Corporate entrepreneurship (also called intrapreneurship) is defined by Guth and Ginsburg as “the birth of new business within existing organizations, that is, internal innovation or venturing; and the transformation of organizations through renewal of the key ideas on which they are built, that is, strategic renewal. A large corporation that wants to encourage innovation and creativity within its firm must choose a structure that will give the new business unit an appropriate amount of freedom while maintaining some degree of control at headquarters. Burgelman proposes that the use of particular organizational design should be determined by (1) the strategic importance of the new business to the corporation and (2) the relatedness of the unit’s operations to those of the corporation. The combination of these two factors results in nine organizational designs for corporate entrepreneurship. Designs for Corporate Entrepreneurship Direct Integration: A new business with a great deal of strategic Continue reading
Strategic Management
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.
Benchmarking as a Strategic Business Tool
Benchmarking is the process of continuously measuring and comparing the business processes against comparable process of the leading organization to obtain the information that will help the organization to identify and implement improvement programs. Benchmarking as a tool stems from the early 1980s when organisational specialists from Xerox were discussing the big performance gaps between Xerox and its competitors. These specialists found two major applications for the process. First, benchmarking can be used to understand competitors and any other organisation by isolating and analyzing common functions and comparing the company’s own practices with them. Second, benchmarking can be used to compare the details of processes used in design, manufacture, marketing and services, as opposed to just the ï¬nished result In simple words, benchmarking is an approach of setting goals and measuring productivity based on best industry practices. It developed out of need to have information against which performances can Continue reading
VRIO Analysis – Meaning, Components, Advantages, and Disadvantages
Resources and capabilities have been considered as one of the biggest factors that aids and assists the business entity in performing and executing the varied range of operations and functionalities. Moreover, the business corporation should utilize various mechanisms for stimulating the resources and capabilities of the enterprise. VRIO analysis will be proven very much beneficial for any business entity while analyzing the internal sources and capabilities of the enterprise. It has been noted down that Jay B Barney introduced the framework of VRIO in 1991. This tool was introduced in his work ‘Firm Resources and Sustained Competitive Advantage’. Valuable: Resources and capabilities minimize the impacts of threats and moreover, the stakeholders determine whether or not the resources are beneficial to the company or not. The resources are proven very much beneficial for the business in various areas, internally and externally and thus will assist in the firm’s development process. Rare: Continue reading
Importance of Strategy in Business Environment
Environment is defined as something external to an individual or organization. From this angle, business environment refers to all external factors which will influence the activities of business. However, some experts have used the term “environment” in a broader sense. They defined business environment as external and internal factors that have direct or indirect influence on business or business activities. Business environment consists of all the factors that affect a company’s operations, actions and outcomes. It is comprised of macro environment and micro environment, the former includes legal and political environment, social environment, economic environment and technological environment, and the later includes customers, competitors, stakeholders, suppliers, banks and so on. Strategy is a action plan designed to achieve a particular goal. It is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a changing environment, to meet Continue reading
Four Major Elements of the Strategic Management Process
The strategic management process is made up of four elements: situation analysis, strategy formulation, strategy implementation, and strategy evaluation. These elements are steps that are performed, in order, when developing a new strategic management plan. Existing businesses that have already developed a strategic management plan will revisit these steps as the need arises, in order to make necessary changes and improvements. 1. Situation Analysis Situation analysis is the first step in the strategic management process. The situation analysis provides the information necessary to create a company mission statement. Situation analysis involves scanning and evaluating the organizational context, the external environment, and the organizational environment. This analysis can be performed using several techniques. Observation and communication are two very effective methods. To begin this process, organizations should observe the internal company environment. This includes employee interaction with other employees, employee interaction with management, manager interaction with other managers, and management interaction Continue reading
The Role of Human Resources in Mergers and Acquisitions
Mergers and acquisitions represent ways for companies to grow, develop strategic positioning, acquire technologies and talents and develop synergies. However, more than 80% of the mergers and acquisitions done failed to produce any benefits while half of them led to a reduction of the value of the companies. This figure is really surprising when we consider the number of mergers and acquisitions occurring in a year. Nevertheless, a merger or an acquisition can also represent an opportunity. Indeed, one case out of eight represents a successful merger (or acquisition) where both companies come out stronger (such as the merger of Glaxo Wellcome and SmithKline in 2000). According to the specificities of both companies, of the industry, the success factor may vary from one situation to another. Whatever the reason why an organization is going to a merger or an acquisition, the good management of the Human resources during this process Continue reading