Management General Questions
Business virtualization as a direction for the development of modern organizations.
A new management trend of the global information technology (IT) application—virtualization—has appeared in contemporary management. Virtualization is a process of enterprise transformation (using IT) that allows breaking through various limitations of organizational constrains. Virtualization changes dramatically the image of business, especially of small and medium enterprises (SMEs); by adopting the concept of virtualization, they can become fully competitive and may effectively operate in the global market. Barriers of scale between SMEs and large organizations disappear. This new type of organization is often called in the literature a modern organization or virtual organization. Organizations of this type have an effective decision-making process and function based on economic criteria. Consequently, their opportunities to grow and compete in the global market are greater than for traditional SMEs. Hence, the thesis: virtualization allows individual organizations to enter strategic cooperative alliances with other similar businesses. Such virtual organizations have a competitive position in the global market.Virtualization, defined as a process of continuous transformation, is a herald of a new direction in the science of organization management. In the context of this analysis, this process may assume such form that will allow them to become competitive in the global market. The process of transformation consists of quick adjustments of the enterprise to new requirements (Hendberg, Dahlgren, Hansson, & Olive, 2000). This is done through changes in the organizational structure as well as in the portfolio of products and services. These changes are possible due to development in the IT sector, particularly Internet applications (Keeny & Marshall, 2000).BPV encompasses the technology of yesterday, today, and increasingly tomorrow to render the bricks-and-mortar in the traditional business irrelevant.BPV is not just about technology. It is derived from the application of a new approach to management, a new focus by IT professionals, a new focus by corporate oversight, and enlightened involvement by many of the traditionally passive (or disruptive) business support activities.
The intellectual capital of the organization - concept and its meaning.
Intellectual capital is the value of a company's employee knowledge, skills, business training, or any proprietary information that may provide the company with a competitive advantage. Intellectual capital is considered an asset, and can broadly be defined as the collection of all informational resources a company has at its disposal that can be used to drive profits, gain new customers, create new products, or otherwise improve the business. It is the sum of employee expertise, organizational processes, and other intangibles that contribute to a company's bottom line. Companies spend much time and resources developing management expertise and training their employees in business-specific areas to add to the "mental capacity," so to speak, of their enterprise. This capital employed to enhance intellectual capital provides a return to the company, though difficult to quantify, but something that can contribute toward many years' worth of business value Components of Intellectual Capital #1 - Human Capital Human capital includes employees, their knowledge and experience, organization's relationship with employees, employee training and appraisal, employee satisfaction, employee review about the organization, etc #2 - Relational Capital Relational capital includes the organization's relationship with employees, its investors, its customers, its supplier's, etc. review of all investors, customers, suppliers, employees all matters. #3 - Structural Capital It is organization processes, databases, policies, culture, vision, mission and value statement, etc. contribute to the capital of the organization. If the organization's work culture is good, and it provides quality products and its reputation in the market, its competitive advantage, etc. are real intellectual capital for the organization.
Main types of organisational structures: line, line-and-staff, functional, matrix, fluid. Characteristics and implementation possibilities.
1. Line organizational structure is one of the simplest types of organizational structures. Its authority flows from top to bottom. The chain of command and each department head has control over their departments. The self-contained department structure can be seen as its main characteristic. Independent decisions can be taken by line officers because of its unified structure. The advantage of this type of organizational structure lies in its simplicity. The disadvantage lies in its rigidity and the length of time needed for information to flow through the organization. This type of organizational structure could work for businesses who work according to a rigid routine, collaborate informally, and don't employ many people. 2. Line and staff organization is a modification of line organization and it is more complex than line organization.Examples of line organizations are small businesses in which the top manager, often the owner, is positioned at the top of the organizational structure and has clear "lines" of distinction between him and his subordinates.The line-and-staff organization combines the line organization with staff departments that support and advise line departments. The distinguishing characteristic between simple line organizations and line-and-staff organizations is the multiple layers of management within line-and-staff organizations. An advantage of a line-and-staff organization is the availability of technical specialists. Staff experts in specific areas are incorporated into the formal chain of command. A disadvantage of a line-and-staff organization is conflict between line and staff personnel. 3. A functional organization is a common type of organizational structure in which the organization is divided into smaller groups based on specialized functional areas, such as IT, finance, or marketing. Functional departmentalization arguably allows for greater operational efficiency because employees with shared skills and knowledge are grouped together by function. A disadvantage of this type of structure is that the different functional groups may not communicate with one another, potentially decreasing flexibility and innovation. A recent trend aimed at combating this disadvantage is the use of teams that cross traditional departmental lines. 4. The matrix organizational structure is a combination of two or more types of organizational structures. The matrix organization is the structure uniting these other organizational structures to give them balance. Usually, there are two chains of command, where project team members have two bosses or managers. Often, one manager handles functional activities and the other is a more traditional project manager.One of the biggest pros of using a matrix organizational structure is that it allows the sharing of highly skilled resources between functional units and projects.Cons - there's the overall expense of the matrix organizational structure. 5. Fluid organizations have bold leaders who are willing to take great risks and yes, even to fail. These leaders possess vision and evangelize it across the organization. They are unafraid to outgrow an existing business model or even to transform it into something radically new. Consider Amazon Key, a technology-enabled delivery service that allows couriers to enter consumers' homes when they aren't present to execute timely deliveries. FLUID teaming puts speed and novelty ahead of everything else. FLUID is appropriate when you're operating with mounting uncertainty. You know you need a FLUID approach when the world belies your best predictions and the definition of success keeps changing.
Compare different methods of change management: Benchmarking, Kaizen, and Reengineering.
Change management is the process, tools and techniques to manage the people side of change to achieve the required business outcome. Change management incorporates the organizational tools that can be utilized to help individuals make successful personal transitions resulting in the adoption and realization of change. 1. Benchmarking tool to help organizations to be more effective in the way they manage change. The tool, a best practice model for change, links five key success factors with the change process ‐ commitment, social and cultural issues, communication, tools and methodology and interactions. It works on the basis that, by applying these key success factors to the change process itself, more effective change will be achieved. The model has potential use at all levels within an organization. It allows the organization to assess and quantify its "maturity" in change management, using a maturity matrix, and identify subsequent actions for improvement. 2.Kaizen The Japanese have always been at the helm of Quality Pyramid. They have contributed various models to world of management. Kaizen, a Japanese word for "Change for better" (Kai- Change and Zen - For Better/Good) is not a project, but a way of thinking/mindset which focuses on Continuous Improvement rather than being happy with a single, standalone change. Masaaki Imai, a Japanese management consultant and an organizational theorist popularised the word "Kaizen" in the West through his book - "Kaizen: Japanese Spirit of improvement" Kaizen suggests continuous, small improvements in the business processes. Moreover, it should be followed by each & every employee of the organization (from top to bottom) on an ongoing basis. Japanese companies like Canon and Toyota follow the Kaizen methodology. Each employee suggests 60-70 changes per year. The organization documents, shares and even implements these changes. Moreover, Kaizen doesn't need major changes but small regular changes which aim at improving effectiveness and productivity. 3.Reengineering is the fundamental analysis and redesign of everything business process flows, job descriptions, planning and control processes,organizational structures, etc.Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service, and speed. It is a systematic and disciplined methodology that encourages the need for removing the processes that are not creating value for the customers.
Implementation of IT tools in the organization's management.
ITSM is meant to create a safe and effective way to run a technology-driven business. 1) Agile Project Management Project management plays a key role in the membership and effectiveness of projects. Planning for a full project lifecycle allows you to effectively allocate practices, resources and controls. 2) Change Management You should include all key internal stakeholders like boardroom members, or external stakeholders like customers and communicate effectively the changes that will be taking place. Identifying and assessing risks to day-to-day work environments can help you better manage it. 3) Continuous Service Improvement Continuous service improvement refers to defining a set of consistent, effective measurement frameworks to ensure business goals are being met, and tweaking where necessary to get optimum results. 4) Effective Communication Having a clear vision is key to effectively communicate your future undertakings. Be prepared to explain the changes that will be taking place, why they are taking place, and what are the overall objectives you hope to achieve when completed. 5) Own Your Processes ITSM implementation can be a long a cumbersome process. Building effective teams with members having key skills and delegating the workload, allowing them to own processes can help you design, build, and deploy tasks. 6) Workflows and Metrics Defined enterprise policies, high-level workflows, need to be documented for establishing accountability and responsibility. Using 'top-of-the-line' technologies like machine learning (ML) and AI, ITSM tools can give you access to more data than ever before. Forming key performance indicators (KPIs) and critical success factors, will help you periodically assess and improve on policy goals and objectives. 7) Follow ITIL The ITIL (Information Technology Infrastructure Library) is an international best practice standard in IT service management (ITSM). ITIL's universal framework is designed to improve efficiency across your complete service delivery lifecycle. By following ITIL best practices you can easily rollout ITSM solutions that meet all your IT compliance and security needs. 8) Testing and Configuration Configuring your ITSM solution in parallel with proper testing and documentation, will help you keep things in order. Disparate development and roll-out can elongate testing times, and hinder policy designs. 9) Automation Equals Great Service Experience Machine learning and artificial intelligence powered automation helps you provide consistently good service. Automation helps you have the best resolution times. 10) ITSM Administration So, you've invested in an ITSM tool, bought its license and implemented it. Your job doesn't end there. To ensure you get the maximum possible ROI on your software investment, you now need to ensure continual service improvement with proper administration in place.
Elements of the staffing process in the organization - characteristics.
It is a staff activity because it is an important area of management also like marketing management, financial management, we have human resource management department also in large organisations. 1. Estimating manpower requirement: which means finding out number and type of employees needed by the organisation in near future.The manager tries to find out the manpower requirement by equating workload analysis to workforce analysis. 2. Recruitment: It refers to the process of inducing the people to apply for the job in the organisation. After assessing the number and type of employee required, the manager tries that more and more people should apply for the job so that the organisation can get more choice and select better candidates. 3. Selection: It refers to choosing the most suitable candidate to fill the vacant job position. The selection is done through a process, which involves test, interviews, etc. In selection number of selected candidate is less than the number of rejected candidates that is why selection is called negative process also. The main objectives of selection are: (i) To select the best among the available. (ii) To make selected candidate realise that how seriously things are done in the organisation. 4. Placement and Orientation: Placement refers to occupying of post by the candidate for which he is selected. After selection the employee is given appointment letter and is asked to occupy the vacant job position. Orientation refers to introduction of new employees to the existing employees large organisations organise orientation programmes to familiarize the new employees with the existing whereas in small organisations superior takes the new employees on round and introduces him to the existing employees. 5. Training and Development: To improve the competence of employees and to motivate them it is necessary to provide training and development opportunities for employees so that they can reach to top and keep improving their skill. Organisations may have in house training centres or arrange with some institutions to provide training for their employees. Training and development not only motivate employees but these improve efficiency of work also.
Knowledge management in the organization. Conditions for implementation and effectiveness of the process.
Knowledge management is the conscious process of defining, structuring, retaining and sharing the knowledge and experience of employees within an organization. The main goal of knowledge management is to improve an organization's efficiency and save knowledge within the company. A winning knowledge management program increases staff productivity, product and service quality, and deliverable consistency by capitalizing on intellectual and knowledge-based assets.As organizations have striven to find ways to compete in the information age, knowledge has emerged as the primary resource and most valuable asset in this fast-paced, ever-changing environment. In fact, "[u]nlike material assets, knowledge assets increase with use: Ideas breed new ideas, and shared knowledge stays with the giver while it enriches the receiver" (Davenport & Prusak, 1998, p. 17). As knowledge is transferred from one individual to the other, it is combined with personal experiences and Knowledge Management 6 expertise, and built upon to create new ideas and knowledge. Therefore, its value increases exponentially: the larger the knowledge pool, the more valuable the new knowledge received will be. This explains why many researchers have now identified knowledge as the only source of sustainable competitive advantage However, implementation can be a challenge.
The evolution of the management theory. Schools and trends of management.
Management theories are a collection of ideas that recommend general rules for how to manage an organization or business. Management theories address how supervisors implement strategies to accomplish organizational goals and how they motivate employees to perform at their highest ability. Classical management theorists, such as Frederick Taylor, Henry Gantt, and Frank and Lillian Gilbreth. Classical approach is the oldest formal school of thought which began around 1900 and continued into the 1920s. • Its mainly concerned with the increasing the efficiency of workers and organizations based on management practices, which were an outcome of careful observation. • Classical approach mainly looks for the universal principles of operation in the striving for economic efficiency. • Classical approach includes scientific, administrative & bureaucratic management. The neoclassical theory was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. The premise of this inclusion was based on the idea that the role of management is to use employees to get things done in organizations. Rather than focus on production, structures, or technology, the neoclassical theory was concerned with the employee. Neoclassical theorists concentrated on answering questions related to the best way to motivate, structure, and support employees within the organization. Studies during this time, including the popular Hawthorne studies, revealed that social factors, such as employee relationships, were an important factor for managers to consider. The neoclassical theory encompasses approaches and theories that focus on the human side of an organization. There are two main sources of neoclassical theory: the human relations movement and the behavioral movement. Modern Management school of thought primarily focuses on the development of each factor of both workers and the organization. It analyzes the interrelationship of workers and management in all aspects. A quantitative theory, systems theory, contingency theory and operational theory of management are 4 approaches by this school of thought. 1. Management is responsive to environmental changes. Successful organisations adapt to environmental changes as part of the management practices. 2. Business organisations are dynamic institutions composed of inter-related divisions and sub-divisions. 3. Firms have multiple objectives. Managers balance economic and non-economic objectives and maximise the interests of diverse groups of stakeholders like shareholders, customers, suppliers etc. 4. Management is multi-disciplinary in nature. It draws knowledge from various disciplines and synthesizes it to solve managerial problems. 5. Management is future oriented. It forecasts environment through scientific techniques and discounts it to make decisions in the present. Effective forecasts reduce risk and increase organisation's adaptability to changing environmental variables.
The manager's competences and roles in a knowledge-based economy.
Managerial competencies identification and development are important tools of human re- sources management that is aimed at achieving strategic organizational goals. Due to current dynamic development and changes, more and more attention is being paid to the personality of managers and their competencies, since they are viewed as important sources of achieving a competitive advantage.Managerial competencies, i. e. behaviour necessary to reach the required level of a manager's performance, in combination with efficient organization management thus become a key fac- tor of success and subsequently also a competitive advantage. Knowledge-based organizations (Perez-Bustamante, 1999) are organizations applying a knowledge-based approach to the organization. This approach perceives organizations as a means for the development, integration, preservation, sharing and application of knowledge. Competencies Creates, integrates, preserves, shares and applies knowledge; is efficient, innovative, flexible and proactive; is customer focused; uses ITs; has a strong and open corporate culture; implements knowledge processes; exploits knowledge resources; manages risks; implements project management; places emphasis on education and organizational learning; disposes of knowledge employees; is process-oriented; supports teamwork; encourages participation in management.
Characteristics of Marketing Mix elements.
Marketing mix is the process of designing and integrating various elements of marketing in such a way to ensure the achievement of enterprise objectives. According to Philip Kotler, 'marketing mix is the mixture of controllable marketing variable that the firm uses to pursue the sought level of sales in the target market' The elements of marketing mix have been classified under four heads—product, price, place and promotion. That is why marketing mix is said to be a combination of four P's.marketing mix involves decisions regarding products to the made available, the price to be charged for the same, and the incentive to be provided to the consumers in the markets where products would be made available for sale. These decisions are taken keeping in view the influence of marketing forces outside the organization (e.g., consumer behaviour, competitors' strategy and government policy). 1)Product The product needs to meet a want or need of your customers. 2)Price Meeting consumer wants and needs also is about selling products that consumers are willing to pay for. 3) Promotion Promotion is concerned with the methods of communication you use to connect with your potential customers. 4)Place This refers to strategically placing the product at a place where consumers can easily access it. Place is therefore closely linked to distribution.
Compare main planning types (strategic, tactical, and operational).
Strategic Planning "Strategic plans are all about why things need to happen," Story said. "It's big picture, long-term thinking. It starts at the highest level with defining a mission and casting a vision." Strategic planning includes a high-level overview of the entire business. It's the foundational basis of the organization and will dictate long-term decisions. The scope of strategic planning can be anywhere from the next two years to the next 10 years. Important components of a strategic plan are vision, mission and values. Tactical Planning "Tactical plans are about what is going to happen," Story said. "Basically at the tactical level, there are many focused, specific, and short-term plans, where the actual work is being done, that support the high-level strategic plans." Tactical planning supports strategic planning. It includes tactics that the organization plans to use to achieve what's outlined in the strategic plan. Often, the scope is less than one year and breaks down the strategic plan into actionable chunks. Tactical planning is different from operational planning in that tactical plans ask specific questions about what needs to happen to accomplish a strategic goal; operational plans ask how the organization will generally do something to accomplish the company's mission. Operational Planning "Operational plans are about how things need to happen," motivational leadership speaker Mack Story said at LinkedIn. "Guidelines of how to accomplish the mission are set." This type of planning typically describes the day-to-day running of the company. Operational plans are often described as single use plans or ongoing plans. Single use plans are created for events and activities with a single occurrence (such as a single marketing campaign). Ongoing plans include policies for approaching problems, rules for specific regulations and procedures for a step-by-step process for accomplishing particular objectives.
Characterise the systems approach to management and illustrate the concept of synergy and feedback loop.
System approach to management views the organization as a unified, purposeful system composed of interrelated parts.• This approach also gives the manager to see the organization as a whole and as a part of the larger external environment. System oriented manager would make decisions only after they have identified impact of these decisions on all other departments and the entire organization.• They must intertwine their department with the total organization and communicate with all other departments, employees and with each other. Synergy means that the whole is greater the sum of its parts. Synergy is an important concept for managers in that it reinforces the need to work together in a cooperative fashion.For example, two people can move a heavy load more easily than the two working individually can each move their half of the load. Synergy can be a positive or negative outcome of combined efforts.Organizations strive to achieve positive synergy or strategic fit by combining multiple products, business lines, or markets. One way to achieve positive synergy is by acquiring related products, so that sales representatives can sell numerous products during one sales call. Rather than having two representatives make two sales calls to a potential customer, one sales representative can offer the broader mix of products .A feedback loop is system structure that causes output from one node to eventually influence input to that same node. For example, the work output of a population can increase the goods and services available to that population, which can increase the average life expectancy, which can increase the population, which can increase the work output still more, and the loop starts all over again.A feedback loop occurs when a change in something ultimately comes back to cause a further change in the same thing. If the further change is in the same direction it's a positive or reinforcing loop. If it's in the opposite direction it's a negative or balancing loop, also called a goal-seeking loop.
Methods and criteria for assessing the financial situation of an enterprise.
To understand and value a company, investors examine its financial position by studying its financial statements and calculating certain ratios. Fortunately, it is not as difficult as it sounds to perform a financial analysis of a company. The process is often a part of any program evaluation review technique (PERT), a project management tool that provides a graphical representation of a project's timeline. A company's worth is based on its market value. To determine market value, a company's financial ratios are compared to its competitors and industry benchmarks. The Balance Sheet Like your financial position, a company's financial situation is defined by its assets and liabilities. A company's financial position also includes shareholder equity. All of this information is presented to shareholders in the balance sheet. To do this, we review the company's annual report, which can often be downloaded from a company's website. The standard format for the balance sheet is assets, followed by liabilities, then shareholder equity. Current Assets and Liabilities On the balance sheet, assets and liabilities are broken into current and non-current items. Current liabilities are the obligations the company has to pay within the coming year and include existing (or accrued) obligations to suppliers, employees, the tax office, and providers of short-term finance. Companies try to manage cash flow to ensure that funds are available to meet these short-term liabilities as they come due The Current Ratio The current ratio—which is total current assets divided by total current liabilities—is commonly used by analysts to assess the ability of a company to meet its short-term obligations. An acceptable current ratio varies across industries, but should not be so low that it suggests impending insolvency, or so high that it indicates an unnecessary build-up in cash, receivables, or inventory. Like any form of ratio analysis, the evaluation of a company's current ratio should take place in relation to the past. Financial Position: Book Value If we subtract total liabilities from assets, we are left with shareholder equity. Essentially, this is the book value, or accounting value, of the shareholders' stake in the company.
Quality management - concept and implementation of TQM method.
Total Quality Management, TQM, is a method by which management and employees can become involved in the continuous improvement of the production of goods and services. It is a combination of quality and management tools aimed at increasing business and reducing losses due to wasteful practices. Some of the companies who have implemented TQM include Ford Motor Company, Phillips, Motorola and Toyota Motor Company.TQM views an organization as a collection of processes. It maintains that organizations must strive to continuously improve these processes by incorporating the knowledge and experiences of workers. The simple objective of TQM is "Do the right things, right the first time, every time." TQM is infinitely variable and adaptable. TQM is mainly concerned with continuous improvement in all work, from high level strategic planning and decision-making, to detailed execution of work elements on the shop floor. It stems from the belief that mistakes can be avoided and defects can be prevented. It leads to continuously improving results, in all aspects of work, as a result of continuously improving capabilities, people, processes, technology and machine capabilities. Steps to Creating a Total Quality Management System Clarify Vision, Mission, and Values. ... Identify Critical Success Factors (CSF) ... Develop Measures and Metrics to Track CSF Data. ... Identify Key Customer Group. ... Solicit Customer Feedback. ... Develop a Survey Tool. ... Survey Each Customer Group. ... Develop Improvement Plan.
Using the examples, compare different methods of strategic planning.
With strategic planning, businesses identify their strengths and weaknesses and choose what not to do and which opportunities should be pursued. 1. SWOT Analysis SWOT analysis is a strategic planning tool and acronym for strengths, weaknesses, opportunities, and threats. It's used to identify each of these elements in relation to your business. This strategic planning tool allows you to determine new opportunities and which areas of your business need improvement. You'll also identify any factors or threats that might negatively impact your business or success. 2. Porter's Five Forces Use Porter's Five Forces as a strategic planning tool to identify the economic forces that impact your industry and determine your business' competitive position. The five forces include: Competition in the industry Potential of new entrants into the industry Power of suppliers Power of customers Threat of substitute products 3. PESTLE Analysis The PESTLE analysis is another strategic planning tool you can use. It stands for: P: Political E: Economic S: Social T: Technological L: Legal E: Environmental Each of these elements allow an organization to take stock of the business environment they're operating in, which helps them develop a strategy for success. 4. Visioning Visioning is a goal-setting strategy used in strategic planning. It helps your organization develop a vision for the future and the outcomes you'd like to achieve. Once you reflect on the goals you'd like to reach within the next five years or more, you and your team can identify the steps you need to take to get where you'd like to be. From there, you can create your strategic plan. 5. VRIO Framework The VRIO framework is another strategic planning tool that's used to identify the competitive advantages of your product or service. It's composed of four different elements: Value: Does it provide value to customers? Rarity: Do you have control over a rare resource or piece of technology? Imitability: Can it easily be copied by competitors? Organization: Does your business have the operations and systems in place to capitalize on its resources?
