Business
Political-Legal
Economical
Social-Culture
Technology
30
Why and How Environment Changes
Strategic Intent
Corporate Culture
Organizational Behavior
Strategies/ Tactics (later)
31
Time Factor with MOSP
Bachchraj
|
Ramdhan Das
|
Jamnalal (Marwari Community)
(follower of Mahatma Gandhi & Congress Party along with Ghanshyam Das Birla)
Kamalnayan Ramkrishna
32
Khadi
Cotton
Sugar
Electrical
Auto
Three Wheeler
Casting Steel
Insurance
33
29th Nov 1945: Bajaj Auto was started as trading company.
1948: Started importing from Italy’s Piaggio & Co.
1959: Indian Govt. granted a license to manufacture.
1960: Entered in Technology Collaboration with Piaggio.
(first plant at Kurla, second at Akurti)
1971: Agreement expired with Piaggio
1975: Manufacturing with the help of Maharastra Govt.
1981: First motor cycle with Kawasaki Heavy Industry of Japan.
1999: Bajaj Auto became largest company in Bajaj Group
34
My marketing department? I don’t require it. I have a dispatch department.
I do not have to go from house to house to sell.
35
Before 1990’s
When there was no internet, it was easy to frame strategies as products were
limited to sell in particular area. Competition was nearly negligible.
After Opening our economy, we faced Globalization and soon many issues
were associated in strategy building.
E-com: Stocks, Dotcom, Retail, Survey, Books, Data, Consultancy, Banking,
Billing and even News.
Domestic Strategies
Market
36
Note 1. What is Synergy?
Synergetic Strategy
37
Note 2. Strategy verses Tactics
Strategy Tactics
Grand Limited
Broad Focused Narrow Focused
On going Specific/ situational
Adaptable Fluid
Before action During Action
Long Term Short Term
Time Based Immediate Results
38
Let’s Start
Proceeding of Business
What We Have
39
External Internal
Constraints
Societal |
Strategic
| Resources Choice
Industry |
| Competence
Competitor |
Value Chain
BusIness Policy
O T S W Functional
EFAS IFAS Strategy
S W O T
SFAS Corporate
Strategy
TOWS
Review of
Strategy Business
Mission &
Formation Strategy
Objective (s)
40
Analysis of External Factors
41
Analysis of Societal
Environment
Economical
Technological
Political – Legal
Socio-Cultural
Global
42
1. Economical
2. Technological
43
3. Political – Legal
4. Socio-Cultural
44
5. Global
45
Porter Industry Environment Analysis
46
Porter’s competitive strategies transformed strategic management in six ways
Second: Identify barriers (at internal level, through conduct and performance
approach) that reduces competition at the industry levels.
Fourth: Outline set of generic strategies that could create a long run position
with superior returns within a given industry.
Other Stack-holders
(Relative power of
Stack holders)
Government, Union,
Share Holders
48
I. Rivalry among Existing Players
49
II. Potential Entrants
A. Economy of Scale
1. Existing Players – are flexible to set prices.
2. New Entrants – Limited flexibility
B. Product Differentiation
1. Existing Players – Loyalty, USP, Brand and Unique Products
2. New Entrants – Many limitations
C. Capital Requirement
D. Switching Cost and therefore Portfolio Management
E. High switching cost for consumers
F. Difficulty in accessing raw materials
G. Access to Supply Base New Existing
H. Distribution Channels Entrants Player(s)
I. Patents and proprietary knowledge
Undo Design
J. Govt. Policies/ Govt. driven obstacles
50
III. Suppliers (Bargaining Power)
a. Outsourcing
b. Making
Supplier may enjoy more power if there are less of them. Costs of
switching to an alternate are high, or there are no alternates. A supplier
may also be the only provider of a certain raw material. This may be the
case in instances where a supplier holds a patent or have proprietary
knowledge. Because of a lack of alternates, they may be able to withhold
quantities or increase prices without losing sales.
51
IV. Buyers (Bargaining Power)
a. Present Buyers
b. Past Buyers
c. Future Buyers
Buyers tend to have power over an industry if they are important to the
company, this may be if the industry is such that buyers either buy in bulk, or
can easily switch to another supplier. A limited number of strong buyers may
be able to exert significant control over a seller. In addition, if a product is
similar to its competitor with little or no differentiation, then there are chances
that the company may need to let the supplier dictate terms in order to avoid
losing the customer.
52
How shifting is possible for both cheap and expensive products
V. Substitute
a. Continuous Improvement
b. Offering and Discounts
53
Criticism
In his views, all other factors that act through the original fives forces.
54
Competitors Analysis
(No set rule)
Plan Accordingly
55
ETOP Study - ETOP Framework
(External Threads and Opportunities )
Analysis is done in headings, factors, weight, rating (in scale 1 to 5, say), weight
score and comments (time frame inclusive)
Total weight of all the factors relating threats and opportunities should be ONE.
Together EFAS and IFAS generate SFAS (Strategic factors analysis summery)
56
Preparation of EFAS (format)
I. Opportunity
A.
B.
C.
II. Threats
A.
B.
C.
57
Analysis of Internal Factors
58
I. Analysis of Constraints
A. What are the constraints in your business and how does it effect the strategy building.
1. (HH) cannot work with (RR) but (HH+RR) can give desired output.
2. XY will not supply materials to us.
59
II. Resources Analysis
60
III. Competence Analysis
R&D Marketing
MIS Logistics
HR IR
Brand Network
61
IV. Value Chain Analysis
62
The Value Chain
Can be used to
63
Firm Infrastructure
Technological Development
Procurement
• Margins
– Capture the value from performing value-creating activities as
cheaply as possible
– The basic idea is that the consumer is willing to pay a certain
amount for the value you create. This is depicted as the size of the
overall pentagon.
– The size of the individual activity boxes represents the cost of
performing those particular activities.
– Thus, the smaller the size of the individual activity boxes relative to
the value the consumer is willing to pay, the greater the MARGIN
will be for the firm.
67
Remember!!!
68
Linkages within the Value Chain
69
Value Chain Linkages in the Supply Chain
Buyer Chain
Supplier
Chain
Supplier
Chain
Buyer Chain
70
Linkages with Suppliers Value Chain
• A firm’s differentiation stems from how its value chain relates to its
buyer’s chain.
• Differentiation derives fundamentally from creating value for the
buyer through a firm’s impact on the buyer’s value chain.
• Value is created when a firm creates a competitive advantage for its
buyer.
• The buyer must perceive the value to pay a premium price.
71
• Internal Factor Analysis Summary (IFAS) Table
72
Strategic Factors Analysis Summary (SFAS) Matrix
summarizes a corporation’s strategic factors by combining the external factors
from the EFAS table with the internal factors from the IFAS table.
73
Situational Analysis
SFAS
SWOT
74
SWOT Analysis/ TOWS Matrix
• SWOT analysis is a tool for helping assess the current situation for the
firm.
75
Strengths Weaknesses
Internal 1. 1.
2. 2.
Environment 3. 3.
Opportunities Threats
External 1. 1.
2. 2.
Environment 3. 3.
76
• SWOT Analysis
– Identifies Organization’s Strengths, Weaknesses, Opportunities, and Threats
• Core Competency
– A special strength that gives an organization a competitive advantage
77
Environmental Scanning
Converting Analysis into Action
Strengths
Weaknesses
Opportunities
Threats Turning
Opportunities and
Weaknesses into
Strengths
Environment Strategy
Scanning Building
78
from Environmental Scanning
to Employing the TOWS Matrix
SO WO
ST WT
– External analysis
• Opportunities
• Threats
– Internal analysis
• Strengths
• Weaknesses
81
The TOWS Matrix
STRENGTHS - S WEAKNESSES - W
Opportunities: Threats:
1. 1.
2. 2.
3. 3.
From ST Strategies
Strengths: SO Strategies
Internal Analysis Take advantage of
(IFAS) 1. Use strengths to
Strengths to
2. take advantage
avoid
3. of opportunities
threats
WT Strategies
Weaknesses:
WO Strategies Defensive strategies
1.
Use Opportunities to to minimize
2.
overcome weaknesses weaknesses and
3.
avoid threats
83
TOWS Matrix illustrates how the external opportunities and threats facing a
particular corporation can be matched with that company’s internal strengths and
weaknesses to result in four sets of possible strategic alternatives.
Strengths
Weakness
Opportunities
Threats
84
Environmental Threat and Opportunity Profile (ЕТОР)
Notes:
1. This is achieved by brainstorming. And finally the Strategy Maker uses his
judgment to place various environmental issues in clear perspective (O or
T) to create the environmental threat and opportunity profile.
2. It should be clearly understood that each sector is not exclusive of the
other. If required each of the major factors pertaining to a particular sector
of environment may be divided into sub-sectors and their effects studied.
3. The field force analysis goes hand in glove with ETOP, as here also the
contribution with regard to opportunities and threats posed by the
environment is also a necessary part of study.
85
Environmental Nature/ Impact of Weighage Conditions/ Logic
Factor (depending Each Factor (May be time/ future
upon Industry/ Sector) dependent)
(O or T)
Social (1) ↑ ↓ ↔ ǁ
Social (2) ↑ ↓ ↔ ǁ
Political ↑ ↓ ↔ ǁ
Economic (1) ↑ ↓ ↔ ǁ
Economic (2) ↑ ↓ ↔ ǁ
Technological ↑ ↓ ↔ ǁ
Regulatory ↑ ↓ ↔ ǁ
Suppliers ↑ ↓ ↔ ǁ
Government ↑ ↓ ↔ ǁ
Promotional
Market ↑ ↓ ↔ ǁ
International ↑ ↓ ↔ ǁ
Natural Calamity ↑ ↓ ↔ ǁ
Recession ↑ ↓ ↔ ǁ
86
Organizational Capability Profile
87
Strategic Advantages Profile (STP)
88
KPI – Key performance Indicator
89
Flow : To be understood meticulously
(Basic Model of Strategic Management)
90
Types of Strategies
91
Corporate Level Strategy
The strategies formulated by each SBU to make best use of its resources
given the environment it faces, come under the gamut of business level
strategies. At such a level, strategy is a comprehensive plan providing
objectives for SBUs, allocation of resources among functional areas and
coordination between them for achievement of corporate level objectives.
These strategies operate within the overall organizational strategies i.e.
within the broad constraints and polices and long-term objectives set by
the corporate strategy. The SBU managers are involved in this level of
strategy. The strategies are related with a unit within the organization. The
SBU operates within the defined scope of operations by the corporate level
strategy and is limited by the assignment of resources by the corporate
level. However, corporate strategy is not the sum total of business
strategies of the organization. Business strategy relates with the “how”
and the corporate strategy relates with the “what”. Business strategy
defines the choice of product or service and market of individual business
within the firm. The corporate strategy has impact on business strategy.
93
Functional Level Strategy
94
Strategic Decision at Different Levels
Dimensions Levels
95
from
Situational Analysis
to
Strategy Formation
96
Situational Analysis
97
Strategic Management Process
98
Strategic Thinking (view of top strategies level)
100
where
we
are
??? Soaring
In The
Box
Of
Mediocrity
Poor trying
to become Faltering
good
Strategic Thinking
101
Seeking new strategic opportunities
The Intuitive
The Rational
Unique interpretation
of the strategic opportunity
103
Technology Readiness Levels (TRLs)
TRL are based on a scale from 1 to 9 with 9 being the most mature
technology. The use of TRLs enables consistent, uniform discussions
of technical maturity across different types of technology.
104
Technology
Description
Readiness Level
TRL 1. basic principles observed
TRL 2. technology concept formulated
TRL 3. experimental proof of concept
TRL 4. technology validated in lab
technology validated in relevant environment (industrially
TRL 5. relevant environment in the case of key enabling
technologies)
technology demonstrated in relevant environment
TRL 6. (industrially relevant environment in the case of key
enabling technologies)
system prototype demonstration in operational
TRL 7.
environment
TRL 8. system complete and qualified
actual system proven in operational environment
TRL 9. (competitive manufacturing in the case of key enabling
technologies; or in space)
105
Note: S – Curve
Mature
Technology
Product New
Performance Technology
Research Effort/Expenditure
106
National Diamond
Competitive advantage of Nations (Porter 1990)
Model covers
107
Porter’s Diamond of National Competitive Advantage
108
Government’s steps in
improving all four factors
Government
Chance
109
Companies in the cluster,
Factor Condition: Key factors (like skilled labor, capital and infrastructure) of
production are created and are not inherited. Non-key factors (unskilled labor,
raw materials etc.) are general use factors.
110
Free Vs. Crony Capitalization
Free market capitalism can be defined as "a system wherein individuals are free to
pursue their own interests, make voluntary exchanges, and hold private property rights
in goods and services." Allowing consumers and producers to trade at mutually agreed
upon prices, free market capitalism is a system characterized by voluntary rather than
coercive exchange. In such a system, the role of government is
limited: protecting individuals' basic rights as applicable.
Lobby groups or advocacy groups, pressure groups, campaign groups, interest groups,
or special interest groups (motives for such action may be political, religious, moral
and/or commercial)
Note: When we talk about ethics or compliance; we must understand that We can
improve our compliance only if we see value in it , not under pressure to integrate into
international supply chains because they are concern for quality and price (may be
apparently compliance) and are not concerned about our compliances.
Evidence
1)Tirupur factories were considered as fully compliant by Wall mart s , Ikea s , H and M s
etc. until the supreme court ordered their closure for mass violation of pollution
treatment norms
2) All Bangladesh factories were considered Compliant by the same International retail
chains until a few came crashing down and exposed total lack of safety exits and other
base minimum factory safety standards. 112
Note: VCs/ Angels and Entrepreneur in MARKET
Strategies
113
Corporate Strategy
114
Outcome of Situational Analysis
(Industry/ Business House Based)
Concentration Diversification
116
Concentration
D1 D2 D D3 D4
G
Consumer, End Customer
117
Diversification
I -2 I -1 I -3
F1
F1’ F3 F1”
F2
118
Outcome of Situational Analysis
(Industry/ Business House Based)
No Change Strategy
Profit Strategy
Entrepreneurial
Result Exercise
121
Outcome of Situational Analysis
(Industry/ Business House Based)
Contraction Consolidation
Turnaround
Captive
to become captive company to other profit making companies
Sellout/ Divestment
Fully/ Partially
Bankruptcy/ Liquidation
Role of SICA/ BIFR
A. Exporting
B. Licensing
C. Franchising
D. Joint Venture
E. Acquisitions
F. Wholly Own Subsidiaries
G. OEM/ Contract Manufacturing
H. Greenfield Development
I. Production Sharing
J. Turnkey Projects
K. BOT (Build – Operate – Transfer)
L. Management Contract
M. Government Stakes
124
Portfolio Analysis/ Strategy
125
The BCG Matrix
Invest
???
STAR PROBLEM
High
Market Growth Rate
>10% CHILD
Reinvest
No
Invest
Low
<10% Divest
Cash Flow
CASH COW DOG
Tool 10 1 0
Relative Market Share
126
22%
(say)
Stars ?
Some cash use High cash use
Future cash cow ? Is to build or not
0%
10x 1.0x 0.1x (log scale)
127
Management Strategies
22%
(say) Stars ?
Growth or
Growth Retrenchment
Strategy Strategy
Market Growth 10%
Rate Cash Cows Dogs
128
Limitations
129
The General Electric Model
High
MARKET ATTRACTIVENESS
3.33
Medium
1.67
Low
0
5 Strong 3.33 Medium 1.67 Weak 0
BUSINESS STRENGTH
130
How to Evaluate Market Attractiveness and Business Strength
(know the attributes)
Overall Rating
Weight Rating Value
Market Attribute 1 Sales Volume 0.4 3 1.2
Attractiveness Attribute 2 Market Growth Rate 0.2 5 1.0
Attribute 3 Competitive Intensity 0.4 4 1.6
3.8
Overall Rating
Weight Rating Value
Business Attribute 1 Market Share 0.2 5 1.0
Strength Attribute 2 Brand Reputation 0.3 5 1.5
Attribute 3 Distribution Coverage 0.1 4 0.4
Attribute 4 Unit Cost 0.4 3 1.2
4.1
131
5
High
MARKET ATTRACTIVENESS
3.33
Medium
1.67
Low
0
5 Strong 3.33 Medium 1.67 Weak 0
BUSINESS STRENGTH
132
Management Strategies
5
Protect Invest Build
High
MARKET ATTRACTIVENESS
Selectivity/ Limited
Build
Manage for Expansion
Selectively
Earnings or Harvest
1.67
Divest
Refocus Earnings
0
5 Strong 3.33 Medium 1.67 Weak 0
BUSINESS STRENGTH
133
Parenting Strategy
Patenting Strategies
Firm
Parent Company XYZ
Pulling Company
Firm’s Strategy
134
Outcome of TOWS Matrix
(SWOT Strategies)
|
Competitive Analysis
(a) Cost Leadership
(b) Differentiation
(c) Cost Focus
(d) Differentiation Focus
|
Cooperative Strategy
(a) Synergy
(b) Alliance
(c) JV
(d) Mutual Agreements
|
Strategic Alternatives
|
Recommended Strategies
|
Policy Making
135
Business Strategy
Ansoff product/market matrix
Porter’s Competitive Strategies
136
Ansoff product/market matrix
Note:
137
Ansoff product/market matrix (first given in a paper 1957 and then in his
book ‘Corporate Strategy’ in 1965)
The output from the Ansoff product/market matrix is a series of suggested
growth strategies that set the direction for the business strategy.
138
Market penetration
Market penetration is the name given to a growth strategy where the business
focuses on selling existing products into existing markets. Market penetration seeks
to achieve four main objectives:
• Maintain or increase the market share of current products – this can be achieved
by a combination of competitive pricing strategies, advertising, sales promotion
and perhaps more resources dedicated to personal selling
140
Product development
Diversification
141
Porter’s Competitive Strategies
142
What is Competitive Advantage?
A third one is generated in being narrow for either cost leadership or differentiation
or amalgamation of both (low cost and high differentiation).
3 (a). Focused Cost Leadership Strategy (Uses cost leadership and target needs of a
special market)
3 (b). Focused Differentiation Strategy (Offers a unique product to a special market
segment)
143
What is Competitive Scope?
Demand-Side Supply-Side
dimension and dimension
looks at the size Strategic Competitive Strategic and looks at
Scope Scope Strength the strength
and composition
of the market or core
you intend to competency
target. of the firm.
144
Decision & Action necessary
to (within a given product market)
Competitive Advantage
Lower Cost Differentiation
1. Cost 2. Differentiation
Broad Target
(total market) Leadership
Competitive
Scope 3 (a) 3 (b)
Narrow Target
(niche market) Cost Focus Differentiation
Focus
145
Differentiation
Niche Markets
Rising Costs
Cost Leadership
146
Risks Associated
f. Others
147
(ii) Risk in Differentiation
e. Others
148
(iii) Risk in being Focused
149
Competitive strategies with five industry forces
(depending upon industry)
Entry Barrier
Five industry forces
Buyers’ Power
Suppliers’ Power
Thread of substitute
Competitive Rivalry
150
Cooperative Strategy
1. Synergy
2. Alliance
3. JV
4. Mutual Agreements
151
Synergetic Strategies for competitive forces
152
Functional Strategy
153
Outcome of TOWS Matrix
(SWOT Strategies)
|
A. Financial Strategy
B. Marketing Strategy
C. HR Strategy
D. Purchasing Strategy
E. Operational Strategy
F. Logistics Strategy
G. Information System Strategy
H. Service Strategy
I. R&D Strategy
|
Strategic Choice
|
Recommended Strategies
|
Policy Making
154
Note. Gap Analysis
155
Usage Gap = Market Potential – Existing Usage
156
Profit Gap Analysis
157
Current State
Gap
158
Sales Gap – Product wise
Break-even Analysis
Margin of Safety
159
Different Functional Strategies
160
Strategy Implementation
161
Steps,
162
Program
163
Program, Budget & Procedure
164
Note
1. Complementary Practices +
2. Interfering Practices –
3. No Interaction Practices ‘Blank’ or ‘Dot’ (.)
+2 +1 0 -1 -2
Very Somewhat Irrelevant Sometimes Significantly
Important Important Interfering Interfering
165
C. Table of Strategies (whether existing or new)
166
D. Matrix of Change
1. Frame 2. Priorities
3. Budget 4. Structure (04*)
5. Procedure (Action Plan)
* Next Slide
167
Structure
168
Organization Life Cycle
169
Structure Characteristics of Modern Corporation
(Note that these are also dependent upon type of industries/ product)
170
Organizational Life Cycle
Structure
Time
171
Organizational Life Cycle
172
Evolution and Revolution as Organizations Grow
1. Crisis of Leadership
2. Crisis of Autonomy
3. Crisis of Control
4. Pressure Cooker Crisis (Internal growth crisis or red-tape crisis)
Note:
Larry E. Greiner originally proposed this model in 1972 with four stages
(five phases) of growth.
In 1998, he added a sixth phase in an updated version of his original
article.
173
Functions Stage I Stage II Stage III Stage IV
Simple Functional Divisional Matrix
Structure Structure Structure Structure
Sizing Up Survival & Growth & Diversification, Merger,
Growth Expansion Action at Decision at
divisional level corporate
level
Objectives Subjective Meeting ROI, Profit, Multi-business
Functionally EPS etc
Strategy Implicit & One Product Diversification
Personal
Structure One Man One Unit Multi-unit Multi-purpose
show
Communicatio Daily & Direct Structured Complex
n Control Formal System
System
Control Direct Direct & Functional & Reporting
Functional Informal Officer (s)
Reward & Informal More By ‘Due
Punishment Structured Process’
174
Stage I Stage II Stage III Stage IV Stage V
Simple Functional Divisional Matrix Complex
Structure Structure Structure Structure Matrix
Expansion Expansion Expansion Expansion Expansion
through through through through through
Creativity Direction Delegation Co-ordination Collaboration
175
Growth &
Renewal crisis
Collaboration phase
Red-tape crisis
Coordination phase
Control crisis
Creativity &
Entrepreneurial phase
176
177
Organization’s Name
Risk and opportunities Assessment Form
Date:
178
Risk No.
Process Title
Risk Description/
Note:-
Identification
Risk Identification
Risk Significance
Risk Assessment and
(R=1 to 4 Low, R = 5 to 12
Medium, R = 15 to 25 High)
Action decided to be taken to
X – VU (Very Unlikely), P (Possible) and VL (Very Likely) reduce Risk Significance
Activity I/C for taking action
Possible
Opportunities
(Date)
Exercise is Required
180
Leadership
Phenomenon – Socio-political
Human Resource
181
3000 BC The Age of Philosophers (Aristotle. Plato)
2000 BC Political Turmoil (Papyrus)
1000 BC Age of Learning (Palm leaf manuscripts)
1000 AD Theosophy (Parchment and block printing)
1700 AD Industrial Revolution
1950 AD Management by Objective
1960 AD Centralization and decentralization
1970 AD Automation
1980 AD Downsizing
1990 AD Market Valuation
2000 AD Knowledge Management
182
Adam Smith, Political- Father of economics Looked at techniques of pin manufacturing
Economist to illustrate how the division of labor can
(1723-1790, Scottish) produce economic efficiency
Karl Marx, Philosopher- One of the founders of Given theory of capital in 1867.
Economist (1818-1883) sociology.
Max Weber, Sociologist Given theory of Types of Authority: Traditional: inherited |
(1864-1920) bureaucracy and types of Charismatic: attraction | Rational-Legal:
authority technical abilities
Frederick Winslow Taylor, Father of scientific mgmt: Developed work standards, uniform work
Engineer applied to maximize the methods, order-of-work sequences,
(1856-1915) benefits to employees, methods of placing workers, methods of
employers, and society. supervision, and incentive schemes.
Henri Fayol, Engineer, CEO, Developed administrative 3 terms out of six given by Henri Fayol
Administrative Theorist principles (forecasting, planning, organizing,
(1841-1925) commanding, coordinating and controlling)
in the year 1990 are in definition of
management.
Luther H. Gulick, Developed a science of Defined the work of the chief executive
Administrative Theorist administration through POSDCoRB i.e. Planning,
(1892-1992) Organizing, Staffing, Directing,
Coordinating, Reporting, Budgeting
183
What is Human Resource Management (formerly personnel management)
The process of hiring and developing employees so that they become more
valuable to the organization.
conducting job analyses, planning personnel needs, recruiting the right people
for the job, orienting and training. Managing wages and salaries, providing
benefits and incentives, evaluating performance, resolving disputes, and
communicating with all employees at all levels.
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The ‘universalistic perspective approach’ suggests that a specified set
of HR practices (the so-called ‘best practices’) will always produce
superior results whatever the accompanying circumstances. It
emphasise that ‘internal fit’ or ‘horizontal fit’ or ‘alignment of HR
practices’ helps to significantly improve an organisation’s
performance.
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What is Charismatic Leadership? Max Weber, a sociologist, was the first scholar
to discuss charismatic leadership. More than a century ago, he defined charisma
(from the Greek for “gift”) as “a certain quality of an individual personality, by
virtue of which one is set apart from ordinary people.
These are not accessible to the ordinary person, but are regarded as of divine
origin or as exemplary, an on the basis of them the individual concerned is
treated as a leader.” Weber argued that charismatic leadership was one of several
ideal types of authority.
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What is Knowledge?
- Data
- Information
- Knowledge
- wisdom
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From Facts to Wisdom
(Haeckel & Nolan, 1993)
one example of the hierarchy
Knowledge
Intelligence
Information
Facts
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What is Knowledge?
190
The Learning and Communication Process Model
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So…what is knowledge management?
• “Knowledge management (KM) is an effort to
increase useful knowledge within the
organization. Ways to do this include
encouraging communication, offering
opportunities to learn, and promoting the
sharing of appropriate knowledge artifacts.”
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From “Leadership” Burns (1978)
• Transactional leadership: occurs when one person takes the initiative in making
contact with others for the purpose of an exchange of valued things.
In other words it motivate followers by appealing to their own self-interest.
Transactional leaders use conventional reward and punishment to gain compliance
from their followers.
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Transactional Leader
Contingent Reward: Contracts exchange of rewards for effort, promises rewards for
good performance, recognizes accomplishments.
Management by Exception (active): Watches and searches for deviations from rules
and standards, takes correct action.
Management by Exception (Passive): Intervenes only if standards are not met.
Laissez-Faire: Abdicates responsibilities, avoids making decisions.
Transformational Leader
Idealized Influence: Provides vision and sense of mission, instills (gradually but
firmly establish) pride, gains respect and trust.
Inspirational Motivation: Communication high expectations, uses symbols to focus
efforts, expresses important purposes in simple ways.
Intellectual Stimulations: Promotes intelligence, rationality, and careful problem
solving.
Individualized Consideration: Gives personal attention, treats each employee
individually, coaches, advises.
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How do leaders develop the bonds necessary to make TF leadership possible?
Bernard Bass has four interrelated components (4 I) that he views as essential for
leaders to move followers into the transformational style.
First is idealized influence. Genuine trust must be build between leaders and followers.
“If the leadership is truly transformational, its charisma or idealized influence is
characterized by high moral and ethical standards.”
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Leadership through spiritual intelligence
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Discussion in the classroom
198
What is Benchmarking?
200
Type of benchmarking
201
Some main types of benchmarking
1. Internal good practice benchmarking
2. Competitive benchmarking
3. Functional benchmarking
4. Generic benchmarking
5. Strategic benchmarking
6. Performance benchmarking
7. Process benchmarking
8. External benchmarking
9. International benchmarking
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Basic Steps
Data
Planning
1. Planning Gathering and
Analysis
2. Analysis
Benchmarking Process
4. Action and Monitoring
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Discussion in the classroom
204
Problem Solving
205
Creative Problem Solving
206
Problem | Problem Solving | Creative Problem Solving
Problem
Creativity
Innovation
Something ► Idea
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Target Setting
(Objectives)
for
Demonstration
Research
Advertisement
Distribution
(Strategies)
Sales
After Sales
Feedback
208
e.g. Target Setting for Sales
Goal Setting
MBO
Objective
Revised Objective
Sub-objective (with time duration)
Review
Reward
209
Monitoring Mechanism
Weekly
Fortnight
Monthly
Quarterly
Half Yearly
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Format of the Report/ Presentation
6. Margin of Safety
8. Gap Analysis
Program Objective
Activities 1.
2.
3.
S. No. Steps Responsibility Start - End
1.1
1.2
|
2.1
|
|
14.7
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Balanced Scorecard (developed in 1992 by Robert Kaplan and David Norton)
Question:
How can a complex organizations achieve best possible results in middle or even short
periods of time?
Answer:
Alignment
Means:
1. The Balanced Scorecard process allows an organization to align and focus all its
resources on its strategy.
2. The Balance Scorecard is required to implement business strategies in the best
possible result oriented way.
3. The Balanced Scorecard provides a system for measuring and managing all aspects
of an organization’s performance across different perspectives.
4. A Good Balanced Scorecard Tells the Story of Your Strategy.
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Perspectives:
Four different but linked, are derived from the organization’s strategy
Financial (Finance)
Customer (Marketing)
Internal (Supply chain)
Learning & Growth (Human Resource)
Existence:
The Balanced Scorecard is just one of three levels in the business
management process:
214
Connecting the Four Perspectives of an organization through BSC
A strategy map provides a visual representation of the linkages in the four perspectives
Learning &
Employees’ Process Improvement Skills Skilled, well trained & capable
Growth production workers
Perspective
215
Early BSC (O M T I)
217
2. Measures:
4. Initiatives are the short-term programs and action plans that will
help achieve the stretch targets established for its measures.
218
New BSC
219
220
The Problem: Most of Today’s Feedback Systems Are “Controls”
Oriented means;
1. Variance deducted
2. Feedback and control loop
3. Correction applied through Management (which may not be
permanent solution)
Performance
221
Strategic Learning
The Strategy
Improve
Returns
Financial
Improve Perspective
FOLLOW-UP
Broaden Operating
Revenue Mix Efficiency
Increase Customer
Confidence in Our
Financial Advice
Increase
Customer
Satisfaction Through
Superior Execution
Customer
Perspective ACTION
Internal
“Closing the loop”
Perspective
update Increase
Employee
Productivity
Learning
Perspective
THE
the Develop
Strategic
Skills
Access to
Strategic
Information
Align
Personal
Goals MANAGEMENT
strategy strategic learning MEETING
loop “Team Problem
Pioneer’s Balanced Scorecard Solving”
FINANCIAL
Performance dialog
222
Shortcomings of BSC
224
Strategies planning in the environment of uncertainties
Discussion on
Risk Management
225
Strategy for a Networked World
226
Multinational Vs. Transnational
227
Multinational Vs. Transnational
230
Cases of JVs & Collaborative Business Models
231
Discussion of Business Examples
232
Thanks & Good Luck
Dr. V K Arora
Trainer, Mentor, Advisor
Entrepreneurship, Startups, Business Incubators and Accelerators
Faculty – Strategic Management and all Functional Areas
Contact Number: + 91 98 11 59 30 59
Email: vkarora@manasso.com
Web: www.vkarora.com
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