Business Management Chapter 8 and 9 Flashcards
Risks of adding layers of management:
1) Today’s market place is changing at a faster rate than ever before; a risk of too many layers of management is that is slows down the decision making process. Too many people have to approve a decision before it can actually be implemented
2) Having increased layers of management can impede communication of info and decisions need to be communicated through too many individuals. This has the potential for information distortion because every time the info changes hands the intent and the facts within it risk the potential for change.
3) Too many layers of management can stifle creativity and innovation within the organization. Bureaucratic red tape, and the need to gain too many approvals, can sap the energy out of new and promising ideas.
4) Too many layers of management can promote meddling with small spans of control, managers often find the need to overmanage. Managers should spend their time leading and energizing others to get the work done. Organizational conflict and productivity issues arise when managers meddle in areas where their attention is not required, or when higher-level managers get themselves directly involved in areas where middle and font-line managers have been assigned such supervisory tasks.
Processes and initiatives needed to support and direct the product/service transformation within the organization, the creation of the value proposition applicable to such products/services, and the distribution, marketing, sales, and service in support of these products/services.
Value Chain
What are the four key components that are used to formulate the design of a business system?
4 Key Components for Business System Design
1) Organizational structure, culture, and management approach
2) Control systems to manage strategic intent
3) Mechanisms for effective talent management
4) Operational processes and market support and alignment
1) Organizational structure, culture, and management approach:
The formal framework around which the business system is designed and how such a structure directs and influences collaboration, the exchange of knowledge, the communication and sharing of ideas, and the work environment surrounding the accomplishment of tasks and the meeting of responsibilities (focus of chapter 8).
2) Control Systems to Manage Strategic Intent:
Managerial evaluation and control processes utilized to determine the success of the organization in meeting its strategic and operational goals and objectives. This would include financial management systems, along with the establishment of key success metrics relating to productivity, market share growth, and asset performance, to name a few. It also refers to the formalized communication tools used to disseminate critical info up, down and across the organization. These control systems are designed to guide managers and employees during the integration of business-level strategies in support of the overall corporate-level vision and mission.
Mechanisms for Effective Talent Management:
The decision-making hierarchy, the delegated span of control within an organization, and the allocation of position power within it (chapter 8 and chapter 9)
Operational Processes and Market Support and Alignment:
The processes and initiatives needed to support and direct product/service transformation within the organization, the creation of the value proposition applicable to such products/services and the distribution, marketing, sales, and service in support of these products/services. These operational and market support processes are commonly referred to as the Value Chain. (Chapters 10 – 12)
In developing an organization’s framework, what three questions should be utilized to drive the development process? How are they interrelated?
1) What is the best structure that will develop, connect, and maintain relationships with our current and anticipated customer base and ensure the effective and efficient design, development and delivery of our products/services to the marketplace?
2) What culture or environment is needed to deliver and reinforce the market position we are striving to achieve (as outlined in our business strategy) and facilitate the development and maintenance of high-performance work units and systems within our organization?
3) What management approach do we feel will best support the activities and interactions required within the organization to successfully achieve the goals and objectives defined in our strategic plan?
The formal framework around which tasks are organized and responsibilities are allocated within an organization.
Structure:
Customer intimacy:
Interactions and connectivity that organizations seek to foster with their customers in order to meet their expectations fro contact, service and support.
When organizations grow they tend to focus on building structure around internal efficiencies but don’t forget the external where products and services are sold. For example, if a decision is made to facilitate customer sales and support via a website, the site must be easy to use and maximize the benefit to the customer. The outcome is to develop a framework for customer connection and intimacy that encourages and rewards costumers for doing business with the organization, thereby encouraging heightened frequencies of purchase and maximizing “per interaction expenditure: by customers while creating a potential barrier to competitors desiring to attack the organization’s customer base.
Work Efficiencies:
The alignment of the tasks required to support the design, development, marketing, distribution, and sale of an organization’s products/services in the most efficient and effective manner possible.
For example, initiatives to re-engineer fabrication and assembly processes, reviewing continuous improvement tactics, assessing packaging and shipping procedures, defining new uses and modifying existing uses of technology in the workplace, determining human resource allocations to various products/services, implement quality assurance protocols and redefining specific task requirements and responsibilities on a position-by-position basis.
Departmentalization:
: The process of dividing the organization’s work units into defined functional areas.
This type of division would take into consideration the specific skill sets needed for the employees involved and the tasks/responsibilities to be completed. A common example of departmentalization is found within functional structures where organizations create defined departments such as finance, engineering, manufacturing and marketing.
Culture:
How the individuals within the organization behave and how the organization as a whole will react to both internal and external challenges and stimuli.
Employee Interaction:
The level and style of interaction that occurs among employees and between work units and their management teams. It defines the participatory nature of the work environment, the sense of teamwork that is fostered within the organization, and the commitment of the management team toward supporting and developing each employee’s skills and capabilities.
Risk Allowance
The degree of entrepreneurship that is embedded into the organization. It is the extent to which the environment allows and encourages risk taking and flexibility in making decisions, supports innovation and innovative ideas, and rewards creativity in the workplace.
