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Student Name: Course of Year: Module: Assignment title: Assignment Number: Tutor

Vaidas Bilkis 2011-2012 Business Strategy Strategic Environment 2 Kieran Alcock

Table of Content
Section 1 Section 2 Section 3 Section 4 Section 5 Appendix Bibliography 3 10 15 19 23 27 51

Sections
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Section 1 Organisational structure


The theories of organisational structure is on Appendix 2 and the theories of the Managing at different level of the organisation is on Appendix 3 Mark & Spence Since the 1900s Mark & Spenser company had applied Simple organisational structure here are the evidence from the case study to support my proposition: Throughout most of the 1900s M&S was led by family members, who favoured close control and meticulous attention to detail. Central edict was given for purchasing, merchandising, layout etc. Hence every M&S was identical, resulting in consistent image and guarantee of standard. From the evidence that have been demonstrated from the case study, I will lay down the small hints and facts that support my justification. As the above evidence has shown that the company was led by family members, who favoured close control and Central edict was given for purchasing, merchandising, layout. These facts lead us to the conclusion that was a small company, because of how the company was led and controlled. This leads that the leader of the companys has wide span of the control over the decisions she/he made. This supports the theory of Simple organisational structure. According to theory Simple organisation structure is characterized by low degree of differentiation of subtasks, and leaders are having wide span of control. This means that the authority often is centralized in a single person, who is often the boss of the company. Formalization will also be low, and work will often be structured through direct control and supervision. (Linehan M 2007:71) The simple organisational structure according to the theory The simple organisational structure is widely practiced in small companies or organisations(Linehan M 2007:71) As the evidence mentioned in the case study that the company was led by the family member and comparing to the organisational theory, I could justify that the company is small and uses Simple organisational structure at that time. There are two theories of organisational structure Flat (small companies) and Tall (big companies) in terms of the span of control and division of labour. As the theory of the simple organisational structure mentioned The simple structure is referred to as flat structure. (Linehan M 2007:71) And the above case study supported this flat structure theory who favoured close control and meticulous attention to detail. Central edict was given for purchasing, merchandising, layout This means that the chain of the command from the top to the bottom is short

and the spam of the control is wide. The role of the family members in the M&S is to running the whole organisation in terms of the running the whole organisation to make organisations goals, overall strategy and also operating policies. They are also have to monitoring and coordinating the operational activities and how people are working, they are also dealing with complains of the customers. The CEO of the company responsible for the meeting the customer needs and wants and also guarantee for the standards of the products and customer service for the pricing of the product. Since 1900s the company has been growing in to bigger company, the previous Simple organisational structure is no longer suitable for the big company in terms of coordination of work the direct control and supervision as the Simple theory states Simple organisation structure is nor relevant when the business or organisation grows in size, and when surrounding environment of the company grows in complexity(Linehan M 2007:71) As the theory has stated that Simple structure is no longer relevant to the bigger companies and M&S no exception. According to the evidence from the case study I came up with the conclusion that M&S has applied Bureaucratic organisational structure in 1990. Here is the following evidence from the case study to support my proposition:
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The Bureaucracy hasnt really changed. They had a go at it, but now its gone back to the old ways. Holmes created an executive committee to deliver the boards plans. Finally, he promised a tightening of logistics, store refurbishments, downsizing of headquarter staff. Rose also thought the process from drawing board to shop floor was too slow. Rose brought with him colleagues Charles Wilson to run Logistics and Steven Sharp to oversee operation In reacting Rose halved the board, to himself, Wilson and Ian Dyson (replacing the ousted finance director), his aim being to move closer to the operating units, get more control and increase speed and flexibility, as he admitted turnaround was an uphill task.

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According to the Bureaucratic organisational theory bureaucratic structure maintains strict hierarchies when it comes to people management. And it also helps when the organisation is growing in complex and also large, bureaucratic structures are required for management. This structure is suitable for tall organisations. (Linehan M 2007:71) And also The Weberian characteristics of bureaucracy are: Clear defined
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roles and responsibilities, hierarchical structure, Respect for merit. (Linehan M 2007:71) The insider of the company has clearly defined the structure of the M&S in the following sentence The Bureaucracy hasnt really changed. There is also hinted as hierarchical structure of the company Holmes created an executive committee to deliver the boards plans and Rose brought with him colleagues Charles Wilson to run Logistics and Steven Sharp to oversee operation These two evidences from the case study support the hierarchical structure, because everybody knows what are they doing in the company, and also what are the responsibilities they have it. As I mentioned in the previous sentence, M&S using bureaucratic organisational structure and they are also clearly defined the roles of the people and also the responsibilities the evidence from the case study is Holmes created an executive committee to deliver the boards plans and Rose brought with him colleagues Charles Wilson to run Logistics and Steven Sharp to oversee operation From the support evidence there is clearly defined the roles and responsibilities: Holmes is run CEO Charles Wilson is run Logistics Steven Sharp is run operation

Holmes is responsible for controlling the whole organisation. This means that his responsibilities are to create the organisations goals, overall strategy and operating policies. Charles Wilson responsabilities are to planning, implementing and controlling the efficient, effective flow and storage of good and also service. Steven Sharp responsibilities are to monitoring and coordinate the activities of operating employees. Sony Corporation Since the 1946 Sony company had applied Simple organisational structure here is the evidence from the case study to support my proposition: 1946. Sony was started as Tokyo Tsuchin Kyogo by Masaru Ibuka and Akio Morita in war ravaged Japan. Initially, the company had 20 employees and capital of 190000 yen. From the evidence that have been demonstrated from the case study, I will lay down the small hints and facts that support my justification. As the above evidence has shown that the company was led by two founders of the company Masaru Ibuka and Akio Morita and they employed 20 people. These facts lead us to the conclusion that was a small

company, because of how the company was led and controlled. This leads that the leader of the companys has wide span of the control over the decisions she/he made. This supports the theory of Simple organisational structure. According to theory Simple organisation structure is characterized by low degree of differentiation of subtasks, and leaders are having wide span of control. This means that the authority often is centralized in a single person, who is often the boss of the company. Formalization will also be low, and work will often be structured through direct control and supervision. (Linehan M 2007:71) The simple organisational structure according to the theory The simple organisational structure is widely practiced in small companies or organisations (Linehan M 2007:71) As the evidence mentioned in the case study that two partners led the company and comparing to the organisational theory, I could justify that the company is small and uses Simple organisational structure at that time. There are two theories of organisational structure Flat (small companies) and Tall (big companies) in terms of the span of control and division of labour. As the theory of the simple organisational structure mentioned The simple structure is referred to as flat structure. (Linehan M 2007:71) Event there is no mentioned in the case study about the companys span of control and division of labour, but we can come logically to conclusion that the companys chain of the command from the top to the bottom is short and the spam of the control is wide, because they are using Simple organisational structure and if they are using simple organisational structure the theory of simple organisational structure stated The simple structure is referred to as flat structure. (Linehan M 2007:71) The role of Masaru Ibuka and Akio Morita are running the whole organisation in terms of the running the whole organisation to make organisations goals, overall strategy and also operating policies. They are also have to monitoring and coordinating the operational activities and how people are working, they are also dealing with complains of the customers. The CEO of the Sony was responsible for product innovation, high quality and meeting the customer needs. Since 1946s the company has been growing in to bigger company, the previous Simple organisational structure is no longer suitable for the big company in terms of coordination of work the direct control and supervision as the Simple theory states Simple organisation structure is nor relevant when the business or organisation grows in size, and when surrounding environment of the company grows in complexity (Linehan M 2007:71) As the theory has stated that Simple structure is no longer
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relevant to the bigger companies and Sony no exception. According to the evidence from the case study I came up with the conclusion that Sony has applied Divisional structure in 1996. Here is the following evidence from the case study to support my proposition: 1996 Sony was organised into 10- company structure. According to the Divisional organisational theory divisional structure, the teams are organised in set of divisions, where each division corresponds to the end product or service provided by organisation. Each division has its own set of functional units like research, manufacturing, marketing etc. and is completely self-contained. (Linehan M 2007:72) There is no much mentioned about the 10-company structure in Sony case, but we can come to the conclusion used by the theory mentioned above about the divisional structure. We can logically make a guess using the case why Sony has restructured the company from Simple to Divisional. The CEO of the Sonys company were focusing on the strategic orientation, they are also made a better performance accountability to the CEO. The divisional organisational structure allowed to Sony Company to focus upon single product, with a leadership structure that supports its major strategic objectives. Having its own president or vice president makes it more likely the division will receive the resources it needs from the company. Role and responsibility in the divisional structure in Sony was: the company had 10 different product/service divisions within the company, and this means that they are targeting with 10 different product different segments. Within the one division there are sales, engineering and marketing department.
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The role of the CEO is to run and control the whole organisation. The responsibilities of CEO are the organisations goals, overall strategy and also operating policies. (Linehan M 2007:3)

2. The role and responsibilities of sales manager are to meeting the sales target of organisation through effective planning and budgeting. Sales manager responsibility is to achieve the companys goals and to develop the people reporting to them. Sales manager responsible for motivating and also building a strong team. The Sales manager is accountable to the companys CEO 3. Role and responsibilities of Marketing manager are to develop the departments marketing strategy. They are estimating the demand for the product or service offered by the firm. Developing pricing strategy to help the department to maximise profits. They are also responsible to work with the advertising and promotion. Marketing manager is accountable to the Sonys CEO
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4. Role and responsibility of engineer marketing is to allocating engineering resources to the project. Participating in managing and developing the engineering personnel. Engineering department manager is accountable to the Sonys CEO Until 2003 Sony Corporation has been used Divisional organisational structure, but in October 2003, Idei came up with another restructuring plan called Transformation 60 this is 3 years transformation. According to the evidence from the case study I came up with the conclusion that Sony has applied Strategic Business unit as the structure of the Sonys company. Here is the following evidence from the case study to support my proposition: The company was reorganised into seven business entities four network companies and three business groups. Above plans were not successful mainly due to the significant drop in sales of conventional televisions and portable audio products. Games division also did not fare well with sales of PlayStation 2 consoles falling rapidly. In March 2005 Stringer became CEO to lead Sony. Stringer was head of Sonys North American business. According to the Strategic business unit theory Strategic business is understood as business unit within the overall corporate identity which distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to product and markets. When the company or organisation becomes large, they are best thought of as being composed of number of businesses. These organisation entities are large enough to exercise control over most strategic factors affecting their performance. (Linehan M 2007:72) In the case study there are mentioned that the company reorganised into seven business entities, and according to the exhibit 1 in the case study, the company consist of four levels. According to the organisation structure in terms of the span of control and division of labour, this is tall organisational structure. The theory of tall organisational structure states, Tall structured organisation has many levels of management and supervisors. There is long chain of command running from the tops (CAO) to the bottom (Employees). (Linehan M 2007:69p) According to the matrix organisational structure The organisational structure is very flat(http://www.slideshare.net) and matrix organisational structure is not suitable for Sony organisation, and there is only one option left and this is Strategic business unit. Strategic business units are small enough to be flexible and large enough to exercise control over most of the factors affecting its long-term performance. Sonys strategic
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business units have different missions and objectives, they allow the owning conglomerate to respond fast to changing economic or market situations. Roles and responsibilities

The role of the CEO is to run and control the whole organisation. The responsibilities of CEO are the organisations goals, overall strategy and also operating policies (Linehan M 2007:3)

Vice president or middle manager of the business unit is responsible for applying the policies and also the plans developed by the group of executives and monitoring and coordinating the activities of lower level managers. (Linehan M 2007:3)

Operational manager of the business unit is responsible for monitoring and coordinate the activities of operating employees. Operational manager most of the time spends supervising the work of subordinates. (Linehan M 2007:3)

Staffs of the business unit are ensure machinery are safe and that safe systems of work are set and followed, they are also have to make sure the workplace safe and eliminated or control risks to health.

On 2005 Sony organisation decided to reorganise the SBU from 7 business units to 5 business units. According to the case study 5 business units are: the Electronics Business Group, Games Business Group, Entertainment Business Group the Personal Solutions Business Group, and the Sony Financial Holdings Group. The whole organisation structure still remains Strategic business unit organisational structure the evidence of the remained organisational structure is On 2005 March 7, Sony announced new organisational structure. Stringer assumed responsibility as chairman, group CEO and Representative Corporate Executive Officer, Sony Corporation, to run Sonys overall group business operation. We are battling on many fronts against many competitors a number of whom have at times proved more agile and more nimble. We can and will compete vigorously. We are going to achieve our goals by breaking down the existing silo walls and eliminating the highly decentralized structure weve maintained in the past. Sony adopted the new organisational structure from 1st of October 2005. Sony was reorganised into five business groups, which included the Electronics Business Group, Games Business Group, Entertainment Business Group the Personal Solutions Business Group, and the Sony Financial Holdings Group.

Sony since 2003 has been using decentralised Strategic business unit this means that daily operations and decision making responsibilities are delegated by top management to middle and lower level managers within the organisation, allowing the top management to focus more on major decisions. But Stringer has decided to centralise Strategic business unit this means that the top management will retain the major responsibilities and power. Comparison Similarities At the beginning of the M&S and Sony Corporation, both companies have been using Simple organisational structures. Both of the companies were small at that time and most suitable structure for them was to use simple organisational structure. Differences As the companies have started to grow, M&S and Sony corporation decided to apply different organisational structures. M&S has applied bureaucratic organisational structure were there are clear defined roles and responsabilities, hierarchical structure within the company and decisions were made very slowly. Sony has applied 2 different structures such divisional and SBU. Divisional structure helped to Sony to organised the teams in the divisions, where divisions corresponds to the end product or service provided by organisation. Sony applied SBU because they become very large organisation, and they thought of as being composed of number of businesses.

Section 2 Organisational cultures


The theories of organisational culture is on Appendix 5 Mark & Spencer During the period 1990s-1998, I have identified different organisational cultures within M&S and these organisational cultures are: Routine culture The evidence of the routine culture within M&S organisation is: St Michael working with suppliers to ensure quality control, and providing a friendly, helpful service. The theory of routine culture states Ways members behave toward one another and towards outsiders the way we doing things around here. (Jason Martin 2006:1) The behavior of the members of the M&S toward the outsiders of the company is according to the evidence from the case study to Ensure quality, providing a friendly and helpful service

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Collaborative

The evidence of the collaborative culture within M&S organisation from the case study is: This was enhanced by close-knit family atmosphere in the stores, which was compounded by employing staff whom M&S believed fit in. The theory of collaborative culture states very friendly place to work where people share a lot of themselves. It is like and extended family (Jason Martin 2006:2) According to the case study there was Close knit family atmosphere within the organization. This means that M&S has been using collaborative culture within organization to design a friendly place to work for the employees. Conservative culture The evidence of the conservative culture within of M&S organisation from the case study is: M&S no longer understood its customer needs, was preoccupied with its traditional risk averse formula thus ignoring changes in the marketplace. According to the literature conservative is holding to traditional attitude and values and cautious about change or innovation (Soanes C, Stevenson A 2005: 300p) According to the case study there was was preoccupied with its traditional risk averse formula thus ignoring changes in the marketplace within the organisation. This means that M&S had conservative culture according to the case study and they had difficulty to be more innovating according to the changes in the market. Routine culture The evidence of the routine culture within M&S organisation is: M&S had inward culture as executive were promoted internally, after immersion in M&Ss routine and tradition. The theory of routine culture states Ways members behave toward one another and towards outsiders the way we doing things around here. (Jason Martin 2006:1) The behavior of the members of the M&S toward the outsiders of the company is according to the evidence from the case study to M&S had inward culture as executive were promoted internally M&S has the routine of promotion someone within the organisation, instead of hiring someone to the executive position outside the company. During the period 2002-2006, I have identified three different organisational cultures within M&S and these organisational cultures are: Conservative The evidence of the conservative culture within of M&S organisation from the case

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study is: Holmes had spoken to customer and was struck by how inwardly focused M&S had remained. According to the literature conservative is holding to traditional attitude and values and cautious about change or innovation (Soanes C, Stevenson A 2005: 300p) According to the case study there was how inwardly focused M&S had remained This means that M&S had conservative culture according to the case study and they had difficulty to change and instead of organization is customer focused, but they are more inwardly focused. Holmes had stated his conclusion in the case study His conclusion was to return to passion for product. This means that the company had no innovation to attract the customers. According to the case study Holmes had tried to change culture by Injected innovation into food ranges Control system culture The evidence of the control system culture within of M&S organisation from the case study is: He began by making culture changes improving decision-making accountability. The theory of control system culture states, Performance measurement and reward, this means that there is supervisor who checks the performance. (Jason Martin 2006:2) This means that Rose has changed the culture within the organization to improve the decision-making accountability. Hierarchical culture The evidence of the control culture within of M&S organisation from the case study is: In reacting Rose halved the board, to himself, Wilson and Ian Dyson (replacing the ousted finance director), his aim being to move closer to the operating units, get more control and increase speed and flexibility, as he admitted turnaround was an uphill task. The theory of control system culture states: Hierarchical organization share similarities with stereotypical large, bureaucratic corporation. As in the value matrix, they are defined by stability and control as well as internal focus and integration. They value standardization, control, and a well-defined structure for authority and decisionmaking. Effective leaders in hierarchical cultures are those that can organize coordinate, and monitor people and process. In other word hierarchical culture is very formalized structured place to work. (Jason Martin 2006:2) As we discussed in the previous section on the organization structure, we have identified that M&S have used bureaucratic organizational structure. Hierarchical culture as the theory stated can be in share similarities with stereotypical large, bureaucratic corporation. According to the case study there was well-defined structure for authority in the organization Rose

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halved the board, to himself, Wilson and Ian Dyson (replacing the ousted finance director). There is also well defined authority for decision making his aim being to move closer to the operating units, get more control and increase speed and flexibility this means that the Rose has completely authority to make decisions and apply these decisions in the organisation. Ritual culture The evidence of the ritual culture within of M&S organisation from the case study is: He wanted them to understand M&S implemented a 10 million training initiative aimed at creating a can do attitude. The theory of ritual culture states An event through which organization emphasizes what is important. Example of this is the company provides an open days or graduation. (Jason Martin 2006:1) This means that the company has provided the formal training on the attitude. As the theory of rituals continues states This can be formal training and recruitment or informal such as drinks in the pub or gossip in the canteen According to the case study M&S company has provided 10 million pounds to provide the formal trainings to the employees and staff. This is my justification why I think they have used ritual culture in the M&S organization. Sony Corporation During the period 1946-2006, I have identified different organisational cultures within Sony and these organisational cultures are: Complete culture The evidence of the complete culture within of Sony organisation from the case study is: Sony planned to reduce the costs by downsizing and consolidating manufacturing, distribution, customer service and also by streamlining procurement. The theory of complete culture states The complete or market culture organizations are similar to the control cultures in that they value stability and control. The organizations with the complete culture are focusing on the external orientation and they value differentiation over integration. Complete culture organizations are focusing on relationship more specifically, transactions with suppliers, customers, contractors, unions, legislators. (Jason Martin 2006:2) There is solid evidence from the case study related to complete culture and this is and consolidating manufacturing, distribution, customer service and also by streamlining procurement. This means that the company is focusing more on external relationship and building a stronger relationship with customers, through

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customer service also with suppliers, manufacturers etc. This means that Sony is major concern is with getting the job done and also people are more competitive and goal orientated. Create or Adhocracy culture The evidence of Adhocracy culture within of Sony organisation from the case study is: Stringer brought with him new leadership style. On the whole he felt that being an outsider was an advantage. According to Stringer: In the end there was an advantage to being an outsider. Sony is built up on a web of interpersonal relationship that go back to the dawn of history. The old boys never go away. But that also makes it very difficult for the insider who has to attack the problems of too much management, and turning around. The theory of adhocracy culture states dynamic entrepreneurial, and creative place to work. People stick their necks out and take risks." Good evidences from the case study of Adhocracy culture in the Sony is But that also makes it very difficult for the insider who has to attack the problems of too much management, and turning around (Jason Martin 2006:2) This means Stringer has set up a creative place to work for the employees and staff. In other word Stringer gives them an opportunity to solve the problems by themselves and take some risks in making decisions in the company. As in the next section (Leadership style) I have mentioned that Stringer is using laissez faire style of leadership within Sony organisation. This means that Stringer gives the general instruction and set the objectives for the company and delegates decision making to the staff and allows them to handling the problems in their own way. Routine culture The evidence of the routine culture within Sony organisation is Stringer identified five main challenges for Sony. These were getting rid of silo (underground) culture in Sony. We are going to achieve our goals by breaking down the existing silo walls and eliminating the highly decentralized structure weve maintained in the past. The theory of routine culture states Ways members behave toward one another and towards outsiders the way we doing things around here. (Jason Martin 2006:1) This means that Sony organization run in silos they are not looking at other aspects and the cause and effect of various activities. Comparison Similarities

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Similarities between M&S and Sony Corporation in terms of organisational culture were on routine culture. M&S was considering that routine culture is important, because it shows how they behave toward each other and also toward the outsiders such customers, unions etc. Sony had silo culture within the organisation that Springer decided to get rid of. Differences Differences between M&S and Sony Corporation in terms of organisational culture were that these companies had different understanding of the cultures. M&S were more cultural company, because they had variety of culture within the organisation such hierarchical culture, rituals, control systems etc that shapes the organisation. Sony had 3 cultures within the organisation that shapes organisation. In comparison M&S is more cultural company than Sony Corporation.

Section 3 Leadership style


The theory of leadership style is on Appendix 6 Mark & Spencer 1900-1998 Since the 1900s the CEO of the M&S Companys had applied Autocratic leadership style. From the case study there is the evidence supporting my proposition: Throughout most of the 1900s M&S was led by family members, who favoured close control and meticulous attention to detail. Central edict was given for purchasing merchandising layout. The theory of Autocratic leadership style states: Autocratic leadership is characterized by individual who controls over all decision and little input from group members. The autocratic leader is commonly making all the decisions on their own ideas and judgments and rarely accepts any advice from the employees or outsiders. This means that the autocratic leader has an absolute control over a group of employees. The autocratic leader is dictates all the work methods and process. There is no trust to the group members with decision or important tasks. (Linehan 2007:5456) From the evidences mentioned above in the case study we can determine small hints thats leads me to the conclusion that there was Autocratic leadership style. As I mentioned in the section 1 organisational structure, M&S structure at that time was Simple. This means that the company is small enough for the CEO to take all the responsibilities and determine the goals, objectives etc. As the theory of the Simple structure states, Simple organisation structure is characterized by low degree of

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differentiation of subtasks, and leaders are having wide span of control. This means that the authority often is centralized in a single person, who is often the boss of the company this leads to the evidence from the case study to support my conclusion Central edict was given for purchasing merchandising layout. In other words the boss of M&S makes all the decisions in terms of the coordination, span of control and division of labour. 1999-2003 Since 1900s M&S Company has changed the structure of organisation, but the style of leadership has not changed and still remains autocratic leadership. From the case study there is the evidence supporting my proposition: Senior and middle management were reported to be disappointed with the lack of progress. Holmes was seen as the problem: blamed for being too nice, taking too long to make decisions, and lacking relevant experience. The theory of Autocratic leadership style states: Autocratic leadership is characterized by individual who controls over all decision and little input from group members. The autocratic leader is commonly making all the decisions on their own ideas and judgments and rarely accepts any advice from the employees or outsiders. This means that the autocratic leader has an absolute control over a group of employees. The autocratic leader is dictates all the work methods and process. There is no trust to the group members with decision or important tasks. (Linehan 2007:54-56) From the evidences mentioned above in the case study we can determine small hints thats leads me to the conclusion that there was Autocratic leadership style. The evidence that justify my proposition is blamed for being too nice, taking too long to make decisions, and lacking relevant experience. The evidence has shown that Holmes was using autocratic leadership style, he makes all the decisions as Senior and middle managers have stated. To support my proposition I am going to use part of the theory of autocratic leadership style The autocratic leader is commonly making all the decisions on their own ideas and judgments 2004-2006 Since 1999 M&S Company has not changed the structure of organisation, and the style of leadership has not changed and still remains autocratic leadership. From the case study there is the evidence supporting my proposition: Colleagues described him (Rose) as nice, quiet and ruthless. Rose acknowledged there had been little communication with employees, as he had undertaken action without debate. The
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theory of Autocratic leadership style states: Autocratic leadership is characterized by individual who controls over all decision and little input from group members. The autocratic leader is commonly making all the decisions on their own ideas and judgments and rarely accepts any advice from the employees or outsiders. This means that the autocratic leader has an absolute control over a group of employees. The autocratic leader is dictates all the work methods and process. (Linehan 2007:54-56) From the evidences mentioned above in the case study we can determine small hints thats leads me to the conclusion that there was Autocratic leadership style. The first hint is that Rose as described their colleagues was ruthless, the second hint was Rose acknowledged there had been little communication with employees, as he had undertaken action without debate The second hint gives very good description, that Rose did not communicate with the employees about the decisions he made, this leads that Rose made all decisions by himself and also there was no trust to the employees with decision or important tasks. The first hint gives a good concern about his behaviour toward the employees in terms of completing the tasks. Sony Corporation 1946-2004 Since the 1946s the CEO of the Sony Companys had applied democratic leadership style. From the case study there is the evidence supporting my proposition: 1946. Sony was started as Tokyo Tsuchin Kyogo by Masaru Ibuka and Akio Morita in war ravaged Japan. Initially, the company had 20 employees and capital of 190000 yen. Since inception, Sony focused on product innovation and high quality The theory of democratic leadership style states: Democratic leadership is characterized by the individual who allows the members of the group take a more participative role in the decision making process. Ideas move freely amongst the group and are discussed openly. Everyone is given a seat at the table, and discussion is relatively free flowing. This style is very good adapted in the dynamic and rapidly changing environment where little can be taken as a constant. (Linehan 2007:56-58) From the evidences mentioned above in the case study we can determine small hint thats leads me to the conclusion that there was democratic leadership style. The evidence I will use is this from the case study Sony focused on product innovation and high quality This means to be innovative make changes in something established or introducing new methods, ideas or products. In autocratic leadership style the boss of the company cannot be always innovative especially in the high technology. This means to be more innovative
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you need to generate new ideas to create or design the product. Democratic leadership helps the members of the company to sit at the table and share the ideas and discuss openly these ideas. 2005Since the 2005 the CEO of the Sony Companys had applied laissez faire leadership style. From the case study there is the evidence supporting my proposition: Stringer brought with him new leadership style. On the whole, he left that being outsider was an advantage. In the end there was an advantage to being an outsider. Sony is built up on a web of interpersonal relationship that go back to the dawn of history. The old boys never go away. But that also makes it very difficult for the insider who has to attack the problems of too much management, and turning that around. The theory of democratic leadership style states: Laissez faire leadership is known as delegate leadership style in which leaders are hands-off and let the group members to make the decisions themselves. The leader gives a little instructions and complete freedom to the followers to came and make the decision. (Linehan 2007:59-61) From the evidences mentioned above in the case study we can determine small hint thats leads me to the conclusion that there was laissez faire style. The evidence I will use is this from the case study In the end there was an advantage to being an outsider. and But that also makes it very difficult for the insider who has to attack the problems of too much management, and turning that around. The first and second hints from the case study are very clear described, that the CEO of the Sony company does not really make all the decisions, he makes the general decisions and set the clear objectives and goals of the company, but gives the freedom to make the decisions themselves. This means that the leader of the company gives the general instruction and complete freedom to followers to came and makes the decision.

Comparison Similarities As I comparing two different styles of leadership I did not fin any similarities between M&S style of leadership of the companys and Sony style of leadership of the

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companys. Differences Sony and M&S has applied different style of leadership throughout the organisational existence. M&S from the beginning has applied the autocratic style of leadership and has remained until present time. Sony has applied different style of leadership throughout the existence of the company. At the beginning of the Sony existence the company applied democratic style of leadership and remained until 2005 when Springer become the CEO of Sonys company. Springer has applied laissez fare style of leadership, when the member of Sony has to solve the problems, instead of all decision making left to the CEO.

Section 4 Strategic Approaches


Theory of strategic approach is in Appendix4 Mark & Spencer 1900s-1998 During this period I have identify two strategic approaches that M&S has been using. Differentiation and cost leadership The evidences of differentiation and cost leadership from the case study is: M&S stocked generic essential clothing and priced its products at reasonable level, while emphasising their high quality. The theory of differentiation states: To be different, is what organisations strive for. Having a competitive advantage, which allows the company and its products ranges to stand out, is crucial for their success. With a differentiation strategy the organisation aims to focus its effort on particular segments and charge for the added differentiated value. (Jain C S 2000:24-39) The theory of cost leadership states This strategy involves the organisation aiming to be the lowest cost producer within their industry. The organisation aims to drive cost down through all the elements of the production of the product from sourcing, to labour costs. (Jain C S 2000:24-39) M&S has been using hybrid strategic approaches; this means that two strategies are applied to have competitive advantage with the rivals. The M&S tries to pricing the product logically to the customers, this means that they are trying to lower the price for the product to win over the customers to buy the products. The other aim of the company is to differentiate themselves from the competitors, and they trying this by emphasising on high quality of the product. Growth strategy (Acquisition)

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The evidence of growth strategy (acquisition) from the case study is: To counter these problems successive CEOs implemented many strategies, including refurbishment, store acquisition, restricting, new ranges, overseas sourcing. The theory of acquisition states: One firm purchasing part or all of another firm (Jain C S 2000:2439) M&S has been using acquisition strategy to grow by purchasing the store, there is no mention in the case study what store they have purchase, but the evidence from the case study that they bought the store. 1998-2003 During this period I have identify three strategic approaches that M&S has been using. Cost leadership The evidence of cost leadership from the case study is: Continuing the turnaround Holmes streamlined M&S logistics by halving its contractors, and sourcing directly rather than through third parties. The theory of cost leadership states: This strategy involves the organisation aiming to be the lowest cost producer within their industry. The organisation aims to drive cost down through all the elements of the production of the product from sourcing, to labour costs (Jain C S 2000:24-39). Holmes have realised that sourcing directly is cheaper than sourcing through the third parties, because they are adding the cost of supplying and the product price is increased. Holmes came to conclusion to apply the cost leadership strategy; they have to sourcing directly the products from first parties instead of sourcing through the third party. Product differentiation The evidence of product differentiation from the case study is: Hence he planned to renew the food ranges, and promote them based on their unique qualities. The theory of differentiation states: To be different, is what organisations strive for. Having a competitive advantage, which allows the company and its products ranges to stand out, is crucial for their success. With a differentiation strategy the organisation aims to focus its effort on particular segments and charge for the added differentiated value. (Jain C S 2000:24-39) According to the case study M&S have focused to promote the product based on their unique qualities. This means that M&S aim is to differentiate the product from the rivals product based their quality. 2004-2006 During this period I have identify three strategic approaches that M&S has been using. Acquisition

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The evidence of growth strategy (acquisition) from the case study is: Acquiring Per Una from Davies for 125m. The theory of acquisition states: One firm purchasing part or all of another firm (Jain C S 2000:24-39)M&S has purchased Per Una shop, and this is Horizontal unrelated acquisition. The theory of horizontal unrelated acquisition states: Acquire a firm in unrelated industry According to the case study Per Una is Womens wear shop. M&S is working in the food industry, but they purchased Per Una shop which works in the clothes industry, this is unrelated industries. Retrenchment The evidence of Retrenchment from the case study is: Cancelling more than 500food products. and Closing or upgrading stores, which likened to hospitals. The theory of retrenchment states: The company applying retrenchment strategy is seeking to reduce the size of organisation in terms of employees, production or assets. (Jain C S 2000:24-39) According to the case study M&S has been cancelled 500 products and also closing or upgrading stores, this is very clear description of the retrenchment. The theory stated that the company reduces Production or assets and the case study clearly stated that M&S reduced the number of products and also closed stores. Restructuring (downsizing) The evidence of restructuring (downsizing) from the case study is: Restructuring and redundancy. The theory of restructuring (downsizing) states: Wholesale reduction of employees. M&S is using downsizing strategy to reduce the number of employees within the company.

Sony Corporation 1946-1998 During this period I have identify one strategic approach that Sony has been using. Prospector strategy The evidence of prospector strategy from the case study is: Since its inception, Sony focused on product innovation and high quality. The theory of prospector strategy states: this means that the company is focuses on new product development, innovation and market opportunities and typically has number of product lines. (Jain C S 2000:24-39) Sony at that time developed prospector strategy, because as the

21

company started, they have to take high risk to expand in the new market. As we looked at the evidence from the case study, that Sony focuses on the product innovation and high quality of the product. As the theory stated that the company applied the prospector theory is focusing on the new product development and innovation, and this is what Sony was focusing on. 1999-2006 During this period I have identify three strategic approaches that Sony has been using. Restructuring (Downsizing) The evidence of Restructuring (downsizing) from the case study is: In October 2003, Idei came up with yet another restructuring plan called Transformation 60. Transformation plan was three year restructuring plan, which Sony to lay off 13% of its workforce or about 20000 people by March 2006. Sony planned to reduce costs by downsizing and consolidating manufacturing, distribution, customer service facilities and also by streamlining procurement. The theory of restructuring (downsizing) states: Wholesale reduction of employees. The outcomes in the short term are to reduce labour costs. Outcome in the long term is to loss of human capital and lower performance. (Jain C S 2000:24-39) As we looked at the evidence in the case study, I found that Sony which Sony to lay off 13% of its workforce or about 20000 people by March 2006. This was restructuring in terms of reduction of employees and this is the evidence that supports my proposition that was downsizing restructuring. Restructuring (downsizing and down scoping) The evidence of Restructuring (downsizing) from the case study is: In September 2005 Stringer announced restructuring plan for Sony. As part of the plan, Sony announced reduction of the global workforce by 6.6% and sales of non-core assets valued at 120bn yen. The theory of restructuring (downsizing) states: Wholesale reduction of employees. The outcomes in the short term are to reduce labour costs. Outcome in the long term is to loss of human capital and lower performance. (Jain C S 2000:24-39) Sony has applied two restructuring strategies such downsizing and down scoping. As the evidence has shown that downsizing take a place by reducing of the global force by 6.6%. As the theory stated the company applying this strategy is reducing the number of employees in the organisation. Strategic alliance The evidence of strategic alliance from the case study is: Sony planed to invest around

22

240bn yen in the chip business over a span of two years. A new division being developed in association with IBM and Toshiba Corporation was created cell chips. The theory of strategic alliance states: Strategic Alliance- corporation between two or more firms in a selected venture (Jain C S 2000:24-39) As the evidence cleared shown that Sony and other two companies participate in creating cell chips; this means that Sony has applied strategic alliance strategy to especially consortia strategy. This means that Sony Company is participating with Toshiba and IBM to work on particular venture.

Section 5 BSG
The theory of BSG is on Appendix 1 Sony Corporation Stars Based on the information from the case study and I compared with the theory of stars that states Stars have high market share and high growth in the market. Company has to invest a lot of money into this product and also requires an investment on the product advertisement. After a while the product growth will slow down and they will turn into cash cows. (Jain C S 2000: 251-252p) I have not recognised any star products from Sony case study. Cash cows Based on the information provided in the case study I have recognised cash cow product of Sonys Corporation During 2000-2001, despite the increase in revenue due to higher sales of the PlayStation, net income dropped to 16.75bn yen from 121.83b yen. The theory of cash cows states: Cash cows have low growth in the market, but have high market share of the products. Company does not have to invest a lot of money in product advertisement to hold their share market (Jain C S 2000: 251-252p) There is no mentioned that Sonys Corporation has investing the money to advertising or promoting the PlayStation to attract the customers to buy. And as it mentioned in the case study their revenue has been increased. Based on the information provided in the case study I have recognised cash cow product of Sonys Corporation Sony planned to introduce the PlayStation 3 and position it as the ultimate portable entertainment player, through which Sony aimed at increasing its market share in the computer entertainment market. According to

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theory of cash cow mentioned above, I have recognised that PlayStation 3 is cash cow. PlayStation 3 helped to the Sony Corporation increased their market share in the computer entertainment market. As we know that PlayStation had significant increase in the market share as the computer entertainment and also increased revenue to Sony Corporation. Because of the PlayStation was popular among the people and also recognised, this leads to the conclusion and the evidence support from the case study that PlayStation 3 was cash cow as well. Question mark Based on the information from the case study and I compared with the theory of question marks that states Question marks are low share business units in high growth markets. They require cash to hold their share, let alone increase it. (Jain C S 2000: 251-252p) I have not recognised any star products from Sony case study. Dogs According to the evidence from the case study I have recognised that Trinitron TV was a dog In 1968, it introduced Trinitron Colour TV, which was highly successful. The theory of dog states, Dogs have low market rate and also low market share of the product. (Jain C S 2000: 251-252p) According to the case study Trinitron colour TV was highly successful at that time, but there was development in the TV industry. Trinitron Colour TV is old fashion TV and compare to the new flat screen, 3d, there is significant different. Old fashion type TV is no longer popular among people, because of the wider variety of newer TVs sets.

Section 5a Ansoff Matrices


The theory of Ansoff Matrices is on Appendix 1 Sony Corporation Market penetration According to the evidence from the case study market penetration is Sony started off manufacturing telecommunications and measuring equipment and went on to manufacture transistor radio and tape recorders The theory of Market penetration states Market penetration is a strategy for company growth by increasing sales of current products to current market segments without changing the product. (Kotler,

24

Armstrong,

Wong,

Saunders

2008:146p)

Sony

has

already

manufacturing

telecommunication equipment. Tape recorder is type of telecommunication product that helps people transfer the message to others. This means that Sony has not came with new products in the same market, but same product in the same market. Product development According to the evidence from the case study product development is The key underlying theme was the need to create convergence between separate products. Example in the electronics business, converging television and games The theory of product development states Product development is strategy for company growth by offering modified new products to current market segments. (Kotler, Armstrong, Wong, Saunders 2008:146p) According to the evidence from the case study, that Sony wants to make hybrid product in the electronic business. This means that Sony wans to make a new product for the existing market. According to the evidence from the case study product development is PlayStation portable, which was released in December 2004. The theory of product development states Product development is strategy for company growth by offering modified new products to current market segments. (Kotler, Armstrong, Wong, Saunders 2008:146p) According to the case study, that PlayStation was introduced in 1994. In 2004 Sony has developed PlayStation into PlayStation portable, this leads that Sony has already supply PlayStation to this market. This means that in 2004 PlayStation Portable is modified product or in other word this is new product supplied at the current market. According to the evidence from the case study product development is Sony planned to introduce the PlayStation 3 and Playstation3 was the first product where cell chips were used The theory of product development states Product development is strategy for company growth by offering modified new products to current market segments. (Kotler, Armstrong, Wong, Saunders 2008:146p) According to the evidence form the case study, we already know that PlayStation was introduced in 1994. PlayStation 3 was developed product.

My Action Plan
Last week of Dec-Jan 11th of January 12th of January Searching the theory First draft of Section 1-5 checked by Tutor Meeting with Tutor

25

13th of Jan

Submission day

Appendix 1
BSG
Definition of Business Portfolio: The collection of businesses and products that make up the company. (Kotler, Armstrong, Wong, Saunders 2008:139p) Business portfolio is a link between general strategy of the business or company and those its parts. The company should: Analyse its current business portfolio and decide which businesses should receive more, less or even no investment

26

Develop growth strategies for adding new products

Portfolio analysis will help the managers to assess the businesses making up the company. The companys manager desire to invest the good resources into its more profitable businesses and to drop its weaker ones. Managements first step is to identify the key businesses making up the company. These are strategic business units. Definition of strategic business units: SBU is unit of company that has a separate mission and objectives, and which can be planned independently from other company businesses. An SBU can be a company division, a product line within a division, or sometime jus a single product or brand. (Kotler, Armstrong, Wong, Saunders 2008:139p) The next is important step in business portfolio analysis calls for management to assess the attractiveness of its various SBUs and decide how much support each deserves. This means that the leaders will look at companys collection of products and uses judgment to decide how much each SBU should contribute and receive. The best-known portfolio planning methods are from Boston Consulting Groups, a leading management consulting firm, and by General Electric and Shell. By using the Boston consulting group approach, the company could classify all its SBUs according to the growth-share matrix. Market growth is on vertical axis and provides the measurement of market attractiveness. Market share is on horizontal axis and provides the measurement of companys strength in the market. There are 4 types of SBU are on the BCG matrix. Stars Stars have high market share and high growth in the market. Company has to invest a lot of money into this product and also requires an investment on the product advertisement. After a while the product growth will slow down and they will turn into cash cows. Cash Cows Cash cows have low growth in the market, but have high market share of the products. Company does not have to invest a lot of money in product advertisement to hold their share market. Cash cow product produce cash for the company that they could pay their bill, taxes and also support other SBUs that requires investment. Question Marks

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Question marks are low share business units in high growth markets. They require cash to hold their share, let alone increase it. The companys management have to consider about the question marks, which one of them should be build as the stars and which one of them should be phase out. Dogs Dogs have low market rate and also low market share of the product. Dogs could generate enough money to maintain themselves, but not promise to generate large source of cash. Table 1.1

(Jain C S 2000: 251-252p)

Ansoff Matrices
Definition of Ansoff Matrices: The Ansoff growth matrix assists organizations to map strategic product market growth. (http://www.ansoffmatrix.com/) Ansoff development growth matrix is useful device for identifying growth opportunities. There are four routs to growth: Market development, new markets, new products and diversification. Market penetration Definition of Market penetration: Market penetration is a strategy for company growth by increasing sales of current products to current market segments without changing the product.

28

(Kotler, Armstrong, Wong, Saunders 2008:146p) For example, if there are 300 million people in a country and 65 million of those people have cell phones then the market penetration of cell phones would be approximately 22%. This would mean in theory there are still 235 million more potential customers for cell phones, which may be a good sign of growth for cell phone makers. In general, the older the offering or industry, the greater the market penetration. (Kotler, Armstrong, Wong, Saunders 2008:146p) Product development Definition of Product development: Product development is strategy for company growth by offering modified new products to current market segments. (Kotler, Armstrong, Wong, Saunders 2008:146p) In this growth strategy involves, where business aims to introduce new products in current market. This strategy may require the development of new competencies and requires the business develop modified products, which can appeal to existing markets. Market development Definition of Market development: Market development is strategy for company growth by identifying and developing new market segments for current company product. (Kotler, Armstrong, Wong, Saunders 2008:146p) This strategy tries to target non-buying customers in currently targeted segments. In other word market development means that the company selling the present products or service in new markets. This means that the managers of a company takes action like targeting promotion, opening sales office and creating alliance to opetionalize a market development. There are many ways of doing this strategy, this include: New geographical markets New product dimensions or packaging New distribution channels Different pricing policies

Diversification Definition of Diversification: Diversification is a strategy for company growth through starting up or acquiring businesses outside the companys current products and markets. (Kotler, Armstrong, Wong, Saunders 2008:147p) In this strategy the company introduce new products in the new markets. Example

29

Mitsubishi is well known for the cars, but they have developed the plan to manufacturing TV sets. This means that Mitsubishi is entering with new product in the new market. This is an inherently more risk strategy, because business is moving into the new waters (Market) in which the company has little or nor previous experience at all. Table 1.2

Appendix 2
Organisational Structure
Definition of organisational structure: The framework, typically hierarchical, within which an organisation arranges its lines of authority and communication, and allocation rights and duties. Organisational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled and coordinated, and how information flows between levels of management (http://www.businessdictionary.com) This means that that organisation structure depend entirely on organisations objectives and the strategy chosen to achieve them. There are two different type of organisational structure in terms of span of control and division of labour: Flat and Tall. Flat Definition of flat structure: A denormalized file structure where each line in the file

30

represents a row of data. (http://www.nppesdata.com) Flat organisation structure will have relatively few layers of management. This means that the chain of command from the top (CEO) to the bottom (employees) is short and the spam of control is wide. Because of the small number of management layer, flat organisation is small companies. (Linehan M 2007:69p) Table 2.1

Table 2.1.1 Advantages Better team spirit Less bureaucracy and easier decision making Greater communication between management and workers (Linehan M 2007:69p) Tall Definition of tall structure: Organisations with narrow spans of control with many managerial levels called tall structure. (Linehan M 2007:69p) Tall structured organisation has many levels of management and supervisors. There is long chain of command running from the tops (CAO) to the bottom (Employees) Table 2.2 Disadvantages May limit the growth of the organisation Structure limited to small organisations such as partnership, cooperatives and some private limited companies

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Table 2.2.1 Advantages There is clear management structure Clear progression and promotion ladder There is narrow span of control i.e. The manager has a small number of employees under his control (Linehan M 2007:69p) There are 6 types of organisational structures. Simple Functional Geographical Disadvantages Decision making is slowing down as approval may be needed by each of the layers of authority Communication has to take through many layers of management

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Simple

Divisional Strategic Matrix

Simple organisation structure is characterized by low degree of differentiation of subtasks, and leaders are having wide span of control. This means that the authority often is centralized in a single person, who is often the boss of the company. Formalization will also be low, and work will often be structured through direct control and supervision. The simple structure is referred to as flat structure. The simple organisational structure is widely practiced in small companies or organisations, in which the coordination of work can be very effectively structured around a narrow set of activities and decision makers, who are able to coordinate activities quickly and effectively. Simple organisation structure is nor relevant when the business or organisation grows in size, and when surrounding environment of the company grows in complexity. (Linehan M 2007:71)

Table 2.3

Table 2.3.1 Advantage Control of all business operation Frequent communication Disadvantage Lack of specialization and hence, complex tasks deterrent

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No coordination problems

Rapid decision making (http://www.slideshare.net) by Rotator Platform Software Consulting c.a accounting manager on August 2009 Bureaucratic The fully developed bureaucratic mechanism compares with other organizations exactly as does the machine compare with the non-mechanical modes of production. Precision, speed, unambiguity, strict subordination, reduction of friction and of material and personal costs- these are raised to the optimum point in the strictly bureaucratic administration. Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations, usually adopting a tall structure. The tension between bureaucratic structures and nonbureaucratic is echoed in Burns and Stalker's distinction between mechanistic and organic structures. The Weberian characteristics of bureaucracy are:

Clear defined roles and responsibilities A hierarchical structure Respect for merit.

Table 2.4

In other word bureaucratic structure maintain strict hierarchies when it comes to people management. And it also helps when the organisation is growing in complex and also

34

large, bureaucratic structures are required for management. This structure is suitable for tall organisations. (Linehan M 2007:71) Functional In a functional structure, teams are created based on the common function in bottom up manner. The result is a set of functional units such engineering, marketing etc., that are controlled and coordinated from the top-level management. Functional structure is the most common type of structural design and has evolved from the concept of high specialization, high control framework of manufacturing organisations tuned toward high efficiency. Functional management is more technical orientated and less product or business orientated while they are skilled in taking decisions in their functional areas, they are weak in the areas of product business plans, market study and product release management. If the organisation does have multiple product lines, then functional hierarchy at lowest level does get divided along product lines, therefore creating deeper hierarchies. (Linehan M 2007:71) Table 2.5

Table 2.5.1 Advantages Efficiency through specialization Retains centralized control of strategic decisions Disadvantages Promotes narrow specialization and potential functional rivalry or conflict Difficulty in functional
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Differentiates and delegates day to

coordination and inter functional decision making

day operating decisions (http://www.slideshare.net) Divisional

In a divisional structure, the teams are organised in set of divisions, where each division corresponds to the end product or service provided by organisation. Each division has its own set of functional units like research, manufacturing, marketing etc. and is completely self-contained. Divisional structure is less hierarchical than functional; it is formed by decomposing the functional structure along the product lines. Divisional management is more skilled along product business and lesser in core technical competencies than functional structure management.

Table 2.6

Table 2.6.1 Advantages CEO focus on strategic orientation Performance accountability Divisions unique environment Disadvantages Divisions Managers line of Authority Policy inconsistencies between divisions

hence unique strategic orientation (Linehan M 2007:72)

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Strategic Strategic business is understood as business unit within the overall corporate identity which distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to product and markets. When the company or organisation becomes large, they are best thought of as being composed of number of businesses. These organisation entities are large enough to exercise control over most strategic factors affecting their performance. Multidivisional structure consisting of three levels, the top level being the corporate headquarters. The SBU groups, and final level division grouped by relatedness. Divisions within groups are related, but groups are largely unrelated to each other. Each SBU is profit centre controlled by firms corporate office.

Table 2.7

Table 2.7.1 Advantages Channels accountability to distinct business units Coordination between divisions with similar strategic concerns and Disadvantages Degree of autonomy for each SBU Dysfunctional competition for corporate resources may increase

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products/market environments (Linehan M 2007:72) Matrix Matrix structure is organisational design that the team of employees by both function and product. The organisational structure is very flat, and the structure of the matrix is differentiated into whatever functions are needed to accomplish certain goals. The employee at the functional department is reporting to the functional heads, but do not working under their supervision. The employees are supervised and controlled by the membership of the certain project. This is the way in matrix structure the employees has two superiors who will jointly ensure the progress of the project. When the project is accomplished the team of the project is dissolved, and workers from different functional areas may get reassigned to other projects and tasks

Table 2.8

Advantages Creativity and multiple sources of diversity Efficient use of functional managers Middle management exposure to strategic issues (http://www.slideshare.net)

Disadvantages Dual accountability can create confusion and contradictory prices Necessities tremendous horizontal and vertical coordination

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Appendix 3
Managing at different level of the organisation
In the organisations there are three levels of management, represented by top managers (CEO), middle managers and first line managers. Top Managers This is small group of executives who are controlling the whole organisation or the company. In this group includes president, vice-president and also chief executive officer. The group of executives creates the organisations goals, overall strategy and also operating policies (Linehan M 2007:3)

Middle Managers The middle mangers are responsible for applying the policies and also the plans developed by the group of executives and monitoring and coordinating the activities of lower level managers. Examples of middle managers are: Human resource manager, finance manager. (Linehan M 2007:3) First line managers The first line managers of operational managers are responsible for monitoring and coordinate the activities of operating employees. Operational manager most of the time spends supervising the work of subordinates. (Linehan M 2007:3)

Appendix 4
Strategic Approaches
As the literature formulate there are three level of strategies: Corporate Business Functional

Corporate level strategy Corporate strategy may be viewed as grand plan for an organisation which describes the

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general action to be taken to achieve long-term objectives. The grand strategy represents the companys overall direction. According to the literature there are three grand strategy options: Retrenchment strategy: The company applying retrenchment strategy is seeking to reduce the size of organisation in terms of employees, production or assets. This could the result of decline in demand for an organisation product, the introduction of new technology or from increased competitors. In other words the company cutting back on the range of the products or markets. This means that the companys management recognise that the organisation is performing badly. In retrenchment the company usually selling off parts of business or liquidation of an entire organisation. Stability strategy: The company tries to remain the same size or to grow in a very slow controlled way. This strategy may be applied after a period of rapid growth in order to take stock and ensure that the expansion is viable. This means that the company is seeking to continue with the same products and markets. This means that the management recognises that its organisation is performing well and opts for low risk and little change in stable environment. Growth strategy: The organisation developing its market position, through increased investment, new product development, and diversification in to new markets. This means that organisation is seeking to add new products in the new market. This means that that the management of the company or business desired its organisation to perform much better, preferring high risk and change. In Growth strategy there are three different acquiring: 1. Mergers- Two or more firms combine usually because of complementing strength 2. Acquisition- One firm purchasing part or all firm. There are five different type of acquisition, and these are: I. Horizontal Integration. This means that the firm buys other firm in the same line of business, and their aims is to increase the market share II. III. Horizontal Related acquisition. This means the firm biys another firm outside present scope of operation, but related. Horizontal unrelated acquisition. This means that firm

40

acquire other firm in unrelated industry. Example of this is that Supervalue purchase petrol service station IV. Vertical related acquisition. This means that firm is acquire other firm with complementary competencies in the vertical value system V. Vertical unrelated acquisition. This means that the firm acquire other firm in unrelated industry.
3.

Strategic Alliance- Corporation between two or more firms in a selected venture. There five forms of strategic alliance, and these are: I. II. III. IV. V. Joint venture. This is new jointly owed organisation, and when the partners remain independent. Consortia. This is when two or more organisation on a particular venture Networks. Informal collaboration on mutual advantage and trust. Opportunistic. Informal market relationship focused on particular venture. Intermediate. Subcontracting or in other words employ business or person outside the company to do the work as part of larger project.

(Jain C S 2000:24-39) Business level strategy According to the Miles and Snow (1976) Business level strategy can be identify as one of the four categories: Defender strategy- this means that the company has limited product line and its management focus is on improving the efficiency of existing operations. The company with this strategy tries to protect the current market share, maintaining stable growth and serving current customers. Prospector strategy- this means that the company is focuses on new product development, innovation and market opportunities and typically has number of product lines. The company with strategy is continuing to expand into new markets and also be high-risk taker.

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Analyser strategy- this means that the company is commonly working in two distinguished markets. One of the markets is stable and one is variable (thus creating new market opportunities). The company implementing this strategy is focuses on the efficiency in the stable market and also innovation in the variable market.

Reactor strategy- this means that the company has no clear strategy and also reacts in changes in the environment very slowly.

(Jain C S 2000:24-39) Functional level strategy Functional level strategy is concerned with the on-going functional operations of an organisation. Functions represented in an organisation depend on the type of business, its size and its structure, but may include: marketing, sales, research and development, finance and human resources. The question at this level of strategy is How do we support the business level competitive strategy? All these functions need to follow the strategic plans of an organisation and must be integrated to ensure the overall success of an organisation. (Jain C S 2000:24-39) Restructuring There are eight restructuring activities: Downsizing- Wholesale reduction of employees. The outcomes in the short term are to reduce labour costs. Outcome in the long term is to loss of human capital and lower performance. Down scoping- Selectively divesting or closing non core businesses. Reducing scope of operations. Outcome in the short term is reducing the debt costs and emphasis on strategic control. Outcomes in the long term are higher performance. Leveraged buyout- a party buys a firms entire assets in order to take the firm private. Outcomes in the short term are emphasis on strategic controls and high debt costs. Outcome in the long term are higher performance and higher risk.

Networking- it refers to the process of breaking companies into smaller independent business units for significant improvement in productivity and flexibility. The phenomenon is predominant in South Korea, where big companies like Samsung, Hyundai and Daewoo are breaking themselves up into

42

smaller units. These firms convert their managers into entrepreneurs.

Virtual Corporation- It is a company that has taken steps to turn itself inside out. Rather than having managers and staff sitting inside in their offices moving papers from in basket to out basket, a virtual corporation kicks the employees outside, sending them to work in customer's offices and plants, determining what the customer needs and wants, then reshaping the corporate products and services to the customer's exact needs. This is a futuristic concept wherein companies will be edgeless, adaptable and perpetually changing. The centrepiece of the business revolution is a new kind of product called a Virtual Product Some of the these products already exist, camcorders create instant movies, personal computers and laser printers have made instant desktop publishing a reality. And for all these we can obtain cash instantly at ATMs.

Verticalization- it refers to regrouping of management functions for particular functions for a particular product range to achieve higher accountability and transparency. Siemens in 1990 moved from a "function-oriented" structure to a vertical "entrepreneur-oriented" structure embracing size business and three support divisions.

Delayering- Flat organization: In the post world war period the demand for goods was ever increasing. Main objective of the corporations was production and capacity build up to meet the demand. The classical, pyramidal structure was well suited to this high growth environment. This structure was scalable and the corporations could immediately translate their growth plans into action by adding workers at the bottom layer and filling in the management layers. But the price paid in the whole process was much higher. The overall process became complicated; number of middle managers and functional managers grew making the coordination of various functions complex. Senior/top management was alienated from the front-line people as well as the end users of the product or service. Decision-making became slower. Hence, a need is felt to attack the unproductive, bulky and sluggish network of white-collar staff. A powerful strategy would be to remove the layers of senior and middle management i.e. making the organization structure flat.

Business Process Reengineering- The Business Process Reengineering method (BPR) is defined by Hammer and Champy as 'the fundamental reconsideration and radical redesign of organizational processes, in order to achieve drastic
43

improvement of current performance in cost, service and speed'. Value creation for the customer is the leading factor for BPR and information technology often plays an important enabling role. Business process reengineering is also known as BPR, Business Process Redesign, Business Transformation, or Business Process Change Management. (Jain C S 2000:24-39)

Michael Porters generic strategies


Cost leadership This strategy involves the organisation aiming to be the lowest cost producer within their industry. The organisation aims to drive cost down through all the elements of the production of the product from sourcing, to labour costs. The cost leader usually aims at a broad market; so sufficient sales can cover costs. Low cost producers include Easyjet airline, Ryan air, Asda and Walmart. Some organisation may aim to drive costs down but will not pass on these cost savings to their customers aiming for increased profits clearly because their brand can command a premium rate. Differentiation To be different, is what organisations strive for. Having a competitive advantage, which allows the company and its products ranges to stand out, is crucial for their success. With a differentiation strategy the organisation aims to focus its effort on particular segments and charge for the added differentiated value. If we look at Brompton folding cycles their compact design differentiates them from other folding bike companies. New concepts which allow for differentiation can be patented, however patents have a certain life span and organisation always face the danger that their idea that gives the competitive advantage will be copied in one form or another. Niche strategies Here the organisation focuses its effort on one particular segment and becomes well known for providing products/services within the segment. They form a competitive advantage for this niche market and either succeeds by being a low cost producer or differentiator within that particular segment. Examples include Roll Royce and Bentley. With both of these strategies the organisation can also focus by offering particular segments a differentiated product/service or a low cost product/service. The key is that the product or service is focused on a particular segment Middle of the road

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The danger some organisation face is that they try to do all three and become what is known as stuck in the middle. The have no clear business strategy, be all to all consumers, which adds to their running costs causing a fall in sales and market share. Stuck in the middle companies are usually subject to a takeover or merger. (Jain C S 2000:24-39)

Appendix 5
Organisation culture
Definition of organizational culture: A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. (Schein 1992:12) There are numbers of visible sign of strong culture and they are divided as follows: Routine Ways members behave toward one another and towards outsiders the way we doing things around here. May provide distinctive competence or typical ability. May provide a taken for grantedness about things are done (this is difficult to change) (Jason Martin 2006:1) Rituals An event through which organization emphasizes what is important. Example of this is the company provides an open days or graduation. This can be formal training and recruitment or informal such as drinks in the pub or gossip in the canteen (Jason Martin 2006:1) Stories The stories that have been told by members of organization to each other and to outsiders (new recruits). Flag important events, personalities. Indicate the essence of the organizations past and types of behavior that are acceptable (Jason Martin 2006:1) Symbols There are the symbols that the new recruits have to be aware such titles, logos, cars,

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uniform, language, and office layouts, how people address each other. Symbols of hierarchy indicate possible barrier levels when implementing strategic change. (Jason Martin 2006:2) Power structure Most powerful groups within an organization are likely to be closely attached to the taken for granted assumption and beliefs. (Jason Martin 2006:2) Control system Performance measurement and reward, this means that there is supervisor who checks the performance. Indicate what is important to the organization (organizational focus). (Jason Martin 2006:2) According to the literature there are four types of culture in organization relating to the characteristics of organization: Control (hierarchy)- Hierarchical organization share similarities with stereotypical large, bureaucratic corporation. As in the value matrix, they are defined by stability and control as well as internal focus and integration. They value standardization, control, and a well-defined structure for authority and decision-making. Effective leaders in hierarchical cultures are those that can organize coordinate, and monitor people and process. In other word hierarchical culture is very formalized structured place to work. Procedures govern what people do. Complete (market)- The complete or market culture organizations are similar to the control cultures in that they value stability and control. The organizations with the complete culture are focusing on the external orientation and they value differentiation over integration. Complete culture organizations are focusing on relationship more specifically, transactions with suppliers, customers, contractors, unions, legislators. In other words Market culture organization whose major concern is with getting the job done. People are competitive and goal orientated. Collaborate (Clan)- A very friendly place to work where people share a lot of themselves. It is like and extended family. Create (Adhocracy)- dynamic entrepreneurial, and creative place to work.

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People stick their necks out and take risks. (Jason Martin 2006:2) Power Culture A power culture emanates from centralized power in a charismatic leader. This leader acts decisively and unilaterally, but always with the best intentions for the organization in mind. Power cultures are demanding of the people within the organization. Late nights and weekends in the office often are the norm. Generally motivation is not a problem since expectations are clear and loyalty is recognized and rewarded. In a dysfunctional stage power cultures can produce inefficient organizations where everyone waits for approval before moving forward on an idea. This is seen in organizations that have become too large for one person to maintain all the control and authority. Employees may also spend too much time playing political games and trying to curry favour with the boss instead of actually working. Members of this type of culture often become burned out, and disloyal employees face a hostile and oppressive environment. (Jason Martin 2006:4) Role Culture A role culture is a highly structured environment where clear objectives, goals, and procedures exist. An employee is judged almost solely on how well they meet these objectives and goals. In a functional stage role cultures operate highly efficiently and include built-in checks and balances of power. This culture rewards dependability and consistency and, due to its well-articulated procedures, produces little stress. However, taken to extremes role cultures can create an organization of automatons that simply follow the rules and have very little concern for that which is not in their prescribed area. This mentality creates an environment where cooperation and collaboration are non-existent and a persons talent may go unused. Change comes very slow in role cultures and those within the culture, especially a dysfunctional one, may become afraid to take risks. (Jason Martin 2006:4) Achievement Culture An achievement culture is one where people work hard to achieve goals and better the
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group as a whole. This culture generally consists of highly motivated people who need little to no supervision. Rules and procedures are limited as they may interfere with the accomplishment of work. When a rule gets in the way of achieving a goal the rule is simply ignored. The best tools and methods for producing results are utilized, and when one goal is met, everyone quickly moves on to another. Because of this environment and mind-set, achievement cultures tend to be highly adaptive. Unfortunately members of an achievement cultures tend to burn out on their work. It may be difficult to establish control if the need arises as the culture cultivates individuals. Members may also become highly competitive with each other and the mind-set of whatever it takes can lead to dishonest and illegal behaviour. (Jason Martin 2006:5) Support Culture A support culture acts like a tiny community where people support and trust each other. Members of this culture will cooperate, make sure everyone is together on an idea, and do all that they can to resolve conflict. Support cultures consist of good communication and excellent service both internal and external. This culture creates a nurturing environment where members like to spend time together and sometimes personal and professional lives can become blurred. When a support culture becomes dysfunctional the needs of the individuals are placed over the needs of the organization. Due to a commitment to consensus decisions come slowly. Support cultures tend to not be very task oriented. And too much time spent together fosters personal differences that often hinder work and ruin the excellent service that is a hallmark of support cultures. (Jason Martin 2006:6)

Appendix 6
Leadership style
There are many leadership styles in the organisation, but the most common leadership types are: Autocratic Autocratic leadership is characterized by individual who controls over all decision and little input from group members. The autocratic leader is commonly making all the decisions on their own ideas and judgments and rarely accepts any advice from the

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employees or outsiders. This means that the autocratic leader has an absolute control over a group of employees. The autocratic leader is dictates all the work methods and process. There is no trust to the group members with decision or important tasks. (Linehan 2007:54-56) Democratic Democratic leadership is characterized by the individual who allows the members of the group take a more participative role in the decision making process. Ideas move freely amongst the group and are discussed openly. Everyone is given a seat at the table, and discussion is relatively free flowing. This style is very good adapted in the dynamic and rapidly changing environment where little can be taken as a constant. In these fast growing organisations, every small detail even little opinion for improvement can be taken in to consideration. This helps to keep the group from falling out of date. Democratic leadership style encourages the members of the group to share their ideas and then synthesizing all the available information into the best possible decision. Democratic leader has to have skills to communicate the decision has been made to the group of people. (Linehan 2007:56-58) Bureaucratic Bureaucratic leadership is when the managers managing the whole organisation according to the rules and policies. This type of leader is making sure that the employees also strictly follow the rules and procedures. Promotion takes place on the basis of employees ability to adhere to organisational rules. This type of leadership is suitable when there is need of safe work conditions and quality is required. (Linehan 2007:58-59) Laissez faire Laissez faire leadership is known as delegate leadership style in which leaders are hands-off and let the group members to make the decisions themselves. The leader gives a little instructions and complete freedom to the followers to came and make the decision. The leader gives all the tools and also the resources needed to the followers. Leader is expecting the followers to solve the problems on their own. (Linehan 2007:59-61)

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