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MG206 all topics

Simona De MG206 English 192 cards

MG206 all topics

Cards in this deck (192)

  1. 1Lesmann-GM used to be the model firm, now its google
    -Google and GM have smiler acquisition models
    -GM (differentiated products, decentralised, institutional environment=> antitrust authorities, diversified acquisition)
    -Ford competitor of GM (homogeneous products, taylorism (mass production), multi-divisional)
    - Both outperformed by Japanese manufacturers (they were cheaper due to TQM)
    -Now Google (innovative, employee autonomy, no unions, low sunk and fixed costs, network effects)
  2. 2Lesmann (Lesson learnt)-When people orient their lives around the rules the purpose of the orientation is lost
    -There is not one fix to the problem of human org that functions in all situations in all times
  3. 3Lafley (People)-diversity
    -ppl who didn't create => not emotionally bound
    -include operational managers=> deeper practical wisdom
    -lower level insider who is NOT perceived as having a strong view on which course should be taken => AVOIDS GROUPTHINK BIAS
    -ppl from outside=> most original ideas
    -8-10 ppl
    -CONDITIONS SHOULD BE EXPRESSED AS DECLARATIVE AND HENCE PAINT A +VE IMAGE OF POSSIBILITY
  4. 4Lafley: Possibilities based approached1) Frame choices
    2) generate possibilities (Keep skepticism for later, choose unusual location, KEEP STATUS QUO)
    3) specify conditions: INDUSTRY ANALYSIS (segmentation, structure) CUSTOMER- VALUE ANALYSIS (channel, consumers) BUSINESS MODEL ANALYSIS (capabilities, costs) COMPETITOR ANALYSIS (predictions)
    4) Identify barriers: ask group members to imagine that they could buy a guarantee that any particular condition will hold=> to which they apply it=the biggest barrier)
    5) design tests
    6) conduct tests=> still entails risk
    7) make choice
  5. 5Lafley (questions that are useful to ask during generation of possibilities)INSIDE OUT (start with company assets, capabilities and reason outward): What does a company do esp well , that parts of the market might value?
    OUTSIDE IN (looks for openings in the market): What are underserved needs?
    FAR OUTSIDE IN (use analogical reasoning): What it takes to be google
  6. 6Lafley: 3 fundamental shifts in mind set1) What is the right answer=> what is the right question?
    2) What do I believe?=> What would I have to believe?
    3) What should i do?=> What might I do?
  7. 7Management (what is it?)Management is a body of knowledge, skills and expertise which must be applied in ways demanded by the org in which the individual manager is working and in ways also demanded by the particular environment in which activities are being conducted
  8. 8Management (what it requires?)1)Achieving things through people (STEW LEONARD CASE illustrates the possibilities inherent in every situation, in terms of getting people who work for the org actively engaged not just in their job but in present and future well being of the org)
    2) Achieving things for people (is based on perceptions and understanding of expectation assurance and permanence which together with delivery of good quality g+s all add up to immediate and enduring confidence of various stakeholders)
    3)making profits
    4)delivering performance
    5) using scarce resources (FOOTBALL INDUSTRY illustrates how failure to ensure leads to resources being squandered)
    6) improving and developing things (customers expect better service, staff better salaries, shareholders better returns)
    7) coping with change and uncertainty (micro and macro level, e.g. be prepared for anything even natural disasters)
  9. 9STEW LEONARD CASE STUDYall employees are sent out on regular basis to observe other company in action. Employees must return from their visit with at least one example of something that the other company does better and that the company could possibly implement at the shop
  10. 10UK Public Service Case StudyUntil the expectations and demand of customers, users and backers are made clear, uncertainty removed, what is being DELIVERED FOR PPL is set to remain unchanged.
    Due to media coverage customer expectations have been raised without a clear plan for how these expectations are to be met
  11. 11Excellence (McKinsey 1970): 7sEXCELLENCE APPROACH TO STUDY BOTH BUSINESS AND MANAGER OF HIGH REPUTE , e.g. Sainsbury in U.K.
    1) Structure
    2) Strategy
    3) Style
    4) Staff
    5) Skills
    6) Shared Values
    7) Systems
  12. 12Peters and Waterman (1982): 8 characteristics of org. excellenceunderlines the complexity of the managerial task, the range, quality and depth of expertise required and the extent of knowledge and understanding on which this expertise must be based
    1) Leadership
    2)Supervision levels=> hierarchies kept to min
    3) Closeness of relationship between org. and customers
    4) core business
    5) innovate and improve
    6) the commitment, motivation and training of STAFF at all levels must be held in respect and rewarded
    7)org must be receptive => stew leonard
    8) bias towards ACTION not procedure
  13. 13Porter vs Hamel view of strategyPORTER: finding a position in the market place that best suits firm's skills => old view
    HAMEL: deciding what a future model will look like and then stretching firm's skills so that it can take advantage of it=> new view
  14. 14FT view of strategy-Strategy is traditionally defined as about how companies achieve competitive advantage BUT its limiting !!!!
    -Open market and profit max does not apply to dynamic sectors today
    -comp adv is STATE-BASED rather than market based
    - To help strategy catch up with new conditions: 1) relax assumptions of profit max, 2) become more wary of notion of comp. adv. 3) more case studies in depth
  15. 15Source and development of org strategy (WHO did it? WHAT is it? with examples)-Richard Pettinger
    -External conditions and trends (Threats, Opportunities and Risks), e.g. PESTEL (list it)
    + Internal conditions (corporate resources), e.g. skills and capabilities
    => consideration and evaluation of alternatives=
    choice of products and markets
  16. 16Corporate strategy definitionoutcome of a series and pattern of decision that: determine the org's aims, objectives and goals, produce plans and policies required to ensure that theses are achieved, define the business in which the org is to operate and how it intends to conduct the business as well as whats its relations with markets, stakeholders and environment will be like.
  17. 17Operational Policies DefinitionOperational policies are based on choices made with the overall strategic view. They are based upon continuous appraisal of current and potential markets and spheres of activity, the ability to acquire, mobilise, and harmonise resources for conduct, including philosophical and ethical standpoints and the meeting of wider social expectations.
  18. 18Deliberate, emergent and realised strategy processes (Mintzberg and Waters)-INTENDED STRATEGY what senior management is concerned with=> becomes unrealised due to ever-changing consumer or economic factors, e.g fuel p goes up
    -IMPOSED STRATEGY is deliberate strategy
    -REALISED STRATEGY is what actually happens
    One of the things that make a strategy not adopted is due to ever changing consumer change or economic factors such as business cycle, for example recession can lead to unrealized strategies.
  19. 19Effective Strategy (Mintzberg and Waters)FOR A STRATEGY TO BECOME REALISED, THE FOLLOWING MUST BE UNDERSTOOD AND ASSESSED IN DETAIL
    1) the level of fin & cap required
    2) he level of income, surplus & profit of the org that it wishes and needs to make
    3) managerial, directional, supervision and leadership styles
    4) the priorities that are to be placed on each of the operations; the markets and sectors in which business is to be conducted
    5) the structure of the org
    6) the timescales involved, esp LT as they are hard to predict
  20. 20Porter 3 generic positionsCOST LEADERSHIP, FOCUS, DIFFERENTIATION => ALL EFFECTIVE ORG STRATEGIES MUST HAVE ADDITIONALLY A CORE FOUNDATION/GENERIC POSITION ON WHICH TO BASE CONSIDERATIONS, DEADLINES AND TARGETS=. common factor in all successful strategies is CLARITY
  21. 21Implementation of StrategyThe determination of strategy is a combination of identification of the OPPORTUNITIES & RISKS afforded by the ENVIRONMENT, the CAPABILITIES, the ACTUAL and POTENTIAL of the org, its LEADERS and top MANAGEMENT and issues of ETHICAL and SOCIAL RESPONSIBILITY.
    the following must be addressed: key task, work and workforce, information; task must be scheduled and prioritised, the required tech must be available, maintain ace and repair schedules, R&D, monitoring, review & evaluation mechanisms, actual perf measured against forecast, HR management, fin returns assessed.
  22. 22Strategic AnalysisStrategic Analysis are conducted to ensure that each aspect of the org and its comp and general environment are clearly understood=> SWOT; PEST; PORTER 5 FORCES; CUSTOMER AND CLIENT ANALYSIS
  23. 23Customer and Client Analysis (Cartwright= Customer Typer)CUSTOMER AND CLIENT ANALYSIS IS A KEY TASK OF STRATEGIC MANAGEMENT & A CRITICAL COMPONENT OF THE DETERMINATION OF POLICY, DIRECTION AND PRIORITIES
    - Apostles (ultra loyal)
    -Browse and Window Shoppers (generally interested in what an org has to offer)
    -Loyalists (key interest of commercial company)
    -Mercenaries (hard to deal with)=> Japanese cars appearance in US was still associated with WWII but presentation of quality to clients changed them from mercenaries to loyalists!!!
    - Convenience customers and clients
    -Hostages
    -Terrostists
  24. 24View of Distinctive Capabilities (John Kay)-KNOWLEDGE OF WHAT IS THE FOUNDATION OF SUCCESS OF THE RIVAL DOES NOT ALONE SHOW DISTINCTIVE CAPABILITIES
    -THE OBJECTIVE OF A SUCCESSFUL FIRM IS PROFIT MAX (traditionally), HOWEVER IN JOHN’S KAY VIEW IT IS TO MAKE SURE THAT THE FIRM IS ADDING VALUE TO THE RESOURCES THAT IT UTILIZES IN CREATING ITS OUTPUT.
    -MOTION OF ADDED VALUE, REPLICATING SOMETHING WHAT YOUR RIVAL CANNOT COPY
  25. 25Sources of Distinctive Capabilities (John Kay) 1ARCHITECTURE: internal, between firm and employees and between employees, contributes to success via creating organisation knowledge and external relationships and networks, establishment of a co-operative ethic, implementation of routine (methods of behavior that become inbuilt into org. members).=> THINK JAPANESE MANUFACTURING
    REPUTATION: becomes essential for conveying information for consumers, e.g. John Lewis historically used to give better consumer warranties, their advertising slogan was: “Never knowingly undersold”- an open guarantee to reimburse the customer the difference of the rival and their price if rival price is cheaper. Excellent staff training.
    -Reputation has to built and has to be sustained, otherwise it can be lost.
    -Reputation being a source of comp. advantage at some point in the future it will become a source of comp. disadvantage as it prevents firm from being flexible, e.g. TESCO.
  26. 26Sources of Distinctive Capabilities (John Kay) 2INNOVATION: in todays world the role of innovation very frequently is in terms of firm engaging in patent races. Most frequently observed in pharmaceutical industry.
    STRATEGIC ASSETS: In certain industries, firms will have advantage due to nature of the industry. In some industries a first mover can gain a lot of competitive advantage, for instance, Apple with vision of Steve Jobs had to be a pioneer to win a market. In some the opposite is true, for example in telecommunication industry in 1990s there was a radical shift in technology that gave a significant advantage to mobile services (late comers) unlike the landline owners (first movers).
  27. 27EVALUATION OF Sources of Distinctive Capabilities (John Kay)It’s not the case that every successful firm has to have all four capabilities.
    These four capabilities can be combined in different fractions and act as a “comprehensive checklist” that can grant a firm a competitive advantage and therefore lucrative profits.
    Nonetheless, firms are complex and social entities that require much more than just creating distinctive capabilities.
    As I mentioned in the beginning of the essay the determination of strategy requires numerous dimensions to be taken in count and therefore distinctive capabilities form a good benchmark for a successful strategy creation but don’t guarantee success.
    The real challenge faced by the companies is to sustain their position over time in order to translate it into profitable opportunities and success.
  28. 28LIST of PORTER 5 FORCES1)Threat of New Entrants
    2)Bargaining power of Suppliers
    3) Bargaining power of Buyers
    4) Rivalry among existing comp
    5) Threat of Substitute
    To predict the future profits of an industry; examine how the industry's current and recent levels of competition and profitability are a consequence of its present structure; identify trends that are changing the industry structure; identify how these structural changes will affect the 5 forces of competition and resulting profitability of industry
  29. 29Intense Forcesairlines, textiles and hotels =>
    fierce competition => almost no company in such industries earns attractive returns on investment.
  30. 30Benign Forcessoftware, soft drinks, toiletries and many others industries, allowing incumbent firms to earn lucrative profits.
  31. 31What does the strongest competitive force/ forces determine?The strongest competitive force/forces determines the profitability of an industry and becomes one of the most important sources for strategy formulation.
  32. 32The threat of entry- a force that puts pressure on prices, costs and the rate of investment necessary to compete.
    -Particularly when new entrants are diversifying from other markets.
    -Lets remember, not so long ago example of Apple entering the music industry and “shacked up” competition by leveraging its existing capabilities and cash flows.
    -Incumbent firms will try to minimise the risk of new entrants coming into the market by building barriers to entry
  33. 33Barriers to Enter1) supply and/or demand side economies of scale,
    2) capital requirements,
    3) incumbency advantages independent of size,
    4) incumbent may have cost or quality advantages not available to rivals, for example, geographic locations or established brand identities,
    5) unequal access to distribution channels, 6) customer switching costs
    7) restrictive government policy such as government direct limitation of entry into industries through licensing requirements. Regulated industries like liquor, retailing, taxi services and airlines are visible examples.
  34. 34The power of suppliers-Powerful suppliers capture more of the value for themselves by charging higher prices, limiting quality or services and shifting costs to industry participants.
    - A supplier group is powerful if it is more concentrated than the industry it sells to and does not depend heavily on the industry for its revenues.
    - It is also of significant meaning for consumer to face switching costs in order to be locked-in within the industry.
    -products offered by a powerful supplier group must be heterogeneous and do not have substitutes. This will eliminate the potential for negotiating leverage of buyers. Good examples of this are pilots’ unions.
    -a powerful supplier must be able to credibly threaten to integrate forward into industry.
  35. 35The power of buyers-the power of buyers is a force opposing the power of suppliers.
    -Powerful buyers capture more of the value for themselves by charging lower prices, demanding better quality or services and generally playing industry participants of against one another at the expense of the industry profits.
    -Strong power of buyers is present in the mobile phone service industry.
    -Powerful buyers are those that have negotiating leverage relative to industry participants, especially if they are price sensitive, using their influence primary to pressure price reductions.
    -Buyers can credibly threaten to integrate backward and produce the industry’s product themselves.
  36. 36The rivalry among existing competitors-A vital force that depends on intensity and on the basis on which they compete.
    -This force will be high if competitors are numerous or are roughly equal in size and power, industry experiences a slow growth, exit barriers are high, and rivals are highly committed to the business and have aspirations for leadership.
    -Rivalry is especially destructive to profits if it gravitates solely to price because price competition translates profits directly from an industry to its customers.
  37. 37The threat of substitutes- An equally important force but yet very tricky to define.
    - Substitutes are always present but they are easy to overlook because they may appear to be very different from the industry product.
    -For example, improvements in the plastic materials allowed substituting for steel in many automobile components.
    -The threat of substitute is high if it offers an attractive price performance trade-off to the industry product, buyers cost of switching to substitute is low, firms cannot read each other’s signals well enough because of lack of familiarity wit one another, diverse approaches to competing or different goals.
  38. 38BENEFITS of PORTER 5 FORCESAll of the five forces give a great of overview of the external market.
    It helps predict the future profits of industry,
    examine how the industries current and recent levels of competition and profitability are a consequence of its present structure,
    identify trends that are changing the industry’s structure and identify how these structural changes will affect the five forces of competition and resulting profitability of the industry.
  39. 39LIMITATIONS of PORTER 5 FORCES (1)- Since economic theory identifies two types of relationship between different products: substitutes and compliments, the analysis of the competitive environment needs to take into account another force- the presence of compliments. Compliments unlike substitutes increase value of product, for example without ink cartridges my printer has very little value to me. (R.M Grant, 2013)
    it does not explain why within one industry, different firms have different profitability levels. Industry accounts for only roughly 20% of the variance in from performance. Competitive advantage rather than industry attractiveness is the primary source of superior profitability (Garth Saloner, 2001) Internal resources and capabilities rather than external market focus have been viewed as comprising a more secure base for formulating strategy.
    The greater the rate of change in a firm’s external environment, the more likely it is to that internal R+C rather than the external market focus will provide a secure foundation for long term strategy.
  40. 40LIMITATIONS of PORTER 5 FORCES (2)- it is static and therefore fails to acknowledge the fact that boundaries move across time. Also the role and nature of the five forces itself can change. Consequently, for the framework to stay relevant one must update it continuously, what in turn is inefficient, and time and resource consuming.
    -it fails to assess the effect of government, public sector on firm performance. Environmental regulation, licensing requirements, safety standards, taxes, subsidies and many other factors have a profound effect on industry profitability. Even though one can argue that Porter has accounted for these factors under barriers to entry category within the threat of entry force, it is not sufficient for those industries where government influence plays a major role. Addressing the many rolls of public sector can play in shaping up from strategic options and decisions.
  41. 41LIMITATIONS of PORTER 5 FORCES (3)Another key deficiency of the five forces framework is in viewing inter-firm relations as exclusively competitive in nature. What about cooperation, for example Intel and Microsoft? With this focus, it dos not really take into consideration strategies like strategic alliances, electronic linking of information systems of all companies along a value chain, virtual enterprise-networks or others.
  42. 42CONCLUSION ON PORTER 5 FORCESPorter Five force of competition framework allows determining the attractiveness of an industry but is not sufficient on its own. It is good to be used as a starting point for further analysis, aiding managers to think about the current situation of their industry in a structured, easy-to-understand way.
    In combination with other frameworks a more comprehensive analysis can be achieved. Vivid examples of such frameworks are: resource-based view, Brandenburger and Nalebuff “Value Net” model, that consists of suppliers, customers, competitors and complementors, PESTEL analysis, which reveals drivers for change in an industry and insights about the expected political, legal, economical, socio-demographical and technological changes that can influence the five competitive forces and thus have impact on industry structures, and SWOT analysis that provides knowledge of strength, weaknesses, opportunities and threats.
  43. 433 factors related to industry analysis (R.Grant)1) External factors are very VOLATILE that is because tech. and govt. regulations change significantly and quickly.
    2) All firms are successful in their own, unique way and therefore industry analysis is not sustainable way for success.
    3) Unless a firm is impressive with its resources and capabilities (internal factors) it will not be successful on sustainable basis.
    => Today firm market power tends to be transitory. That is why R&D of big corporation is enormous. Big players try to ensure that barriers to enter are high enough to prevent the new entrants to create the competition.
  44. 44Basis for classifying and disaggregating the firm's activitiesFUNCTIONAL ANALYSIS:Identifies org. Capabilities within each of the firms functional areas
    A VALUE CHAIN ANALYSIS: identifies a sequence chain of the main activities that firm undertakes. => Porter generic value chain distinguishes between PRIMARY AND SUPPORT ACTIVITIES
  45. 45CRITICISM Basis for classifying and disaggregating the firm's activitiesEVERY ORG HAS FEATURES OF ITS CAPABILITIES TAHT ARE UNIQUE AND DIFFICULT TO CAPTURE USING SIMPLE FUNCTIONAL AND VALUE CHAIN CLASSIFICATIONS
    Identifying the components of Apple produce design/ development capability and establishing where and with whom within Apple this capability is located is NO SIMPLE TASK
  46. 46RoutinizationAn essential step in creating org capability- only when activities of organisational members become routine can tasks to be completed EFFICIENTLY and RELIABLY
    e.g. McDonalds personnel now are routinised through continual repetition there is no need to consult operating manuals
    Organisational routines are viewed as the fundamental building blocks of what firms do and who they are!!!!
  47. 47CRITICISM of RoutinisationA limited repertoire of routines can be performed highly efficiently with near perfect coordination
    Org may find it extremely difficult to respond to novel situations=> there is a tradeoff between EFFICIENCY & FLEX
  48. 48What is required to create capabilities?Combining resources to create capability requires conscious and systematic actions by management: bringing relevant resources within an org, designing processes, creating motivation, aligning the activity with the overall strategy of the org
  49. 49Why is there a shift in FOCUS OF STRATEGY THINKING from external environments of the firm to the internal ?-Internal environment is much more STABLE
    -Internal resources and capabilities rather than external market focus have been used as comprising a more secure base for formulating strategy
    -competitive advantage rather than industry attractiveness is the primary source of superior profitability
    -the greater the role of change in a firm's external environment, the more likely it is that internal resources and capabilities rather than external market focus will provide a secure foundation for long term strategy. In fast-moving, technology-based industries basing strategy upon capabilities can help firm outlive the life cycles of the initial products
    +VE EXAMPLE: Apple's remarkable ability to combine technology, aesthetics and ease of use has allowed it to to expand beyond its initial focus on desktop and notebook computers into and MP3 players smartphones and tablet computers
    -VE EXAMPLE: KODAK tried to maintain its market focus
  50. 50HONDA CASE STUDYHONDA MOTOR company is the world's biggest motorcycle producer and a leading supplier of automobiles BUT it has never defined itself either as a motorcycle company or motor vehicle company. Since it's founding in 1948, its strategy has been built around its expertise in the development and manufacturing of engines; this capability successfully carried it from motorcycles to a wide range of gasoline-engine products
  51. 51Sources of profitability1)MONOPOLY RENTS:
    industry attractiveness=> profits arising due to market power =>Porter 5 forces framework suggests that industry attractiveness often derives from ownership of strategic RESOURCES , e.g. barriers to entry that are typically a result of patents and brands
    Monopoly is usually based on the ownership of the KEY RESOURCE such a technological standard or government license
    2)RICHARDIAN RENTS:
    profits arising from SUPERIOR RECOURSES
  52. 52Sources of profitability & THE RESOURCE-BASED VIEWThe resource-based view recognises that each company possesses a unique collection of resources and capabilities;
    THE IMPLICATION IS THAT THE KEY TO PROFITABILITY IS NOT DOING THE SAME AS OTHER FIRMS BUT RATHER EXPLORING DIFFERENCES.
    Establishing competitive advantage involves formulating and implementing strategy that exploits a firms unique strength
  53. 53RESOURCES-Recourses are productive assets owned by the firm
    Can be tangible, intangible and human
  54. 54TANGIBLE ResourcesTANGIBLE (easiest to identify and value)=> fin and physical assets
    WHAT OPPORTUNITIES EXIST FOR ECONOMISING ON THEIR USE???
    CAN EXISTING ASSETS BE DEPLOYED MORE PROFITABLY???
    =>DISNEY=> use both these approaches=> recourse economies included consolidated admin, activities into fewer headquarters buildings & spreading the costs of movie studios over bigger vol; deployment of resources included the exploitation of the Disney movie library on videocassette and then on DVD
  55. 55INTANGIBLE Resources-INTANGIBLE => TECH : patents, copyrights, trade secret REPUTATION & CULTURE=>
    FOR MOST COMPANIES MORE IMPORTANT THAN TANGIBLE. Exploiting the profitability potential of intangible assets typically involves extending the range of products of which they are exploited. => NIKE has extended its brand from shoes so apparel and sport equipment
  56. 56HUMAN Resources-HUMAN(skills/ know-how, capacity for communication and collaboration, motivation)=>
    companies with sustained superior fin perf are frequently characterised by strong ORG CULTURES. Culture is viewed as a firm resource of great strategic importance that is potentially very valuable
  57. 57Criticism of RESOURCESResources and not productive on their own.
    To perform a task, a team of resources must work together
  58. 58CAPABILITIESCapabilities are what a firm can do=> A firm's capacity to deploy resources for a desired end result
    Can be identified after identifying key success factors
    Core competencies (capabilities) describe capabilities that are fundamental to a firm's strategy and performance
    -contribute to consumer value
    -to the efficiency with which that value is delivered
    -provide a basis for entering new markets
    GLOBAL LEADERS ARE THOSE WHO DEVELOP CORE COMPETENCIES OVER CAPABILITIES
  59. 59WHY are organisational capabilities more elusive?Organisational capabilities are more elusive, partly because they are idiosyncratic- every org has features of its capabilities that are UNIQUE using simple functional and value chain classifications
  60. 60What does recognition that CAPABILITIES are about PROCESSES and ROUTINES suggest?Recognition that CAPABILITIES are about PROCESSES and ROUTINES suggestS that the broadly defined abilities can be DISAGREGATED into more specialist capabilities
  61. 612 ISSUES of appraising r+c1) What is the STRATEGIC IMPORTANCE of different r+c????
    2) What are the strength of the focal firm in these r+c RELATIVE TO COMPETITORS????
  62. 62The profit earning potential of a r+c framework=> THE POTENTIAL OF ESTABLISHING COMP ADV
    -Scarcity (if r+c are widely available=may be necessary to compete=NOT sufficient for comp adv)
    -Relevance (r+c must be relevant to key success factor in the market)
    =>SUSTAINABILITY OF COMP ADV
    -Durability (the more durable r the greater its ability to sustain comp adv over LT)
    -Transferability (comp adv is undermined by comp imitation)
    -Replicability (capabilities based on complex routines are not easy to copy)
    => APROPRIABILITY
    -Property Rights (the less clear are Property rights in r+c the greater bargaining power)
    -Relative Bargaining power (in determining the division of returns between the firm and its members)
    -Embeddedness (the more deeply embedded are individual skills and knowledge within org routines, the more they depend on corporate systems, reputation= the weaker is employee relative to the firm)
  63. 63How can one assess relative strength of a firm's r+c?BENCHMARKING
    The process of identifying, understanding and adopting outstanding practices from org anywhere in the world to help your org improve its performance.
    Offers a systematic framework and methodology for identifying particular functions and processes and then for comparing their performance with other companies
    By establishing different capabilities an org can rate its relative position
    Xerox corporation is a pioneer of benchmarking=> observed massive superiority of its Japanese competitors in cost efficiency, quality and new in product development
  64. 64RISKS of BENCHMARKINGDANGER of looking at specific practices without taking account of inter-dependencies with other processes and the org context more broadly
    Needs to be supplemented by more reflective approaches to recognising STRENGTH & WEAKNESSES
    BOTH STRATEGIC IMPORTANCE AND RELATIVE STRENGTH ARE CONTEXT SPECIFIC
  65. 65EXAMPLES : KEY STRENGTH & KEY WEAKNESSHARLEY DAVIDSON key strength is its BRAND IDENTITY. Their strategy was focus on traditionally styled motorcycles
    NIKE undertakes product design, marketing and overall system integration BUT outsources manufacturing, logistics and many other functions.
    =>
    THE MOST DECISIVE AND OFTEN SUCCESSFUL SOLUTION TO WEAKNESS IN KEY FUNCTIONS IS TO OUTSOURCE!
  66. 66A.Chandler view of strategy and structureStructure follows Strategy was proposed by the historian Alfred Chandler. This means that a corporate structure is created in order to implement a given corporate strategy.
  67. 67Hall and Saias view of strategy and structureHall and Saias inverted Chandler's thesis, suggesting that Strategy Follows Structure.
    For example, they point out that a multidivisional structure biases a firm towards a conglomerate strategy.
  68. 68Henry Mintzberg view of strategy and structureoffered a balanced view, arguing that the relationship between strategy and structure is reciprocal. "Structure follows strategy ... as the left foot follows the right."
  69. 693 principle functions of org design1. Where the decision making units within an org are located
    2. Divide the various activities of the firm into different units, e.g. departments, sub-divisions (sales, marketing, hr, etc)
    3. Coordinating and Integrating mechanism of the activities of the firm
  70. 70Factors that influence org design-Firms that produce tangible goods are likely to have a centralized org structure
    -Service industry are likely to have decentralized org structure
    -Regulatory environment
    -Pharmaceutical company focuses on innovation, hence will have a structure where STAR INNOVATORS are rewarded
    -Airline wants safety and efficiency, hence org design would have functional divisions
    -Tech environment
  71. 71Matrix StructureMatrix Structure--KALEIDOSCOPE: crisscrossing responsibilities, multilayered connections, and very changeable structure
  72. 72Matrix Structure ADVANTAGES-Can help to break down traditional department barriers, improving communication across the entire organisation
    -Can allow individuals to use particular skills within a variety of contexts
    -Avoid the need for several departments to meet regularly, so reducing costs and improving coordination
    -Likely to result in greater motivation amongst the team members
    -Likely to result in greater motivation amongst the team members
    -Encourages cross-fertilisation of ideas across departments – e.g. helping to share good practice and ideas
    -A good way of sharing resources across departments – which can make a project more cost-effective
  73. 73Matrix Structure DISADVANTAGES-Members of project teams may have divided loyalties as they report to two line managers. Equally, this scenario can put project team members under a heavy pressure of work.
    -There may not be a clear line of accountability for project teams given the complex nature of matrix structures.
    -Difficult to co-ordinate
    -It takes time for matrix team members to get used to working in this kind of structure
    -Team members may neglect their functional responsibilities
  74. 742 problems that need to be addressed by every firmCoordination:
    In-house vs. outsourcing
    Incentive:
    Principle-agent problem (shareholders vs. managers)
    -Shareholders agenda is profit max
    -Agenda of managers may be different to shareholders and often happen at expense of the firm
    -Think of regulation of financial services bonus structures
  75. 75WHY IS EXTERNAL MARKET ANALYSIS PERFORMED?• It shows Future Trends Forecast (once you can predict future well (meet future expectations), you can engage in advantageous behavior)
  76. 76What are the effects of industry characteristics on firm performance?Differences in industry performance can be large and long lasting, managers need to understand what determines them.
    For example, OPEC prices rose in 1970 => Decreased profits of plastic industry in which petroleum derivates are an important input
  77. 77Industry analysisFramework for anticipating systematic differences in average firm performance
    The variation in profits occurs in part because firms in the same industry make different strategic decisions in which both industry characteristics and firms response matter
    Industry accounts for only 20% of variance in firm performance
  78. 78What are the industry characteristics that are important for firm performance?-number of firms
    -tech comp
    -sizes of firms
    -eco of scales
    -consumer pref
    -etc
  79. 79SCPSTRUCTURE-CONDUCT-PERFORMANCE
    Framework was designed to understand how government might intervene to increase social welfare
    Basic conditions (for any framework the starting point is a well-defined industry)=> market structure=> conduct=> performance
    &
    Public policy
    Modified to place performance as centrepiece has been basis of many industry analysis strategic management trends=> porter 5 forces
    Firm behaviour is driven primarily by the market structure => as the number of firms in the industry decrease and competitive pressures abate, the firm can behave in ways that increase profits, e.g. Increase prices
  80. 80What is the greatest strategic challenge general managers face?CHANGE maybe the greatest strategic challenge general managers face
    Managers must maintain a mental map of the relationship among firms internal and external environments, actions and performance
    e.g. Ford believed in elastic demand, decreased costs and standardisation => decreased prices=> by 1927 captured 1/2 market
    G.M. produced range of models that it updated each year=> acquired many independent firms=> dominated the market
    Attractive entry by foreign firms: small car segment+ changing fuel prices+ change in technology= Japanese and European cars are better quality than US
    Response of US is production of SUV that made fortunes
    THROUGHOUT THE HISTORY, THE LEADING FIRMS TRANSFORMED THEIR RELATIONSHIP WITH THE VALUE CHAIN, WHAT SHOWS THE IMPORTANCE OF FORMULATING STRATEGIC RESPONSE TO CHANGE
  81. 81How can they change in a firm's environment affect it's competitive advantageA sustained competitive advantage is CENTRAL to a successful strategy, and change in the firm's environment can affect its competitive advantage
    e.g. Small independent drugstores tailored their services to a local community of customers. When large chain stores entered, the incumbent firms were unable to compete in the new environment.
    The share of pie (potential industry earnings) that the incumbent firms can capture depends on how intense competition among them is, how high barriers to entry are, how much value buyers/ suppliers can capture
    Managers often cannot distinguish between LT AFFECTS and ST FLUCTUATIONS=> ILC
  82. 82INDUSTRY LIFE CYCLE = EMERGENCEEMERGENCE=>
    Competition among different approaches is what distinguishes competition in the emergence stage of an industry
    One approach triumphs in the market and firms that pursue wrong approach fail
    INVENTION-common ingredient of the new successful venture BUT uncertain, hard to see opportunity and bring the resources to seize it
    FIRST MOVER ADV
    Entrepreneurs and investors face 4 main sources of uncertainty:
    TECH; MARKET; ORG; STRATEGIC
    The competition for resources help explain why the market tends to grow relatively slowly in this phase, none of their resource holders is confident enough to place any large bets on any alternative.
  83. 83INDUSTRY LIFE CYCLE = EMERGENCE=>RETENTIONRetention occurs when the winning approaches emerge and the surviving firms imitate the more successful features of their rivals' approaches & new entrants imitate the successful incumbents= there is much less variety among the survivors than among the original contenders
  84. 84INDUSTRY LIFE CYCLE = GROWTHThe WINNERS is in the GROWTH stage are the firms that produce the most attractive products within the class of products that won out during their emergent phase
    -increase in industry demand=> does not need to steal customers from competitors=> high-performance by solidifying its position in the market BUT a new firm that does not have commitments to existing channels or A well established product line might adopt new business models more readily
    THE STRATEGY must deal with potential threat from new entrants as well as current competition from incumbents
  85. 85INDUSTRY LIFE CYCLE = MATURITY&DECLINEMATURITY&DECLINE PHASE of the industry life cycle exhibits greater stability than any other stage
    Leaders have well-established position, stable market shares, innovation tends to be incremental- refining and improving what is already there. Focus on maintaining competitive advantage
    Once growth rate slow all the industry enters the mature/ declining phase. a firm's ability to maintain competitive advantage determines its ability to survive and prosper.
    Uncertainty is LOW
  86. 86INDUSTRY LIFE CYCLE CRITICISMNo industry has to follow these stages. Managers should use this profile to think about what problems industry EVOLUTION presents the firm
  87. 87WHAT FACTORS INFLUENCE INDUSTRY ENVIRONMENT?- The national/ international economy
    -Tech
    -Govt and political forces
    -The natural environment
    -Demographics
    -Social forces
    THE CORE OF THE FIRM'S BUSINESS ENVIRONMENT IS FORMED BY ITS RELATIONSHIPS WITH 3 SETS OF PLAYERS: CUSTOMERS, SUPPLIERS, COMPETITORS
  88. 88PESTPEST analysisi and similar approaches to macro-level environment scanning can be USEFUL IN KEEPING A FIRM ALERT TO WHAT HAPPENING IN THE WORLD
    BUT
    -costly
    -info overload
  89. 89STRATEGIES to alter industries structure-Identify key structural futures of an industry that are responsible for depressing profits
    -which of those structural features are amenable to change through appropriate strategic initiatives
    e.g. Profits revival in steel industry was mainly result of demand from China, however it was also supported by rapid consolidation of the industry led by NITTAL's merger with ARCELOR
    e.g. In the absence of significant product differentiation the airlines have used frequent-flyer schemes to build customer loyalty. The companies have also achieved dominance of particular airports
  90. 90ARCHITECTURAL ADVANTAGE (who? & what?)M.JACOBIDES
    All firms have the potential to influence the development of industry structure to suit their own interests
    Thereby achieving architectural advantage that results from:
    1)Creating one's own bottleneck:
    e.g. Apple dominance of the music download market through iTUNES is achieved through a digital right management strategy that effectively locks in consumers through the incompatibility of its music files with other MP3 formats
    2)Relieving bottlenecks in other parts of the value chain
    e.g. Google developed Android to prevent other firms from gaining a bottleneck in operating systems for mobile devices which might have threatened Google's ability to transfer its dominance of search service from fixed to mobile devices
    3) redefining roles and responsibilities in the industries
    e.g. IKEA's ability to become the worlds biggest and most successful supplier of furniture was based upon a strategy which required a transfer of furniture assembly from furniture manufacturers to consumers
  91. 91positioning the companyRecognising and understanding the competitive forces that a firm faces within its industry allows managers to position the firm where competitive forces are weakest
    e.g. PACCAR illustrates the principle of positioning a company within a given industry structure. The firm has found a position of its industry where the competitive forces are weaker- where it can avoid buyer power and price-based rivalry. And it has tailored every single part of the value chain to cope well with their forces in their segment. As a result PACCAR has been IT for 68 years straight and has earned a LR return on equity above 20%
    EFFECTIVE POSITIONING requires THE FIRM to anticipate CHANGE in the competitive forces likely to affect the industry
    e.g. Traditional book retailing has been devastated by online retailers such as Amazon and e-books
  92. 92KEY CHALLENGE IN INDUSTRY ANALYSISKeep challenge in industry analysis is defining the relevant industry and establishing who competing with whom
    IDENTIFYING KEY SUCCESS FACTORS CAN BE HELPFUL TO OVERCOME THESE CHALLENGES
    -What do customers want? (analysis of demand=> can be done through analysing profit drivers)
    -how does the firm survive competition?
    => industry analysis allows to make first approach at identifying the sources of competitive advantage through recognising key success factors in which competition must move quickly and build advantages and erode the advantage of its rivals
  93. 93HypercompetitionHypercompetition-Intense and rapid competition moves
    Competition is a dynamic process in which industry structure is constantly changing raises issues of whether competitive behaviour should be seen as an outcome of industry structure or a determinant (AUSTRIAN SCHOOL OF ECONOMICS)
    If structural transformation is rapid, and then the 5 forces DO NOT offer a stable basis on which to predict competition and profitability.
    The ONLY route to sustained superior performance and the Hebrew competition is through continual you'll be creating and renewing competitive advantage
  94. 94The contribution of game theoryPermits the framing of strategic decisions
    Predicts the outcome of competitive situations and identifies optimal strategic choices
    Points to 5 aspects of strategic behaviour through which a firm can increase its competitive outcomes:
    1) Cooperation (Intel+Microsoft)
    2) Deterrence (impose costs on the another players for actions deemed undesirable)
    3) commitment
    4) change the structure of the game being played
    5) signalling
    Game theory has not developed to the point where it permits us to model real business situation in a level of detail that can generate precise predictions
    Game theory provides a set of tools that allows us to structure our review of competitive interaction-as systematic framework for exploring the dynamics of competition
  95. 95Competitive intelligenceInvolves the systematic collection and analysis of information about rivals for informing decision-making
    Useful for everyday business situations
    Less formal and more empirically based approach for predicting competitive behaviour
    Main purpose:
    Forecast competitive future strategies and decisions
    Predict competitors likely reactions to firms strategic initiatives
    Determine how competitors behaviour can be influenced to make it more favourable
    PROBLEM!
    Sam information is private=> legal issues
    Information OVERLOAD
  96. 96A framework for competitors analysis (WHO? WHAT?)PORTER
    Involves: strategy + objectives +assumptions+ resources and capability = predictions
    The key is to link the content of top management communication with evidence of strategic actions
  97. 97Segmentation and strategic groupsThe main usefulness of strategic group analysis is understanding strategic positioning, recognising patterns of competition, identifying strategic niches, it is less useful tool for analysing Interfirm profit differences
    Basic argument is that mobility barriers between strategic groups permit some groups of firms to be persistently more profitable than other groups. BUT this may reflect the fact that the members of a strategic Group, although PURSUING similar strategies, are not necessary in competition with one another
    E.g. Within the European airline industry budget airlines such as: easyJet, airbaltic, skyeurope, ryanair pursue similar strategies that do not for the most part compete on the same route
  98. 98Org. Decision-Making-org. decision-making takes place in the firms structure as well as the processes embedded in this structure
    -more important decisions undertaken at higher levels
    -some decisions including strategic errors, show full importance over time
    - decision-making is always embedded in the social context, is never something undertaken in a vacuum=> therefore involves some collective activity
    -has bearing on choice of topics considered for decision-making
    e.g. gender setting: some decisions don't even get spoken about
    -must guard against anthropomorphism, assigning human attributes to inanimate entities, assumption that firms are rational, coherent individuals - not always the case
    -must take into account the role of power
    -if the org does not have the right culture, those lower down may have information that is unable to be channelled the top-senior management may have not enough information to make the correct decision
    e.g. BP: engineers did not portray the risks of the undertaken projects properly to the seniors=> led to oil spill
  99. 99Glaxo example & LESSON LEARNTYamada restructured R&D at Glaxo by forming autonomous, entrepreneurial start-up laboratories to develop new drugs (TOP-bottom approach to giving decision-making to research scientists responsible for discovering and developing new drugs)=> x2 drugs production
    THE WAYS IN WHICH DECISIONS ARE MADE AND WHO MAKES THEM CAN HAVE A PROFOUND INFLUENCE ON ORG EFFECTIVENESS AND INNOVATION
    BUT
    SUCH DECISIONS CAN BE VERY DIFFICULT TO MAKE BECAUSE THEY ARE FRAUGHT WITH UNCERTAINTY
  100. 100THE NATURE OF MANAGERIAL DECISION MAKNG (E.MEYER)DECISION MAKING is a process by which managers respond to the opportunities and threats that confront them by analysing the options and making determinations/ decisions about specific org. goals and courses of action
    TO AMKE EFFECTIVE DECISIONS NEED INFO FROM BOTH INSIDE THE ORG AND FROM THE EXTERNAL STAKEHOLDERS
    MANAGERS ABILITY TO MAKE EFFECTIVE DECISIONS THUS RESTS ON THEIR ABILITY TO ACQUIRE AND PROCESS INFO
  101. 101HOW DO MANAGERS ACHIEVE CONTROL OVER ORG ACTIVITIES?1) establish measurable standards of perf/goals
    2)they measure actual perf
    3)compare actual perf against established goals
    4)evaluate result and take corrective action
    co-ordinating departmental and divisional activities to achieve org goals is another basic task of mngmt
    WHILE COMPANIES HAVE SOPHISTICATED SYSTEMS, SOMETIME EMPLOYEES ESP MANAGERS HAVE T MAKE DECISIONS BASED ON INCOMPLETE INFO
  102. 102Programmed decision making-routine, virtually automatic process
    -managers can develop rules and guidelines to regulate all routine org. activities
    -most decision making that relates to day-today running of an org is programmed decision making
    e.g. how much inventory to hold
    -occurs when managers have the info they need to create rules that will guide decision making
    -little ambiguity is involved
  103. 103Non-Programmed decision making-non routine decisions are made in response to UNUSUAL opportunities and threats
    e.g. decision to invest in a new tech, develop a new product etc
    -rely on INTUITION or REASONED JUDGEMENT=> often flawed and can result in POOR DECISION MAKING
    LIKELIHOOD OF ERROR IS GREATER THAN IN PROGRAMMED DECISION MAKING
  104. 104CRITICISM OF MANAGERIAL DECISION MAKING (WHO? & WHAT?)D. KAHNEMAN
    MANAGERS TEND TO BE OVERCONFIDENT what in turn leads to FAILURE to evaluate and rethink the wisdom of decisions one takes and to learn from one's mistakes
  105. 105Org Routines- daily activities that ensure a unique decision need not to be taken when faced with a task
    -supposed to massively improve efficiency in an attempt to min costs with respect to competitors
    -embody formal and informal procedures
    -informal routines can give a firm a certain capability=> difficult for comp to replicate
    e.g. Google and they approach to innovation
  106. 106Decision -making modelsThe Classical and Administrative decision making models reveal many of the assumptions, complexities and pitfalls that affect decision-making
    BUT
    in real life, the process is typically not as clear- cut and simplistic, however MODELS CAN HELP TO REFLECT ON THE PROCESS OF DECISION-MAKING AND GUIDE MANAGERS THROUGH
  107. 107THE CLASSICAL MODEL-series of simplifying assumptions about the nature of decision-making process
    -generate a complete list of all alternatives and consequences and make the best choice
    CRITICISM
    -Assumption that managers have access to all info they need to make optimal decision
    -Assumption that managers can easily list their own preferences for each alternative and rank from least to most preferred
  108. 108THE ADMINISTRATIVE MODELEVEN IF ALL INFO WERE READILY AVAILABLE, MANY MANAGERS WOULD LACK MENTAL OR PSYCHOLOGICAL ABILITY TO ABSORB AND EVALUATE IT CORRECTLY
    -The admin model recognises that decision making is an inherently UNCERTAIN & RISKY process
    BOUNDED RATIONALITY (March & Simon)
    human decision making capabilities are bounded by pp.'s COGNITIVE LIMITATION-that is, limitations is their ability interpret, process and act on large amounts of info
    -number of alternatives a manager must identify is so great and the amount of info is so vast=> difficult for the manager to even come close to evaluating it ALL before making a decision
    => INCOMPLETE INFO because the full range of decision-making alternatives is unknowable in most situations and the consequences associated with known alternatives are UNCERTAIN, AMBIGUOUS & RISKY & HAVE TIME CONSTRAINTS
  109. 109STEPS IN DECISION MAKING1)recognise the need for a decision
    2)generate alternatives
    3)evaluate alternatives (legality, ethicalness, eco feasibility etc)
    4)choose among alternatives=> cognitive bias and groupthink
    5)implement the chosen alternative
    6)learn from feedback
  110. 110COGNITIVE BIASall decision makers are subject to BOUNDED RATIONALITY
    tend to use HEURISTICS- rules of thumb that simplify the process of making decisions
    +ve => useful to make sense of complex, uncertain and ambiguous info
    -ve => can lead to SYSTEMATIC ERRORS
    COGNITIVE BIAS IS CAUSED BY 4 SYSTEMATIC ERRORS
    1)PRIOR HYPOTHESIS: decision makers tend to seek and use info that is consistent with their prior beliefs and ignore info that contradicts them
    2)REPRESENTATIVENESS: many decision makers inappropriately generalise from a small sample or even from a single case/episode
    e.g. INTEL still believes that desktop market will be growing
    3)ILLUSION OF CONTROL: the tendency of decision makers to over-estimate their ability to control activities and events. Senior level managers are particularly prone to this bias
    4)ESCALATING COMMITMENT:
    managers decide to increase their investment of time and money in a course of action and ignore evidence that it is illegal, unethical, uneconomical or impractical
  111. 111LESSON LEARNT FROM COGNITIVE BIASMANAGERS MUST BECOME AWARE OF BIASES AND THEIR EFFECTS, AND THEY MUST IDENTIFY THEIR OWN PERSONAL STYLE OF MAKING DECISIONS TO AVOID NEGATIVE AFFECTS OF COGNITIVE BIAS AND IMPROVE PROBLEM SOLVING ABILITIES
    THE PROBLEM OF BOUNDED RATIONALITY HAS BEEN DECREASED BY USE OF SOPHISTICATED TOOLS AND COMPUTERS: +ve: ppl working in different geo dispersed locations can define problems and make decision together
    -ve : might be hard to keep up with soft info
  112. 112GROUPTHINKpattern of faulty and biases decision making that occurs in groups whose members strive for agreement among themselves at the expense of accuracy assessing the info relevant to decision
    pressures for agreement and harmony within a group have the unintended effect to discouraging individuals from raising issues that run counter to majority opinion
  113. 113What can help counteract the effects of the groupthink and cognitive bias? (WHO? & WHAT?)GARVIN ET AL
    1) Diversity- way to improve group decision making as diverse groups are less prone to groupthink because group members already differ from each other and so are less subject to pressure for uniformity
    2)Advocacy: participants approach to decision making as a contest, although they don't necessarily compete openly or even consciously
    -Concept of decision making- contest
    -Purpose of discussion: persuasion/ lobbying
    -Participants role: spokesman
    -Patterns of behaviour: strive to persuade others, defend your position, downplaying weaknesses
    Minority views: discouraged or dismissed
    outcome: winners and losers
    3)Inquiry: very OPEN process to generate MULTIPLE alternatives, foster the exchange of ideas, and produce a well-tested solutions.
    --Concept of decision making: collaborative problem solving
    -Purpose of discussion: testing and evaluation
    -Participants role: critical thinkers
    -Patterns of behaviour: present balanced arguments, remain open to alternatives, accept constructive criticism
    Minority views: cultivated and value
    outcome: collective ownership
  114. 114PROBLEM WITH CRITICAL THINKERSCRITICAL THINKERS AND RIGOUROUS DEBATE= CONFLICT
    THE GOOD NEWS IS THAT CONFERENCE BRINGS ISSUES INTO FOCUS, ALLOWING LEADERS TO MAKE MORE INFORMED CHOICES.
    THE BAD NEWS IS THAT THE WRONG KIND OF CONFLICT CAN DERAIL THE DECISION MAKING ALTOGETHEE
  115. 115CONSTRUCTIVE CONFLICTCOGNITIVE CONFLICT- healthy and crucial for effective inquiry
    When people express differences openly and challenge underlying assumptions they can flag real weaknesses and introduce new ideas.
    AFFECTIVE CONFLICT- emotional, it involves personal fiction, rivalries and clashing personalities.
    It tends to diminish peoples willingness to cooperate during implementation, rendering the decision-making process less effective
  116. 116CHALLENGE FOR LEADERS WITH THE CONSTRUCTIVE CONFLICT==> The challenge for leaders is to increase cognitive conflict while keeping affective low
    -The technique that is: to establish NORMS that make VIGOROUS DEBATE the RULE rather than an exception
    -CEO of Motorola in 1980s habitually asked unexpected hypothetical question that stimulated creative thinking. This sometimes sparkled a creative and highly productive debate.
    -to structure the conversation so that the process by its nature fosters debate. This can be done by dividing people into groups with different, and often competing responsibilities.
    BUT there is always a risk that the cognitive conflict will become personal
  117. 117WHAT CAN LEADERS DO TO PREVENT A CONFLICT BECOMING PERSONAL?1) Set ground rules about language, insisting that team members avoid words and behavior that trigger defensiveness.
    2) Help people step back from the pre-established positions by breaking up natural coalitions and assigning people to tasks on some basis are other than traditional loyalties
    3) Shift individuals out of well-grooved patterns, where vested interest are highest.
    4) Assign team members to play functional/ managerial roles different from their own.
    5) Ask participants locked in a debate to revisit key facts and assumptions and gather more info
  118. 118Perception of fairness==> EVEN IF THE LEADER WILL MAKE THE ULTIMATE DECISION, PEOPLE PARTICIPATING IN THE PROCESS MUST BELIEVE THAT THEIR VIEWS WERE CONSIDERED AD THAT THEY HAD A GENUINE OPPORTUNITY TO INFLUENCE THAT FINAL DECISION
    ==> Researchers have found that if participants believe the process was fair, they are far more willing to commit to resulting decision, even if their views did not prevail.
    BUT
    voice without consideration is often damaging => resentment and frustration rather than to acceptance
  119. 119HOW TO ACHIEVE PROCEDURAL JUSTICE?LEADERS CAN DEMONSTRATE CONSIDERATION THROUGHOUT THE DECISION MAKING PROCESS:
    1) Convey openness to new ideas and willingness to accept views that differ from their own
    - Avoid suggesting that their minds are already made up
    - Avoid Disclosing their personal preferences early in the process
    - Absent themselves from early deliberations
    2) Show active and attentive listening
    - Ask questions
    - Probing for deeper explanation
    - Making eye contact
    - Echoing comments
    - Showing patience when participants explaining their position
    - Taking notes=>esp. powerful signal, suggests that leader is making real effort to capture, understand and evaluate people’s thoughts
    3) After making the final decision, leader should explain the logic behind it
    - Convey how each participants arguments affected the final decision and explain clearly why they chose to differ with those views
  120. 120CLOSURE==> Knowing when to end deliberations is tricky, all too often decision-making bodies rush conclusion or else dither endlessly and decide too late
    Early=> groupthink
  121. 121Set of process traits that is closely linked to superior outcomesMultiple alternatives: helps engage in making thoughtful analysis and avoid setting to quickly on the easy and obvious answer
    Assumption testing: helps not confuse the carefully tested facts and assumed=> eliminates cognitive bias
    Well-defined criteria: without crisp, clear goals it is easy to fall into trap of comparing apples with oranges
    Dissent and debate: measure the health of the debate by looking at the kinds of question being asked and the level of listening
    Perceived fairness: measure the perceived justice by looking at the level of participation that’s maintained after a key midpoint or milestone has been reached
  122. 122ORG LEARNING AND CREATIVITYOrg learning is the process through which managers seek to improve employees desire and ability to understand and manage the organisation and its task environment so that they can make decisions that consciously raise organisational effectiveness. Managers must take steps to promote organisational learning and creativity at the individual and group levels to improve the quality of decision making.
  123. 123The ethics of power and politicsThe ethics of power and politics rare common to those found in any decision situation
    Managers can easily slip into questionable territory unless they keep their behaviour limited to the task in hand.
    All behaviour can be rationalised as acceptable, however it must meet the personal test of ETHICAL BEHAVIOUR.
    When political behaviour is ethical, it will satisfy the criteria of utilitarian outcomes, individual rights, distributive justice and/or other overwhelming factors.
  124. 124THE VROOM-JAGO MODELMANAGERS MUST KNOW HOW TO NVOLVE OTHERS IN DECISION MAKING AND HOW TO CHOOSE AMONG INDIVIDUAL, CONSULTATIVE AND GROUP DECISION METHODS=> THIS IS OFTEN A COMPLEX PROCESS
    THE VROOM-JAGO MODEL IDENTIFIES HOW DECISION METHODS CAN BE VARIED TO MEET THE UNIQUE NEEDS OF EACH PROBLEM SITUATION, WHICH WILL ALSO INVOLVE THE POWER AND POLITICAL CLIMATE.
    TYPICALLY A GOUP DECISION IS BASD ON MORE INFO AND RESULTS IN BETTER MEMBER UNDERSTANDING AND COMMITMENT
    THE LIABILITIES INCLUDE GREATER TIME REQUIREMENT AND DANGER OF GROUPTHINK
  125. 1254 relevant notions to tech-based industries and the management of innovation1) Knowledge: what is embodied in new ideas
    - Tacit knowledge- very personalized, cannot be easily put on paper in terms of rules of operations,
    - Explicit knowledge for firms- systemic in nature, can be spread easily, can be protected by legal systems, in need of hierarchical org. structural, e.g. manuals
    - Firms rely on both type of knowledge depending on industry, tacit knowledge however plays a bigger part
    2) Invention: creation of new products and processes
    - Gives a potential for comp. Advantage to arise
    3) Innovation: application of invention to commercial use
    THE FIRST MAN TO DRILL FOR NATURAL RESOURCE-OIL USED THE CHINESE TECH THAT WAS USED TO MINE SALT= INNOVATION IS NOT INVENTION
    (Economist, 2007)
    4) Diffusion: this can be done through Demand side (adoption by customers) or through Supply side (imitation by competitors)
    can also occur through contract manufacturing
    ==> Critical factors in determining how the value of innovation can be appropriated
  126. 126Regime of appropriabilityused to describe the conditions that influence the distribution of returns to innovation.
    ==> In a stronger regime of appropriability the innovator is able to capture a substantial share of the value created
    ==> The regime of appropriability comprises 4 key components, which determine the innovators ability to profit from innovation: property rights, tacitness and complexity of the knowledge, lead time, complementary resources.
    ==> Appropriating the returns on innovation depends to a great extent on the ability to establish property rights and innovation.
  127. 127Property rightsProperty rights (depend on legislation in different countries)
    - Patents (manufacturing): exclusive rights to a new and useful product, process, substance or design. Obtaining a patent requires that the invention is novel, useful and not excessively obvious
    - Copyrights (service industry e.g. music industry): exclusive production, publication or sales right to the creators of artistic, literary, dramatic or musical work
    - Trademarks words, symbols or other marks used to distinguish goods/service supplied by a firm. => Basis for brand identification
    - Trade Secrets (Coca-Cola recipe secret) offer a modest degree of legal protection for recipes, formulae and other knowledge acquired in the course of business
  128. 128Tacitness and complexity of the technologyTacitness and complexity of the technology (the more complex tech, the harder for rivals is to figure out the root of your comp.adv)
  129. 129Lead-timeLead-time (the loner the time period one firm can explore one innovation, the less likely rivals are able to threat the incumbents position)
  130. 130Complementary resourcesComplementary resources
    ==> 2 relevant issues for strategies to exploit innovation:
    1. How to enter (licensing, outsourcing, strategic alliance, joint venture, internal commercialisation)
    - The choice of strategy depends on: the characteristics of the innovation, the resources and capabilities of the firm, the external environment
    2. When to enter
    - The notion of DSIR (Demand side increasing reruns, network externalities, network effects, positive feedback economics, etc.
    The sources of DSIR:
    - Compatibility Benefits
    - Network Benefits
    ==> The winner takes all phenomenon (positive feedback): whoever becomes an industry leader that newcomers will find it practically impossible to dislodge the leader. Means that there are high risks, yet high rewards. => not many industries like that
  131. 131ChallengesHow to enable creativity to flourish?
    How to match “pony tail culture” (individualistic people) with the “suited people” (finance orientated)
    What org. structures are relevant to sustain innovation? What are their advantages and disadvantages?
    - Agile, decentralized, etc.
    How to organize for creativity?
    Financing
    - A lot of firms will rely on venture capital (Silicon Valley)
    - Many very rich companies providing seed funding (Google, Facebook, etc.)
    - In-house funding depending on ideas quality (Google)
  132. 132WHAT DOES COMPETING IN EMERGING AND TECH BASED INDUSTRIES INCLUDE (WHO? & WHAT?)R.GRANT
    1) Understanding the INNOVATION PROCESS in particular the progression from knowledge creation to invention to innovation to diffusion
    2) the determinants of profitability of innovation in particular property rights, tacitness and complexity of the knowledge, lead time, complementary resources.
    3) the design of innovation strategies, INCLUDING THE CHOICE BETWEEN BEING AN EARLY MOVER AND A FOLLOWER, the relative merits of licensing, alliances, joint ventures, and internal dvlpmnt exploiting innovation and the mngmnt of risk    WHAT DOES COMPETING IN EMERGING AND TECH BASED INDUSTRIES INCLUDE (WHO? & WHAT?)
  133. 133Competing for standards(e.g. Apple with vision of Steve Jobs had to be a pioneer to win market. IBM in turn had all the expertise to wait until the market has developed to the point where IBM strength could have their max impact)
    Competing for standards requires recognising the presence of network externalities and exploiting +ve feedback mechanisms to gain market leadership;
    and the management of identifying the factors to determine the comp adv of being a leader or a follower of innovation
    DVD=> BLU-RAY
  134. 134Strategy implementation in emerging and tech-based industries & CHALLENGE & SOLUTIONcreating the STRUCTURE, MNGMNT SYSTEMS & ORG. CLIMATE CONDUCTIVE TO INNOVATION
    CHALLANGE= reconciliation of the conditions for creativity with those required for operational efficiency and commercial effectiveness
    innovation is an UNPREDICTABLE process requiring flexibility and market responsiveness while strategy is about irreversible resource-allocation decisions involving LT commitments
    Experience of companies such as Cisco System, 3M, Amgen and IBM point to solutions of such dilemmas. THE ROLE OF CROSS-FUNCTIONAL TEAMS, PRODUCT CHAMPIONS, AND OPEN INNOVATION ARE EXAMPLES OF ORG INITIATIVES THAT HAVE ASSISSTED LARGE, ESTABLISHED FIRMS IN MAINTAING IMPRESSIVE RECORDS OF INNOVATION
  135. 135Sources of DSIR (who? & what?)Saloner et al
    DSIR - demand side increasing returns
    1) COMPATIBILITY BENEFITS
    -IMPLY STANDARDISATION
    -Cameras and Lenses: independent lens manufacturers have to make different lenses for different cameras since the lens is usually not compatible with the camera that other manufacturer makes
    -typewriter keyboard: the way we have wired our brains to find keys as we learned type creates compatibility. "QWERTY" in standard English keyboard. Computer makers have made other more efficient options yET did not give any popularity.
    2)NETWORK BENEFITS: networks facilitate transactions among users by connecting them to each other
    The value of the phone depends on being able to communicate with other people who also own a telephone; and its value increases enormously as the network of telephone users grows
    COSTS ASSOCIATED WITH NETWORK SIZE= AS NETWORK GROW, ANY CONSTRAINT ON RESOURCES NEEDED TO SUSTAIN THEM CAUSE CONGESTION
  136. 136COMPETITION IN MARKETS WITH DSIRDSIR can turn small advantages in the market share into large, enduring positional advantage
    how many ppl already own a product (INSTALLED BASE) will heavily influence beliefs about how many ppl will use it in the future
    BUT
    if ppl can easily switch between products, installed base will be less important=> a product with LARGE SHARE OF THE INSTALLED BASE and HIGH SWITCHING COSTS will retain most of customers=> COMP ADV
  137. 137+ve feedbackstrong firms/tech that compete in the market with DSIR become even stronger
    installed base grows=>tech has the largest installed base of users=>tech is attractive to new buyers=> tech gets large share of new purchases
    Switching costs lock buyers into their current tech.
    Lock-in can change over time, sometimes it decreases as product ages (e.g. LED TV)
    sometime sit increases as product ages (e.g. Bloomberg: people spend time on training and the longer they stay on the platform the less likely they are to change)
    main lock-in because no user wants to switch unless most of users do (Ebay)
    Unless the enhancement offered by new tech can compensate new users for the loss of compatibility with the installed base, they will choose old tech
  138. 138Competitive strategies for building DSIRCOMPETITION SHIFTS FROM BEING PRIMARILY COMPETITION WITHIN MARKETS TO COMPETITION FOR MARKETS
    TO BUILD UP FIRMS FUTURE INSTALLED BASE EACH FIRM HAS AN INCENTIVE TO CHARGE LESS THAN IT OTHERWISE WOULD (an extreme form of this is "give-aways" or penetration pricing)
    DSIR protect the predator against entry when it eventually raises prices
    TARGET PPL WITH NO SWITCHING COSTS
    Apple targeted youthful ppl who never owned a computer
    CHOOSE TO DELAY INNOVATION, the incumbent can decrease both demand for the new entrant products and its own investment in product dvlpmnt
    Firms producing competing platforms must decide whether to make their products compatible with competitors systems (good for buyers, bad for suppliers)
    A firm can increase profits by leveraging its dominant position as the producer of one component into dominance of another
    e.g. Microsoft used its dominant position in PC market to gain strong position in the market for apps, Internet browser, application dvlpmnt tools and related operating systems
  139. 139Technology adoptionWHEN DSIR ARE IMPORTANT, ADOPTERS ARE AFRAID THAT THEY WILL ADOPT THE TECH BUT THAT FEW OTHERS WILL NOT=> ADOPTERS WILL NOT BE ABLE TO ENJOY THE INTENDED DSIR EFFECTS
    willingness to adopt depends on how many others are willing to adopt
    Users face coordination problem when adopting new tech that has DSIR
    Expectations are important, bandwagons emerge, early adopters are curtail but can be difficult to attract
    Firms often manage the adoption process by marketing to create momentum, leveraging reputation, committing to open standards, targeting influence buyers, engaging in advance sign-ups, leasing rather than selling and making long-lasting price commitments
  140. 140STANDARD SETTING PROCESSBecause markets where DSIR is present have a winner-take-all flavour, the battles often end with some product/architercture becoming the industry STANDARD=DE FACTO
    A standards committee is an excellent mechanism for solving the coordination problem BUT they have an ENGINEERING BIAS
    PUBLIC GOOD PROBLEM=> everyone wants to have a standard established but no one wants to bear the costs of selecting one=> goats establish the standards
  141. 141Why would a firm commit to opening up its techBased on its comp adv it believes that it would win in head-to head comp with other firms
    It expects its size of a pie will be larger than its proprietary pie would be
    If its behind the standards race with another firm and believes that it tech will prevail only if it is open
  142. 142Friedman 2011 view of LeadershipUsing CARROTS AND STICKS- to exert power OVER people is fast being REPLACED by CONNECT & COLLABORATE to generate power THROUGH people. Leaders and managers cannot just impose their will. "Now you have to have 2-way conversation that connects deeply with your citizens or customers and employees".
    A lot of CEO's will tell you that this shift has taken them by surprise and they are finding it hard to adjust to the new relationships with customers and employees. "As POWER SHIFTS TO INDIVIDUALS. leadership itself must shift with it- FROM COERCIVE/ MOTIVATIONAL LEADERSHIP THAT USES STICKS OR CARROTS TO EXTRACT PERFORMANCE AND ALLEGIANCE OUT OF PPL TO INSPIRATIONAL LEADERSHIP THAT INSPIRES COMMITMENT AND INNOVATION AND HOPE IN PPL"
    THE ROLE OF A LEADER NOW IS TO GET BEST OF WHAT IS COMING UP FROM BELOW AND THEN MELD IT WITH VISION FROM ABOVE
  143. 143THE CHAOS THEORY OF LEADERSHIP (S.STERN +P. MARSH, 2008, FT)WL GORE:
    The corporate hierarchy is almost completely flat
    Decision are reached by agreement not diktat
    Leaders emerge through democratic process rather than being appointed from the top, and peer appraisal is curtail to both salary levels and career announcement - even the appointment of CEO
    Leadership model= you have to sell your idea, even when you are CEO. You have to explain rationale behind the decision & do a lot of internal selling
    It may take longer to reach a decision BUT once it is in place, it is pursued energetically
    GOOGLE, SEMCO, WHOLEFOOD also challenge the orthodox style of mngmnt and leadership
    CRITICISM:
    -May find it alien
    -Intolerance for those who do not grasp the "Gore" way
  144. 144THE WORK OF LEADERSHIP (1997 R.A. HEIFETZ & D.L. LAURIE)1) GET ON THE BALCONY: Business leaders have to be able to view pattern as if they were on a balcony (FULL PIC): leaders have to see context for change or create one. Getting on the balcony is prerequisite for the following 5 principles
    2) IDENTIFY THE ADAPTIVE CHALLENGE:
    BA transformation from pleasing bosses to pleasing customers => the world's favourite airline
    LEADERS NEED TO UNDERSTAND THEMSELVES, THEIR PEOPLE AND THE POTENTIAL SOURCES OF CONFLICT
    3) REGULATE DISTRESS => adaptive work generates distress BUT removing stress eliminates the impetus for doing adaptive work => (e.g. STEAMER) => Leader must strike the balance between having ppl feel the need to change and having them feel overwhelmed by change!!!!
    TO CREATE PRODUCTIVE LEVEL OF TENSION CREATE HOLDING ENVIRONMENT:
    Conditions for diverse groups to talk to one another about challenges taking them, to frame and debate issues, and clarify assumptions behind competing perspectives and values
    LEADER NEEDS TO COMMUNICATE CONFIDENCE THAT HE AND THEY CAN TACKLE THE TASKS AHEAD
  145. 145THE WORK OF LEADERSHIP (1997 R.A. HEIFETZ & D.L. LAURIE) 2Leader is responsible for direction, protection, orientation, managing conflict and shaping norms
    UNFREEZ NORMS AND ROUTINES=> CREATE NEW=> REFREEZE=>DONT REFREEZE TOO EARLY
    4) MAINTAIN DISCIPLINED ATTENTION=>DISCIPLINED ATTENTION IS THE CURRENCY OF LEADERSHIP !!!!!!!
    Diversity is valuable because innovation and learning are the products of differences
    A leader must get employees to confront through trade-offs in values, procedures, operating styles and power
    A leader has to counteract distractions that prevent ppl from dealing with adaptive issues
    Leaders have to demonstrate the need for collaboration
    If ppl don't feel responsible, they may boycott
    PPL NEED LEADERSHIP TO HELP THEM MAINTAIN THEIR FOCUS ON THE TOUGH DECISIONS.
    5) GIVE THE WORK BACK TO PPL: A leader must also develop collective self-confidence
    6) PROTECT IDEAS OF LEADERSHIP FROM BELOW
    giving VOICE to ppl in the foundation of an org that is willing to experiment and learn => Glaxo
    Leaders must rely on others within the business to raise questions that may indicate and impending adaptive challenge
  146. 146ADAPTIVE WORK (internal)ADAPTIVE WORK CALLS FOR LEADERSHIP, EVEN THOUGH THE RESPONSIBILITIES ARE THE SAME IN DIFFERENT SITUATIONS. THERE IS A DIFFERENCE BETWEEN ROUTINE AND ADAPTIVE SITUATIONS
    RESPONSIBILITIES:
    DIRECTION,
    Routine: Define problems & provide solutions
    Adaptive: Identify the adaptive challenges and frame key questions and issues
    PROTECTION,
    R: Shield the org from external threats
    A: Let the org feel the external threats within a range it can stand
    ORIENTATION,
    R: Clarify roles and responsibilities
    A: Challenge current roles and resist pressure to define new roles quickly
    MANAGING CONFLICT,
    R: Restore order
    A: Expose conflict or let it emerge
    SHAPING NORMS
    R: Maintain norms
    A: Challenge unproductive norms
  147. 147ADAPTIVE WORK (external)Adaptation is a dynamic concept,
    External adaptation exploits actors that are around you.
    This can be done via:
    merger
    outsourcing
    asking suppliers to change
    BOUNDARIES OF THE FIRM ARE DEFINED BY ITS ABILITY TO ADOPT
  148. 148KPMGKPMG was originally an AUDITING company, when it entered a MATURE STAGE and markets were not growing it started to generate VERY SLIM PROFITS.
    Their org structure key characteristics were very BUREAUCRATIC, e.g. building relationships with partners and rewarding staff for NOT MAKING MISTAKES=> CHOCKING CREATIVITY
    ORG CULTURE HAD TO BE RESTRUCTURED=>ADAPTIVE WORK and NEW LEADERSHIP= more creativity, more ideas , started exploring r+c (knowledge), move to diversified consultancy
  149. 149LEADERSHIP (E. Meyer)“Management is about doing things right, whereas leadership is about doing the right things“ Peter Drucker
    Leadership is a key ingredient for managerial success in large and small org
    Everyone has their own concept of leading but generally it involves getting people to do things willingly and influencing others to follow you
    The nature of leadership should always be GOAL-DIRECTED so that subordinates know what they are expected to achieve
    EFFECTIVE LEADERS EXERT INFLUENCE over others that helps a group/org to achieve its perf goals, increase an org's ability to meet all the contemporary challenges, including the need to obtain a comp. adv., the need to foster ethical behaviour and the need to manage a diverse workforce fairly and equitably
    LEADERSHIP STYLES VARY MOT ONLY AMONG INDIVIDUALS BUT ALSO COUNTRIES AND CULTURES (JAPAN VS EUROPE)
  150. 150Management vs Leadership (MILLER ET AL)The job of a manager is utilising human equipment and ufo resources to achieve objectives.
    Leadership involves getting things done through others.
    In other words, you lead people, you manage things.
  151. 151LeadershipLeadership cannot be defined easily, but one can outline characteristics of leadership
    ==> Leadership is a quality associated with variety of generally accepted traits
    •Has a vision, able to set goals
    •Exercising judgment
    •Able to articulate a vision to greater audience => adherence
    •Able to motivate people, to achieve to strive people to the goals
    •Charisma
    •Decisive + able to set the right org. direction
    •Posses emotional intelligence =>
    Emotional intelligence (EI) is the ability to monitor one's own and other people's emotions, to discriminate between different emotions and label them appropriately, and to use emotional information to guide thinking and behavior. (Daniel Goleman)
    •Sensitive to feelings of others=> better able to gain enthusiasm from subordinates
    Not every leader posses all of these traits in equal measure
    Different leaders combine these traits in different degrees
  152. 152Power (Ray French et al)Best managers are not those that force their subordinates, but leaders who can make their subordinates chose to do what the leaders want them to do
    power is the key to leadership
    power- potential ability to influence behaviour
    politics and influence are the processes, actions and behaviours through which the potential power is used and released
    Influence-an outcome achieved through the use of power
    SOURCES OF POWER : (POSITION BASED: reward, coercive, legitimate; PERSON BASED: expert, referent)
    THE INFLUENCE PROCESS: provide power that when activated becomes influence that gets someone to do something the way you want it.
  153. 153POSITION BASED POWER (Ray French et al) 11) COERCIVE POWER
    the ability of a manager to force an employee to follow an order by threatening the employee with punishment if the employee does not comply with the order.=> worse is sacking
    -workplace bullying is a major source of employee discontent and lost productivity
    -the ability of a manager to punish others. (Verbal reprimands=> reduction in pay=> dismissal)
    2) LEGITIMATE POWER
    relates to the right to command (is the extent to which a manager can use the internalised belief of an employee that the "BOSS" has a right to command to control other ppl=> FORMAL AUTHORITY)
    -power exercised by somebody by virtue of their position
    PERSONAL LEADERSHIP HAS EFFECTS ON HOW A MANAGER EXERCISES LEG POWER
    PROCESS POWER is part of leg. power- the control over methods of production & analysis, found in individuals whose positions influence how inputs are transformed into outputs
    INFO POWER is part of leg. power-the extent to which individuals have the control over info needed by others
  154. 154POSITION BASED POWER (Ray French et al) 23) REWARD POWER-the extent to which a manager can use extrinsic and intrinsic rewards to control other people
    Reward power arises from the ability of a person to influence the allocation of incentives in an organization.
    These incentives include salary increments, positive appraisals and promotions.
    In an organization, people who wield reward power tend to influence the actions of other employees.
    Reward power, if used well, greatly motivates employees.
    BUT if it's applied through favoritism, reward power can greatly demoralize employees and diminish their output.
    EFFECTIVE MANAGERS USE THEIR REWARD POWER IN SUCH A WAY THAT SUBORDINATES FEEL THAT THEIR REWARD SIGNAL THAT THEY ARE DOING A GOOD JOB AND THEIR EFFORTS ARE APPRECIATED
    IF IT IS USED IN CONJUNCTION WITH OTHER LEADERSHIP AND MANAGEMENT TECH THEN CAN PRODUCE HIGH PERF
  155. 155PERSONAL BASED POWER (Ray French et al) 1EXPERT POWER- the ability to control another's behaviour through the possession of knowledge, experience, or judgement that the other person does not have but needs (linked to info power)
    e.g. computer specialists can influence non-tech staff behaviour because they have special knowledge that may be critical to them.
    Access to key org. decision makers is another element of expert power
    Such people are highly valued by organizations for their problem solving skills.
    People who have expert power perform critical tasks and are therefore deemed indispensable.
    The opinions, ideas and decisions of people with expert power are held in high regard by other employees and hence greatly influence their actions.
    Possession of expert power is normally a stepping-stone to other sources of power such as leg power. e.g., a person who holds expert power can be promoted to senior management, thereby giving him legitimate power.
    MANY SENIOR MANAGERS LACK TECH EXPERTISE & DERIVE THEIR EXPERT POWER FROM THEIR ABILITIES AS DECISION MAKERS, PLANNERS AND STRATEGIES
    e.g. CEO of GE
  156. 156PERSONAL BASED POWER (Ray French et al) 2REFERENT POWER-the ability to control another's behaviour because the individual wants to identify with the power source due to his/her perceived attractive characteristics. (COMES FROM OTHERS WANTING TO BE LIKE YOU)
    A boss who is thought of being a GOOD ROLE MODEL would be a typical way of thinking of referent power
    *One persons prototype might not be others
    Referent power is derived from the interpersonal relationships that a person cultivates with other people in the organization.
    People possess reference power when others respect and like them.
    Referent power arises from charisma, as the charismatic person influences others via the admiration, respect and trust others have for her.
    Referent power is also derived from personal connections that a person has with key people in the organization's hierarchy, such as the CEO. It's the perception of the personal relationships that she has that generates her power over others.
  157. 157POWER CRITICISMAll INDIVIDUALS HAVE ONE OR MORE SOURCE OF POWER , TO VARYING DEGREES AND IN VARYING COMBINATIONS.
    IT IS IMPORTANT THAT MANAGERS DO NOT RELY ON A SINGLE SOURCE OF POWER AS THIS MAY LIMIT THEIR EFFECTIVENESS.
    POWER ASSIGNED BY OTHERS AND WILL CHANGE OVER TIME
    APPLYING MILGRAMS EXPERIMENT (65% of obedience) TO WORK SETTING => THERE ARE STRONG TENDENCIES TO FOLLOW THE INSTRUCTIONS OF BOSS=> BUT=> BARNAR argued that employees will accept a directive from boss only if employee understands it, able to perf it, the directive is NOT inconstant with purpose of the org, is NOT inconsistent with his/her own interests=> THERE IS ALASO A ZONE OF INDIFFERENCE THAT DEFINES THE BOUNDARIES WITHIN WHICH PPL IN ORG WILL LET OTHERS INFLUENCE THEIR BEHAVIOUR WITHOUT QUESTIONING IT.
  158. 158Empowerment:Empowerment: the process by which mngrs help others acquire & use the power needed to make decisions that affect them & their work. Clear delegation of authority, integrated planning and the involvement of senior mngmnt are all important to implementing empowerment. BUT, the key to success lies in redefining power so everyone can gain. The redefinition emphasises power as ability to get things done rather than to get others to do what yo want.
    e.g. Honda has engendered a process of constant improvement by giving teams the power to make decisions for improvement in processes this has changed the nature of the power of senior mngmnt BUT they have made it a remarkable source of comp adv
    empowerment is asociated with:
    taking decisions at the lowest possible level, giving ppl autonomy, making more and more ppl feel that they have contributed to the outcome=> procedural justice, making everybody associate themselves with org. goals=> ownership of org. goals
    The more subordinates are empowered, the more senior mngrs and leaders can concentrate on most important decisions.
  159. 159Empowerment 2Empowerment is a part of effective leadership:
    -gives subordinates and active role in leading thus enabling managers more tie to concentrate on their own concerns=> spend less time on day-to-day supervisory activities, therefore increasing manger's ability to get things done
    -increases worker's involvement, motivation and commitment=> working toward org goals
  160. 160Trait & Behaviour models of Leadership (who? & what?)M.A.HITT
    Older trait theories held that leaders were born not made
    Modern theories: sought to determine what effective leaders were like as ppl and what they did what made them so effective.
    some traits concerned with a leaders skills, abilities, knowledge & expertise
    *TRAITS ALONE R NOT THE KEY TO UNDERSTANDING LEADERS EFFECTIVENESS. SOME LEADERS R EFFECTIVE BUT DON'T POSSESS ALL OF THESE, & SOME LEADERS WHO DO POSSESS THEM R NOT EFFECTIVE=>
    This lead to SHIFT FROM WHAT LEADERS ARE LIKE to WHAT LEADERS DO=> BEHAVIOURAL MODEL shows leader behaviours engaged to influence subordinates
    -CONSIDERATION to show subordinates that they trust, respect & care about them
    -INITIATING STRUCTURE to take steps to make sure that work gets done, subordinates perf their jobs acceptably & the org is efficient & effective
    -Many LEADERS like CEO of Toyota engage in both
    SOME LEADERS ARE EFFECTIVE EVEN WHEN THEY DON'T PERF CONSIDERATION OR INITIATING STRUCTURE BEHAVIOURS, & SOME INEFFECTIVE EVEN WHEN THEY PERF BOTH=> TRAIT AND BEHAVIOUR MODEL ALONE CANNOT EXPLAIN LEADER EFFECTIVENESS=>
  161. 161Trait & Behaviour models of Leadership (who? & what?) 2=> HAVE TO LOOK AT SITUATION/ CONTEXT, WHAT MAKES A MANAGER AN EFFECTIVE LEADER IN ONE SITUATION IS NOT NECESSARILY WHAT THE MANAGER NEED TO BE EQUALLY EFFECTIVE IN A DIFFERENT ONE =>
    CONTINGENCY MODELS takes into account the situation within which leadership occurs
    FIEDLER'S CONTINGENCY MODEL explains why managers may be effective in one situation & ineffective in another=> RELATIONSHIP ORIENTATED LEADERS are most effective in situations that are MODERATELY favourable for leading, and TASK ORIENTED LEADERS are most effective in situations that are VERY favourable for leading.
    HOUSE'S PATH- GOAL THEORY describes how effective managers can motivate their subordinates by deterring what outcomes their subordinates want, rewarding them with these outcomes when they achieve their goals and perf at a high level, and clarifying the paths to goal attainment
    THE LEADER SUBSTITUTES MODEL suggests that managers sometimes do not have to play a leadership role because their subordinates perf highly without the manager having to exert influence over them
  162. 162TRANSFORMATIONAL LEADERSHIPoccurs when managers have dramatic effects on their subordinates and on the org as a whole and inspire and energise subordinates to solve problems and improve perf.
    These effects include:
    making subordinates aware of the importance of their own jobs and high perf,
    making subordinates aware of their own needs for personal growth, development and accomplishment
    motivating subordinates to for the good of the org and not just their own personal goals
    MANAGERS CAN ENGAGE BY BEING CHARISMATIC LEADERS, BY INTELLECTUALLY STIMULATING SUBORDINATES AND BY ENGAGING IN TRANSACTIONAL LEADERSHIP BY USING THEIR REWARD AND COERCIVE POWERS TO ENCOURAGE HIGH PERF
  163. 163TRANSACTIONAL LEADERSHIPis one who treats leadership as an exchange, giving followers what they want if they do what leader desires, taking into account person's self-concept and self-esteem needs.
    The leader frames the rewards for the expected performance and then utilizes path-goal concepts to clearly show the follower how to achieve the rewards.
    The leader then steps aside and does not intervene unless the goals are not being achieved, hence it is called management by exception
  164. 164GENDER & LEADERSHIPWomen CEO in large companies are still very rare
    BUT there are some e.g. Anita Roddick @ The Body Shop
    Female and Male managers do not differ in the leadership styles=> equally effective as managers and leaders
    Female managers sometimes are ore Paticipative
  165. 165EMOTIONAL INTELLIGENCEthe moods and emotions that leaders experience on the job, and their ability to effectively manage theses feelings, can influence their effectiveness as leaders.
    Emotional Intelligence has the potential to contribute to leadership effectiveness in multiple ways, including encouraging and supporting creativity among followers
  166. 166The globalisationThe globalisation of business has helped to understand that leaders must exhibit different styles to be effective in different regions in the world.
    In the Anglo region, the leader demonstrates CHARISMATIC influence and inspiration, while in the Arabic regions leaders expected to have a great deal of POWER and to DIRECT MOST DECISIOS AND ACTIONS
  167. 167AUTHENTIC LEADERIn 21st century importance of not only transformational leaders arises but also AUTHENTIC
    an AUTHENTIC LEADER IS GENUINE, TRUSTWORTHY AND TRUTHFUL
    THEY "OWN" THEIR THOUGHTS, EMOTIONS AD BELIEFS AND ACT ACCORDING TO THEIR TRUE SELVES
    GUIDED BY VALUES TAHT FOCUS ON DOING WHATS RIGHT FOR THEIR CONSTITUENCIES
    TRANSPARENT
    WALK THE TALK
    EQUAL WEIGHT ON GETTING THE TASK ACCOMPLISHED AD DEVELOPING ASSOCIATES
  168. 168The essence of leadership==> The essence of leadership is not so much about doing as it is about enabling.
    Not always a top-down
    Has to do with inspiring and motivation
    Subsidiarity=> Decisions have to be taken at the lowest possible level
    Good leaders do not expect everybody to agree with them =>encourage debate
    Nurturing decent in an org.
    Capable of aligning interests of everybody in an org.
    Likely to promote behavior with integrity => create an ethic in org. where people are sensitive about effects on other people from ones course of action
  169. 169State Firms (The Economist, 2011)is state-owned firms were to pay a market interest rate, their profits would be entirely wiped out => reason is that state firms must pursue the state aims, which include many things besides making profits
  170. 170Chinese public sector International Herald Tribune, 2012145k state owned enterprise
    Bad service provision
    e.g. Chinese carry 3 smartphones, one for each of the 3 state-owned providers of mobile phone service, in hope that at least one will have enough network capacity
    The banks cannot afford to pay more as they need fat margins to cover losses on loans to politically connected borrowers
  171. 171UK public service Times, 2012at the moment, in Whitehall the customer is always wrong. We need to retain civil servants to think about how we design govt services from a CONSUMER POINT OF VIEW
    USER RATHER THAN A PROVIDER FOCUS
    plan to incorporate MYSTERY SHOPPERS to go around the country incognito, testing job centres, GPs etc
    ADAPTION is required from LEADERS =>
    *"The reasonable man adapts himself to the world... The unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man."
    George Bernard Shaw
  172. 172Privat Market vs Public Market (who? & what?)T. Besley et al
    Reforming public service delivery occupies a central position in the current policy agenda both in Uk and elsewhere in the world
    PRIVATE MARKET FEATURES
    the role of choice and competition
    the use of incentives
    PUBLIC SERVICES are goods that an unregulated market will under-provide. This is due:
    1)EXTERNAL BENEFITS: societies with healthier and better educated populations benefit everybody
    2)EGALITARIANISM: delivery on min levels of consumption of key goods to its population
    3)MERIT GOODS: g+s that govt feels that ppl will under-consume, and which ought to be subsidised/ provided free.
    e.g. Education is an example as it is an info and agency problem, if parents do not value education sufficiently, failure of rational forward-looking decision making occurs
    PRICE SIGNALS DO NOT REFLECT THE SOVIAL VALUE OF CONSUMPTION=> MARKET FAILURE=> leads to centralised govt provision (traditional model in uk)
    CRITICISM
    Absence of choice (individuals have different needs ad wants)
    Inefficiency in production (limited incentives to improve quality)
  173. 173SHIFT (WHO? & WHAT?)BESLEY ET AL
    SHIFT to borrow ideas from PRVATE SECTOR=> satisfaction of consumer
    BUT
    forget that these g+s are fundamentally different from standard private goods and can add dominance of inequalities like in private sector.
    Public sector underemphasises costs (relate to Economist)
    Public and Private sectors share similar org design concerns relating the structure of accountability, incentives and the extent of comp of service users as well as personnel=>
    any org is a network of principal-agent relationships
    e.g. School => the principals are the head teacher, local education dept officials/ politicians, and the parents. The agents are the classroom teachers=> pubic services have differences and complications
  174. 174Pubic services have differences and complicationsMEASURABILITY
    The services in question are complex=> the objectives of the relevant org are somewhat imprecise. Good education harder to define compared to production of rice.
    -Hard to find perf measure
    -Unnecessary risk on the employee
    MULTI-TASKING
    Services involve several dimensions. e.g. Standardised tests and encouragement of creativity.
    => makes provision of incentives hard when employees have to perf multiple tasks=> could lead to loss in efficiency
    MULTIPLE PRINCIPLES
    1) By nature they generate direct consumption and production externalities=> society at large can be thought of as an additional principal
    2) There are several actors who are directly affected by the actions of an agent in the proviso of pubic services.
    e.g. teacher might want to give more emphasis on learning using expensive teaching aids => parents happy=> school principal unhappy as cares about costs=>FREE RIDER PROBLEM INEFFICIENCIES OVER AND ABOVE THE BASIC AGENCY COSTS
  175. 175DESIGN OF AN ORG FOR PROVIDING PUBLIC SERVICESMISSION
    -displaces the conventional notion of profit max
    -determined by the principals
    -change the mission in a way that is not favoured by the agent=> decrease efficiency
    -mission-orientated org are CONSERVATIVE and SLOW MOVING
    MOTIVATION
    -provision of public services benefits from the effort put in by agents and requires a high intensity of EFFORT=> effort is costly=> agents have to be motivated to put in effort. => DEPENDS ON ORG STRUCTURE
    MATCHING
    -the process by which principals and agents come together to create an org
    -governed by CHOICE OF POLICY e.g the state provides citizens with a voucher that entitles the individuals to a particular service and they can choose where to spend that voucher
    -principals and agents match based on mission=> increase efficiency
  176. 176MODEL OF PUBLIC SERVICE PROVISION1) MARKET
    -Missions & consideration of agent motivation are irrelevant
    - Competition works through either INTENSIFICATION of the RETURNS to effort or greater use of YARDSTICK COMPARISON
    -Monetary incentives matter above all=> DOES NOT TAKE ADVANTAGE OF AGENT MOTIVATION
    2) TRADITIONAL STATE
    -Single CENTRALISED mission for all providers
    -Limited use of monetary incentives
    -NO competition
    => This is the much derided model from which public services are moving
    3) DECENTRALISED
    -Heterogeneous missions
    -Competition by matching of providers, workers & customers
    -Limited use of monetary incentives
    => RIGHT MODEL for an efficient system of public services delivery=> emphasises CHOICE unlike the TRAD model, the role of competition is to provide effective MATCHING in the mission pref of principals & agents
    BETTER MATCHING DECREASES THE NEED FOR GIVING INCENTIVES AND CAN ENHANCE PRODUCTIVITY. THIS LOGIC UNDERTAKES THE MOVE TOWARDS GREATER DECENTRALISATION & CHOICE IN PUBLIC SERVICE PROVISION=>PUTS PREMIUM ON MOBILITY & INFO
  177. 177When is DECENTRALISED model most relevant?-There is a variety of legitimate missions which customers & producers care about
    -Unmonitored effort is an important component of production
    -consumers are sufficiently well informed about the options available
    - when used for education and care provision
    NOT RELEVANT in postal services, issuing passports, etc<=PRIVATE SECTOR IS BETTER
    In PUBLIC SERVICES COMP LEADS TO BETTER ALIGNMENT ON MISSION PREF=> improves served customer needs, increases productive efficiency
  178. 178Strategic management in the public sector (who? & what?) 1A. HABERBERG ET AL
    -Public sector org depends on the state for their funds
    -Managing OUTWARD- working within the networks of which most public org r part=> Few sector org exercise fully independent choice=> participants in programmes broad-based projects
    -Managing INWARD- dealing with the elected politicians that set the policy frameworks=> a typical programme is administrated by MULTIPLE AGENTS=> proliferation of customers & partnerships=> Architecture of public sector agencies is very complex, both internally & externally
    Because of the near -certainty of regular, radical environmental change, senior manage decision- making in the public sector may be driven by ST expediency
    Comp adv and comp stance take on a different meaning in public sector
    -"Weakness" in a public sector org is not unnecessary a bad thing- it may represent a welcome opportunity to return that activity to the private sector
  179. 179Strategic management in the public sector (who? & what?) 2A. HABERBERG
    Public sector manager must manage a wide variety of STAKEHOLDERS and it may be difficult to find a COMMON GOAL around which they can all unite, in the way profits can unite different fractions in private firms
    Public sector org can be EXTREMELY POLITICAL & often feature small fiefdoms, which make it difficult to gain support & commitment to an overall goal
    Historically public org have focused on cost mngmnt rather than profit generation, with little scope for creativity/ entrepreneurship to be rewarded => NOW, public org mngmnt moves away from govt control & funding (vouchers + empowerment of user)
    High proportion of public sector employees belong to trade unions=> sacking are rare and are usually only carried out for the most serious offences
  180. 180Strategic management in the public sector (who? & what?) 3THE MOST RADICAL MEANS OF INTRODUCING MARKET MECH HAS BEEN PRIVATISATION
    e.g. pushing org such as airlines & utilities out if the public sector all together
    -where the full privatisation has been deemed inappropriate, depts have been turned into COMMERCIAL QUASI-BUSINESS OF PROFIT CENTRES. They are given objective by govt but are not controlled on day-to-day basis
    MOVE TOWARDS THE CONTRACTING OUT OF AN EVER INCREASING RANGE OF SERVICES (including waste disposal, prisons and in the UK mngmnt of schools)
    Public sector departments r made to bid competitively against private sector rivals
    Extensive use of PFI (priv finance initiative)=> even used for training for British armed forces
    SOME SUGGEST THAT BY KEEPING THE COSTS OF THE INVESTMENT OFF THE PUBLIC ACCOUNTS, THE PFI IS CONCEALING THE TRUE EXTENT OF PUBLIC DEBT
    FOCUS SHIFTED FROM INPUTS & PROCESSES TO EFFICIENT USES OF RESOURCES & EFFECTIVE SERVICE DELIVERY
    TAKING A LT VIEW IS STILL MORE DIFFICULT THAN IN COMMERCIAL FIRM DUE TO ENVIRONMENTAL OR REGULATORY CHANGE THAT IS REGULAR & FOR THE MOST PART Unpredictable
  181. 181Strategic management in the public sector => The management of change (who? & what?)A. HABERBERG
    the management of change due environmental and regulatory factors has been a challenge for managers
    As many org are called upon to adopt a more commercial orientation. The strategic directions that have been pursued to meet these challenges include:
    -STRENGTHENING INTERNAL LINKAGES
    -DEVELOPING COOPERATIVE RELATIONSHIPS BETWEEN AGENCIES
    IMPROVING ORG IMAGE WITH THE PUBLIC AND POLITICIANS
    -DEVELOPING KNOWLEDGE ASSETS AND INNOVATION CAPABILITIES
    -MONITORING TRENDS AND CHANGES IN THE AGENCY'S ENVIRONMENT & INFLUENCING THE LEGISLATIVE AGENDA WHERE APPROPRIATE
    THE NON-FOR-PROFIT SECTOR IS A HIGHLY DIVERSE ONE THAT IS OFTEN YSED TO SUPPLEMENT GOVT SERVICES
  182. 182PUBLIC VS PRIVATE MNGMNT (WHO? & WHAT?) 11) HYBRID FORMS of org, such state owned enterprises, govt corp. And heavily regulated business firms, mix govt auspices and control, with features usually conceived as private economic activity, such as sale of g+s for a price
    2) CONTRACTING-OUT by government and other forms of relationship in which government buys from private organisation/ carries out programs and policies through and by them
    3)COMP TENDERING
    Public– Private or govt – business distinction does not predict organisational characteristic very well
    Most government agencies do not sell their output on economic markets and this characteristic, among others causes them to be very different from business firms on many important dimensions
  183. 183PUBLIC VS PRIVATE MNGMNT (WHO? & WHAT?) 2H.G. RAINEY
    ENTERPRISES UNDER PRIVATE OWNERSHIP
    -more choice for producers and buyers
    -can fail to produce public goods
    -can fail to control externalities
    -more independent from government than government agencies
    -make most money through sales
    -executives named profitability is the most important goal
    HYBRID FORMS
    State owned Enterprises, Government authorities, heavily regulated firms
  184. 184PUBLIC VS PRIVATE MNGMNT (WHO? & WHAT?) 3H.G.Rainey
    GOVT AGENCIES
    -more centralised rules & authoritative directions
    -can respond to market failure BUT can create problems due to excessive central control & the inflexibility of centrally developed authority directives in relation to local pref & needs
    -lack direct link between sales & revenues
    -Government funded=> less INCENTIVE toward cost-cutting & efficient operations
    -agencies operate less efficiently & with more rules & red tape rather than business enterprises
    -more political authority
    --Govt activity is often more monopolistic, coercive and unavoidable, with a greater breadth of impact & necessity of more oversight & control
    -Weaker incentives and information for achieving operational efficiency & certain types of affective performance
    -operating environment to provide less inducement for public sector management to achieve eco efficiencies through responding to consumer pref & apportioning supply to demand
    -must use legal and formal constraints to impose external govt control=> more external controls on the manageable structures and procedures
  185. 185PUBLIC VS PRIVATE MNGMNT (WHO? & WHAT?) 4H.G.RAINEY
    GOVT AGENCIES (continue)
    -goals and evaluation criteria are more diverse, conflict and more intelligible and harder to measure
    "... In reality management has varying degrees of authority over financial resources and activity of their organisation with business firms typically having more than government agencies" BOZEMAN, 1988
    many factors such as size, task, function & industry characteristics can influence an organisation and management more than its publicness or privateness
    Executives in private sector feel intense goal conflicts and problems with clarity of goals, while the goals of some public management activities- , Taxes, send out benefit checks, issue licenses- do not seem vastly more complex than goals that many businesses pursue
    Public managers report much more constrained and difficulty in tying pay, promotion and discipline to performance
    Special patterns of motivation in public sector and non-profit orgs can produce levels of motivation & effort comparable to those among private sector employees or higher
  186. 1866 core issues for public sector management:1. Productivity (relationship between inputs and outputs)=> HOW DO YOU MEASURE PRODUCTIVITY IN PUBLIC SECTOR? =>Nhs, GP
    2. Marketization => benchmarking and private sector outsourcing
    3. Service Orientation => greater emphasize on experience targets (before time and budget constraint) that users get and the improvements of the service over time
    4. Decentralization => equality of the user experience =>equality of access to public service=> brought nearer and nearer to the end user
    o One size fits all is no longer relevant =>scope for innovation=> different customers have different needs and therefore need different treatment
    5. Policy Focus => govt will take decision but outsource the service provision => before home office responsible for passport provision, 15 years ago it outsourced it to an agency but now it got it back
    6. Accountability => has to be an emphasize on who has to be responsible for what => still not as severe as in private sector => civil servants enjoy more job security => provision of a service relies on many departme
  187. 187m.moore==> Purpose of public management strategy aim their to create “public value” that consists of economic welfare, achieving public goals, customer satisfaction. Position org. in the authorizing environment; align public value and operational capacity with this position. (M.Moore)
    => need for strategic coherence between support, capacity, channels, substance.
    ==> At the heart of the issue in the public sector are: incentives, choice and accountability
    ==> Need for new ideas is very imperative
    • In private sector, employees are subject to appraisal to measure the performance of employees => 10% rule for G.E. => poor performance chances of promotion and pay rise are minimal
    • In private companies, whatever product you are selling now, in 3 years time at least 1/3 of your revenue must come from this product=> managers have to tank of profitable innovation
    • In public sector penalties and innovation yet have to be implemented
  188. 188Public sector differsone can argue, in the modern world, one cannot neglect public sector, management is management, despite the sector a firm operates in. =>although there are many overlaps there are also numerous differences.
    • Public sector accounts for a significant part of the economy
    • In macroeconomic view C+I=private sector G + net imports = public sector
    • Look at G to analyse the public sector, e.g. US (mature and advanced) 25%, Scandinavian countries the public sector accounts for more than 50%, China (peculiar combination of free economy and govt. control)
  189. 189Public sector connectivity to private sector==> In todays world, what we find is if the public sector performs poorly then:
    1. All the revenues are likely to have a large proportion of them being wasted
    2. The public sector starts dragging the private sector down.
    • E.g. public sector services will cost more for private industry hence damaging private sector competitiveness
  190. 190Public sector is seen as enabler rather than provider!In some countries, education is not entirely provided by govt, govt rather provides vouchers for both private and public sector => consumer choice
    • Similar system is used in healthcare
    • Provision of services=> public service contracts are put out for private tender=> in UK job centers are run by private providers and have financial incentives by the govt=> greater incentive than when it used to be done by govt=> the problem is that sometimes private companies don’t look for LT employment of people but rather immediate placement so to get the financial reward=> ineffective for govt
  191. 191old vs new==> Public sector imports private sectors notions of management (the infusion of competition in the activities of the state: directly through competing suppliers and indirectly through best practices and benchmarking)
    • Now unlike older days, public sector perf is measured, e.g. Heathrow airport has public sector workers and is asking people for feedback of its service
    Top ten employers => 7/10 are PUBLIC SECTOR
    1st biggest private sector is Wallmart
    2nd biggest private sector McDonalds
    economist => 1/3 output of china attributed to public sector
    • Instead of emphasizing what provider has to offer, now people look at what consumer wants to see
    • Use ideas of private sector => “Mystery shoppers” – people who pretend to be customers and judge the service provided= > govt started using this too!=> Highlights efficiencies and makes room for improvement
    • The issue with public service is changing a culture
  192. 192Differences and Similarities==> Differences between public and private sector
    • Private sector is aiming for profit max
    • Public sector is not
    ==> Similarity in public and private sector
    • Both faced with the same challenge => HOW DO YOU MAKE EFFECTIVE USE OF R+C?

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MG206 Flashcards on MG206 all topics, created by Simona De on 08/04/2015.
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