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Harvard - Story

Case: Rob Parson at Morgan Stanley Rob Parson was a star producer in Morgan Stanley's Capital Markets division. He had been recruited from a competitor the prior year and had generated substantial revenues since joining the firm. Unfortunately, Parson's reviews from the 360-degree performance evaluation process revealed that he was having difficulty adapting to the firm's culture. His manager, Paul , faces the difficult decision of whether to promote Parson to managing director. Paul must also complete Parson's performance evaluation summary and conduct Parson's performance review.

Harvard
(1)Have you ever faced a managerial challenge

similar to the one Paul face? How did you think about it at the time? What did you do any why? What was the outcome and consequence? (2)What is your assessment of the organization development process employed by Morgan Stanley as described in the case? What are its chief strengths and weaknesses? (3) What is your assessment of Rob Parsons performance? Should he be promoted? Case A->Case B -> Case C

Diagnosing the Working Project


TIC total revenue increased to 1.3 billion NT in 2005,

compared with 1.2 billion NT in 2004. The case companys EPS drew from 2.82 to 2.01 (28% ) Why?

Why Quality Issue


(1) Rush orders from sales department!

(2) Rush orders disarrange the production schedule.


(3) An insufficiency of raw materials! (4) Wait for the raw materials for production!

(5) To meet with the delivery deadline!


(6) To condense the time for QC! (7) Sale return incase ->Cost of quality increase

(8) EPS drew from 2.82 to 2.01 (28% )

The Bosss Comments


Managers never understand why the company makes

money, when it makes money. The same, managers never understand why the company cannot make money, when it cannot make money! Who should take the responsibilities for the current situation? You, our managers! We pay well, and you should do more. You have one year to get thing better!

ERP Decisions?
The raw materials need to be controlled! ERP system cannot support an effective

Material Replenishment Management David, the CIO of TIC, has to make a decision: whether TIC needs to have a new ERP system which can provide a better function to control raw materials for production? So what're your thoughts on the ERP decision?

What ERP Can do is


Reducing Total Order Fulfillment Time Reducing Order Processing Time and Cost Reducing Transportation and Logistics Costs Enhancing Customer Service Enhancing the Ability to Penetrate Markets Improving On-time Delivery Performance Increasing Visibility of Corporate Data Integrating Business Process Integrating Information, Material and Cash flow

But
(ends) (means)

Requirements Management Practices...The 'Essence' Betty Luedke - Borland Software Corporation

Back to Quality Issue

Sales Process

Rush Order

Raw Materials

R&D Process

From RBOM to MBOM

ERP

Manufacture Process

QC

Cost of Sales Return

EPS Down

Relevant Projects
After the diagnosis, David came out with Organizational Change (vs. TQM) Process reengineering project! (Process) ERP Project (technology) Promoting blood Project (People)

Process Reengineering
Business process reengineering (BPR) is the analysis

and redesign of workflow within and between enterprises. Start from the future and work backwards BPR is not easy - serious work BPR is not free - financial & cultural BPR often driven by fear and greed Change is a struggle; BPR is a war

Change Management Model


Unfreezing Diagnose need for change, status quo no longer acceptable Prepare people & plan change Changing Implement changes Overcome resistance Refreezing Institutionalize new ways
Unfreezing Changing Refreezing

Phase One of Organizational Change


Flat organization structure: Flat organization (also

known as horizontal organization) refers to a organizational structure with few or no levels of intervening management between staff and managers.

Organization Changing

For TIC, there are five levels.

Phase two of Organizational Change


Promoting blood Project Human resources inventory Human Resources Development
Acquisition Development Motivation Maintenance

http://www.wretch.cc/blog/prajina&article_id=12717319

Actions
The HR manger was fired! David becomes the HR manager (David has no

historical burden.) Redesign job function and job description. Clarify the departmental and personal accountability! Seeking for new managing team members!

Phase three of Organizational Change


Change from conventionally functional divisions to

Profit Center System (Strategic Business Unit) ! A business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets.

So, OC+ERP can work?

Sales Process

Rush Order

Raw Materials

R&D Process

From RBOM to MBOM

ERP

Manufacture Process

QC

Cost of Sales Return

EPS Down

No! Why Rush Order?


Sales Process Rush Order Raw Materials

R&D Process

From RBOM to MBOM

ERP

Manufacture Process

QC

Cost of Sales Return

EPS Down

The Problem or Rush Orders


The margins of orders may not attractive to our

competitors! Signals:

Our competitors focus on the high-margin orders! Our competitors are over-loading!

Assuming the specified due dates are fixed, certain

orders must be denied in the presence of limitations on raw materials or production capacity. But, can TIC do it and how to do it?

Can Sales Reject Rush Order? Why?


Sales Process Rush Order Raw Materials

R&D Process

From RBOM to MBOM

ERP

Manufacture Process

QC

Cost of Sales Return

EPS Down

The MIT90 Framework


External Technological Environment

Structure

Strategy

Management Processes Individuals & Roles

Technology

External Socioeconomic Environment

Culture

Organization Boundary

The TIC Case


External Technological Environment

Organizational Structure

Marketing Strategy

Order fulfillment

Mgt. Processes

ERP System Technology

External Socioeconomic Environment

Sales, R&D, Manu.

Ind.& Roles

Culture

Organization Boundary

The General Problem of ODMs


Count on their major customers! Lack of market information! Neglect the change of users demands!

Sales Department
Achieving sales revenue growth targets is particularly

challenging with rising competition and difficult trading conditions. The sales function has never been under so much pressure. TIC has no marketing department! When sales generate quotations to their customers, they still cannot ensure whether TIC provides the most efficient products at the best market price.

Role of Marketing
Organizational Resources Effective match
www.coba.unt.edu/mktg/faculty/blankson/

Specification of Target Market Customer Satisfaction Organizational Aims/objectives

Elements of a Market Orientation


mktg-sun.wharton.upenn.edu/marketingstrategy/

Customers

Competitors

Culture is externally oriented


Shared Knowledge Base Capabilities Market sensing Market relating Strategic thinking Channels

Configuration Focus on superior customer value Coherence of structure and systems Superior Ability to Understand, Attract, and Keep Valuable Customers

Collaborators

Components
According to Narver and Slater (1990), Market
www.coba.unt.edu/mktg/faculty/blankson/

orientation comprises three components: Customer orientation Competitor orientation and Interfunctional co-ordination.

Can Sales Reject Rush Order? Why?


Lack of Market Orientation
No KPI for Sales Prediction Performance Evaluation Control mechanism

Sales Process

Rush Order

Raw Materials

R&D Process

From RBOM to MBOM

ERP

Manufacture Process

QC

Cost of Sales Return

EPS Down

Re-Diagnosing the Working Project


The case companys EPS drew from 2.82 to 2.01

(28% ) Quality issue vs. ERPs Problems No Marketing department! Established a reengineering project! Strategic Planning for Market Orientation Organization Transformation

Action Planning
HR Projects BI Projects New ERP (under evaluation!)

New Performance Evaluation System!


Actions is taking now!

From Manufacture to Marketing


Sales and Production meeting Key Performance Indicator (BSC) Strategy Map

Establish Marketing Department

Establish Marketing Department


Market analysis Collect information (both from Customer and

Competitor) for Interfunctional co-ordination Product Map TIC decides to focus on high-quality, long-term Customer Ranking (top 20) relationship, standardized New product policies products. Sales need to predict the demand for next 3 months & KPI will evaluate the predictions.

Q&A