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Management chap 3

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Strategies, Policies and Planning Premises

Strategies, Policies and Planning Premises

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    Management chap 3 Management chap 3 Presentation Transcript

    • A Global and Entrepreneurial Perspective MANAGEMENT
    • PRINCIPLES OF MANAGEMENT Sr. No. Chapter No. Chapter Heading 1 1 Management: Science, Theory and Practice (27 th September 2010) 2 4 Essentials of Planning and Managing by Objectives (4 th Oct) 3 5 Strategies, Policies and Planning Premises (11 th Oct) 4 6 Decision Making 5 7 The Nature of Organizing, Entrepreneuring, and Reengineering 6 8 Organization Structure: Departmentation 7 9 Line/ Staff Authority, Empowerment and Decentralization 8 10 Effective Organizing and Organization Culture 9 14 Human Factors and Motivation 10 15 Leadership 11 16 Committees, Teams and Group Decision Making 12 18 The System and Process of Controlling Sessional Evaluation External Evaluation 15 15 20 50 50 Quiz per Class Assignment & Presentation Mid-term Total Sessional External Exam
    • Chapter 3 Strategies, Policies and Planning Premises mQ
    • TABLE OF CONTENTS
      • The nature and purpose of strategies and policies
      • The strategic planning process
      • The tows matrix: a modern tool for analysis of the situation
      • Blue ocean strategy: in pursuit of opportunities in an uncontested market
      • The portfolio matrix: a tool for allocating resources
      • Major kinds of strategies and policies
      • X:Hierarchy of company strategies
      • X:Porter’s industry analysis and generic competitive strategies
      • Premising and forecasting
    • THE NATURE AND PURPOSE OF STRATEGIES AND POLICIES
      • STRATEGY:
        • The determination of the mission or purpose and the basic long-term objectives of an enterprise, followed by the adoption of courses of action and allocation of resources necessary to achieve these aims.
      • POLICIES:
        • General statements or understandings that guide managers’ thinking in decision making
        • They ensure that the decisions fall within certain boundaries
      • SIMILARITIES:
        • They give direction
        • They are frame work for plans
        • They are the basis of operational plans
        • They affect all areas of managing
      • MAJOR DIFFERENCE:
        • The essence of policy is discretion
        • Strategy concerns the discretion, in which human and material resources will be applied in order to increase the chance of achieving selected objectives
        • Tactics: the action plans through which strategies are executed.
    • THE STRATEGIC PLANNING PROCESS Inputs: People, Capital, Managerial skills, Technical Skills, Others Goals of Stake holders: Employees Consumers Suppliers Stock holders Govt Community Others Industry Analysis Enterprise Profile Executive orientation values vision
      • Mission
      • Major Objectives
      • Strategic Intent
      Development of alternative strategies Present & Future External Threats & Opportunities
      • Internal weaknesses & Strengths
      Evaluation & strategic choice Implementation Medium & Short Range planning
      • Reengineering Organization structure Staffing
      Leadership Control Consistency Testing Contingency Planning
    •  
    • THE STRATEGIC PLANNING PROCESS
      • Inputs to the organization
      • INDUSTRY ANALYSIS
        • The competition and its kinds available
        • Possibility of new firms entering
        • Availability of substitute products or services
        • Bargaining position of the suppliers and buyers
      • ENTERPRISE PROFILE
        • Mission
        • Geographic orientation (would it operate in home country or in different countries
        • Competitive position of the company itself
      • 4. Orientation, vision and values of executives
    • THE STRATEGIC PLANNING PROCESS
      • Mission (purpose), major objectives, and strategic intent
        • MISSION: “what is our business”
        • OBJECTIVE: “the end points towards which the activities of the enterprise are directed”
        • STRATEGIC INTENT: “the commitment to win in the competitive market”
      • Present and future external environment:
      • Internal environment:
      • Development of alternative strategies:
        • To concentrate
        • To diversify
        • International expansion
        • Joint ventures
        • Strategic alliances
        • Liquidation
        • Retrenchment
    • THE STRATEGIC PLANNING PROCESS
      • Evaluation and choice of strategies:
      • Consistency testing and contingency planning
      • Medium and short range planning, implementation through organizing, staffing, leading and controlling
    • QUIZ
      • What is meant by TOWS
      • How is the tows matrix helpful for an enterprise?
    • The TOWS MATRIX: T: O: W: S:
    • FOUR ALTERNATIVE STRATEGIES Strengths in internal departments like management, R&D, Finance, marketing, OD etc Eg weaknesses in internal departments Current and Future conditions in respect of economy, politics, financial regulations, new products, services and technology The most successful strategy, utilizing the org’s strengths to take adv of opportunities Developmental strategy: to overcome internal weaknesses to take adv of opportunities Energy shortages, competition and other areas like conditions mentioned above Use of strengths to cope up with threats or to avoid threats Retrenchment, liquidation, joint ventures etc to minimize weaknesses & threats
    • APPLICATION OF THE TOWS MERGER MATRIX FOR MERGERS, ACQUISITIONS, JOINT VENTURES AND ALLIANCES TIME DIMENSION AND THE TOWS MATRIX
    • BLUE OCEAN STRATEGY
    • BLUE OCEAN STRATEGY
      • THE FOUR ACTIONS FRAMEWORK
      • Identify and eliminate those factors that may be unimportant to the buyer
      • If elimination is not an option, consider reducing those factors
      • Raise or strengthen those factors that are unique
      • Create new and unique factors that are wanted by the buyers but are ignored by the competition
      • Companies may adopt both the SO and SW alternative strategies
    • THE PORTFOLIO MATRIX: A TOOL FOR ALLOCATING RESOURCES
      • This tool was developed by Boston consulting group in 1970s.
      • This is a relationship between Market Growth and Market share of a company/ its business unit or a product
      • This was developed for large corporations with several divisions, called as Strategic Business Units (SBUs) for the allocation of resources in the right place
      • By dividing the matrix into four areas, four types of SBU can be distinguished:
      • Stars - Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow down and, assuming they maintain their relative market share, will become cash cows.
      • Cash Cows - Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars.
      THE PORTFOLIO MATRIX: A TOOL FOR ALLOCATING RESOURCES
      • Question marks - Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors.
      • Management have to think hard about "question marks" - which ones should they invest in? Which ones should they allow to fail or shrink?
      • Dogs - the term "dogs" refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.
      • Criticism:
        • Its too simplistic
        • The growth rate criterion is insufficient for the evaluation of an industry’s attractiveness
        • The market share is also insufficient for estimating the competitiveness
      THE PORTFOLIO MATRIX: A TOOL FOR ALLOCATING RESOURCES
      • GROWTH
      • FINANCE
      • ORNANIZATION
      • PERSONNEL
      • PUBLIC RELATIONS
      • PRODUCTS OR SERVICES
      • MARKETING
      MAJOR KINDS OF STRATEGIES AND POLICIES
      • Planning premising:
        • The anticipated environment in which plans are expected to operate
      • Environmental Forecasting
        • Human and material resources and their opportunities and threats
      • Values and areas of Forecasting
        • The making of forecasts and their review by managers compel thinking ahead, looking to the future, and providing for it
        • Preparation of forecast may disclose areas where necessary control is lacking
        • Forecasting, especially when there is participation throughout the organization, helps unify and coordinate plans. By focusing attention to the future, it assists in bringing a singleness of purpose to planning
        • The areas of forecasting; usually are economic, social, political/ legal, and technological environments
      PREMISING AND FORECASTING
      • Forecasting with Delphi Technique:
        • This technique was developed by Olaf Helmer ad his colleagues at the RAND corporation for technological forecasting
        • The process is as follows:
          • A panel of experts on a particualr problem area is selected, usually from both inside and outside the organization
          • The experts are asked to make a forecast (anonymously) in terms of discoveries and developments
          • The answers are compiled and fed back to the audience
          • Further estimates of future are made collectively
          • Repetitions take place if required for further additions
          • When a convergence of opinion begins to evolve, the results are then used as an acceptable forecast
      PREMISING AND FORECASTING