Every organization goes through a period of change and development at one time or another whether these be big organization mergers, such as companies being bought out such as when Coca-Cola bought Costa coffee for 3.9 billion pounds, or small changes such as an alteration to a software a company uses or the development and implementation of autonomous machinery that helps create an increase in productivity. It has long been argued that companies should apply a participative dialogical approach to manage these changes to help prevent resistance to these changes. However, there is the possibility that this will be resisted due to psychological reasons or self-interest. This essay aims to find out if psychological reasons or self-interest make it impossible to have a truly open and participative approach to organizational development? While looking at how leadership plays in to preparing and guiding through an organizational development. Despite probable positive results, Continue reading
Strategic Management Tools
Market Activated Corporate Strategy (MACS) Framework
Market Activated Corporate Strategy (MACS) Framework was developed in the late 1980s. But it wasn’t developed at once. There were several predecessors to this framework. Once of the first can be the BCG Growth-Share Matrix. This matrix represents the market growth rate and the relative market share, and according to the level, the business units were divided into 4 categories. It was used very often before, but over the time more comprehensive tools were designed, to eliminate the weaknesses of BCG Matrix, like the fact that is takes into consideration only two factors, avoiding many many others that have a huge impact on profitability. BCG Matrix also assumes the independence of each business unit, therefore it leads to underestimation of the interconnection that often exists (as “Dogs”, for example, sometimes help in gaining competitive advantage) Another predecessor is the old nine-box matrix, developed by McKinsey. It covers industry attractiveness and Continue reading
Strategic Implications of Business Life Cycle Analysis
Life cycle analysis relies on the belief that there are predictable relationships among the stages of business unit life cycles on one hand, and certain elements of strategy on the other. The typical business life cycle curve is analogous to the life cycle of products. During pre-introduction and introduction, the firm is investing heavily to build sales growth through product awareness and refinement, with emphasis on the latter. Thus profit margin is negative until growth begins to occur. If sales growth proceeds at a high enough rate, then unit profit margin will swing positive during the growth phase. Typically the firm’s emphasis is shifted from product refinement to building market share, thus increasing the length and slope of the curve during this phase. As more and more competitors enter the market, however, share is whittled away. Consequently the product’s growth rate begins to level off and the product enters the Continue reading
Corporate Entrepreneurship
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
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