assignment ist 887 bp&m spring 2010

8/8/2019 Assignment Ist 887 BP&M Spring 2010

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Business Policy & Managment (887)

1/43By: M. Hammad Manzoor, MBA HRM-III, 508, 5 th Floor, Continental Trade Centre (CTC), Clifton 08, Karachi. (Roll No. 508195394)Email: [email protected], Cell: 0321-584 2326

Strategic Management (887)Assignment No. 01

Submitted to:Prof. Safdar Ahmed KhanHouse No. A-664, Block N,North NazimabadKARACHI (0345- 210 1062)

Submitted By:Muhammad Hammad Manzoor

MBA (HRM)-3rd SemesterRoll No. 508195394

508, 5 th Floor, Continental Trade Centre (CTC)Block 08, Clifton, KARACHI

(0321-584 2326)

Department of Business AdministrationBlock No. 13, H-8

Islamabad


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Q. No. 1: Develop your vision and mission statement for an organization of your choice from broadcasting sector and compare your vision and missionstatement with the original vision and mission statement of that organization?

Answer)

NATIONAL PUBLIC RADIO PURPOSES:

Early in 1970, Bill Siemering one of the organizers of National Public Radio and laterits first program director put together a "mission statement" for NPR. Thestatement supported NPR's request for aid from CPB and went on to define thenetwork's first daily program, All Things Considered , which debuted May 3, 1971.

By William H. Siemering

National Public Radio will serve the individual: it will promote personal growth; it willregard the individual differences among men with respect and joy rather than derisionand hate; it will celebrate the human experience as infinitely varied rather than vacuousand banal; it will encourage a sense of active constructive participation, rather thanapathetic helplessness.National Public Radio, through live interconnection and other distribution systems, willbe the primary national non-commercial program service. Public radio stations will be asource for programming input as well as program dissemination. The potentials of liveinterconnection will be exploited; the art and the enjoyment of the sound medium willbe advanced.In its cultural mode, National Public Radio will preserve and transmit the cultural past,will encourage and broadcast the work of contemporary artists and provide listenerswith an aural esthetic experience which enriches and gives meaning to the human spirit.In its journalistic mode, National Public Radio will actively explore, investigate andinterpret issues of national and international import. The programs will enable theindividual to better understand himself, his government, his institutions and his naturaland social environment so he can intelligently participate in effecting the process of change.The total service should be trustworthy, enhance intellectual development, expandknowledge, deepen aural esthetic enjoyment, increase the pleasure of living in apluralistic society and result in a service to listeners which makes them more responsive,

informed human beings and intelligent responsible citizens of their communities andthe world.


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Implementation of Goals

Such statements of purpose are only platitudes and good intentions unless there is thestrong commitment, creative energy and specific strategy to implement them. Thedetailed implementation of National Public Radio is the responsibility of the Presidentand his staff, but some priorities and suggested approaches are necessary to helpanswer the how and why of NPR.

The priorities of NPR program development:

1. Provide an identifiable daily product which is consistent and reflects the higheststandards of broadcast journalism.

2. Provide extended coverage of public events, issues and ideas, and acquire andproduce special public affairs programs.

3. Acquire and produce cultural programs which can be scheduled individually by

stations.4. Provide access to the intellectual and cultural resources of cities, universities andrural districts through a system of cooperative program development with memberpublic radio stations.

5. Develop and distribute programs to specific groups (adult education, instructional,modular units for local productions) which meet needs of individual regions orgroups.

6. Establish liaison with foreign broadcasters for a program exchange service.7. Produce materials specifically intended to develop the art and technical potential of

radio.

DISCUSSION

1. Provide an identifiable daily product which is consistent and reflects the higheststandards of broadcast journalism.

Because National Public Radio begins with no identity of its own it is essential that adaily product of excellence be developed. This may contain some hard news, but theprimary emphasis would be on interpretation, investigative reporting on publicaffairs, the world of ideas and the arts. The program would be well paced, flexible,and a service primarily for a general audience. It would not, however, substitute

superficial blandness for genuine diversity of regions, values, and cultural and ethnicminorities which comprise American society; it would speak with many voices andmany dialects. The editorial attitude would be that of inquiry, curiosity, concern forthe quality of life, critical, problem-solving, and life loving. The listener should cometo rely upon it as a source of information of consequence; that having listened hasmade a difference in his attitude toward his environment and himself.


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There may be regular features on consumer information, views of the world frompoets, men and women of ideas and interpretive comments from scholars. Usinginputs from affiliate stations, for the first time the intellectual resources of collegesand universities will be applied to daily affairs on a national scale.

Philosophically, time is measured by the intensity of experience. Waiting for a busand walking through an art gallery may occupy the same time duration, but not thesame time experience. Listeners should feel that the time spent with NPR wasamong their most rewarding in media contact. National Public Radio will not regardits audience as a "market" or in terms of its disposable income, but as curious,complex individuals who are looking for some understanding, meaning and joy in thehuman experience. Represented in visual terms, the listener turning from acommercial station to National Public Radio should sense a difference as thatbetween a shopper's newspaper and Consumer Reports; Teen Magazine andRealities.

2. Provide extended coverage of public events, issues and ideas, and to acquire andproduce special public affairs programs.

Broadcasting of public hearings and public affairs programs is not just a "good thingto do" but a necessity for citizens in a democratic society to be enlightenedparticipants. The mechanistic instruction about government we all recall from civicsclasses ill prepares adults to know about the real legislative process and how toeffect change. Political scientist Fred Newmann wrote:

By teaching that the constitutional system of the United States guarantees abenevolent government servicing the needs of all, the schools have fostered massivepublic apathy.

He believes the legalistic curriculum should be "balanced if not replaced by emphasison the influence of personal motives and ambitions, emotions (envy, hate, love,pride), political debts, accidents and even honest mistakes in the formulation of public policy." [Newmann, p. 545] This requires investigative reporting and citizenparticipation during the decision-making process. Broadcasts of public hearings areone of the best ways to hear the evidence presented on proposed legislation andpublic radio might develop some vehicle through local affiliates whereby citizens

could indicate their judgment to the decision makers. This coverage need not beconfined to Congressional Hearings but should apply to governmental regulatoryagencies as well. If no government body is holding hearings on an important issue,National Public Radio could sponsor its own debate to help define the problem andsuggest alternate solutions with the consequences of each explored.


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Jack Gould, writing in the New York Times, testified that "radio retains the enormousvirtue of complete unobtrusiveness." In reviewing coverage of congressionalhearings he wrote:

Television, commercial or noncommercial, says it can attend a hearing withoutcausing any inconvenience; this is poppycock. The glaring lights needed by NationalEducational Television, . . . are a short cut to a raging headache when experiencedmorning and afternoon. The hearing room was bathed in artificial incandescence,little short of nuisance, and that some witnesses donned sun glasses moreconfirmed the annoyance.

Because the cost of radio coverage is one-tenth television coverage, Mr. Gouldconcluded "...it may well prove that radio will be the most economical andconsistent means for uniting a citizen with his government in operation."

National Public Radio, through public affairs programs, would not only call attentionto a problem, but be an active agent in seeking solutions. Hiring of minorities in theconstruction trades, for example, is a complex social, racial problem. A thoroughexposition by all sides would be instructive, but to enable persons struggling withthis issue to speak on live radio with those who developed the Philadelphia Plan andChicago Plan, could actually help solve the problem in many other communities andprobably evolve a better solution.

Everyone is aware that stopping environmental pollution is critical for survival, butwhat can a single individual do to solve such a massive problem? Not usedetergents? Picket the local steel plant? Organize but for what, to do what?Obviously individuals and groups must solve this, and shared information and crossfertilization of ideas by live national radio could do much to speed the process.

3. Acquire and produce cultural programs which can be scheduled individually bystations.

Susan Sontag wrote, "Art today is a new kind of instrument, an instrument formodifying consciousness and organizing sensibility." Art is no longer a pleasantpastime for social elite, but at the core of contemporary life. Understanding is bothmore essential and more difficult. Without adequate background, the artist's

message is frequently unintelligible and we wander as one in the forest unfamiliarwith trail markings, unable to "read" the environment. With the rapidity of changeand decline of local theaters and orchestras there is an equal need to preserve andtransmit the culture of the past. As the arts become less of a social occasion andmore of a personal experience, the role of radio as a creator and transmitter shouldincrease.


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National Public Radio might use any of the following to make the artsunderstandable and engaging.

Listeners could gain a contemporary view of the world through the eyes of asensitive writer. National competitions might be held to encourage new radiowriters.

Encourage, and provide facilities for leading writers of fiction and dramatists toprepare new materials for radio.

Standards of the radio art could be improved by broadcasting regular criticismsof the medium.

Young people could be introduced to the beauty of the medium throughmaterials prepared for in-school listening. Writers of children's books could becommissioned to write for radio.

Work cooperatively with National, State and local councils on the arts andinternational agencies in developing greater understanding and appreciation of

the arts. For example, reproductions collected from around the country of aperiod or school of art could be printed and distributed through local stations.Leading art historians could lead the listener viewer through the book in abroadcast series.

Stimulate local symphony orchestras, through national broadcasts. Rather than aseries of the New York Philharmonic, there could be a concert series with adifferent local orchestra each week performing what it does best.

Compose and perform new works live across the country. Use the products of the National Center for Audio Experimentation at the

University of Wisconsin as a contemporary esthetic experience and to help givethe service a unique identifiable sound.

A sense of the cultural diversity could be achieved by programs featuring themusic of the different ethnic groups across the country.

Competitions could be sponsored to encourage new artistic uses of the mediumand to improve the quality of the product.

4. Provide access to the intellectual and cultural resources of cities, universities andrural districts through a system of cooperative program development withmember public radio stations.

One of the unique aspects of National Public Radio is that each member station will

have the potential of being an originator of programs as well as a transmitter; it willbe national in input as well as distribution. Since the majority of member stationsare part of large universities or near urban areas, for the first time the bestintellectual resources of the country will be able to he effectively used, quickly andeasily, on a national scale. Many Americans probably know only of oneanthropologist, Margaret Mead, and one historian, Arthur Schlesinger, Jr. Individualstations may contribute short actualities, an interview of national interest, segmentsof a longer special program, a complete program or program series or help to


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arrange for a live discussion of one specialist with another in a distant city. Stationsshould receive appropriate compensation for their contributions.

Initially, many stations may lack the skilled personnel or experience for some of thetasks necessary to implement this goal. Workshops for production personnel shouldbe provided so that standards of excellence can be established and maintained. Asignificant by-product of this goal will be the considerable upgrading of staff andservice of many local public radio stations.

5. Develop and distribute programs for specific groups (adult education, instruction,modular units for local productions) which may meet needs of individual regionsor groups, but may not have general national relevance.

The implementation of this priority will provide needed diversity of programming toaudiences presently served by some but not all public radio stations. Through a tape

distribution system, programs from the national production center could be suppliedto the public radio stations without live interconnection service, as well as specialinterest programs to member stations. Even though some stations lack the staff andfacilities to use the live network service, they should receive a program service fromNational Public Radio which can help strengthen their schedule and local service.The tape service could include special documentaries and cultural programsproduced by member stations, the National Public Radio production center, off airrecordings of network programs, and materials acquired from foreign sources.

Most public radio stations have developed several distinct program services forspecific audiences: farmers, elderly, blind, low income, youth. These efforts could befurthered and supplemented by NPR production on a national basis.

The largest specialized audience programming has been instructional programs forin-school listening and continuing professional education. Hundreds of thousands of youngsters presently receive enrichment programs by radio and while many of thesemust be designed for local school district curricula, some live (a daily newsbackground program for elementary pupils) and taped programs drawn fromnational resources could strengthen this important service. Similarly, the group of stations now providing in-service training for health related professions could beexpanded and used to disseminate vital timely information to key health centers

across the country. An increasing number of stations will be developing instructionalprogramming on the side channel of FM (SCA) while broadcasting general audienceprograms on the main channel. With the unique technical versatility of radio twodifferent program services can be offered simultaneously.

Programs in the "by and for" specific cultural, ethnic minorities category could bedeveloped. For example, there could be a linkup of stations in urban areas withsizeable non-white audiences, or student groups studying ecology, or groups with


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distinct lifestyles and interests not now served by electronic media. As man pullshimself out of the mass society to develop his unique humanness, his minorityidentification (ethnic, cultural, value) becomes increasingly important. This diversityis partially reflected in print media, but has not been manifested in the electronic. Afew of these growing interests are reflected in the comparative circulation figuresfor the periodicals listed below. The figures are taken from Ayer's Directories basedupon the previous year's circulation.

1964 1969 American Home 3,357,988 3,693,307 Art in America 16,803 40,878Better Nutrition -- 151,069Business Week 412,173 578,600Down Beat 50,747 74,878Ebony 763,389 1,054,117High Fidelity 118,275 150,003Home and Garden -- 444,352Gourmet 197,295 334,264National Geographic 3,497,354 6,050,137New York Review of Books -- 75,000Sierra Club (Conservation) -- 43,000Village Voice 27,779 116,708

In order to provide minorities access to the medium, it is not only important toestablish the identity of that group, but essential if the total population is tounderstand and appreciate the interdependence of pluralism. In addition to thecognitive information, these programs should help supply what Warren Bennis callsthe "need for affective education -- the cultivation of competence in the emotionaland interpersonal."

National Public Radio could also supply modular program units to network stationswhich could be used in local news and public affairs programs. For example, theremay be congressional testimony on pollution problems in Lake Michigan whichwould be of interest to stations in that region. There may be interviews with personsfrom a specific region or about regional issues. Some of the material may be in

rough form, outs of national productions or actualities for local newscasts.

6. Establish liaison with foreign broadcasters for a program exchange service.

Although presently overwhelmed by domestic problems, the individual's role as acitizen of the world should not be overlooked. International programs can be asource of cultural enrichment and an effective means to further understandingamong peoples around the world. The speed and volume of international travel,


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economic interdependence among nations makes this area of programming moreimportant than ever. In time/space, New York now is closer to Asia than it was toWashington, D.C. at the turn of the century; a plane can travel from New York toLondon in the same time as an automobile or train travels across New York State.We not only learn more about other peoples through international programs, butalso more about ourselves through the eyes of a distant observer.

Contact can be established with the Canadian Broadcasting Corporation, BritishBroadcasting Corporation, Australian Broadcasting Commission and otherinternational sources for acquisition of programs of common interest.

In addition to the cultural fare usually associated with international programs, therecould be live interconnected broadcasts on aspects of foreign policy and problemsof common concern--development of the north country of Canada, ecology of LakesErie and Ontario, balance of payments, etc. National Public Radio could also be a

primary resource for programs on U.S. life for distribution to foreign broadcasters.

7. Produce materials specifically intended to develop the art and technical potentialof radio.

There should be a close working relationship with the National Center for AudioExperimentation at the University of Wisconsin to apply the principles discoveredthere to the art of broadcasting. Improving the art of the sound medium should bean on-going concern at the production center just as newspapers and magazinesconstantly improve the format and appearance of their medium. The technical staff will be concerned with new developments in studio and remote equipment and thetransmission of material by satellite. National Public Radio should utilize the mostadvanced techniques of the medium, should introduce new concepts and have thehighest technical standards in the field.

odfrey Featherstone, writing in the British publication Anarchy suggests some of thepotentials:

Using sounds alone, with no imposed pictures or rigid, linear print tending tofragment and narrow thought processes and imagination, can stimulate a habit of thinking in terms of dynamic complexes of ideas or far-reaching constellations or

"fields" of imagery. Sound can tap the flow and structures of feelings of ordinarypeople if they speak directly for themselves about their lives' central experiences inactuality is made fuller, complex, concrete through the tone, pace, rhythm, andstress of their speech ... Skillfully, tactfully and simply relating actuality material tosong, Charles Parker's Radio Ballads ... about the efforts, strengths, risks, hardshipsdiscriminating wisdom rooted inmost people's working lives did this with an impactgreater than a multitude of political propaganda efforts.


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Vision and Mission: Seven Suggestions Why You Need Both

One of the most common questions that Im asked is whether there is anydifference between a mission and a vision. Its a question that has a quick answer yes! -with a whole lot of reasoning behind it.

Im always glad to be asked this question because its usually asked by a thoughtfulperson who wants to do their best for their organization. The person has likelybeen reading or talking to someone who uses the words mission and vision orperhaps has to fill out a form where they are required. People who ask this questionare actually aware that you need to have one if not both, and care enough to findout which they should use.

I think there are good reasons why people talk about mission and vision these days.

1.

The awareness of mission and vision has three major bases: There are many books, articles, conferences speakers that speak in lay

language about mission and vision. What used to belong to researchers andhigh level consultants is now everywhere for anyone.

There are consultants aplenty who are trained to use one or the other wordsand justify neither.

Business models for non-profits use these words and there continues to be atransference of what is good for the for profit sector to the not for profitsector.

2. Funding requirements are now as never before asking for the mission and visionto be filled in the blanks.

3. Semantics are more precise because people talk about it more often. When weinvent new words its because this is important for communication. I think thatthe distinctions between mission and vision are becoming more important.

4. There is a trend to making sure that a framework is in place . People care moreabout how we do things right and are moving away from the just do it approachto one that requires a more serious framework. The dot com hurry up and getgoing had its place and lost it to be replaced by a calculated and consideredapproach.

Here are 7 questions with answers that might help to provide more rationale as towhy an organization needs both a mission and a vision:

What exactly are a mission and a vision?

A mission and a vision are statements that have been written to guide certainactions and future states:


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A mission is what an organization does, its action; a vision is what anorganization would like to happen as a result of the action that it does.

Mission equals the action; vision is the ultimate result of the action. Mission answers the question What would not happen if we were not here as

an organization? Or more positively, What change is achieved because weexist?

Vision answers the question: What are the results, the ends, the consequencesof our action?

Vision looks forward; mission looks at today.

Do we need both a mission and a vision? Yes. You need to be able to tell yourself both what you do and why to make senseof your work. I like Joel Barkers quote from the Power of Vision, a training video fororganizations who need examples about how individuals and organizations usevision for their success. Vision without action is merely a dream. Action without

vision just passes the time. Vision with action can change the world. If you have justa mission, the action written, - and not the vision, you will not know where youregoing or if you have arrived.In an organization, vision is to leadership as mission is to management. Caneveryone be a leader? Can everyone be a manager? No, but you need to have someof both leadership and management.How do we figure out two when one is hard enough to do? Vision-creating is one of those things that people either love or hate to do. If youare part of a team that is giving birth to a vision you need to try and be creativeabout how you do this. This kind of thinking, of visioning, takes time; takes lots of input from members and other key stakeholders; and, I believe it takes a creativeand task-oriented facilitator to help it happen.Which do we decide first - the vision or the mission? Since the vision is the most difficult for most people to come up with, I suggest thatyou find the mission first. Focus on the answering the easiest question first whatdo we do? which gives you the mission, then answer the question what willhappen as a result of what we do? - which gives you the vision.How often do we change the mission and vision? A vision is tied to the strategic plan and may not change in much less than 5 years if not more. A mission could change annually and since it directs the annual orbusiness plan, depends on the external and internal changes. The mission could

change in less than 5 years as long as it still fits with the vision.How do we know our vision and mission are right? People nod when you tell them what you do. People who are part of your organization can visualize themselves and what they

do in the vision and mission statements. The mission and vision are still exciting to the creators the morning after the

retreat.


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The mission and vision make sense for our organization and fits with all we saywe are and do.

Theres an irresistible pull of emotion in the center of us around the vision thatmakes us feel that its right.

How long are the vision and mission? Vision and mission statements are just that brief and concise. If you are writingpages and pages you likely will cause confusion. On the other hand, if you make thestatements too short you are likely writing a slogan. Try to keep the vision andmission statements long enough to make sense and short enough for people toremember, and say, easily.Vision and mission statement are foundational parts of good governance.Organizations which work at having both will find that they will have no problemdistinguishing between a vision and mission and using them toward their success.


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Q: 2 a) As a manager of any service organization, how would you identifyand analyze strategic gap?

Answer)

The SWOT analysis is an extremely useful tool for understanding and decision-making for allsorts of situations in business and organizations. SWOT is an acronym for Strengths,Weaknesses, Opportunities, and Threats. Information about the origins and inventors of SWOTanalysis is below. The SWOT analysis headings provide a good framework for reviewingstrategy, position and direction of a company or business proposition, or any other idea .Completing a SWOT analysis is very simple, and is a good subject for workshop sessions. SWOTanalysis also works well in brainstorming meetings. Use SWOT analysis for business planning,strategic planning, competitor evaluation, marketing, business and product development andresearch reports. You can also use SWOT analysis exercises for team building games. See alsoPEST analysis, which measures a business's market and potential according to external factors;Political, Economic, Social and Technological. It is often helpful to complete a PEST analysisprior to a SWOT analysis. See also Porter's Five Forces model, which is used to analysecompetitive position.

A SWOT analysis measures a business unit, a proposition or idea; a PEST analysis measures amarket. A SWOT analysis is a subjective assessment of data which is organized by the SWOTformat into a logical order that helps understanding, presentation, discussion and decision-making. The four dimensions are a useful extension of a basic two heading list of pro's and con's(free pro's and con's template here).

SWOT analysis can be used for all sorts of decision-making, and the SWOT template enables

proactive thinking, rather than relying on habitual or instinctive reactions. The SWOT analysistemplate is normally presented as a grid, comprising four sections, one for each of the SWOTheadings: Strengths, Weaknesses, Opportunities, and Threats. The free SWOT template belowincludes sample questions, whose answers are inserted into the relevant section of the SWOTgrid. The questions are examples, or discussion points, and obviously can be altered dependingon the subject of the SWOT analysis. Note that many of the SWOT questions are also talkingpoints for other headings - use them as you find most helpful, and make up your own to suit theissue being analysed. It is important to clearly identify the subject of a SWOT analysis, becausea SWOT analysis is a perspective of one thing, be it a company, a product, a proposition, andidea, a method, or option, etc.

Here are some examples of what a SWOT analysis can be used to assess:

a company (its position in the market, commercial viability, etc) a method of sales distribution a product or brand a business idea a strategic option, such as entering a new market or launching a new product a opportunity to make an acquisition


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a potential partnership changing a supplier outsourcing a service, activity or resource an investment opportunity

Be sure to describe the subject for the SWOT analysis clearly so that people are contributing to the

analysis, and those seeing the finished SWOT analysis, properly understand the purpose of the

SWOT assessment and implications.

SUBJECT OF SWOT ANALYSIS: (DEFINE THE SUBJECT OF THE ANALYSIS HERE)

Strengths Advantages of proposition? Capabilities?

Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution,

awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications,

certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession?

Weaknesses Disadvantages of proposition?

Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession?


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Opportunities Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics - surprise, major contracts, etc? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences?

Threats Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions - various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects?

S w o t a n a l y s i s e x a m p l eThis SWOT analysis example is based on an imaginary situation. The scenario is based on abusiness-to-business manufacturing company, who historically rely on distributors to take theirproducts to the end user market. The opportunity, and therefore the subject for the SWOTanalysis, is for the manufacturer to create a new company of its own to distribute its products

direct to certain end-user sectors, which are not being covered or developed by its normaldistributors.

Subject of SWOT analysis example: the creation of own distributor company toaccess new end-user sectors not currently being developed.


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Strengths End-user sales control and direction. Right products, quality and reliability. Superior product performance vs

competitors. Better product life and durability. Spare manufacturing capacity. Some staff have experience of end-user

sector. Have customer lists. Direct delivery capability. Product innovations ongoing. Can serve from existing sites. Products have required accreditations. Processes and IT should cope. Management is committed and confident.

Weaknesses Customer lists not tested. Some gaps in range for certain sectors. We would be a small player. No direct marketing experience. We cannot supply end-users abroad. Need more sales people. Limited budget. No pilot or trial done yet. Don't have a detailed plan yet. Delivery-staff need training. Customer service staff need training. Processes and systems, etc Management cover insufficient.

Opportunities Could develop new products. Local competitors have poor products. Profit margins will be good. End-users respond to new ideas. Could extend to overseas. New specialist applications. Can surprise competitors. Support core business economies. Could seek better supplier deals.

Threats Legislation could impact. Environmental effects would favour larger

competitors. Existing core business distribution risk. Market demand very seasonal. Retention of key staff critical. Could distract from core business. Possible negative publicity. Vulnerable to reactive attack by major

competitors.

See also the free PEST analysis template and method, which measures a business according toexternal factors; Political, Economic, Social and Technological. It is often helpful to complete aPEST analysis prior to competing a SWOT analysis.See also Porter's Five Forces model.

M o r e o n t h e d i f f e r e n c e a n d r e l a t i o n s h i p b e t w e e n P E S Ta n d S W O TPEST is useful before SWOT - not generally vice-versa - PEST definitely helps to identify SWOT

factors. There is overlap between PEST and SWOT, in that similar factors would appear in each.That said, PEST and SWOT are certainly two different perspectives:PEST assesses a market, including competitors, from the standpoint of a particular propositionor a business.SWOT is an assessment of a business or a proposition, whether your own or a competitor's.Strategic planning is not a precise science - no tool is mandatory - it's a matter of pragmaticchoice as to what helps best to identify and explain the issues.


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PEST becomes more useful and relevant the larger and more complex the business orproposition, but even for a very small local businesses a PEST analysis can still throw up one ortwo very significant issues that might otherwise be missed.The four quadrants in PEST vary in significance depending on the type of business, eg., socialfactors are more obviously relevant to consumer businesses or a B2B business close to theconsumer-end of the supply chain, whereas political factors are more obviously relevant to aglobal munitions supplier or aerosol propellant manufacturer.All businesses benefit from a SWOT analysis, and all businesses benefit from completing aSWOT analysis of their main competitors, which interestingly can then provide some feed backinto the economic aspects of the PEST analysis.

T h e o r i g i n s o f t h e S W O T a n a l y s i s m o d e lThis remarkable piece of history as to the origins of SWOT analysis was provided by Albert SHumphrey, one of the founding fathers of what we know today as SWOT analysis. I amindebted to him for sharing this fascinating contribution. Albert Humphrey died on 31 October

2005. He was one of the good guys.SWOT analysis came from the research conducted at Stanford Research Institute from 1960-1970. The background to SWOT stemmed from the need to find out why corporate planningfailed. The research was funded by the fortune 500 companies to find out what could be doneabout this failure. The Research Team were Marion Dosher, Dr Otis Benepe, Albert Humphrey,Robert Stewart, Birger Lie.It all began with the corporate planning trend, which seemed to appear first at Du Pont in 1949.By 1960 every Fortune 500 company had a 'corporate planning manager' (or equivalent) and'associations of long range corporate planners' had sprung up in both the USA and the UK.However a unanimous opinion developed in all of these companies that corporate planning in

the shape of long range planning was not working, did not pay off, and was an expensiveinvestment in futility.It was widely held that managing change and setting realistic objectives which carry theconviction of those responsible was difficult and often resulted in questionable compromises.The fact remained, despite the corporate and long range planners, that the one and onlymissing link was how to get the management team agreed and committed to a comprehensiveset of action programmes.To create this link, starting in 1960, Robert F Stewart at SRI in Menlo Park California lead aresearch team to discover what was going wrong with corporate planning, and then to findsome sort of solution, or to create a system for enabling management teams agreed andcommitted to development work, which today we call 'managing change'.The research carried on from 1960 through 1969. 1100 companies and organizations wereinterviewed and a 250-item questionnaire was designed and completed by over 5,000executives. Seven key findings lead to the conclusion that in corporations chief executiveshould be the chief planner and that his immediate functional directors should be the planningteam. Dr Otis Benepe defined the 'Chain of Logic' which became the core of system designed tofix the link for obtaining agreement and commitment.


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1. Values2. Appraise3. Motivation4. Search5. Select

6. Programme7. Act8. Monitor and repeat steps 1 2 and 3

We discovered that we could not change the values of the team nor set the objectives for theteam so we started as the first step by asking the appraisal question ie what's good and badabout the operation. We began the system by asking what is good and bad about the presentand the future. What is good in the present is Satisfactory, good in the future is an Opportunity;bad in the present is a Fault and bad in the future is a Threat. This was called the SOFT analysis.When this was presented to Urick and Orr in 1964 at the Seminar in Long Range Planning at theDolder Grand in Zurich Switzerland they changed the F to a W and called it SWOT Analysis.

SWOT was then promoted in Britain by Urick and Orr as an exercise in and of itself. As such ithas no benefit. What was necessary was the sorting of the issues into the programme planningcategories of:

1. Product (what are we selling?)2. Process (how are we selling it?)3. Customer (to whom are we selling it?)4. Distribution (how does it reach them?)5. Finance (what are the prices, costs and investments?)6. Administration (and how do we manage all this?)

The second step then becomes 'what shall the team do' about the issues in each of thesecategories. The planning process was then designed through trial and error and resulted finallyin a 17 step process beginning with SOFT/SWOT with each issue recorded separately on a singlepage called a planning issue.The first prototype was tested and published in 1966 based on the work done at 'ErieTechnological Corp' in Erie Pa. In 1970 the prototype was brought to the UK, under thesponsorship of W H Smith & Sons plc, and completed by 1973. The operational programme wasused to merge the CWS milling and baking operations with those of J W French Ltd.The process has been used successfully ever since. By 2004, now, this system has been fullydeveloped, and proven to cope with today's problems of setting and agreeing realistic annualobjectives without depending on outside consultants or expensive staff resources.

T h e s e v e n k e y r e s e a r c h f i n d i n g sThe key findings were never published because it was felt they were too controversial. This iswhat was found:1) A business was divided into two parts. The base business plus the development business.This was re-discovered by Dr Peter Senge at MIT in 1998 and published in his book the 5thDimension. The amount of development business which become operational is equal to orgreater than that business on the books within a period of 5 to 7 years. This was a major


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surprise and urged the need for discovering a better method for planning and managingchange.2) Dr Hal Eyring published his findings on 'Distributive Justice' and pointed out that all peoplemeasure what they get from their work and divide it by what they give to the work and thisratio is compared to others. If it is not equal then the person first re-perceives and secondlyslows down if added demands are not met. (See for interest Adams Equity Theory and theEquity Theory3) The introduction of a corporate planner upset the sense of fair play at senior level, makingthe job of the corporate planner impossible.4) The gap between what could be done by the organisation and what was actually done wasabout 35%.5) The senior man will over-supervise the area he comes from. Finance- Finance, Engineering-Engineering etc.6) There are 3 factors which separate excellence from mediocrity:a. Overt attention to purchasing

b. Short-term written down departmental plans for improvementc. Continued education of the Senior Executive7) Some form of formal documentation is required to obtain approval for development work. Inshort we could not solve the problem by stopping planning.In conclusion

By sorting the SWOT issues into the 6 planning categories one can obtain a system whichpresents a practical way of assimilating the internal and external information about thebusiness unit, delineating short and long term priorities, and allowing an easy way to build themanagement team which can achieve the objectives of profit growth.This approach captures the collective agreement and commitment of those who will ultimately

have to do the work of meeting or exceeding the objectives finally set. It permits the teamleader to define and develop co-ordinated, goal-directed actions, which underpin the overallagreed objectives between levels of the business hierarchy.

Q. 2) B. Select any firm from manufacturing sector; discuss the generalenvironment technology to leverage human capital and knowledge?

Answer)

ANALYSIS OF COMPETITION The third element of Strategic analysis is to look at the competitive environment - what yourCompetitors are doing, where the next technological developments are coming from and thegeneral directions the market is moving.


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Competitive and environmental analysisA competitive and environmental analysis of your markets should include all the key influencingfactors that affect the way in which you can compete. A competitive review is important fortwo reason.Firstly, even if you know what the customers want and have the resources to meet thecustomers' demands, it may be that the competitive environment means that it is not worthpursuing particular parts of the market for a whole range of strategic reasons, such as thethreat a price war, channel conflict, or legal or ethical considerations.Secondly, you need to know if your competitors are doing things better than you are, or moredangerously, whether they are looking to change the basis of competition in the market, forinstance by moving to a direct sales model, or by introducing some revolutionary new productor technology.The main types of competitive analysis from a strategic point of view are: "The Five Forces"

Benchmarking and competitive evaluationMarket Intelligence is the primary mechanism for gathering information about competitors(although some may come from talking to customers in your own market surveys). Notanant isour on-line market knowledge system for collecting, sharing and managing customer andcompetitor knowledge provided by Gegen CIS.

Five forces The five forces come from Porter's famous framework and are: Power of Buyers Power of Suppliers Threat of substitutes Barriers to entry CompetitorsThe idea is that change in your market is likely to come as the basis of one of these five areas.For instance, buyers may distort the market by forcing prices down, or by deciding to take buildproducts in-house.In considering how these "forces" act on your markets, you get a picture of issues such aschannel conflict, threats from vertical integration, the impact of regulatory change or theadvent of new technology. You can also take a view as to how you are or can affect thecompetitive situation for your own benefit, rather than statically accepting the status quo.Consequently it becomes possible to play around with different future competitive scenarios

and to use these to test different propositions to try and guess how the market will change.Your strategy can then include contingencies and responses to changes that might affect you,or changes that you might make to the market.

BENCHMARKINGBenchmarking is used to ascertain how well you are doing against the competition. Are thereareas that you can learn from the competition? Are there ideas in markets outside your ownthat would be worth bringing into your market to give you a competitive advantage?


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Your competitors can also be a source for information about the general market. Theiradvertising and marketing is telling you something about the messages and approaches thatthey think are applicable to your market. If they have done their research, you can learn fromtheir approaches.One common issue that comes from looking at the competition is what do you do about it? Theoptions are:

Ignore Fight AdoptIn practice, if there is merit in something new and you ignore it, it is likely to bite you later. If you fight against it, you add to your costs potentially just to save market share, rather than towin market share.Consequently often adoption of the competition's good ideas is the best way forward (althoughperhaps after a little fighting to test whether the ideas are sound). Microsoft's Embrace and

Extend and Intel's "Only the Paranoid Survive" are good examples of companies that use thecompetition to keep their products at the cutting edge.Often there can internal cultural issues that mean this can be difficult to accept. But learningfrom the competition, doesn't mean following the competition. This approach, known as an"invest in your threats " strategy, can be an extremely effective way of keeping up with andahead of the market.


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Q3: Suppose you are running a large scale business organization, how will youuse the technology to leverage human capital and knowledge?

Answer)

Businesses are racing to gain and sustain advantage in today's globally competitive businessenvironment. Digital age technology is rapidly shifting where and how business is done. Thepressure for profitability, to decrease the cost of production and increase revenues, fuels theneed to leverage all of the sources of capital a company can access--including human capital.HR's response has been to become HR strategic business partners. This is a great and necessarystep, but the stakes are high and we need to shift gears faster--and think bigger! Either wemove up the business value chain, or we slide down it driven by the twin and intertwined forcesof technology and outsourcing that are already reshaping HR.

The term human capital management (HCM) is entering our lexicon of change. Most use theterm interchangeably with HR, but HCM can and should be more than HR with a new name.HCM is a C-suite business discipline that develops enterprise human capital strategies andensures the human capital portfolio is effectively managed. Just as the chief financial officer(CFO) is a full senior partner in identifying and solving business issues from a financialperspective, the chief human capital officer (CHCO) is a full senior partner in identifying andsolving business issues from a human capital perspective. As C-suite members, the CFO andCHCO are accountable for overall enterprise performance. Both also have responsibilities forenabling business operations and the performance of their organizations.

HCM provides decision support by combining business and workforce intelligence to thedevelopment of enterprise human capital strategies: how to leverage people and their ideas

effectively to achieve bottom-line business goals such as growing the business, increasingmarket share, margins, share price, and decreasing SG&A costs, as well as improving businessprocesses, benefiting from technology investments, and increasing productivity.

The future of HR and the emergence of HCM are big topics. In this article we touch on a fewstarter points, hoping to open up further dialogue.Human Capital Management--Strategic DomainsLeadership Capital: Executive performance and credibilityStructural Capital: Governance, business structure, processes, and technologyWorkforce Capital: Employees, contingent labor, outsourcers, suppliers, and partnersCultural Capital: Ethics, values, relationships, and reputationIntellectual Capital: Innovations, inventions, and knowledge managementLeadership Capital: Strategy

Determining strategies for growth is a significant component of leadership performance.Growing the business is as much a human capital decision as it is a product/service and financialdecision. Organic growth through extending existing products, adding new products, openingsales channels or expanding into new markets requires human capital resources. HCM


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considers the state of the enterprise innovation engines, SG&A impact, and the leadership andworkforce options and costs of expanding and operating in new channels, markets, orgeographies.

Perhaps it is time to "buy" growth through a merger or acquisition (M&A). Have you noticedwhen a major M&A deal is initially announced the stock of the acquired company usually goesup and the stock of the acquiring company goes down? Shareholder skepticism is justified, asmany mergers do not produce all the promised results. The wheeling and dealing of an M&A isheady, but the aftermath is often simply a headache. If the M&A value proposition is based onanything more than merely buying the tangible book value assets and market footprint, thenincreased HCM due diligence and preplanning for the post merger integration is critical beforedeal fever kicks in.

STRUCTURAL CAPITAL: GOVERNANCEOperating structure and governance exist to facilitate achievement of the business goals in the

current environment and at each stage of the business life cycle. To be public or private,centralized, decentralized, or a holding company should be based on how well the needs of thebusiness are met now, not on just the preferences of the current management team or whatworked in the past.

Structuring the board and senior leadership team, defining management roles andresponsibilities, designing total executive compensation packages and employment contractsare among the most powerful domains of HCM, and are currently under intense public andstakeholder scrutiny.

Public companies need a balance of internal power and controls between the C-suite membersand the board of directors. Without better corporate discipline, plenty of regulatory andlegislative bodies are ready to step in with more regulations and legislation, and overreachingrequirements, like Sarbanes Oxley, will continue to drive up compliance costs. Part of thatbalance could be a strong CHCO backed by a professional body of HCM ethics and standards.Workforce Capital Strategy and structure are only as valuable as the results produced. The"make vs. buy" decision extends to more than products and services. An employee-basedworkforce is only one of today's many choices. HCM critically assesses the competitiveadvantage of any work done in-house and explores an extended workforce portfolio todetermine the optimum mix of full- and part-time employees, contingent workers, outsourcedwork, and suppliers or partners.

HCM includes influencing external workforce sourcing, contracting, and management to ensurevendor capabilities and controls in areas such as training, turnover, and incentive transparency,in addition to competitive pricing and service levels.


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In telecommunications, when a telemarketer's employees make bad sales in your name("slamming"), it is your company that will be in the news and pay fines to regulatory agencies. If your customer care outsourcer has poor training and high turnover, your company's customerswill be dissatisfied and perhaps lost. In business process outsourcing (BPO), you are buyingperformance and results; you are not managing the vendor's processes, but you do need toknow that they are!

Offshoring work? HCM goes beyond labor arbitrage to review the decision drivers and businessimplications of where work is done. Would an offshore investment add needed HCM capabilityand flexible capacity? Would you recommend expansion via a "captive," an acquisition, or anoutsourcer? Do the risk management calculations of using a low-cost country and weigh thebusiness impact of outsourcing back office, mid office, and front office work.The question must be asked: Why use people at all? HCM looks for cost-effective technology toenable direct access and self-service across the value chain. Technology displacement of labor isa fact of life in most industries (including HR). Use people where complexity, judgment, and

personal interaction add competitive advantage. Get ahead of the curve by ensuring technologyinvestments are made in alignment, managing the total cost of labor and the value propositionsof the business.

CULTURAL CAPITALNow more and more of a company's market value is in "intangibles" rather than book value.Today's performance results and tangibles such as cash and inventory on the balance sheet areeasy to understand, measure, and manage--at least easier than concepts that drive stakeholderactions founded on beliefs about the future. Belief in the sustainability of profitable growth andcompetitive advantage drives much of the intangible market value. Perceptions about culture,

operational values, ethics, and behaviors of the leaders and the workforce influence customer,investor, and employee decisions.

Effective cross-functional and organizational collaboration can increase speed to market and inturn support external brand reputation. Cultural fit supports strategic alignment andinterdependence of action across increasingly diverse people and places, businesses and supplychains. Cultural compatibility between alliance partners, or the talent acquired in an M&A, maymean the difference in finishing first or worst.Intellectual Capital

Human capital management is about people and their ideas, and the capability to leverage bothin achieving business strategies and goals. A great salesperson is a valued asset. But onesalesperson can only reach and serve so many clients, no matter how capable. People havebuilt-in capacity constraints. If you leverage the learning and competencies of the one to trainothers or to improve staffing selection criteria, you can achieve a greater level of performancefor many.


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The common thread across income from patents and new products, proprietary processes thatenable competitive advantage (think Wal-Mart and eBay), or operational efficiencies thatincrease productivity and reduce expense is people and the leveraging of their ideas to increasetransferable knowledge, repeatable results, and sustainable advantage.

What HCM Brings to the TableHuman capital decisions are made all the time in businesses. Why add HCM as a discipline?Because a series of scattered one-off decisions may suboptimize the overall workforceportfolio, and missteps with people in one area often have negative public consequences forthe whole company. The CHCO does not own or make sole decisions in every area mentioned.The key is to have the enterprise HCM strategic view and management of the total cost of human capital led by a responsible and accountable senior leader with the authority of a C-suiteseat at the CEO's table.

HCM strategic decision support requires extensive authoritative external and internal business

and workforce intelligence with a credible understanding of business financials and operations.The CHCO should be the first and most informed source of what is going on externally with theworld of work related to your company, competitors, and industry. Internal businessintelligence requires data mining, metrics, and analytics. HR is too often well back in the pack interms of producing metrics at the business impact level. It is hard to have business intelligencewithout intelligent IT systems and the analytic capabilities to interpret the data. Whenupgrading the enterprise ERP or the internal HR technology infrastructure, or embarking oncomprehensive platform outsourcing, be sure to design in (and invest in) the diagnostic andreporting capabilities to identify, analyze, and measure performance of the enterprise's use of human capital.

Where Does HR Fit? The Push and the PullWe have been looking at the pull: the strategic aspects and advantages to be gained, such asbusiness growth, improved productivity, and profitability. Leadership development andsuccession planning, talent management, performance management, employee development,compensation, and benefits are as important as ever. Depending on the company and culture,the HCM elements may be led by HR, or the CHCO may be a separate office.The push is on as well. HR technology that enhances employee and manager self-services at lesstotal cost is a win for our clients and customers, and HR outsourcing is an increasingly viableoption. But if HR technology is selected piecemeal and if outsourcing is based only on costcutting, you may end up perpetuating treatment of HR as a cost center to be driven down to

the lowest cost. Done well, technology and outsourcing (or a centralized shared services center)will free up more of HR to be strategic business partners. But time availability does not equalHCM capability. These twin forces will better serve HR and our businesses if they are part of anoverall HR strategy and transformation plan.


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HCM is about the enterprise, about human capital options expressed in dollars and data. This isa hot-seat position, not one for the faint of heart. Nor is it a position for a cold, numbers-onlybottom liner. Each race is run and won, or lost, with real people with real lives. Trading the car Idrive does not hurt the feelings of the car--I have no obligation to it. Cutting jobs, adding jobs,investing in a global extended workforce all carry obligations--moral, financial, legal, political--and the entire enterprise network of customers, employees, shareholders, and communitiesmay be affected.

HCM is a cross-functional, cross-enterprise leadership discipline with oversight and decision-making responsibility and accountability. It requires business and financially savvy, technology-aware, data-embracing, senior leaders who bring strategic human capital expertise, businessintelligence, and judgment to the C-suite table.There is much overlap with HR, but there is a core difference. Today's HR concentrates onemployees and not enough on the broader workforce and issues that impact the enterprise'ssuccess. HCM increases the scope to include all of the sources of human capital, wherever they

reside in the human capital value chain.

The good news is that HCM is not yet fully defined. We can define it, shape it, and bring it intocreation--if we shift gears faster and think bigger!


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SUCCESSFUL HR STRATEGY HR Strategy is a much misused term in many HRM Departments. HR Strategy is the basicdocument for Human Resources demonstrating the most important goals in the future. It isderived directly from the Business Strategy and must be agreed by the top management of thecompany.HR Strategy is a document to show the employees in HRM and the rest of the organization themain imperatives and key initiatives of Human Resources to be achieved and how they willimpact the whole organization.HR Strategy can be completely new and innovative, but many times the HR Strategy uses thebasic blocks, which can be found on the market and putting just different priorities. Generally,there are about 10 different HR Strategies, which are used and the priorities and initiativesdiffer.Also, the HR Strategy is very dependant on the sector, in which the organization operates. Themanufacturing company can have very different HR Strategy from the financial institution.

HRM STRATEGIC CHALLENGESThe HRM Function has some strategic challenges , which will affect the whole organization inthe future. The strategic challenges will change the organization of the HRM Function and itsrole in the organization.The current role of the HRM Function is about providing services to the organization and themanagers are clear clients of the HRM Processes. The HRM Function usually do not providechallenging questions and initiatives to the organization and the business leaders do not haveto worry about the HRM Function as the salaries are paid correctly at every pay date defined bythe organization.

The main HRM Strategic Challenges can be defined in four main areas: Leadership Development; Management Development; Globalization; Outsourcing.

The Leadership Development is one of the biggest HRM Challenges. The leadershipdevelopment is the only way to secure the organization for the future. The supply of theleaders is very limited and the organization has to focus on the growth of the potential availableinside the organization. The HRM Function has to take the responsibility for the initiatives toidentify and grow the potential inside the organization and to secure the best potential to stay

in the organization. The leadership development initiatives are extremely costly, but theorganization has to recognize the need to invest in such initiatives. This is a major HRMChallenge.

The line management is another HRM Challenge . The line management is the main user andclient of the HRM Value Added processes and they have to be able to use the processescorrectly. The HRM Function can be seen as the enemy, but the HRM Challenge is to develop


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and train the line management in the daily usage of the value added HRM Processes to makethe organization more efficient.

The globalization is another HRM Challenge. The HRM Function has to make its policies,procedures and processes to work on the global level. Currently, most of the HRM Policies isfocused on the concrete country, but the employees have to start to move from the country toanother country and the HRM Processes have to be able to support such a need in theorganization. The globalization has a huge impact on the HRM Function and the it is usually notready to take more responsibility in the movement of the workforce around the Globe.

The outsourcing is the main issue for the HRM Function. The HRM Function has to be able tooutsource its non-core services for the organization and it has to be able to keep the servicelevel for the organization. The outsourcing HRM Challenge is pretty huge as it requests a lot of standardization and practice from the HRM Function.

IMPACT OF CORPORATE CULTURE ON HR STRATEGYCorporate Culture is one of key elements for Human Resources. Corporate Culture is a verydifficult complex of corporate values, decision processes and human behavior in eachorganization.Generally, the Corporate Culture consists of 4 main building blocks:

The attitudes, Experiences, Beliefs. Values

The Corporate Culture is not born, it evolves and develops over a longer period of time and it is notcreated by the single person. The corporate culture forms the norms in the organization. The corporate

culture is the most important aspect, when evaluating the formal and informal decision processes indifferent organizations. The corporate culture with the stress on informal behavior of employees willdefinitely lead to less formal decision processes and will support the quick reaction to the externalchanges on the market.

It is not possible to say, that one Corporate Culture is better than the other one. Each CorporateCulture is very unique and the external observer can just make a judge about the generalapproach and stresses inside the corporate culture.HRM is responsible for recognizing the competitive advantages in the corporate culture. On the job market the corporate culture can be an excellent opportunity for the company to differfrom the competitors. In case the other competitors are really formal companies, the informalcompany can win a lot of excellent candidates, just based on the fact of the informal corporateculture.

HRM is many time responsible for corporate culture, but this is a nonsense. The corporateculture is not set by Human Resources and it is not set by any internal procedure. The corporateculture is set by the behavior of top management and the potential change of the corporate


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culture is a very long run, which fails many times as the top management does not demonstratethe will to change the corporate culture by its own decisions and examples.

For Human Resources the corporate culture is a huge challenge to adjust its own behavior andstyle internally and externally. The corporate culture is in many cases the most importantfactor to sell the organization as the best employer in the neighborhood. For HRM, thecorporate culture is a very important input for setting the HR Strategy .THE ORGANIZATIONAL CLIMATEThe organizational climate was defined by two psychologists ... Litwin and Stringer. Later Mr.McClelland redefined their original version of the theory of the organizational climate.The whole concept of the organizational climate refers to the main 6 key factors of the workingenvironment.Generally, the organizational climate is not a topic to ignore in the serious business discussionsas the studies conducted bring the amazing results. The organizational climate has the overallimpact of 33, 3% on the success of the organization in the changing world around us.

T h e 6 k e y f a c t o r s o f t h e O r g a n i z a t i o n a l C l i m a t eThe organizational climate has 6 key elements:

Flexibility how free the employees are to innovate Responsibility degree to which the employees feel free to work without asking for the

permission and guidance from the manager Standards the sign the organization emphasizes the excellence, that the goals for the

employees are really high but attainable Rewards the employees have to receive regular feedback and that they are rewarded

accordingly Clarity the employees know, what is expected from them and how their efforts relate to the

organizational goals

Team Commitment the employees have to know they belong to the winning team or thewinning organization and that all of the employees work towards the same goals or objectives.

The Organizational Climate ParadoxThe manager or the leader cannot fulfill all the 6 key elements immediately. But out of 6 keyelements of the organizational climate, the three ones are really key from the real beginning:

Standards Clarity Team Commitment

When these three elements are not met, the motivation of employees is lost and the positionof the manager is in the danger as the team can start the search for the informal leader. Also,

you can read more about the c orporate culture as this is also very important for theorganizational climate .


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Q. 5: (A) How an International organization develop its different strategies?Explain the factors effecting international strategies.

Answer)

Globalization was the buzzword of the 1990s, and in the twenty first century, there is noevidence that globalization will diminish. Essentially, globalization refers to growth of trade andinvestment, accompanied by the growth in international businesses, and the integration of economies around the world. According to Punnett (2004) the globalization concept is based ona number of relatively simple premises:

o Technological developments have increased the ease and speed of international communicationand travel.

o Increased communication and travel have made the world smaller.o A smaller world means that people are more aware of events outside of their home country,

and are more likely to travel to other countries.o Increased awareness and travel result in a better understanding of foreign opportunities.o

A better understanding of opportunities leads to increases in international trade andinvestment, and the number of businesses operating across national borders.o These increases mean that the economies around the world are more closely integrated.

Managers must be conscious that markets, supplies, investors, locations, partners, andcompetitors can be anywhere in the world. Successful businesses will take advantage of opportunities wherever they are and will be prepared for downfalls. Successful managers, inthis environment, need to understand the similarities and differences across nationalboundaries, in order to utilize the opportunities and deal with the potential downfalls.

The globalization of business is easy to recognize in the spread of many brands and servicesthroughout the world. For example, Japanese electronics and automobiles are common in Asia,Europe, and North America, while U.S. automobiles, entertainment, and financial services arealso common in Asia, Europe, and North America. Moreover, companies have becometransnational or multinational-that is, they are based in one country but have operations inothers. For example, Japan-based automaker Honda operates the largest single factory in theUnited States, while U.S. based Coca-Cola operates plants in other countries including Franceand Belgiumwith about 80 percent of that company's profits come from overseas sales.

During the early1990s, there were reasons to feel that globalization was working. The economicsuccess of Singapore, the rapid economic growth in the Asian Tigers (as the Asian countries that

grew rapidly were called), the industrializing of countries, such as Brazil and Mexico, and avariety of other positive economic events around the world suggested that the results of globalization were indeed good for development in poorer countries, as well as in richer ones.During the 1990s, the United States experienced one of its most sustained periods of growth aswell, and there was much talk of a "new economy", based on globalization, which was immuneto economic shocks and recession.


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Unfortunately, this rapid growth was not without consequences. The Seattle meetings of theWorld Trade Organization turned into a fiasco, with anti-globalization groups demonstratingagainst globalization on all frontsfrom animal rights to environmental concerns, povertyalleviation, and jobs for Americans. The anti-globalization forces have not coalesced into acoherent whole because they represent such diverse and often contradictory views. Thevehemence of their protests, however, makes it clear that globalization is not a panacea for theworld's problems. In addition, the Asian Tigers suffered major economic setbacks in the late1990s. In 2002, Argentina's economy, which had been one of the stars of the 1990s, crashed,when the country could no longer maintain its currency at par with the U.S. dollar.

Further problems occurred in the Triad economies. Japan, Europe, and the United States, oftenreferred to as the Triad, dominated international trade and investment for much of the secondhalf of the twentieth century. The Japanese economy went into a severe period of recessionand deflation in the late 1990s, and in 2001 both the European and the U.S. economies took adownward turn as well. In turn, the rest of the world was negatively affected by the economic

situation in the Triad. The terrorist attacks in the United States in September, 2001,exacerbated this already negative economic situation.

In developing appropriate global strategies, managers need to take the benefits and drawbacksof globalization into account. A global strategy must be in the context of events around theglobe, as well as those at home.

International strategy is the continuous and comprehensive management technique designedto help companies operate and compete effectively across national boundaries. Whilecompanies' top managers typically develop global strategies, they rely on all levels of management in order to implement these strategies successfully. The methods companies useto accomplish the goals of these strategies take a host of forms. For example, some companiesform partnerships with companies in other countries, others acquire companies in othercountries, others still develop products, services, and marketing campaigns designed to


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Table: 1 Differences between Domestic and International Strategy

Source: World BankAppeal to customers in other countries. Some rudimentary aspects of international strategiesmirror domestic strategies in that companies must determine what products or services to sell,

where and how to sell them, where and how they will produce or provide them, and how theywill compete with other companies in the industry in accordance with company goals.

The development of international strategies entails attention to other details that seldom, if ever, come into play in the domestic market. These other areas of concern stem from cultural,geographic, and political differences. Consequently, while a company only has to develop astrategy taking into account known governmental regulations, one language (generally), and

Factors

Domestic Conditions Global Conditions

Culture Homogeneous Heterogeneous

Currency Uniform Different currencies and exchange rates

Economy Stable and uniform May be variable and unpredictable

Government Stable May be unstable

Labour Skilled workers available Skilled workers may be hard to find

Language Generally a single language Different languages and dialects

Marketing Many media, few restrictions May be fewer media and more restrictions

Transport Several competitive modes May be inadequate


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one currency in a domestic market, it must consider and plan for different levels and kinds of governmental regulation, multiple currencies, and several languages in the global market.

The most recent wave of globalization by U.S. companies began in the 1980s, as companiesbegan to realize that concentrating on the domestic market alone would lead to stagnant salesand profits and that emerging markets offered many opportunities for growth. Part of themotivation for this globalization stemmed from the lost market share in the 1970s tomultinational companies from other countries, especially those from Japan. Initially, these U.S.companies tried to emulate their Japanese counterparts by implementing Japanese-stylemanagement structures and quality circles. After adapting these practices to meet the needs of U.S. companies and recapturing market share, these companies began to move into newmarkets to spur growth, enable the acquisition of resources (often at a cost advantage), andgain competitive advantage by achieving greater economies of scale.

The globalization of U.S. companies has not been without concerns and detractors. Exporting

U.S. jobs, exploiting child labor, and contributing to poverty have all been charges laid at thedoors of U.S. companies. These charges have been accompanied by demonstrations andconsumer boycotts.

Nor have U.S. companies been the only ones affected. Companies in the rest of the developedworld have globalized along with U.S. companies, and they have also faced the sometimesnegative consequences.

Interestingly, in the late twentieth and early twenty-first century, there has also been a growthin international companies from developing and transitional countries, and this trend can beexpected to continue and increase. Exports and investment from the People's Republic of Chinaare a notable example, but companies from Southeast Asia, India, South Africa, and LatinAmerica, to name some countries and regions, are making themselves known around theworld.

T Y P E S O F G L O B A L B U S I N E S S A C T I V I T I E SBusinesses may choose to globalize or operate in different countries in four distinct ways:through trade, investment, strategic alliances, and licensing or franchising. Companies maydecide to trade tangible goods such as automobiles and electronics (merchandise exports andimports). Alternatively, companies may decide to trade intangible products such as financial orlegal services (service exports and imports).Companies may enter the global market through various kinds of international investments.Companies may choose to make foreign direct investments, which allow them to controlcompanies and assets in other countries. In addition, companies may elect to make portfolioinvestments, by acquiring the stock of companies in other countries in order to gain control of these companies.Another way companies tap into the global market is by forming strategic alliances withcompanies in other countries. While strategic alliances come in many forms, some enable each


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35/43By: M. Hammad Manzoor, MBA HRM-III, 508, 5 th Floor, Continental Trade Centre (CTC), Clifton 08, Karachi. (Roll No. 508195394)Email: [email protected], Cell: 0321-58

assignment ist 887 bp&m spring 2010

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