mit bbm(ib),ipm-session 2.4

7/29/2019 Mit Bbm(Ib),Ipm-session 2.4

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BBM(IB),IPM-Session 2.4


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Companies can apply one of the three differentapproaches to managing and staffing their subsidiaries :1. Ethnocentric. The home country practice prevails withthis approach. Headquarters from the home countrymakes key decisions, employees from the home countryhold important jobs, and the subsidiaries follow the home

country resource management practice.2. Polycentric. Each subsidiary manages on a local basis. Alocal employee heads a subsidiary because headquartersmanagers are not considered to have adequate localknowledge. Subsidiaries usually develop human resourcemanagement practices locally.


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3. Geocentric or global. The company thatapplies the global integrated businessstrategy manages and staffs employees on aglobal basis.

For example, Electrolux (the vacuum cleanercompany) has for many years attempted torecruit and develop a group of internationalmanagers from diverse countries. These

people constitute a mobile base of managerswho are used in a variety of facilities as theneed arises.


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1. Parent country national. The employeesnationality is the same as the organizations. Forexample, a Slovenian citizen working for aSlovenian company in Macedonia.2. Host country national. The employees

nationality is the same as the location of thesubsidiary. For example, a Macedonian citizenworking for a Slovenian company in Macedonia.3. Third country national. The employeesnationality is neither that of the organization nor

that of the location of the subsidiary. Forexample, an Albanian citizen working for aSlovenian company in Macedonia


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Definition: Ethnocentricity(ethnocentrism) is a belief in the

superiority of one's own ethnic group. The firm basicallybelieves that parent-country nationals are better qualifiedand more trustworthy than host country nationals.

Rationale and advantages: Experience curve effects derive from standardization of

production. The firm produces in the home country initially and

transfers its core competency to the host country underthe guidance of expatriate managers.

These managers have the knowledge to create valuethrough core competencies. They also contribute to the maintenance of the corporate

culture.


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Problems and disadvantages: Denies advancement to host country

nationals.

This may breed resentment and diminish thefirm's public image.

Expatriate managers are expensive tomaintain: they may become insular in their

attitudes and be prone to cultural myopia. The latter may result in management

overlooking market niche opportunities.


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Problems and disadvantages: No synergy because there is little

communication between national units.

Limits experience of host nationals to theirown country.

Corporate headquarters may become isolatedfrom national units and lead to lack of

integration. This in turn may lead to corporate inertia.


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Definition: Geocentricity(geocentrism) is the notion that the best

people should be employed, regardless of their nationality. Rationale and advantages: Enables the firm to make best use of its human resources

and builds a cadre of executives who feel comfortableworking in any culture.

Ethnocentric and polycentric pressures are balanced infavor of optimizing the company's operations.

The ethnocentric pressure for low cost standardizedoperations is satisfied because enough of the right kinds

of products exist in the global customer base to permitscale economies and experience curve effects. The polycentric pressure for local responsiveness is

satisfied because of the need to meet the distinctivecharacteristics which remain in every market.


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Problems and disadvantages: May be contrary to host countries' desire for

the MNE to employ local citizens.

Expensive to implement because of the needfor considerable cross-cultural training anddevelopment.


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Definition: Regiocentricityis the variation of staffing policy

to suit particular geographic areas.

Rationale and advantages:

Policy varied to suit the nature of the firm'sbusiness and product strategy.

Allows interaction between executives because ofinter-regional transfers.

Shows some sensitivity to local conditions.

Provides a 'stepping stone' for a firm wishing tomove from an ethnocentric or polycentricapproach to a geocentric approach.


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Problems and disadvantages: May produce federalism at a regional (rather

than a country) basis and constrains the firmfrom taking a global stance.

May improve career prospects at the nationallevel, but only to the regional level: staff maynever attain positions at corporation

headquarters.


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1. Parent country national. The employeesnationality is the same as the organizations. Forexample, a Slovenian citizen working for aSlovenian company in Macedonia.2. Host country national. The employees

nationality is the same as the location of thesubsidiary. For example, a Macedonian citizenworking for a Slovenian company in Macedonia.3. Third country national. The employeesnationality is neither that of the organization nor

that of the location of the subsidiary. Forexample, an Albanian citizen working for aSlovenian company in Macedonia


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A milestone is a scheduled event signifying thecompletion of a major deliverable or a set ofrelated deliverables. A milestone has zeroduration and no effort -- there is no workassociated with a milestone. It is a flag in the

work plan to signify some other work hascompleted. Usually a milestone is used as a project

checkpoint to validate how the project isprogressing and revalidate work. Milestones are

also used as high-level snapshots formanagement to validate the progress of theproject. In many cases there is a decision to bemade at a milestone.


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The sequence of activities that must becompleted on schedule for the entire projectto be completed on schedule. This is thelongest duration path through the work plan.

If an activity on the critical path is delayed byone day, then entire project will be delayedby one day.


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The essential technique for using CPM includes the following: A list of all activities required to complete the project (typically

categorized within a work breakdown structure), The time (duration) that each activity will take to completion, and The dependencies between the activities. Using these values, CPM calculates the longest path of planned

activities to the end of the project, and the earliest and latestthat each activity can start and finish without making the projectlonger.

This process determines which activities are "critical" (i.e., on thelongest path) and which have "total float" (i.e., can be delayedwithout making the project longer).

This determines the shortest time possible to complete theproject. Any delay of an activity on the critical path directlyimpacts the planned project completion date (i.e. there is nofloat on the critical path).
http://en.wikipedia.org/wiki/Work_breakdown_structurehttp://en.wikipedia.org/wiki/Work_breakdown_structurehttp://en.wikipedia.org/wiki/Dependency_(project_management)http://en.wikipedia.org/wiki/Dependency_(project_management)http://en.wikipedia.org/wiki/Work_breakdown_structure


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The Work Breakdown Structure (WBS) isdefined by A Guide to the ProjectManagement Body of Knowledge 3rd Edition(PMBOK Guide) as:

"A deliverable-oriented hierarchicaldecomposition of the work to be executed bythe project team to accomplish the projectobjectives and create the requireddeliverables.


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.There are three reasons to use a WBS in projects. The first is that is helps more accurately and specifically define

and organize the scope of the total project. The most commonway this is done is by using a hierarchical tree structure. Eachlevel of this structure breaks the project deliverables orobjectives down to more specific and measurable chunks.

The second reason for using a WBS in your projects is to helpwith assigning responsibilities, resource allocation, monitoringthe project, and controlling the project. The WBS makes thedeliverables more precise and concrete so that the project teamknows exactly what has to be accomplished within eachdeliverable. This also allows for better estimating of cost, risk,and time because you can work from the smaller tasks back up

to the level of the entire project. Finally, it allows you double check all the deliverables' specificswith the stakeholders and make sure there is nothing missing oroverlapping.


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The Program (or Project) Evaluation andReview Technique, commonly abbreviatedPERT, is a statistical tool, used in projectmanagement, that is designed to analyze and

represent the tasks involved in completing agiven project.

First developed by the United States Navy inthe 1950s, it is commonly used inconjunction with the critical path method orCPM.
http://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Projecthttp://en.wikipedia.org/wiki/United_States_Navyhttp://en.wikipedia.org/wiki/Critical_path_methodhttp://en.wikipedia.org/wiki/Critical_path_methodhttp://en.wikipedia.org/wiki/United_States_Navyhttp://en.wikipedia.org/wiki/Projecthttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Project_management


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The Program Evaluation and Review Technique (code-namedPERT) is applied as a decision-making tool designed to save timein achieving end-objectives, and is of particular interest to thoseengaged in research and development programs for which timeis a critical factor.

The PERT takes recognition of three factors that influencesuccessful achievement of Project objectives: time, resources,

and technical performance specifications. Through an electronic computer, the PERT technique processes

data representing the major, finite accomplishments (events)essential to achieve end-objectives; the inter-dependence ofthose events; and estimates of time and range of time necessaryto complete each activity between two successive events.

Such time expectations include estimates of "most likely time","optimistic time", and "pessimistic time" for each activity.


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PERT is a method to analyze the involved tasks incompleting a given project, especially the timeneeded to complete each task, and to identify theminimum time needed to complete the totalproject.

The concept of PERT was developed by anoperations research team staffed withrepresentatives from the Operations ResearchDepartment ofBooz, Allen and Hamilton; theEvaluation Office of the Lockheed Missile Systems

Division; and the Program Evaluation Branch,Special Projects Office, of the Department of theNavy.
http://en.wikipedia.org/wiki/Booz_Allen_Hamiltonhttp://en.wikipedia.org/wiki/Booz_Allen_Hamiltonhttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Lockheed_Martin_Space_Systemshttp://en.wikipedia.org/wiki/Booz_Allen_Hamilton


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Advantages PERT chart explicitly defines and makes visible

dependencies (precedence relationships) between theWBS elements

PERT facilitates identification of the critical path and

makes this visible PERT facilitates identification of early start, late start,

and slack for each activity, PERT provides for potentially reduced project

duration due to better understanding ofdependencies leading to improved overlapping ofactivities and tasks where feasible.

The large amount of project data can be organized &presented in diagram for use in decision making
http://en.wikipedia.org/wiki/Work_breakdown_structurehttp://en.wikipedia.org/wiki/Work_breakdown_structurehttp://en.wikipedia.org/wiki/Work_breakdown_structure


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Disadvantages There can be potentially hundreds or thousands of

activities and individual dependency relationships

PERT is not easily scalable for smaller projects

The network charts tend to be large and unwieldyrequiring several pages to print and requiring specialsize paper

The lack of a timeframe on most PERT/CPM chartsmakes it harder to show status although colors canhelp (e.g., specific color for completed nodes)

When the PERT/CPM charts become unwieldy, theyare no longer used to manage the project.


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http://en.wikipedia.org/wiki/File:Pert_chart_colored.svg


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Although the activity-on-arrow diagram("PERT Chart") is still used in a few places, ithas generally been superseded by theactivity-on-node diagram, where each activity

is shown as a box or node and the arrowsrepresent the logical relationships going frompredecessor to successor as shown here inthe "Activity-on-node diagram".


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http://en.wikipedia.org/wiki/File:SimpleAONwDrag3.png


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These results, including the dragcomputations, allow managers to prioritizeactivities for the effective management ofproject completion, and to shorten the

planned critical path of a project by pruningcritical path activities, by "fast tracking" (i.e.,performing more activities in parallel), and/orby "crashing the critical path" (i.e., shorteningthe durations of critical path activities byadding resources).


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Crash duration "Crash duration" is a term referring to the

shortest possible time for which an activity canbe scheduled. It is achieved by shifting moreresources towards the completion of that activity,resulting in decreased time spent and often areduced quality of work, as the premium is set onspeed.

Crash duration is typically modeled as a linear

relationship between cost and activity duration,however in many cases a convex function or astep function is more applicable.

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