Corporate Management Lecture Two:

Developing the Basic Management Framework

Dr. Fred Mugambi Mwirigi

JKUAT

Introduction

The practice of management requires that the manager develops a basic framework of management as quickly as possible upon taking over a unit or organization

This framework helps him/her to appreciate his management environment and the strategic direction that he may want to steer the firm to

04/21/23

2

Components of the basic framework

Divided into:Internal environmental factors External environmental factors The intra-relationship among internal factors and external factors The inter-relationship between internal factors and external factors

04/21/23

3

Internal factors

PeopleStructure SystemTechnologyEquipment Financial position

Existing plansExisting strategies Internal policies Internal culture Internal goodwill –

management and non-management good will

04/21/23

4

External factors

Markets (size, proximity, capacity and willingness to buy)

Competition Supply of basic inputs Policy (regulatory) frameworkNational (people’s) cultures

04/21/23

5

Analyzing the factors

Comparisons Same period Intra-organizational comparisons Same period inter-organizational comparisons Different period Intra-organizational

comparisons Different period Intra-organizational

comparisonsTrend analysisGap analysisBenchmarking

04/21/23

6

Developing internal capacity

Identify missing internal and external capacity

Identify potential interventions Develop capacity either internally or by

tapping external capacity Roll out interventions effectively and

efficiently

04/21/23

7

Capacity development

Lay the basis

Identify methods of developing the capacity

Identify missing internal and external capacity

CAPACITY

Interventions

04/21/23

8

Developing initial plans: the process

Development of the organizational structure Identification of key issues Identification of strategic objectives Identification of strategies for each objectiveIdentification of activities for each objectiveDevelopment of key support policies Objective resourcing matrix Compilation of strategic plans and periodical

work plans

04/21/23

9

Key Planning Concepts

VisionMission Core ValuesPolicies Strategic objectivesStrategies

04/21/23

10

Vision

Answers the question: What will success look like in future?

A mental perception of the kind of environment is to be created within a broad time horizon

A shared image of what an org. wants to become – resonates with all & helps them feel proud, excited & part of something bigger…

A Vision is more emotional than analytical – a dream…

11

04/21/23

Example of a Vision

To be a university of global excellence in training, research, and innovation for development (JKUAT)

12

04/21/23

Mission

An elaboration of the vision statement Defines the basic reasons for the existence and helps

legitimize existence in society Common intent to which everyone in the organization can

point - captures the broad purpose and functions of the organization

Contents of a mission statement: Purpose statement – Why do we exist? What is

the ultimate result of our work? Business statement – What activities do we do to

accomplish the purpose?

13

04/21/23

Example of a mission

To offer accessible quality training, research, and innovation in order to produce leaders in the fields of Agriculture, Engineering, Technology, Enterprise Development, Built Environment, Health and other Applied Sciences to suit the needs of a dynamic world (JKUAT)

14

04/21/23

Core values

Guiding values, corporate philosophy or guiding principles

Definitions:

a. the guiding principles for corporate actions and ethical behaviour

b. define the character of relations with stakeholders, and set management style and corporate culture

c. the organization’s essential and enduring tenets - a small set of timeless guiding principles that require no external justification

d. reflection of the deeply held values and tend to be independent of the external environment

15

04/21/23

Examples of CVs

integrity fairness and justice excellent and friendly customer service team work innovation professionalism, etc

16

04/21/23

SWOT

S&W are the resources or capabilities that help (S) or deficiencies that hinder (W) an organization to accomplish its mission

O&T are external factors or situations that affect an organization in a favorable (O) or negative way (T)

Usefulness: clarifies the conditions within which an organization

operates provides good indication of strategies – build on S,

take advantage of O & minimize the effects of W&T

17

04/21/23

Core vs. Non-core Business: the value chain approach

Involves an analysis of

1.Core business of an organization

2.Core competences of the firm

3.Key activities across the value chain

4.Interaction between and among the activities to optimize returns

Decisions finally made on what to retain and what to outsource

18

04/21/23

Structuring the Organization

Structures reflect various degrees of centralization or decentralization of operations

Centralization- authority to make important decisions is retained by managers at the top of the hierarchy

Decentralization- authority to make important decisions is delegated to managers at all levels in the hierarchy

04/21/23

19

What Is an Organizational Structure?

An illustration showing how job tasks are formally divided, grouped, and coordinated.

Also called an organogram

04/21/23

20

Questions to consider

To what degree are articles subdivided into separate jobs?

On what basis will jobs be grouped together?

To whom do individuals and groups report? How many individuals can a manager

efficiently and effectively direct? Where does decision-making authority lie?

decentralization To what degree will there be rules and

regulations to direct employees and managers?

2104/21/23

Key pillars of structuring

Work specializationDepartmentalizationAuthority vs responsibilityChain of commandUnity of commandSpan of controlCentralization vs decentralization

04/21/23

22

Mechanistic Vs Organic Structures

Mechanistic Model

A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization.

Organic Model

A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.

04/21/23

23

Mechanistic v/s Organic Structure

Mechanistic Organic

Individual Specialization Joint Specialization

Simple Integration Complex integration

Centralization Decentralization

Standardization Mutual Adjustment

04/21/23 24

2404/21/23

Integrating controls in the plan Ask Key Questions:

What is planned?

What could go wrong?

How will we ensure

things run as per plan?

Will our control

tools actually work?

Incorporating controls04/21/23

25

Key controls areas

Financial controlsMarketing controlsHuman Resource controls IT Procurement controlsProduction controls Inventory controls

04/21/23

26

The Support Structure

Strategic Direction

Strategic Actioning

Strategy

Theenvironment

Expectations,objectives

andpower

Resources

Resourceplanning

Organisationstructure

Selection of strategy

People and systems

Evaluation of options

Generationof options

04/21/23

27

Support Structure

The manager must ensure that support items are constantly realigned, refocused and nurtured

This process must be all-inclusive. It must incorporate both managers and non-management staff

It should be a process of reconciling internal environmental factors with the external factors

28

04/21/23

29

Reframing the mindset

Developing the Framework

Charting the Strategic Direction

Strategic actioning

Goal Achievement

The Transition

Thank you

30

04/21/23