Operational decisions are what make your business strategy real and ensure that your organization runs effectively, right down to the front-lines interacting with your associates. To ensure that operational decisions are effective, you need to manage operational decision making. Operational decisions helps the organization to understand some fundamental cost-volume relationship relate to the operation in the company. In operational decision making, the decision makers have to consider about volume, latency, variability, managing risk, self service and personalized. Volume is the number of decisions of a specific type that decision makers made must be high. The volume can cause problems or exacerbate another decision problem, such as compliance and risk assessment. Besides that, latency means when you could foresee problem is coming but still couldn’t change how you are going to make decision in time. So you might have an operational problem. The change in mind-set required is akin to the Continue reading
Strategic Management Basics
How to Develop a Mission Statement
The most common initial act in establishing organizational direction is an organizational mission. The statement that describes the mission talks about the target market and also talks about its strategy to be profitable by providing good customer service through friendly and knowledgeable people. It is essential to look into external influences like labor, conditions, competitors, government rules while considering mission statement. Company’s mission statement should define stakeholders expected return along with the measurement of the performance of the company through those returns. The expected profit too should be included in the organization’s mission. Moreover, the company should come to consensus as to what all areas should be measured like margin growth, efficiency, competitive cost position, product quality, market share etc. A mission statement sets the boundaries for how resources should be allocated and what strategic and operational goals should be set. The mission statement should acknowledge the company’s strength and Continue reading
Different Types of Mergers
In perspective of merger and acquisition there are different types of mergers that host a difference between each one it. Each merger derived with specific reasons depending on the fitting characteristics in cross boarder operation. Each type of merger will be discussed in detail to know the differences and their characteristics. 1. Horizontal Merger It is a merger of two or more companies that compete in the same industry. It is a merger with a direct competitor and hence expands as the firm’s operations in the same industry. Horizontal mergers are designed to produce substantial economies of scale and result in decrease in the number of competitors in the industry. The merger of Tata Oil Mills Ltd. with the Hindustan lever Ltd. was a horizontal merger. In case of horizontal merger, the top management of the company being meted is generally, replaced, by the management of the transferee company. One Continue reading
Ten Schools of Strategy
Strategy is considered as one of the interesting and engaging subject to discuss in business management schools. The strategy can be described or can be explained as a detail and systematic plan of particular action that has to be performed when it is required or when a requirement is envisaged. Different types of strategic problems form part of the strategic management process. Is it necessary for the companies or the organizations to focus more on the market share or focus on the revenue capital of the company or the organization? What are the plans and the processes required and necessary for the organization to focus on as to reach its goal and to reach the market shares? The great authors of Strategy Safari like Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel have explained strategies in their own words with their experiences. The strategy is explained in different approaches which includes Continue reading
The Concept of Strategist
Strategist is the person performing the activities associated with business strategy planning. There are various kinds of strategists in any kind of organization like board of directors, chief executive officer, entrepreneurs, senior management, SBU-level executives, corporate planning staff, consultants, middle level manager, and executive assistants. Each one plays a different role in an organization. The major responsibilities of a strategist are: First, he must assume the responsibility to develop a plan to complete the strategy activities, the plan must be initiated, dates set, deadlines established, and the process must be monitored to ensure that the deadlines are met. Second, basic assumptions about forecasts, economic indicators, technology, and general industry competitiveness must be agreed on and communicated to the functional areas. Procedures must be developed to assure uniformity in the development of the plan. Responsibility for undertaking fundamental studies and valuation of special matters necessary to strategic planning must be assumed. Continue reading
Prescriptive and Descriptive Schools of Strategy – Similarities and Differences
Strategy is a direction and scope of an organization over the long term, which achieves advantage in changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations. Having strategy in an organization is very important because it helps on how to meet the goals in consideration with the organization’s situation. An organization strategy answers all questions about fundamental business whether to concentrate in single business or build a group of several businesses, either to go for a broad range of customers or to concentrate on a market niche, either to focus on a wide or narrow product line, whether to base on competitive advantage with low cost or product differentiation. An organization has to know deeply everything concerned strategic management, strategic levels, and has to reach to the level of achievement of the strategic goals. Organizations also use strategy as the most important tool Continue reading