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Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
Presentation material for begining module.ppt
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Presentation material for begining module.ppt

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  • 1. AROUSAL A R eal O rganisational U nit S imulated A s L ife I mproving the Competitiveness of A UK Construction Company Steve Male & Krisen Moodley University of Leeds & Sue Armstrong University of Sheffield
  • 2. THE KEY TO SUCCESSFUL BUSINESS STRATEGIES AND IMPROVING THE FIRM
  • 3. Objective of Presentation <ul><li>Provide a Framework To Assist Developing Integrated Business Strategies In A Structured Way Using a Construction Business Simulation Package </li></ul><ul><li>Transfer Lessons From a Business Simulation – AROUSAL – into Real Life </li></ul>
  • 4. The Construction Business Chain Client Design Team Main Contractor On Site Production Suppliers &amp; Sub Contractors The Board of Directors
  • 5. AROUSAL <ul><li>You will be set up as a Board of Directors </li></ul><ul><li>You will need to analyse where the contracting company is now </li></ul><ul><li>You will need to analyse where the company needs to be over the next three months, twelve months and two years </li></ul><ul><li>You will need to make a range of decisions on various components of the firm and enter them into the simulation software </li></ul>
  • 6. The Decision Areas <ul><li>Analyse the external market </li></ul><ul><ul><li>Which clients? </li></ul></ul><ul><ul><li>Which projects? </li></ul></ul><ul><ul><li>Which locations? </li></ul></ul><ul><ul><li>Which services do we want to offer? </li></ul></ul><ul><ul><ul><li>Traditional procurement, design and build etc </li></ul></ul></ul><ul><ul><ul><li>Civil engineering – which types of technology </li></ul></ul></ul><ul><ul><ul><li>Buildings – which types of technology </li></ul></ul></ul><ul><li>What is our financial situation? </li></ul>
  • 7. The Decision Areas <ul><li>What are we good at – where are our core competencies? </li></ul><ul><li>What are we not good at? </li></ul><ul><li>Where do we make a profit? </li></ul><ul><li>What projects should we bid on? </li></ul><ul><li>How are our staff performing? </li></ul><ul><li>How good is our marketing? </li></ul><ul><li>How good is our estimating? </li></ul><ul><li>Are we structured correctly? </li></ul>
  • 8. The Decision Areas <ul><li>How good is our site management and on site production? </li></ul><ul><ul><li>Is it better for some projects than others? </li></ul></ul><ul><ul><li>Why? </li></ul></ul><ul><li>Have we got good staff, are we paying them enough, are they satisfied, should we recruit better staff, should we sack some from the firm? </li></ul><ul><li>What is the competition up to?. </li></ul><ul><ul><li>How good are we against them? </li></ul></ul><ul><ul><li>How could we become better? </li></ul></ul><ul><ul><li>Which projects, which clients, which locations? </li></ul></ul>
  • 9. The Decision Areas <ul><li>What is our vision for the company? </li></ul><ul><li>What is our business strategy? </li></ul><ul><ul><li>In the short term – 3 months </li></ul></ul><ul><ul><li>In the medium term – 12 months </li></ul></ul><ul><ul><li>In the long term – 24 months and beyond </li></ul></ul><ul><li>What can go wrong and why? </li></ul>
  • 10. Core Competencies: What are we good at? <ul><li>Core competencies – skills and knowledge which can exist in a number of places in a firm </li></ul><ul><li>They give a firm an edge over the competition </li></ul><ul><li>The firm could be good at particular types of projects </li></ul><ul><li>The firm could be good at working for particular types of clients </li></ul><ul><li>The firm could be good at working in particular locations </li></ul>
  • 11. WHERE ARE OUR CORE COMPETENCIES? Board of Directors WHAT IS OUR STRATEGY? Which Clients – Why? Which Locations – Why? Which Projects – Why? STRATEGY FOR THE FUTURE STRATEGY NOW
  • 12. Core Competencies: What are we good at? <ul><li>Other examples could include: </li></ul><ul><ul><li>Core knowledge and skills in estimating </li></ul></ul><ul><ul><li>Core knowledge and skill in managing on site production </li></ul></ul><ul><ul><li>Core knowledge and skills in knowing what to purchase and when </li></ul></ul><ul><ul><li>Core knowledge and skills in particular types of technical and logistical projects </li></ul></ul>
  • 13. In order to make decisions in these areas you will need a framework to help you think through the issues, come up with options and implement them in the simulation package As in real life there are no right or wrong answers – only shades of grey. You will need to balance the evidence, facts and discussions when you make your choices. The next series of slides will provide you with a series of models and a framework to help you make choices. BALANCING THE SCALES OF STRATEGY
  • 14. Understand The Firm’s Current Situation Understand the Firm’s Potential Future Situation Time THE BASICS OF BUSINESS STRATEGY
  • 15. Understand Current Situation Potential Future Situation Time Use a Diagnostic Framework Where are we now? What do I need to change? Why? THE BASICS OF BUSINESS STRATEGY
  • 16. Understand Current Situation Potential Future Situation Time Diagnostic Framework Where do you want to go? Where are you now? Vision What do I need to change? Why? THE BASICS OF BUSINESS STRATEGY
  • 17. Understand Current Situation Future Situation Time Diagnostic Framework How do I get there? How do I measure performance and improve performance? Where, why, how? Where do you want to go? Vision Strategy Why? THE BASICS OF BUSINESS STRATEGY Where are you now? What do I need to change? Why?
  • 18. Industries and Markets Positioning the Contracting Firm Against the Competition
  • 19. Use Techniques for Analysis <ul><li>SWOT </li></ul><ul><ul><li>Strengths, Weaknesses, Opportunities, Threats </li></ul></ul><ul><li>Competitor Analysis – who, where, why, when? </li></ul><ul><li>Boston Matrix, which projects fall into the following: </li></ul><ul><ul><li>Cash cows – good for cash flow </li></ul></ul><ul><ul><li>Dogs – Loosing money: Divest </li></ul></ul><ul><ul><li>Stars – will need investment but can become cash cows in the future </li></ul></ul><ul><ul><li>? – watch and decide </li></ul></ul><ul><li>Porter’s Five Forces </li></ul>
  • 20. INDUSTRY STRUCTURE AND RESTRUCTURING MARKET PRESSURES - Five Forces PROJECT TECHNOLOGIES AND DRIVERS Power of Clients Rivalry between Competitors Substitute Materials New Entrant Companies Civil Engineering THE NEED TO CHANGE Simple &amp; Routine Power of Suppliers Building Engineering Complex &amp; Specialist Time Pressures/ Urgency High Value/ Low Value
  • 21. HIGH ADDED VALUE HIGH VOLUME Engineering Specialists Simple &amp; Routine Stay Local INDUSTRY STRUCTURE &amp; RESTRUCTURING Complex &amp; Specialist Projects May need to Travel POSSIBLE STRATEGIES? Bid Low Cost COMBINATION
  • 22. The European Business Excellence Model <ul><li>The Business Excellence model provides a framework for thinking through where the success or failure of a firm might lie </li></ul><ul><li>It gives weightings to certain components </li></ul><ul><li>It sees some components as enablers to success </li></ul><ul><li>It sees other components as outcomes or results </li></ul>
  • 23. A Business Excellence Model European Quality Foundation Model Leadership 10% Processes 14% Business Results 15% People Management 9% Policy &amp; Strategy 8% Resources 9% People Satisfaction 9% Customer Satisfaction 20% Impact on Society 6% Enablers 50% Results 50%
  • 24. Leadership describes the behaviour and example set by all the people with a responsibility for leading others within the firm. Policy &amp; Strategy describes how the principles of business excellence form the basis of the plans and actions to which everyone can contribute, and how we ensure that the relevance of these plans are reviewed and improved. Resources describes how we maximise the use of resources available to us. These include finance, materials, buildings, equipment, information and and technology. Under this enabler we also consider how we develop and manage supplier and sub contractor relationships. People Management describes how we identify, plan and realise the full potential of the people who work in our firm. Processes describes how we identify and improve the business processes by which we operate. It asks us to consider how we manage these processes, review their performance and improve Enablers
  • 25. Customer Satisfaction asks if we are satisfying our customers and how we know if we are. We are asked to look at feedback from our customers and show in measurable terms the customers’ view of us. We examine any internal data we have relating to customer satisfaction. Impact on Society examines how the firm affects the surrounding community, the environment at large and how its actions are perceived. People Satisfaction examines what we are achieving in terms of the satisfaction of those who work in the firm? What measures do we have for this and how good are the results? Business Results covers what the firm is achieving in relation to its planned performance in terms of both financial and non-financial measures. The latter may include areas such as market share, process capability, cycle times, staff motivation Results
  • 26. The Next Series of Slides Provides a More Comprehensive Framework that can be used with the other Management Models
  • 27. A Diagnostic Framework for a Firm
  • 28. How Can The Framework Help? <ul><li>Assists managers to think through and structure causes and effects that can impact the company </li></ul><ul><li>Assists managers to look at interactions and linkages between the various components of the company </li></ul><ul><li>Assists managers to target areas for change and improvement </li></ul>
  • 29. A Diagnostic Framework Structure Style Resources Processes Strategy Vision Systems
  • 30. A Diagnostic Framework Structure Resources Processes <ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision Systems Style
  • 31. A Diagnostic Framework Structure Resources Processes <ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>Strategy Vision Systems Style
  • 32. A Diagnostic Framework Structure Resources Processes <ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>Strategy Vision Systems Style
  • 33. A Diagnostic Framework Structure Resources Processes <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>Strategy Vision Systems Style
  • 34. A Diagnostic Framework Structure Resources Processes <ul><li>People - core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision Systems Style <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>
  • 35. A Diagnostic Framework Structure Resources Processes <ul><li>Ownership </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Organigrams </li></ul><ul><li>Roles &amp; Responsibilities </li></ul><ul><li>People - core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision Systems Style <ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul><ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul>
  • 36. A Diagnostic Framework Structure Style Resources Processes <ul><li>Ownership </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Organigrams </li></ul><ul><li>Roles &amp; Responsibilities </li></ul><ul><li>People - core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision External Environment Systems <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>
  • 37. A Diagnostic Framework Structure Style Systems Resources Processes <ul><li>Ownership </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Organigrams </li></ul><ul><li>Roles &amp; Responsibilities </li></ul><ul><li>People - core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision External Environment Performance Measures <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>
  • 38. The Constituent Parts of the Framework
  • 39. Vision … . is the purpose and future direction of the company. Where does it want to be, why does it exist Vision can be set by the Chief Executive, the Managing Director or by a Board of Directors It can be shared throughout a firm or remain at Director level
  • 40. Strategy … ..is the implicit or explicit means by which management allocate resources to achieve the objectives of the company and guide the company’s behaviour over the long term towards its vision Put simply it is how the company gets from A to B over time
  • 41. Style The nature and “personality” of the organisation - how people behave in the firm to achieve the firm’s objectives and vison – “the way we do things around here” Leadership … is the capacity to mobilise, in competition or conflict, someone who is prepared to follow. There are a range of leadership styles: autocratic, democratic etc. Culture The shared values and beliefs of the members of the firm Individuals The behavioural traits and motivational needs of the members of the company
  • 42. Systems The procedures, reports and routinised processes that define the operations and support the competitive processes of the firm Quality Systems to assists achieving the level of quality required by the customer and reducing the occurrence of errors. Safety Systems for minimising accidents and harm at work. External Relations The policies and procedures that govern interaction with external organisations, e.g. clients, professional teams and project sponsors. Ensuring customer satisfaction Co-ordination Systems that overview project processes and achieve co-ordination of single and multiple projects. Planning Scheduling single and multiple projects. Finances Managing the finances of the firm, and, single and multiple projects.
  • 43. Processes … are a series of linked activities that add value to inputs to create outputs for the customer Selling/Marketing Creating opportunities for profit by winning project orders where the price allows the potential to make a profit. Design Collection and creation of all the information required to detail a project for production Purchasing/ Procurement Providing the material inputs for production On-Site Production Converting information and materials to assembled components to produce the final product on site
  • 44. Resources … the assets a firm uses to conduct its business People The staff (and their skills)that make up the firm, one of the key resources of a company. Technology The equipment, hardware and software systems used by the firm. It can also refer to the types of project that a firm is good at doing Finance The financial basis of the company; cashflow, debts and assets. Facilities The physical assets of the company; offices, location etc.
  • 45. Structure … is the formal and informal co-ordination and linkages between activities in the company Ownership The nature of the financial stakeholders of the firm. Subsidiaries Divisions and companies within a large firm Organigrams The organisation’s hierarchical structure that set out the roles and responsibilities of people Roles &amp; Responsibilities The allocation of tasks to people within a firm
  • 46. The Diagnostic Framework Structure Style Systems Resources Processes <ul><li>Ownership </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Organigrams </li></ul><ul><li>Roles &amp; Responsibilities </li></ul><ul><li>People - core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision External Environment Performance Measures <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>
  • 47. The Influence of Time Structure Style Systems Resources Processes <ul><li>Ownership </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Organigrams </li></ul><ul><li>Roles &amp; Responsibilities </li></ul><ul><li>People -core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision External Environment Operational/Tactical Short and medium term strategies Strategic Long term strategies Performance Measures <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>
  • 48. Strategic Flexibility A firm needs to have the capability to be flexible over time and survive through expansion and recession
  • 49. Summary
  • 50. Understand Current Situation Future Situation Time Diagnostic Framework How do I get there? How do I measure performance and improve performance? Where do you want to go? Vision Strategy Why? THE BASICS OF BUSINESS STRATEGY Where are you now? What do I need to change? Why?
  • 51. The Influence of Time Structure Style Systems Resources Processes <ul><li>Ownership </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Organigrams </li></ul><ul><li>Roles &amp; Responsibilities </li></ul><ul><li>People -core skills </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Facilities </li></ul><ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>External Relations </li></ul><ul><li>Co-ordination </li></ul><ul><li>Planning </li></ul><ul><li>Vision </li></ul><ul><li>Business plans </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Core Competencies </li></ul>Strategy Vision External Environment Operational/Tactical Short &amp; Medium Strategies Strategic Long term strategies Performance Measures <ul><li>Selling/Marketing </li></ul><ul><li>Design </li></ul><ul><li>On site Production </li></ul><ul><li>Purchasing/procurement </li></ul><ul><li>Financial Management </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Impact on Individuals </li></ul>

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