2. Contingency Approach Flashcards
Name the environmental factors that affect any company
PESTEL FRAMEWORK:
- political
- economical
- social
- technological
- environmental
- legal environment
Industry environment that affect company
FIVE FORCES OF PORTER FRAMEWORK:
- rivalry among existing competitors
- threats of new entrants
- threat of substitutes
- bargaining power of suppliers
- bargaining power of buyers
Name the different competitive strategies according to Porter.
- cost leadership (LIDL)
- cost focus (PRIMARK)
- differentiation leadership(AUDI)
- differentiation focus (Lamborghini)
Elements that form the organisational culture.
- taken-for-granted
- (semi-)conscious
- stable/difficult to influence
What is organisational culture?
Basic assumption as and beliefs that are shared within the members of a company, that operate unconsciously and define in a basic taken-for-granted fashion and organisation’s view of itself and its environment.
Name and explain the 4 elements of culture
- VALUES: usually written down
- BELIEFS: refer to conduct of employees
- BEHAVIOURS : refer to work routines, how to handle customers requests…
- PARADIGM: basic assumptions that are taken for granted and in common and that are difficult to identify and explain.
What should we do if our corporate performance is unsatisfactory?
First we should implement a tighter control over the organisation, its processes (IMPLEMENTATION). Then if it continues to be unsatisfactory we reconstruct or develop strategy (STRATEGY DEVELOPMENT). If not the last step is to abandon the actual paradigm and adopt a new one (CULTURE).
Ways of analysing the Inter links of a structure
- MCKINSEY 7-S FRAMEWORK: strategy, structure, systems; style, staff, skills; shared values.
- STAR MODEL APPROACH: helps to achieve better performance
- strategy (direction) defined by vision, mission, goals, objectives and values.
- structure (power) number departments and jobs needed.
- business processes (information) type of flow, vertical or horizontal.
- reward system (motivation)
- human resource management (skills) build and recruit those needed skills.
Types of design tests
- feasibility test
- market-advantage test
- people test
- difficult link test
- redundant hierarchy test
- accountability test
- flexibility test
Difference between centralisation and decentralisation.
They are two types of structures that can be found within an organisation. The first has the unification of powers and authorities on hands of high-level management; the other has the powers and authorities dispersed from the top to the functional level management. Concentration of power in one point; systematic delegation of authority. Decisions take longer; shorter time and decisions are taken much closer to the actions. The communication is vertical; open and free.
Advantages and disadvantages of centralisation (also in global perspective)
A
- easier to implement common policies and practices for the whole company
- prevents other parts of the business from becoming too independent.
- easier to coordinate and control from the centre
- decisions fully reflect global perspective (HQ)
D
- more bureaucratic (often extra layers in hierarchy)
- lack of authority down the hierarchy may reduce manager motivation (subsidiary managers for example)
- slow decision making process
- specific information regarding foreign countries is not taken fully into consideration.
Advantages and disadvantage of decentralisation
A
- decisions made closer to customer (better customer service?)
- better to respond to local issues
- improves staff motivation
- aligned when seeking for flatter hierarchy
- good way of training and developing junior management
D
- harder to ensure consistent practices and policies in each location
- maybe duplication of roles
- who provides strong leadership when needed?
- harder to achieve tight financial control
