Knowledge outcomes

1
Knowledge outcomes

• The impact of the external environment on the
  organisation.
• Analysis of the external environment.
• Factors affecting the internal environment.
• Analysis of the internal environment.

2
Three Layer Model
Macroenvironment
Political Economic Sociocultural
Technological Natural Legal
(PESTLN)
Stakeholders
Customers
Suppliers
Intra-firm (organisation) 7 s Framework
Microenvironment
? Martin Mulholland 2005
3
Checklist for a PESTLN Analysis

• Political
• Government policy
• Legislation, taxation
• Government ownership of industry
• Economic
• Inflation
• Exchange Rates
• Employment
• Sociocultural
• Lifestyle changes
• Attitudes to work and leisure
• Demographic changes
• Internet growth

• Technological
• Organisational investment
• Impact on employees
• Legal
• Trade and Competition law
• Employment legislation
• Natural
• Environmental issues
• Tsunamis, hurricanes

4
Storm Of Expenses

• The cost of cleaning up after the hurricane will
  make the federal budget deficit even bigger,
  warns BW's Kathleen Madigan

5
Unswayed by Storm, Fed Raises Key Rate

• WASHINGTON, Sept. 20 - Saying that Hurricane
  Katrina was unlikely to pose a "persistent
  threat" to the economy, the Federal Reserve
  raised interest rates on Tuesday(20/09/05) for
  the 11th time in a row and signaled that more
  increases were on the way.
• The widespread devastation in the gulf region,
  the associated dislocation of economic activity
  and the boost to energy prices imply that
  spending, production and employment will be set
  back in the near term," the central bank's
  Federal Open Market Committee said in a
  statement.

6
Porters Five Forces Model

Potential entrants
Industry competitors
Suppliers
Buyers
Substitutes
Source adapted from Porter,M (1980) Competitive
StrategyTechniques for Analyzing Industries and
Competition, Simon Schuster
7

• Boston Consulting Group Matrix
• High
  Low

M A R K E R T A T G E R
O W T H
Stars
Problem Children
Cash Cows
Dogs
High
RELATIVE MARKET SHARE POSITION
8

• Stars are highly attractive businesses(high
  market growth), and strong competitive
  positions(high relative market share). They
  generate cash but require significant investment.
• Cash Cows provide sources of cash for the
  business in declining markets.
• Question marks are possibly major untapped
  opportunities because of high market growth.
• Dogs regarded as unattractive and weak.

9

• Four Links Model

Government links and networks competition law
and customer
Informal co-operative links and networks CBI,CIPD
The organisation
Complementors Computer hardware/software
Formal co-operative links alliances/J.V.s
10

• Seven S Framework

Strategy
Structure
Systems
Skills
Staff
Superordinate goals
Style
11
Seven S Framework

• Strategy, Structure, Systems (Hard Ss), Staff,
  Skills,Style and Superordinate Goals are
  interrelated and interdependent. If one of the
  Ss changes it will impact upon the other Ss.

12
Product/Market Expansion Grid
13
Product/Market Expansion Grid

• MARKET PENTRATIONmore sales to current customers
  with unchanged product /service.
• MARKET DEVELOPMENT identifying and developing
  new markets for current products /services.
• PRODUCT DEVELOPMENT offering modified or new
  products / services to current markets.
• DIVERSIFICATION new products / services in new
  markets

14
Organisation Structure

• Strategic Apex

EXTERNAL ENVIRONMENT
(Threats and Opportunities)
HR
FINANCE
Middle management
(Strengths and Weaknesses)
Operating core
15
Organization as a Goal-seeking Open System

• STRATEGIC LOGIC
• Operative rationale for achieving organizations
  goals
• through coordinated deployments of resources
• Data and revenues
  Decisions,
  Policies,Procedures,Budgets
• MANAGEMENT PROCESSES
• Coordination mechanisms for acquiring and
  deploying resources
• Data on Intangible Assets
• INTANGIBLE ASSETS
• Knowledge, intellectual property,reputation,
  relationships
• Data on Tangible Assets
• TANIGBLE ASSESTS
• Physical assets
• Data on Operations
• OPERATIONS
• PRODUCT OFFERS
• Market Data, Revenues
• PRODUCT MARKETS

A R D E D S R O E U S R S
C A E B S L E
Competing Organizations
16
The Value Chain
Firm infrastructure
M
a
Human Resource management
Support activities
r
Technology development
g
Procurement
i
Inbound logistics
Operations
n
Outbound logistics
Marketing sales
Service
Primary activities
17
Fayols Wheel

• Control
  Plan
• Staff
  Organise
• Lead

COMMUNICATE
18

• Strategy Texts
•  Lynch,Richard,Corporate strategy, Prentice
  Hall, 2003(good overview of the strategy process)
• THIS TEXT IS APPLICABLE TO YEAR ONE AND TWO
• Sanchez,Ron Heene, The new strategic
  management,Wiley,2004(user friendly text)
•  Wheelen,Thomas Hunger, David, Strategic
  Management and Business policy,Prentice
  Hall,2002(supporting CD included practical
  orientation)
•  Grant,Robert,Contemporary strategy
  analysis,Blackwell,2002(more advanced text- for
  those interested in deeper issues)
•  De Wit,Bob Meyer,Ron,Strategy,Thomson,2004(st
  rategy articles)
•  Johnson,Gerry Scholes,Kevan, Exploring
  Corporate Strategy,Prentice Hall,1993(old text
  preferred good overview of strategy process)
•  Mabey,Christopher, Salaman,Graeme and
  Storey,John,Human Resource Management A
  Strategic Introduction,Blackwell,2003 (excellent
  text for practical illustrations of the strategic
  link to functionalHR strategies)
• THIS TEXT IS APPLICABLE TO YEAR ONE AND TWO AND
  IS RECOMMENDED FOR YEAR TWO MODULE
• Marketing Texts
• Lancaster, Geoff and Massingham, Lester,
  Essentials of Marketing,McGraw-Hill,1988(good
  coverage of macro/micro issues also relevant to
  Managing Activities)
•  Kotler, P., et al., Principles of
  Marketing,Prentice Hall,2001(good coverage of
  macro/micro issues also relevant to Managing
  Activities)
•  Doyle, Peter, Marketing Management and
  Strategy, Prentice Hall, 2002
• (good introductory text)
•  Gilligan, Colin Wilson,Richard,Strategic
  Marketing Planning,Butterworth
  Heinemann,2003(Intermediate text Degree/MSSc.
•  Keegan, Warren, Schlegelmilch, Bodo, Global
  Marketing Management, Prentice
  Hall,2001(practical orientation with academic
  leaning)
• Doole, Isobel, Lowe,Robin, International
  Marketing Strategy,1997(application of theory
  and practice)

19

• Explain why an organisation may change over time.
• What are the essential characteristics of an
  organization required to attract and retain
  participants in its activities?
• What are some of the key management processes
  involved in coordinating the activities of an
  organization?

20
Handouts

• Worldclass Manufacturing Richard Schonberger
• Hurricane katrina - http//www.businessweek.com/bw
  daily/dnflash/sep2005/nf20050913_8975_db082.htm
• Vodaphone - By KEVIN J. O'BRIENInternational
  Herald Tribune Published May 25, 2005
• Unilever /Colgate - ALAN COWELL,nytimes.comPubli
  shed September 21, 2004