Presentation on theme: "“An Overview of the Strategic Management; Concepts & Process”"— Presentation transcript:
1 “An Overview of the Strategic Management; Concepts & Process” bySheikh Naseer-ul-HaqM.A. (Economics), MS Dev. Mgt (USA), PA & ASFormer Director General, National Institute of ManagementFormer Additional Secretary, Establishment DivisionFormer Deputy Auditor-General of Pakistan
2 MODULE OBJECTIVES The main objectives of the module are:- To help the students understand the “Strategic Management” Concepts and processes by highlighting key terms and steps of i) Strategy formulation ii) Strategy implementation iii) Strategy evaluation;To identify the ever-changing, dynamic and challenging Organizational environment of 21st CenturyTo help the students understand the characteristics of an effective organization; and to make them aware of the steps required to achieve organizational effectiveness in a 21st Century dynamic managerial environment
3 Strategic Management; Definition Strategic Management can be defined “as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives”.(Fred R. David)As the definition implies Strategic Management focuses on integrating various departmental units like Production/Operations, Marketing/Sales, Finance/Accounting, Research & Development, IT based Management Information Systems to achieve organizational success, goals and objectives
4 Stages of Strategic Management The Strategic Management process consists of three stages;Strategy FormulationStrategy ImplementationStrategy Evaluation
5 Strategy Formulation Strategy formulation includes; Developing an organizational “Vision” and “Mission”Identifying an organization’s external “Opportunities” and “Threats”Determining internal “Strengths” and “Weaknesses”Establishing long term “Objectives”Generating alternative “Strategies” (courses of action)Choosing particular “Strategies to pursue”
6 Strategy Formulation….cont. Strategy formulation issues include deciding;What businesses to enterWhat businesses to abandonHow to allocate resources (department-wise)Whether to expand operations or to diversifyWhether to enter international marketsWhether to merge or form a joint ventureHow to ovoid a hostile takeover
7 Strategy Implementation Strategy Implementation includes;Establishing “Annual Objectives”Develop “Policies” supporting new initiativesMotivate employees to pursue renewed objectivesAllocate resources so that formulated strategies can be executedPromote “Organizational Culture” supportive of the change direction management
8 Strategy Implementation…cont. Create effective organizational structuresRedirect market effortsPrepare budgets for the change managementDevelop and utilize effective “MIS”Link “Employee Compensation to Organizational Performance”Strategy Implementation is “Action Stage”; most difficult stage in Strategic Management
9 Strategy Evaluation Strategy Evaluation includes; Reviewing external and internal factors that are the bases for current strategiesMeasuring performance; (Macro and Micro)Taking corrective action where neededStrategy evaluation is extremely important to know the results of “Strategy Implementation”; success or failure
10 Other Critical variable of Strategic Management Integrating Intuition with AnalysisAdapting to Change; pro-actively managing change externally and internallyManaging Information Technology; e-business and e-commerceManaging the natural environmentSurviving in the “Global Context”
11 Key Terms in Strategic Management Competitive AdvantageStrategistsVision and Mission StatementsBusiness ethics and Social ResponsibilityOperations ManagementTransition Management
12 ORGANIZATIONAL GOALS AND RELATIONSHIPS Subject OverviewWhat is an Organization by “Definition” ?What are the environmental “Challenges of the 21st Century” for an organization ?What are its Strategic Planning/Management capabilities to effectively meet these challenges ?How it sets the “Goals & Targets; Long term & in the Short run” to achieve its “Organizational Objectives” ?What are its “internal & external relationships” that are critical to its “effectiveness”
13 Organization; Definitions Organization is a System of consciously coordinated activities or forces of two or more persons who get together and formally agree to combine their efforts for a common goals; (Chester Barnard around 1940)An Organization is a “Structured Process” in which “individuals interact” for the attainment of “Collective Objectives”; (H.R.Hicks around 1970)Organizations are “Social Inventions” for accomplishing “Common Goals” through “Group Effort”; (Gary Johns around 1990)
14 Organizational Environment; Internal Whatever resides within the SystemStructure and DesignPeople; the Management & the WorkforceState-of-the-Art; its level of professional work processesTechnology ArchitectureSystems and ProcedureLeadership; the Management Philosophy/ApproachTotal Organizational Culture
15 Organizational Environment; External With whoever the Organization interacts at the “Task” level and in “General”External “Task Environment”External “General Environment”The Clients, the Customers, the Suppliers, the Regulatory Agencies, the Competitors, the Special Interest Groups constitute the “External Task Environment”The Political, the Legal, the Social, the Economic, the Technological or even the International factors affect the “General External Environment” of the Organization
16 Organizational Environment The Organization; structure,Its people, technology,Systems, managementPhilosophy & CultureThe Political, legal, economic,Social, technological,International factorsThe customers, clients, suppliers,The competitors, special interest groupsRegulatory agencies etc.
17 Major 21st Century Challenges for Organizations Intense Competition (Bench marking)GlobalizationInformation Technology (IT) ManagementWorkforce Diversity/MoraleChange ManagementTotal Quality Management (TQM)Social Responsibility & Ethics
18 Process of Organization Development OrganizationalStrategic Planning/ManagementCapabilitiesThis is the Placewhere you want be.VisionMissionObjectivesStrategiesInterventionsFutureStateThis is the Placewhere you are.TransitionManagementPresentState
19 PROCESS OF STRATEGIC PLANNING & MANAGEMENT FUTURESTATESTRATEGICPLANNING/MANAGEMENTCAPABILITIESPRESENTSTATETRANSITIONMANAGEMENTOPERATION’SMANAGEMENT
20 ANALYSIS OF THE PRESENT & THE FUTURE STATE; and THE WAY FORWARD Vision of the Organisational future stateClear Perception of the organisational present state with deficiencies & gaps(Knowledge, Skills and Abilities)Analysis of the organisational Present Strengths, Weaknesses, Opportunities and Threats (SWOT Analysis)Develop the Way Forward; the Mission, the Objectives, the Strategies and the Interventions
21 Strategic Planning/Management Capacity of the Institution Build on all organisational StrengthsChallenge, combat and remove all organisational weaknesses and endeavour to convert them into strengthsCapitalise on all organisational OpportunitiesFace all organisational Threats with courage, capability and sagacity to convert them ultimately as opportunities
22 Organizational Change Characteristics WORLD-CLASS ORGANIZATIONS Today the very best Multi-National Corporations are going beyond even the learning organization and have become what can be called as “World-class organizations (WCOs)” which are enterprises that are able to compete with anybody, anywhere, anytime, anyway.(Fred Luthans)
23 Analysis Focal Point (Step-1) Visualise the future state in terms of :-State-of-the Art (Professional expertise)Technology Architecture (Hardware/Software)Management philosophy and ApproachOrganisational Structure and DesignSystems and ProceduresTotal Organisational Culture
24 Analysis Focal Point (Step-2) Analyse the present state in terms of the change parameters identified during step-1 with the following broad criteria in view:-Openness; towards all organisational issuesCritique; everything, no sacred cowsCreativity; analyse all situations with creative inputs &Personal Efficacy; the confidence among organisational members to carve their own destiny
25 Clear Perception & Assessment of the Organisational Change Parameters As a result of visualising the future state and the analysis of the present state, a clear perception & assessment of the organisational dynamics of the change process would be developed; on the basis of which ‘Strategic Action Planning’ exercise could be carried out to meet future challenges
26 Analysis Focal Point (Step-3) Keeping in view the results of the SWOT ANALYSIS, and the dynamics of the Change as perceived; the “Organization” is now in a position to determine its “Long term and Short run Goals & Targets”Draw its Strategies to bring about and manage ChangeUse different “Interventions/Projects” to implement its change process and to transform its “Vision” into “Action/Reality”
27 Organizational Goals & Objectives Goals provide a clear, engaging sense of direction and specify what is going to be accomplishedObjectives outline the desired results to be attained/achieved(Management Challenges in the 21st Century by Pamela, Goodman & Fandt)Goals are quite often broken up into “Targets/Milestones” over a period of time
28 SMART; Goals & Targets SMART Specific Measurable Achievable Realistic; &Time boundGoals and Targets provide the Organization with the clear sense of “Direction and what is going to be accomplished over a stated period of Time; Long term or in the Short run”
29 Goal Setting; a dynamic exercise Goal setting is a structured process of determining the “Long term and Short run Objectives of the Organization” by specifying the desired outcomes toward which individuals, groups, departments, and organizations should work to achieve “organizational efficiency and effectiveness”
30 Management By Objectives (MBO) Given by Peter Drucker in 1954Considered to be the “Management Technique of the 20th Century”Effectively and successfully being used around the world by Multi-National Corporations, Governments for setting Objectives, Goals and TargetsIt is a four step process in which Objectives are set at three levels; the Corporate, the Departmental and the Individual level
31 Management By Objectives (MBO) Objectives are Negotiated between Supervisor and the Subordinate; written down for a time periodAction Plans and Management Guides are developed to achieve these objectives andPeriodic Review is carried out and final Evaluation at the end of the stated period completes the processBench marks for Quality are observed and all compensations are linked to job performance
32 Organizational Relationships 6 Box ModelOf OrganizationalDiagnosis by MarvinWeisbordPurposeStructureRelationshipsLeadershipRewardsHelpingMechanismsOrganizationalEnvironment
33 Organizational Relationships Mckinsey’s 7 S ModelFor Strategy implementationStructureSystemsStrategySubordinateGoalsStyleSkillsStaff
34 Japanese Management Style Life time employmentOrganizational Commitment among its workforceTraining and skill developmentRespect for seniorityManagement philosophy based on core values of Ethics, honour and CredibilityFamily type Organizational Culture
35 HUMAN RESOURCE MANAGEMENT DefinitionsThe process of developing, applying, and evaluating policies, procedures, methods, and programs relating to the individual in the organization. (Miner)Function in the organization concerned with the staffing, training, development, motivation and maintenance of employees. (Decenzo)
36 HRM IN A DYNAMIC ENVIRONMENT Environmental Factors and their HRM implicationsGlobalization:The introduction and making of goods and services worldwide.Cultural Environments: The attitude and perspectives shared by individuals from specific countries that shape their behavior and how they view the world.
37 HRM IN A DYNAMIC ENVIRONMENT (Contd.) Work-Force DiversityThe varied personal characteristics that make the work force heterogeneous.Changing Skills RequirementsThe lacking of basic abilities to perform many of today’s jobs.Corporate DownsizingAn activity in an organization aimed at creating greater efficiency by eliminating certain jobs.
38 HRM IN A DYNAMIC ENVIRONMENT (Contd.) The Rationale Behind DownsizingMaking the organization leaner, smarter, reducing the overheads and bringing efficiency/effectiveness among the employees through self-management/ empowermentTotal Quality ManagementA continuous process of Quality improvementReengineering Work Processes for Improved ProductivityRequires Radical, quantum change in perception of the organizational workforce
39 HRM IN A DYNAMIC ENVIRONMENT (Contd.) The Contingent Work ForceThe part-time, temporary, and contract workers used byorganizations to fill peak staffing needs, or perform workunable to be done by regular employees.Decentralized Work SitesWork sites that exist away from an organization’sfacilities. A management culture that brings aboutEmployee Involvement by affording them moredelegation, participative management, work teams, goalsetting and training.
40 Dynamics of the HRM Process SelectionTrainingRecruitmentCompensation(Pay for Performance)CareerPlanningVacanciesPerformanceAppraisalSeparation
41 CRITICAL ISSUES IN PUBLIC SERVICE HRM PROCESS An Evaluation of the critical HRM variables in terms of the Johari’s window:-OK NOT OKCHANGEABLENOT CHANGEABLESTRATEGIC INTERVENTIONS:-LET US FOCUS ON “NOT OK BUT CHANGEABLE” PARAMETERSIN HRM CYCLE TO EFFECT THE KEY RESULT AREAS (KRA)Recruitment, Selection, Training, Career Planning, Performance Appraisal,CompensationSeparation
42 REQUIRED STRATEGIC/CRITICAL INTERVENTIONS IN HRM PROCESS A PLANNED SYSTEMS CHANGE IS REQUIRED IN THE FOLLOWING HRM AREASRECRUITMENT/SELECTIONTRAININGCAREER PLANNING/PLACEMENTPERFORMANCE APPRASIALCOMPENSATIONTHROUGH A STRUCTURED PROCESS OF CIVIL SERVICE REFORMSTHE ABOVE STRATEGIC/CRITICAL INTERVENTIONS ARE PART OF A FIVE YEAR “PUBLIC SECTOR CAPACITY BUILDING PROJECT” IN THE COMPONENT OF ESTABLISHMENT DIVISION LAUNCED BY GOVT OF PAKISTAN IN 2004; but what has it achieved???
43 FOCUSED CIVIL SERVICE TRAINING “Orientation to public service” focus in the pre-service training at Civil Service Academy.“Professionalism” at the specialized training institution.Advancement of Knowledge, Skills & Abilities; and Attitudinal change perspective at the Mid Career Management Course (MCMC)Senior Management Course for B-19 officers at Senior Management College, Lahore with a focus on “POLICY IMPLEMENTATION” in Public Service.Training at the National Management College and National Defence University for B-20 officers to focus on “Capacity building for public policy formulation and development options”.Training of the selected personnel through technical assistance programs abroad
44 CAREER PLANNING/PLACEMENT BASED ON: “MAN FOR THE JOB” AND NOT “JOB FOR THE MAN”JOB DESCRIPTION MATCH JOB SPECIFICATIONDESCRIBE THE JOB REQUIRED KNOWLEDGECONTENT SKILLS, ABILITIES, APTITUDE, EXPERIENCE AND BACKGROUNG REQUIRED FOR THE JOB.
45 COMPENSATIONANY EFFORT AT CHANGE WOULD LACK IMPEUTS WITHOUT ADDRESSING THE ISSUE OF COMPENSATION.COMPENSATION MUST BE LINKED TO RESPONSIBILITY AND PERFORMANCE.JOB DESCRIPTION/JOB CONTENT ANALYSIS.JOB SPECIFICATIONS.COMPENSATION/PAY PACKAGE ACCORDING TO JOB CONTENT.
46 COPENSATION ENDEAVOURS PAY & PENSION COMMITTEE RECOMMENDATIONSRATIONALIZATION OF THE PAY & PENSION KEEPING IN VIEW THE CONCEPTS OF “MARKET WAGE” AND “LIVING WAGE”.MONETIZATION OF CERTAIN ALLOWANCE.INTRODUCE THE CONCEPT OF “PAY FOR PERFORMANCE”.PARAMETERIC REFORMS IN PENSIONS BY REDUCING THE PERCENTAGE OF COMMUTATION AND INCREASING TAKE- HOME PENSION.
47 National School of Public Policy AIMS & OBJECTIVESWILL PROVIDE AN UMBERLLA TO THE ENTIRE SPECTURM OF TRAINING FOR CIVIL SERVANTS i.e pre-service & In-service training.Education in relevant areas of public policy like public finance, economic management, general management. (Eventually NSPP will become a degree awarding institution).Research in areas of Public Administration i.e PUBLIC POLICY FORMULATION AND IMPLEMENTATION OVERSIGHT, DEVELOPMENT OF HRM CAPACITIES etc.Research and consultancy of public policy options in critical areas.International level of training/education with standard/quality to fill the critical gaps in civil servants training/education.
48 Human Resource Activities for Organizational Development Organizational Input Transformation OrganizationalInputs Processes Processes OutputsHumanResourcesMerit basedRecruitment &SelectionAppropriateTraining,Compensation,Job Security &Career PlanningJob Performance;Evaluated byObjectiveAppraisals to beThe benchmarkForall compensations,Promotions etc.