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
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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
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Internal factors
PeopleStructure SystemTechnologyEquipment Financial position
Existing plansExisting strategies Internal policies Internal culture Internal goodwill –
management and non-management good will
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External factors
Markets (size, proximity, capacity and willingness to buy)
Competition Supply of basic inputs Policy (regulatory) frameworkNational (people’s) cultures
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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
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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
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Capacity development
Lay the basis
Identify methods of developing the capacity
Identify missing internal and external capacity
CAPACITY
Interventions
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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
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Key Planning Concepts
VisionMission Core ValuesPolicies Strategic objectivesStrategies
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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…
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Example of a Vision
To be a university of global excellence in training, research, and innovation for development (JKUAT)
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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?
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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)
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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
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Examples of CVs
integrity fairness and justice excellent and friendly customer service team work innovation professionalism, etc
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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
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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
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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
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What Is an Organizational Structure?
An illustration showing how job tasks are formally divided, grouped, and coordinated.
Also called an organogram
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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?
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Key pillars of structuring
Work specializationDepartmentalizationAuthority vs responsibilityChain of commandUnity of commandSpan of controlCentralization vs decentralization
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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.
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Mechanistic v/s Organic Structure
Mechanistic Organic
Individual Specialization Joint Specialization
Simple Integration Complex integration
Centralization Decentralization
Standardization Mutual Adjustment
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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?
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Key controls areas
Financial controlsMarketing controlsHuman Resource controls IT Procurement controlsProduction controls Inventory controls
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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
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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
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Reframing the mindset
Developing the Framework
Charting the Strategic Direction
Strategic actioning
Goal Achievement
The Transition
Thank you
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