Presentation material for begining module.ppt
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Transcript of Presentation material for begining module.ppt
AROUSALAROUSALAA RReal eal OOrganisational rganisational UUnit nit SSimulated imulated AAs s LLifeife
IImproving the Competitivenessmproving the Competitivenessof A UK Construction Companyof A UK Construction Company
Steve Male & Krisen MoodleySteve Male & Krisen MoodleyUniversity of LeedsUniversity of Leeds
&&Sue ArmstrongSue Armstrong
University of SheffieldUniversity of Sheffield
THE KEY TO SUCCESSFUL THE KEY TO SUCCESSFUL BUSINESS STRATEGIES AND BUSINESS STRATEGIES AND
IMPROVING THE FIRMIMPROVING THE FIRM
Objective of PresentationObjective of Presentation
Provide a Framework To Assist Developing Provide a Framework To Assist Developing Integrated Business Strategies In A Structured Integrated Business Strategies In A Structured Way Using a Construction Business Simulation Way Using a Construction Business Simulation
PackagePackage
Transfer Lessons From a Business Simulation – Transfer Lessons From a Business Simulation – AROUSAL – into Real LifeAROUSAL – into Real Life
The Construction Business ChainThe Construction Business Chain
Client Design Team Main Contractor On Site Production
Suppliers & Sub Contractors
The Board of Directors
AROUSALAROUSAL
You will be set up as a Board of DirectorsYou will be set up as a Board of Directors You will need to analyse where the You will need to analyse where the
contracting company is nowcontracting company is now You will need to analyse where the You will need to analyse where the
company needs to be over the next three company needs to be over the next three months, twelve months and two yearsmonths, twelve months and two years
You will need to make a range of decisions You will need to make a range of decisions on various components of the firm and on various components of the firm and enter them into the simulation softwareenter them into the simulation software
The Decision AreasThe Decision Areas
Analyse the external marketAnalyse the external market Which clients?Which clients? Which projects?Which projects? Which locations?Which locations? Which services do we want to offer?Which services do we want to offer?
Traditional procurement, design and build etcTraditional procurement, design and build etc Civil engineering – which types of technologyCivil engineering – which types of technology Buildings – which types of technologyBuildings – which types of technology
What is our financial situation?What is our financial situation?
The Decision AreasThe Decision Areas
What are we good at – where are our core What are we good at – where are our core competencies?competencies?
What are we not good at?What are we not good at? Where do we make a profit?Where do we make a profit? What projects should we bid on?What projects should we bid on? How are our staff performing?How are our staff performing? How good is our marketing?How good is our marketing? How good is our estimating?How good is our estimating? Are we structured correctly?Are we structured correctly?
The Decision AreasThe Decision Areas How good is our site management and on How good is our site management and on
site production?site production? Is it better for some projects than others?Is it better for some projects than others? Why?Why?
Have we got good staff, are we paying Have we got good staff, are we paying them enough, are they satisfied, should them enough, are they satisfied, should we recruit better staff, should we sack we recruit better staff, should we sack some from the firm?some from the firm?
What is the competition up to?.What is the competition up to?. How good are we against them?How good are we against them? How could we become better?How could we become better? Which projects, which clients, which locations?Which projects, which clients, which locations?
The Decision AreasThe Decision Areas
What is our vision for the company?What is our vision for the company? What is our business strategy?What is our business strategy?
In the short term – 3 monthsIn the short term – 3 months In the medium term – 12 monthsIn the medium term – 12 months In the long term – 24 months and In the long term – 24 months and
beyondbeyond What can go wrong and why?What can go wrong and why?
Core Competencies: Core Competencies: What are we good at?What are we good at?
Core competencies – skills and knowledge Core competencies – skills and knowledge which can exist in a number of places in a firmwhich can exist in a number of places in a firm
They give a firm an edge over the competitionThey give a firm an edge over the competition The firm could be good at particular types of The firm could be good at particular types of
projectsprojects The firm could be good at working for The firm could be good at working for
particular types of clientsparticular types of clients The firm could be good at working in particular The firm could be good at working in particular
locationslocations
WHERE ARE OUR CORE WHERE ARE OUR CORE COMPETENCIES?COMPETENCIES?
Board of Directors
WHAT IS OUR STRATEGY?
Which Clients – Why?
Which Locations – Why?
Which Projects – Why?
STRATEGY FOR THE FUTURE
STRATEGY NOW
Core Competencies: Core Competencies: What are we good at?What are we good at?
Other examples could include:Other examples could include: Core knowledge and skills in estimatingCore knowledge and skills in estimating Core knowledge and skill in managing on Core knowledge and skill in managing on
site productionsite production Core knowledge and skills in knowing Core knowledge and skills in knowing
what to purchase and whenwhat to purchase and when Core knowledge and skills in particular Core knowledge and skills in particular
types of technical and logistical projectstypes of technical and logistical projects
In order to make decisions in these areas In order to make decisions in these areas you will need a framework to help you you will need a framework to help you think through the issues, come up with think through the issues, come up with
options and implement them in the options and implement them in the simulation packagesimulation package
As in real life there are no right or wrong answers – As in real life there are no right or wrong answers – only shades of grey. You will need to balance the only shades of grey. You will need to balance the evidence, facts and discussions when you make evidence, facts and discussions when you make
your choices. your choices.
The next series of slides will provide you with a The next series of slides will provide you with a series of models and a framework to help you series of models and a framework to help you
make choices. make choices.
BALANCING THE SCALES OF STRATEGYBALANCING THE SCALES OF STRATEGY
Understand The Firm’s
Current Situation
Understand the Firm’s Potential Future
Situation
Time
THE BASICS OF BUSINESS STRATEGY
Understand Current
Situation
Potential Future
Situation
Time
Use a Diagnostic Framework
Where are we now?
What do I need to change?
Why?
THE BASICS OF BUSINESS STRATEGY
Understand Current
Situation
Potential Future
Situation
Time
Diagnostic Framework
Where do you want to go?
Where are you now?
Vision
What do I need to change?
Why?
THE BASICS OF BUSINESS STRATEGY
Understand Current
Situation
Future Situation
Time
Diagnostic Framework
How do I get there?
How do I measure performance and improve performance?
Where, why, how?
Where do you want to go?
Vision
Strategy
Why?
THE BASICS OF BUSINESS STRATEGY
Where are you now?
What do I need to change?
Why?
Industries and MarketsIndustries and Markets
Positioning the Contracting Positioning the Contracting Firm Against the CompetitionFirm Against the Competition
Use Techniques for AnalysisUse Techniques for Analysis SWOT SWOT
Strengths, Weaknesses, Opportunities, ThreatsStrengths, Weaknesses, Opportunities, Threats Competitor Analysis – who, where, why, Competitor Analysis – who, where, why,
when?when? Boston Matrix, which projects fall into the Boston Matrix, which projects fall into the
following:following: Cash cows – good for cash flowCash cows – good for cash flow Dogs – Loosing money: DivestDogs – Loosing money: Divest Stars – will need investment but can become Stars – will need investment but can become
cash cows in the futurecash cows in the future ? – watch and decide? – watch and decide
Porter’s Five ForcesPorter’s Five Forces
INDUSTRY STRUCTUREAND
RESTRUCTURING
MARKETPRESSURES- Five Forces
PROJECTTECHNOLOGIES AND
DRIVERS
Power of Clients
Rivalry between Competitors
SubstituteMaterials
New EntrantCompanies
Civil Engineering
THE NEEDTO CHANGE
Simple & Routine
Power of Suppliers
Building Engineering
Complex & Specialist
Time Pressures/Urgency
High Value/Low Value
HIGHADDED VALUE
HIGHVOLUME
Engineering Specialists Simple & Routine
Stay Local
INDUSTRY STRUCTURE &
RESTRUCTURING
Complex & SpecialistProjects
May need to Travel
POSSIBLE STRATEGIES?
Bid Low Cost
COMBINATION
The European Business The European Business Excellence ModelExcellence Model
The Business Excellence model provides The Business Excellence model provides a framework for thinking through where a framework for thinking through where the success or failure of a firm might liethe success or failure of a firm might lie
It gives weightings to certain It gives weightings to certain componentscomponents
It sees some components as enablers to It sees some components as enablers to successsuccess
It sees other components as outcomes It sees other components as outcomes or resultsor results
A Business Excellence ModelA Business Excellence ModelEuropean Quality Foundation ModelEuropean Quality Foundation Model
Leadership
10%
Processes
14%
Business
Results
15%
People
Management
9%
Policy &
Strategy
8%
Resources
9%
People
Satisfaction
9%
Customer
Satisfaction
20%
Impact on
Society
6%
Enablers 50% Results 50%
Leadership describes the behaviour and example set by all the people with a responsibility for leading others within the firm. Policy & Strategy describes how the principles of
business excellence form the basis of the plans and actions to which everyone can contribute, and how we ensure that the relevance of these plans are reviewed and improved.
Resources describes how we maximise the use of resources available to us. These include finance, materials, buildings, equipment, information and and technology. Under this enabler we also consider how we develop and manage supplier and sub contractor relationships.
People Management describes how we identify, plan and realise the full potential of the people who work in our firm.
Processes describes how we identify and improve the business processes by which we operate. It asks us to consider how we manage these processes, review their performance and improve
Enablers
Customer Satisfaction asks if we are satisfying our customers and how we know if we are. We are asked to look at feedback from our customers and show in measurable terms the customers’ view of us. We examine any internal data we have relating to customer satisfaction.
Impact on Society examines how the firm affects the surrounding community, the environment at large and how its actions are perceived.
People Satisfaction examines what we are achieving in terms of the satisfaction of those who work in the firm? What measures do we have for this and how good are the results?
Business Results covers what the firm is achieving in relation to its planned performance in terms of both financial and non-financial measures. The latter may include areas such as market share, process capability, cycle times, staff motivation
Results
The Next Series of Slides The Next Series of Slides Provides a More Provides a More
Comprehensive Framework Comprehensive Framework that can be used with the that can be used with the
other Management Modelsother Management Models
A Diagnostic FrameworkA Diagnostic Frameworkfor a Firmfor a Firm
How Can The How Can The Framework Help?Framework Help?
Assists managers to think through Assists managers to think through and structure causes and effects that and structure causes and effects that can impact the companycan impact the company
Assists managers to look at Assists managers to look at interactions and linkages between interactions and linkages between the various components of the the various components of the companycompany
Assists managers to target areas for Assists managers to target areas for change and improvementchange and improvement
A Diagnostic FrameworkA Diagnostic Framework
Structure Style
ResourcesProcesses
Strategy
Vision
Systems
A Diagnostic FrameworkA Diagnostic Framework
Structure
ResourcesProcesses
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
Vision
SystemsStyle
A Diagnostic FrameworkA Diagnostic Framework
Structure
ResourcesProcesses
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
•Leadership•Culture•Impact on Individuals
Strategy
Vision
SystemsStyle
A Diagnostic FrameworkA Diagnostic Framework
Structure
ResourcesProcesses
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
•Leadership•Culture•Impact on Individuals
Strategy
Vision
SystemsStyle
A Diagnostic FrameworkA Diagnostic Framework
Structure
ResourcesProcesses•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
•Leadership•Culture•Impact on Individuals
Strategy
Vision
SystemsStyle
A Diagnostic FrameworkA Diagnostic Framework
Structure
ResourcesProcesses•People - core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
Vision
SystemsStyle
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Leadership•Culture•Impact on Individuals
A Diagnostic FrameworkA Diagnostic Framework
Structure
ResourcesProcesses
•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities
•People - core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
Vision
SystemsStyle
•Leadership•Culture•Impact on Individuals
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
A Diagnostic FrameworkA Diagnostic Framework
Structure Style
ResourcesProcesses
•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities
•People - core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
VisionExternal Environment
Systems
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Leadership•Culture•Impact on Individuals
A Diagnostic FrameworkA Diagnostic Framework
Structure Style Systems
ResourcesProcesses
•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities
•People - core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
VisionExternal Environment
Performance Measures
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Leadership•Culture•Impact on Individuals
The Constituent Parts of the Framework
Vision…. is the purpose and future direction of the company.
Where does it want to be, why does it exist
Vision can be set by the Chief Executive, the Managing Director or by a Board of Directors
It can be shared throughout a firm or remain at Director level
Strategy…..is the implicit or explicit means by which
management allocate resources to achieve the objectives of the company and guide
the company’s behaviour over the long term towards its vision
Put simply it is how the companygets from A to B over time
StyleThe nature and “personality” of the organisation - how people behave in the firm to achieve the
firm’s objectives and vison – “the way we do things around here”
Leadership… is the capacity to mobilise, in competitionor conflict, someone who is prepared tofollow. There are a range of leadership styles:autocratic, democratic etc.
CultureThe shared values and beliefs of the membersof the firm
IndividualsThe behavioural traits and motivationalneeds of the members of the company
SystemsThe procedures, reports and routinised processes
that define the operations and supportthe competitive processes of the firm
QualitySystems to assists achievingthe level of quality required bythe customer and reducing theoccurrence of errors.
Safety Systems for minimisingaccidents and harm at work.
External RelationsThe policies and procedures that governinteraction with external organisations, e.g. clients, professional teams and project sponsors. Ensuring customer satisfaction
Co-ordinationSystems that overview projectprocesses and achieve co-ordinationof single and multiple projects.
PlanningScheduling single and multiple projects.
FinancesManaging the financesof the firm, and, single and multiple projects.
Processes… are a series of linked activities
that add value to inputs to create outputsfor the customer
Selling/MarketingCreating opportunities for profit bywinning project orders where the price allows thepotential to make a profit.
DesignCollection and creationof all the informationrequired to detaila project for production
Purchasing/ProcurementProviding the materialinputs for production
On-Site ProductionConverting information andmaterials to assembled components to produce the final product on site
Resources… the assets a firm usesto conduct its business
PeopleThe staff (and their skills)thatmake up the firm, one of thekey resources of a company.
TechnologyThe equipment, hardware and software systems usedby the firm. It can also refer to the types of project that a firm is good at doing
FinanceThe financial basis ofthe company; cashflow,debts and assets.
FacilitiesThe physical assets ofthe company; offices,location etc.
Structure… is the formal and informal co-ordination and linkages
between activities in the company
OwnershipThe nature of the financialstakeholders of the firm.
SubsidiariesDivisions and companieswithin a large firm
OrganigramsThe organisation’s hierarchicalstructure that set out the roles and responsibilities ofpeople
Roles & ResponsibilitiesThe allocation of tasks to peoplewithin a firm
The Diagnostic FrameworkThe Diagnostic Framework
Structure Style Systems
ResourcesProcesses
•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities
•People - core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
VisionExternal Environment
Performance Measures
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Leadership•Culture•Impact on Individuals
The Influence of TimeThe Influence of Time
Structure Style Systems
ResourcesProcesses
•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities
•People -core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
VisionExternal Environment
Operational/TacticalShort and medium term strategies
StrategicLong term strategies
Performance Measures
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Leadership•Culture•Impact on Individuals
Strategic FlexibilityStrategic Flexibility
A firm needs to have the capability A firm needs to have the capability to be flexible over time and survive to be flexible over time and survive through expansion and recessionthrough expansion and recession
SummarySummary
Understand Current
Situation
Future Situation
Time
Diagnostic Framework
How do I get there?
How do I measure performance and improve performance?
Where do you want to go?
Vision
Strategy
Why?
THE BASICS OF BUSINESS STRATEGY
Where are you now?
What do I need to change?
Why?
The Influence of TimeThe Influence of Time
Structure Style Systems
ResourcesProcesses
•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities
•People -core skills•Technology•Finance•Facilities
•Quality•Safety•External Relations•Co-ordination•Planning
•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies
Strategy
VisionExternal Environment
Operational/TacticalShort & Medium Strategies
StrategicLong term strategies
Performance Measures
•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management
•Leadership•Culture•Impact on Individuals