MANAGEMENT BUSINESS AND CORPORATE GOVERNANCE

Management Processes Planning Organizing Actuating Controlling

Planning

Organizing

Actuating

Controlling

Planning Objective Activity A Activity B Activity N Resources Time

Objective

Activity A Activity B Activity N

Resources

Time

Organization Design The Mechanisms Which Define the Features of the Organization and Which Serve to Link the Different Parts of the Organization Structure Job Description SOP

The Mechanisms Which Define the Features of the Organization and Which Serve to Link the Different Parts of the Organization

Structure

Job Description

SOP

Dimension of Organization Design Centralization The locus of decision making authority along the vertical dimension Formalization Explicitness of expectation regarding work means and production Complexity Number of different components or sub system in an organization Configuration The shape of organization: Number of level and span of control

Centralization

The locus of decision making authority along the vertical dimension

Formalization

Explicitness of expectation regarding work means and production

Complexity

Number of different components or sub system in an organization

Configuration

The shape of organization: Number of level and span of control

1 2C 2D 2C 3A 3B 3C 2A 2B Configuration Span of Control (Horizontal Integration) Horizontal Complexity (Differentiation ) Vertical Complexity (Differentiation ) Mechanisms of Vertical Integration - Centralization - Formalization Configuration (Number of Level) 1 3 2

Form of Organizational Design Simple Design Functional Design Divisional Design Conglomerate Design Hybrid Design

Simple Design

Functional Design

Divisional Design

Conglomerate Design

Hybrid Design

Basic Component Top Management Middle Management Technical Core Technical Support Staff Administrative Support Staff

Top Management

Middle Management

Technical Core

Technical Support Staff

Administrative Support Staff

Hybrid Structure Top Operational Services T e c h n I c a l A d m i n Middle

Controlling Planning Actuating Evaluation Yes No Feedback

Management Control System Concerned with processes and procedures related to planning, measuring, and controlling all activities within the organization

Concerned with processes and procedures related to planning, measuring, and controlling all activities within the organization

Generalized Structure of Management Control System Objectives Performance Criteria Performance Evaluation Modified Performance Criteria Corrective Action System Operation Non Performance Justified ? Performance Criteria Need Change? No No No Yes Yes Yes Performance Criteria Met ?

Level of Management System Corporate/Business Business/Functional Operationa l Middle Top Operational

Attention of Organizational Level Org. Level Mgt Level Performance Org. Focus Mgt. Attn Corporate Top Return Gov.Structue Fiscal Business Middle Market Share Process Market Cust.Satisfactn Operation Operational Efficiency Work Process Productivity

Time Frame Operational Functional Business Corporate

Operational Functional Business Corporate

Strategic Linkages Corporate Strategy Business Strategy Functional Strategy Operation/Production Management

Corporate Strategy

Business Strategy

Functional Strategy

Operation/Production Management

Strategic Planning Strategy is the pattern or plan that integrates an organization’s major goal, policies, and action sequences into cohesive whole

Strategy is the pattern or plan that integrates an organization’s major goal, policies, and action sequences into cohesive whole

Dimension of Strategy 1. Effective formal strategies contain 3 essential elements: Goal/objective, Policy and Program 2. Effective strategies develop around a few key concepts and thrust, which give cohesion, balance and focus 3. Strategy deals not just with the unpredictable but also the unknowable 4. Each strategy must be more or less complete in itself, congruent with level of decentralization intended

1. Effective formal strategies contain 3 essential elements: Goal/objective, Policy and Program

2. Effective strategies develop around a few key concepts and thrust, which give cohesion, balance and focus

3. Strategy deals not just with the unpredictable but also the unknowable

4. Each strategy must be more or less complete in itself, congruent with level of decentralization intended

Criteria for Effective Strategy Clear Maintaining the initiative Concentration Flexibility Coordinated and committed leadership Surprise Security

Clear

Maintaining the initiative

Concentration

Flexibility

Coordinated and committed leadership

Surprise

Security

Corporate Strategy Scope : Corporate/ Enterprise Objectives : Growth Performance : ROI/RONA/ROE….. Formulation : Penetration Market Development Product Development Diversification

Scope : Corporate/ Enterprise

Objectives : Growth

Performance : ROI/RONA/ROE…..

Formulation :

Penetration

Market Development

Product Development

Diversification

Ansoff Strategy Product EXISTING NEW NEW EXISTING PENETRATION PROD. DEV MARKT. DEV DIVERSIVICATION Ma r ke t

Business Strategy Scope : SBU Objective : Competitiveness Performance : Market Share Formulation: Cost Leadership Differentiation Focus

Scope : SBU

Objective : Competitiveness

Performance : Market Share

Formulation:

Cost Leadership

Differentiation

Focus

Functional Strategy Scope : Business Function Objective : Competitive Priority Performance : Target Cost

Scope : Business Function

Objective : Competitive Priority

Performance :

Target

Cost

Operation Strategy Scope : Production/operation Objective : Competitive Priority Performance : Quality Cost Delivery Flexibility Safety

Scope : Production/operation

Objective : Competitive Priority

Performance :

Quality

Cost

Delivery

Flexibility

Safety

Example of Operation Objective QUALITY TAHUN INI 5 TAHUN YAD KOMPETITOR Kepuasan konsumen 75 % 85 % 75 % Persentase scrapdan reject 15 % 5 % 10 % Biaya garansi ( % penjualan) 1 % 0.5 % 1% COST COGM ( % COGS ) 55 % 45 % 50% ITO 41 x 52 x 50 x

QUALITY

TAHUN INI 5 TAHUN YAD KOMPETITOR

Kepuasan konsumen 75 % 85 % 75 %

Persentase scrapdan reject 15 % 5 % 10 %

Biaya garansi ( % penjualan) 1 % 0.5 % 1%

COST

COGM ( % COGS ) 55 % 45 % 50%

ITO 41 x 52 x 50 x

Example of Operation Objective DELIVERY TAHUN INI 5 TAHUN YAD KOMPETITOR Fill Rate 90% 95% 95% Lead Time (minggu ) 3 1 1 FLEXIBILITY Waktu untuk 10 bulan 6 bulan 8 bulan mengenalkan produk baru Waktu perubahan kapasitas 3 bulan 3 bulan 3 bulan

DELIVERY

TAHUN INI 5 TAHUN YAD KOMPETITOR

Fill Rate 90% 95% 95%

Lead Time (minggu ) 3 1 1

FLEXIBILITY

Waktu untuk 10 bulan 6 bulan 8 bulan

mengenalkan produk baru

Waktu perubahan kapasitas 3 bulan 3 bulan 3 bulan

Operation Management Scope : Production/operation Objective : Efficiency Performance: Quality Cost Delivery Flexibility Safety

Scope : Production/operation

Objective : Efficiency

Performance:

Quality

Cost

Delivery

Flexibility

Safety

Strategic Implementation Strategic Decision Policy Program Organization SOP

Strategic Decision

Policy

Program

Organization

SOP

Strategic Decision Determine the overall direction of an enterprise and its ultimate viability in light of predictable, the unpredictable, and unknowable changes that may occur in its most important surrounding environment

Determine the overall direction of an enterprise and its ultimate viability in light of predictable, the unpredictable, and unknowable changes that may occur in its most important surrounding environment

Implementation Hierarchy Philosophy Corporate Business Operation Program & Budget Policy Guidelines Procedures and Rules Ends Means

Goal Goal state what is to be achieved and when results are to be accomplished but they do not state how the results are to be achieved Strategic goals is major goals that affect the entity’s overall direction and viability

Goal state what is to be achieved and when results are to be accomplished but they do not state how the results are to be achieved

Strategic goals is major goals that affect the entity’s overall direction and viability

Policy Policy is rules or guidelines that express the limits within which action should occur Strategic policies is major policies that guide the entity’s overall direction and posture or determine its viability

Policy is rules or guidelines that express the limits within which action should occur

Strategic policies is major policies that guide the entity’s overall direction and posture or determine its viability

Policy Development Business & Operation Strategies Resources Evaluation of Environment Cost Quality Delivery Flexibility Feedback and Contn.Improv Capacity Others PPC Integration Facilities Technology Volume Scale/Scope Loading Size Location Focus Automation Lead/Lag Prod. Design Supplier Customer Material Workforce R & D Quality Performance Measure

Policy Implementation Processes Definition of Program Goal Resourcing Program & Action Plan Implementation & Management of Program Process Review Management Review Program Goal Sales Revenues & Budgets Distribution Budgets Operating Budgets Sales Price & Volume Labor Material & Overhead Rules & Directives Operating Procedures Variance Adjustment Performance Monitoring Budget Review & Dec. Processes

Program Programs specify the step-by-step sequence of actions necessary to achieve major objective Program express how objectives will be achieved within the limits set by policy Strategic programs is a major programs that determine the entity’s overall thrust and viability

Programs specify the step-by-step sequence of actions necessary to achieve major objective

Program express how objectives will be achieved within the limits set by policy

Strategic programs is a major programs that determine the entity’s overall thrust and viability

Hierarchy of Program Main Program Program Project

Main Program

Program

Project

PPBS Strategic Implementation Plan based on Strategic Plan PPBS has 4 principle components: Policy Guide Lines Structure of Program Cycle of Program and Project Information System

Strategic Implementation Plan based on Strategic Plan

PPBS has 4 principle components:

Policy Guide Lines

Structure of Program

Cycle of Program and Project

Information System

(PPBS) Planning Programming and Budgeting System

PPBS ? Cara ( ways ) perencanaan dan penganggaran untuk mencapai tujuan ( end ) dengan memanfaatkan sarana dan sumberdaya ( means ) yang tersedia atau yang dapat disediakan, secara sistematis dan berkesinambungan

Cara ( ways ) perencanaan dan penganggaran untuk mencapai tujuan ( end ) dengan memanfaatkan sarana dan sumberdaya ( means ) yang tersedia atau yang dapat disediakan, secara sistematis dan berkesinambungan

Characteristics 1. Systemic Approach 2. Output Oriented 3. Based on Program Structure 4. Balance Between Autonomy and Direction ( Top Down & Bottom Up) 5. Based on Rolling Plan

1. Systemic Approach

2. Output Oriented

3. Based on Program Structure

4. Balance Between Autonomy and Direction ( Top Down & Bottom Up)

5. Based on Rolling Plan

Requirement for Implementation Commitment Participation Discipline Infrastructure

Commitment

Participation

Discipline

Infrastructure

Components of PPBS 1. Cycle 2. Structure of Program 3. Information System

1. Cycle

2. Structure of Program

3. Information System

Cycle of PPBS Urutan kegiatan yang mengatur seluruh urutan dan jadwal kegiatan perencanaan, pelaksanaan dan pengendalian program

Urutan kegiatan yang mengatur seluruh urutan dan jadwal kegiatan perencanaan, pelaksanaan dan pengendalian program

Cycle of PPBS RUP BOD Unit Pengusul J M A M F J A D N O S J O S A J J M A M F J N MPK UP ER RA EP D EP Pelaksanan Program TS TS + 1 Monitoring & Control

Structure of Program Menggambarkan hirarkhi program yang disusun dengan bertitik tolak dari rencana strategis dan dijabarkan kedalam kegiatan operasional ( proyek ) Rencana Strategis Program Utama Program Proyek

Menggambarkan hirarkhi program yang disusun dengan bertitik tolak dari rencana strategis dan dijabarkan kedalam kegiatan operasional ( proyek )

Rencana Strategis

Program Utama

Program

Proyek

Structure of Program R. Stratrgis Program Utama Program 1. Meningkatkan Effisiensi 2. Meningkatkan Mutu 3. Meningkatkan Citra 1. Menata PPBS 2. TQM 3. Kelembagaan dan organisasi 4. Sistem Reward 1. Penataan produk dan proses 2. Penerapan CBL 3. Penerapan TQA 1. Program Produk Unggulan 2. Aliansi Strategik

Information System Merupakan urat nadi PPBS dimana prinsip perencanaan Bottom up dan Top Down diimplementasikan PCM UP RA

Merupakan urat nadi PPBS dimana prinsip perencanaan Bottom up dan Top Down diimplementasikan

PCM

UP

RA

Program Coordinate Memo Dokumen yang berisi arahan, program dan prioritas serta pagu anggaran yang tersedia

Dokumen yang berisi arahan, program dan prioritas serta pagu anggaran yang tersedia

Usulan Proyek Dokumen yang berisikan proyek-proyek yang diusulkan untuk dilaksanakan pada tahun mendatang (TS +1) Permasalahan yang dihadapi Hasil yang diharapkan Spesifikasi proyek Anggaran

Dokumen yang berisikan proyek-proyek yang diusulkan untuk dilaksanakan pada tahun mendatang (TS +1)

Permasalahan yang dihadapi

Hasil yang diharapkan

Spesifikasi proyek

Anggaran

Budgeting Rencana tahunan yang berisi program dan anggaran yang diperlukannya Rencana Anggaran diajukan oleh BOD untuk mendapat persetujuan dari RUPS

Rencana tahunan yang berisi program dan anggaran yang diperlukannya

Rencana Anggaran diajukan oleh BOD untuk mendapat persetujuan dari RUPS

Corporate Governance

Stockholder Board of Director Officers Manager Employee Board of Commissioner

Major Stakeholder Involved in Corporate Government Corporate Governance Employees Stockholder Board of Commissioner Management Board of Director

Stockholder Board of Director Officers Manager Employee Board of Commissioner

Board of Commissioner Controller Body and Guide the Board of Director Appointed by Stockholder and responsible to Stockholder Directing, guiding and controlling the BOD

Controller Body and Guide the Board of Director

Appointed by Stockholder and responsible to Stockholder

Directing, guiding and controlling the BOD

Board of Director Top executive body in the corporation and nominated by stockholder Responsible for establishing corporate objectives, developing policy, and selecting top level personnel to carry out these objectives and policies Review management’s performance to be sure that the company is well run and stakeholder’s interest are promoted

Top executive body in the corporation and nominated by stockholder

Responsible for establishing corporate objectives, developing policy, and selecting top level personnel to carry out these objectives and policies

Review management’s performance to be sure that the company is well run and stakeholder’s interest are promoted

Management Carry out business and management processes based on objectives and policies decided by board of director Responsible for economic survival of the company Balancing the interest of stakeholder in such a way in order the company can achieve its objectives.

Carry out business and management processes based on objectives and policies decided by board of director

Responsible for economic survival of the company

Balancing the interest of stakeholder in such a way in order the company can achieve its objectives.

Employee Carry out the day to day operation of the business Responsible for productivity and efficiency of business and management processes

Carry out the day to day operation of the business

Responsible for productivity and efficiency of business and management processes