The one-semester Strategic Management course integrates various fields of study to help student develop a unified understanding of business planning and strategy. In addition, the module attempts to bridge the gulf between theoretical class understanding and the business world.

The effective manager must understand a wide range of technical and social relationships and be able to integrate them within the cost, performance, and time constraints of her/his area of responsibility. To learn and practice strategic planning skills, students will use a variety of media: selected texts, lecture and tutorial presentations, case studies, coursework assignments, research and the vast Internet and library resources.

Most real-world, strategic decisions, especially crucial ones, are made after consultation with key executives and colleagues in an atmosphere of committee deliberations and discussion. To simulate this procedure, each student has the opportunity to select his/her own team.

Team work is an important aspect of this course. Students who are studying online or for personal or job-related reasons are unable to work in teams are advised to actively participate in the module specific discussion forums open to all students regardless of their mode of study.

Strategic Planning consists of the process of defining objectives and developing strategies to reach those objectives. By labelling a piece of planning "strategic" we expect it to operate on the grand scale and to take in "the big picture" (in contradistinction to "tactical" planning, which by definition has to focus more on the tactics of individual detailed activities). "Long range" planning typically projects current activities and programs into a revised view of the external world, thereby describing results that will most likely occur. "Strategic" planning tries to "create" more desirable future results by (a) influencing the outside world or (b) adapting current programs and actions so as to have more favorable outcomes in the external environment.

Within business, strategic planning may provide overall direction strategic management to a company or give specific direction in such areas as:

Financial strategies
Human resource/organizational development strategies
Information technology deployments
Marketing strategy

We want to do Strategic Planning to:

Have the capability to obtain the desired objective
Fit well both with the external environment and with an organization's resources and core competencies
Have the capability of providing an organization with a sustainable competitive advantage - ideally through uniqueness and sustainability
Prove dynamic, flexible, and able to adapt to changing situations
Suffice on its own - specifically providing favorable outcomes without the need for cross-subsidization

Contents

See also

Predictive analytics

References

Learning Outcomes

After completing this module, students will be able to:

Knowledge

1. Critically review the advanced concepts and strategic principles of management.

2. Show understanding of the relationship between the functional areas of a business.

3. Show improved understanding of management decisions relative to the functional areas.

4. Show a well developed ability to view the business organization as a system consisting of interrelated functions.

5. Apply theoretical knowledge into the solution of policy problems.

6. Critically evaluate how corporations implement strategic management.

7. Demonstrate understanding of the concepts and models used in strategic planning for a business

Skills

After completing this module, students will be able to:

1. Design organizational strategies and develop alternative solutions to problems.

2. Exercise significant judgement in formulating strategic plans within the context of SWOT factors analysed.

3. Develop conceptual skills to integrate previously learned aspects of corporations.

4. Critically review the performance of people responsible for strategic decisions.

5. Construct a strategic autdit for any organisation.

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Teaching and Learning Resources

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Learning Contents

Introducing Strategic Management

Tutorials

Readings

Strategic Management is that set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control.

See also

External links

Leading Strategically through Effective Vision and Mission

Tutorials

Mission and Objectives
Mission Statement is a description of an entity's purpose to exist
Leading Strategically through Effective Vision and Mission

Readings

Creating a Vision
- Mission Statement

The Dynamic Model of Strategy is a way of understanding how strategic actions occur. It recognizes that strategic planning is dynamic, that is, strategy involves a complex pattern of actions and reactions. It is partially planned and partially unplanned.

See also

Management
Strategic innovation
Strategic planning
Marketing strategies
Strategic management

References

Examining the Internal Environment: Resources, Capabilities, and Activities

Tutorials

Readings

A Core Competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):

It provides customer benefits
It is hard for competitors to imitate
It can be leveraged widely to many products and markets.

A core competency can take various forms, including technical/subject matter know how, a reliable process, and/or close relationships with customers and suppliers (Mascarenhas et al. 1998). It may also include product development or culture such as employee dedication. Modern business theories suggest that most activities that are not part of a company's core competency should be outsourced.

If a core competency yields a long term advantage to the company, it is said to be a sustainable competitive advantage.

See also

References

Measuring the Impact of Core Competencies

Sustainable competitive advantage (SCA) not reach in its competitive landscape. Michael Porter posits that a competitive advantage, sustainable or not, exists when a company makes economic rents, that is, their earnings exceed their costs, especially including cost of capital. That means that normal competitive pressures are not able to drive down the firm's earnings to the point where they cover all costs and just provide minimum sufficient additional return to keep capital invested. Most forms of competitive advantage cannot be sustained for any length of time because the promise of economic rents drives competitiors to duplicate the competitive advantage held by any one firm.

A firm possesses a Sustainable Competitive Advantage when it has value-creating processes and positions that cannot be duplicated or imitated by other firms that lead to the production of above normal rents. An SCA is different from a competitive advantage (CA) in that it provides a long-term advantage that is not easily replicated. But these above-normal rents can attract new entrants who drive down economic rents. A CA is a position a firm attains that lead to above-normal rents or a superior financial performance. The processes and positions that engender such a position is not necessarily non-duplicable or inimitable. It is possible for some companies to make profits for a time above the cost of capital without sustainable competitive advantage.

A key difference between CA and SCA is that the processes and positions a firm may hold are non-duplicable and inimitable when a firm possesses a SCA. Hence a sustainable competitive advantage is one that can be maintained for a significant amount of time even in the presence of competition. This brings us to the question what is a "significant amount of time". A CA becomes SCA when all duplication and imitation efforts have ceased and the rival firms have not been able to create the same value that the said firm is creating.

Planning for SCA in the IT industry

Analysis of the factors of profitability is the subject of numerous theories of strategy including the five forces model pioneered by Michael Porter of the Harvard Business School.

In marketing and strategic management, sustainable competitive advantage is an advantage that one firm has relative to competing firms. The source of the advantage can be something the company does that is distinctive and difficult to replicate, also known as a core competency -- for example Procter & Gamble's ability to derive superior consumer insights and implement them in managing its brand portfolio. It can also be an asset such as a brand (e.g. Coca Cola) or a patent, such as Viagra. It can also simply be a result of the industry's cost structure -- for example, the large fixed costs that tend to create natural monopolies in utility industries. To be sustainable, the advantage must be:

distinctive, and
proprietary

See also

Microeconomics is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources ^[1] , typically in markets where goods or services are being bought and sold.

Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the supply and demand of goods and services.^[2] ^[3] Microeconomics has been called “the bottom-up view of the economy” ^[4] , or “how people deal with money, time, and resources.” ^[5]

Macroeconomics studies the “sum total of economic activity, dealing with the issues of growth, inflation, and unemployment and with national economic policies relating to these issues” ^[6] and the effects of government actions (e.g., changing taxation levels) on
them. ^[7]

External links

AmosWEB GLOSS*arama - online economics dictionary
A free textbook of microeconomics, supplemented by software and data
Smartalec Economic Discussion Board: [1] - Growing community for Economic discussion.

Activity

Costs and Revenues

Image: What has marginal cost and fixed costs got to do with filling
aircraft seats with paying passengers? Copyright: Celia Martinez Bravo

Key Performance Indicators (KPI) are financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization. KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. The act of monitoring KPIs in realtime is known as business activity monitoring. KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction. KPIs are typically tied to an organization's strategy (as exemplified through techniques such as the Balanced Scorecard).

The KPIs differ depending on the nature of the organization and the organization's strategy. They help an organization to measure progress towards their organizational goals, especially toward difficult to quantify knowledge-based activities.

A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark, target and timeframe. For example: "Increase Average Revenue per Customer from £10 to £15 by EOY 2008". In this case, 'Average Revenue Per Customer' is the KPI.

KPIs should not be confused with a Critical Success Factor. For the example above, a critical success factor would be something that needs to be in place to achieve that objective; for example, a product launch.

See also

External link

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Critical Success Factor (CSF) is a business term for an element which is necessary for an organization or project to achieve its mission. For example, a CSF for a successful Information Technology (IT) project is user involvement. A company may use the critical success factor method as a means for identifying the important elements of their success.

The concept of "success factors" was developed by D. Ronald Daniel of McKinsey and Company, "Management Information Crisis," Harvard Business Review, Sept.-Oct., 1961. The process was refined by Jack F. Rockart in, "A Primer on Critical Success Factors" published in, The Rise of Managerial Computing: The Best of the Center for Information Systems Research, edited with Christine V. Bullen, Homewood, IL: Dow Jones-Irwin, 1986.

A plan should be implemented that considers a platform for growth and profits as well as take into consideration the following critical success factors [1]:

Money factors: positive cash flow, revenue growth, and profit margins.
Acquiring new customers and/or distributors -- your future.
Customer satisfaction -- how happy are they?
Quality -- how good is your product and service?
Product / service development -- what's new that will increase business with existing customers and attract new ones?
Intellectual capital -- increasing what you know that's profitable.
Strategic relationships -- new sources of business, products and outside revenue.
Employee attraction and retention -- your ability to do extend your reach.
Sustainability -- your personal ability to keep it all going

A critical success factor is not a key performance indicator or KPI. Critical Success Factors are elements that are vital for a strategy to be successful. KPIs are measures that quantify objectives and enable the measurement of strategic performance.

For example: KPI = number of new customers CSF = installation of a call centre for providing quotations

See also

Exploring the External Environment: Macro and Industry Dynamics

Tutorials

Readings

Macroeconomics is a sub-field of economics that examines the behavior of the economy as a whole, once all of the individual economic decisions of companies and industries have been summed. Economy-wide phenomena considered by macroeconomics include Gross Domestic Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels.

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In contrast, microeconomics is the study of the economic behaviour and decision-making of individual consumers, firms, and industries.

Macroeconomics can be used to analyze how to influence government policy goals such as economic growth, price stability, full employment and the attainment of a sustainable balance of payments.

Macroeconomics is sometimes used to refer to a general approach to economic reasoning, which includes long term strategies and rational expectations in aggregate behavior.

Origins
Analytical approaches

The traditional distinction is between two different approaches to economics: Keynesian economics, focusing on demand; and supply-side (or neo-classical) economics, focusing on supply. Neither view is typically endorsed to the complete exclusion of the other, but most schools do tend clearly to emphasize one or the other as a theoretical foundation.

Keynesian economics focuses on aggregate demand to explain levels of unemployment and the business cycle. That is, business cycle fluctuations should be reduced through fiscal policy (the government spends more or less depending on the situation) and monetary policy. Early Keynesian macroeconomics was "activist," calling for regular use of policy to stabilize the capitalist economy, while some Keynesians called for the use of incomes policies.

Supply-side economics delineates quite clearly the roles of monetary policy and fiscal policy. The focus for monetary policy should be purely on the price of money as determined by the supply of money and the demand for money. It advocates a monetary policy that directly targets the value of money and does not target interest rates at all. Typically the value of money is measured by reference to gold or some other reference. The focus of fiscal policy is to raise revenue for worthy government investments with a clear recognition of the impact that taxation has on domestic trade. It places heavy emphasis on Say's law, which states that recessions do not occur because of failure in demand or lack of money.

Schools

See also

Activity

Business Survival, Profit and Growth

Image: Who are the stakeholders when
it comes to expanding airports?
Try the Manchester Airport activity to find out.
Copyright: Marcelo Silva

Rational Expectations is a theory in economics originally proposed by John F. Muth (1961) and later developed by Robert E. Lucas Jr. It is used to model how economic agents forecast future events. Modeling expectations is of central importance in economic models, especially those of new classical macroeconomics, new Keynesian macroeconomics, and finance. For example, a firm's decision on the level of wages to set in the coming year will be influenced by the expected level of inflation, and the value of a share of stock is dependent on the expected future income from that stock.

See also

References

External links

An article by Thomas Sargent in the Economics Encyclopedia.

Creating Business Strategies

Tutorials

Readings

See also

Strategic Innovation is the creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and the corporation. Strategic Innovation takes the road less traveled – it challenges an organization to look beyond its established business boundaries and mental models and to participate in an open-minded, creative exploration of the realm of possibilities.

Major contributors to the practice of Strategic Innovation include: Hamel, Markides, Von Hippel, Chesbrough, InnovationPoint. For more information and downloadable White Papers please visit InnnovationPoint at: http://www.innovation-point.com

References

The Strategy Hierarchy

Using Economic Value Estimation (EVE) to Execute a Value-Based Strategy

In most (large) corporations there are several levels of strategy. Strategic management is the highest in the sense that it is the broadest, applying to all parts of the firm. It gives direction to corporate values, corporate culture, corporate goals, and corporate missions. Under this broad corporate strategy there are often functional or business unit strategies.

Click on image on the left for PA Consulting Group's approach to Value-based Strateyy at the corporate level and the business unit level.

Functional strategies include marketing strategies, new product development strategies, human resource strategies, financial strategies, legal strategies, and information technology management strategies. The emphasis is on short and medium term plans and is limited to the domain of each department’s functional responsibility. Each functional department attempts to do its part in meeting overall corporate objectives, and hence to some extent their strategies are derived from broader corporate strategies.

Many companies feel that a functional organizational structure is not an efficient way to organize activities so they have reengineered according to processes or strategic business units (called SBUs). A strategic business unit is a semi-autonomous unit within an organization. It is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting. An SBU is treated as an internal profit centre by corporate headquarters. Each SBU is responsible for developing its business strategies, strategies that must be in tune with broader corporate strategies.

The “lowest” level of strategy is operational strategy. It is very narrow in focus and deals with day-to-day operational activities such as scheduling criteria. It must operate within a budget but is not at liberty to adjust or create that budget. Operational level strategy was encouraged by Peter Drucker in his theory of management by objectives (MBO). Operational level strategies are informed by business level strategies which, in turn, are informed by corporate level strategies. Business strategy, which refers to the aggregated operational strategies of single business firm or that of an SBU in a diversified corporation refers to the way in which a firm competes in its chosen arenas.

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Corporate strategy, then, refers to the overarching strategy of the diversified firm. Such corporate strategy answers the questions of "in which businesses should we compete?" and "how does being in one business add to the competitive advantage of another portfolio firm, as well as the competitive advantage of the corporation as a whole?"

Since the turn of the millennium, there has been a tendency in some firms to revert to a simpler strategic structure. This is being driven by information technology. It is felt that knowledge management systems should be used to share information and create common goals. Strategic divisions are thought to hamper this process. Most recently, this notion of strategy has been captured under the rubric of dynamic strategy, popularized by the strategic management textbook authored by Carpenter and Sanders [1]. This work builds on that of Brown and Eisenhart as well as Christensen and portrays firm strategy, both business and corporate, as necessarily embracing ongoing strategic change, and the seamless integration of strategy formulation and implementation. Such change and implementation are usually built into the strategy through the staging and pacing facets.

Reasons why strategic plans fail

There are many reasons why strategic plans fail, especially:

Failure to understand the customer
- Why do they buy
- Is there a real need for the product
- inadequate or incorrect marketing research
Inability to predict environmental reaction
- What will competitors do
  - Fighting brands
  - Price wars
- Will government intervene
Over-estimation of resource competence
- Can the staff, equipment, and processes handle the new strategy
- Failure to develop new employee and management skills
Failure to coordinate
- Reporting and control relationships not adequate
- Organizational structure not flexible enough
Failure to obtain senior management commitment
- Failure to get management involved right from the start
- Failure to obtain sufficient company resources to accomplish task
Failure to obtain employee commitment
- New strategy not well explained to employees
- No incentives given to workers to embrace the new strategy
Under-estimation of time requirements
- No critical path analysis done
Failure to follow the plan
- No follow through after initial planning
- No tracking of progress against plan
- No consequences for above
Failure to manage change
- Inadequate understanding of the internal resistance to change
- Lack of vision on the relationships between processes, technology and organization
Poor communications
- Insufficient information sharing among stakeholders
- Exclusion of stakeholders and delegates
Failure to focus
- Inability or unwillingness to make choices which are true to the strategic mission, leads to mediocrity, inability to compete

Looking at International Strategies

Tutorials

Readings

International Economics is a branch of economics with two main subdisciplines international trade and international finance.

International trade is a study of the exchange of goods and services across international boundaries.
International finance is a study of the exchange of currencies and flows of money or capital across international boundaries.

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A Trade Bloc is a large free trade area or free trade area formed by one or more tax, tariff and trade agreements. Typically trade pacts that define such a bloc specify formal adjudication bodies, e.g. NAFTA trade panels. This may include even a more democratic and participative system, as the EU and its parliament.

Most active regional blocs in the world.

Particularly since the demise of most of the world's empires, a number of international—generally regionally based—economic blocs have been developed to promote trade between member states.

Several blocs also have stated or implicit political goals—notably the EU. Varieties of economic blocs include free trade areas, customs unions, single markets, and economic and monetary unions.

One of the first economic blocs was the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871.

A trade bloc is established through a trade pact (or pacts) covering different issues of the economic integration.

Most active regional blocs

See also

References

Comparison between regional blocs

		Activities
Regional bloc		Free Trade Area	Customs Union	Economic and monetary union		Free Travel		Political pact	Defence pact	Other
Regional bloc		Free Trade Area	Customs Union	Single Market	Currency Union	Visa-free	Border-less	Political pact	Defence pact	Other
EU		in force ²	in force	in force	in force ¹	in force	in force (Schengen ¹ and CTA ¹)	in force	in force (NATO ¹ and CFSP/ESDP ¹)	ESA ¹, Euratom
CARICOM		in force	in force	in force ¹	in force ¹ and proposed common	in force ¹	?	proposed
ECOWAS		in force ^{1, 3}	in force ¹	?	in force ¹ and proposed for 2009 ¹ and proposed common	in force ¹	proposed	proposed	in force
CEMAC		in force	in force	proposed	in force	proposed	?		in force
EAC		in force	in force		proposed for 2009	proposed	?	proposed for 2010
CSN	MERCOSUR	in force	in force	?		in force		proposed for 2014 [4]
	CAN	in force	in force ¹	?		in force
	Common	proposed for 2014 ⁴	proposed for not after 2019	proposed for 2019	proposed for 2019	in force[5]	?	proposed for 2019
GCC		in force	in force	proposed for 2007	proposed for 2010
SACU		in force	in force	proposed for 2012	de-facto in force ¹ and proposed common for 2016	proposed [6]
COMESA		in force ¹	proposed for 2008	?	proposed for 2025
NAFTA		in force
ASEAN		in force ⁵	?	proposed for 2015[7]	proposed [8]	in force[9]		?	proposed for 2020 [10]
SAARC		in force ⁶
Agadir		in force
EurAsEC		proposed	proposed	proposed		in force [11]			in force ¹
CACM		proposed	proposed
PARTA
AEC (for reference)		proposed for 2019	proposed for 2019	proposed for 2023	proposed for 2028			proposed for 2028

¹ not all members participating yet
² involving goods, services, telecommunications, transport (full liberalisation of railways from 2012), energy (full liberalisation from 2007)
³ telecommunications, transport and energy - proposed
⁴ sensitive goods to be covered from 2019
⁵ least developed members to join from 2012
⁶ least developed members to join from 2017

International Trade is the exchange of goods and services across international boundaries or territories. In most countries, it represents a significant share of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, transportation, globalization, multinational corporations, and outsourcing are all having a major impact. Increasing international trade is the usually primary meaning of "globalization".

International trade is also a branch of economics, which, together with international finance, forms the larger branch of international economics.

See also

External Links

Activity

International Trade: The Falling Dollar or Rising Pound?

Image: The falling dollar may mean
a rise in tourism to the US but the effect
might be mitigated by the increased
security measures being introduced by
US authorities.
Source: Jake Levin, stock xchng

In economics, an Export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export goods or services are provided to foreign consumers by domestic producers. Export of commercial quantities of goods normally requires involvement of the Customs authorities in both the country of export and the country of import. The advent of small trades over the internet such as through Amazon, e-Bay and the like, have largely by-passed the involvement of Customs in many countries due to the low individual values of these trades. Export is an important part of international trade. Its counterpart is import.

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External links

See also

Foreign Direct Investment (FDI) is defined as a long term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The FDI relationship, consists of a parent enterprise and a foreign affiliate which together form a transnational corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The UN defines control in this case as owning 10% or more of the ordinary shares or voting power of an incorporated firm or its equivalent for an unincorporated firm.

See also

External links

The Investment Promotion Network (IPAnet), a portal site
Multilateral Investment Guarantee Agency of the World Bank Group)
OECD work on international investment
World Investment Report (UNCTAD)
FDI: A lead driver for Sustainable Development? (Earth Summit 2002)
World Bank archived online discussion: "Do Changing FDI Trends Require Governments to Adopt New Promotion Strategies?"
The International Services Trade Information Agency (ISTIA)
UNCTAD World Investment Report

Understanding Alliances and Cooperative Strategies

Tutorials

Readings

A business alliance is an agreement between businesses, usually motivated by cost reduction and improved service for the customer. An example of this is code sharing in airline alliances. Many, if not all, large airlines participate in one or more business alliances.

Bounded by a single agreement with equitable risk and opportunity share for all parties. Usually managed by a totally integrated project team.

Kuglin and Hook (2002) define five basic categories or types of alliances:

Sales alliance
Solution-specific alliance
Geographic-specific alliance
Investment alliance
Joint venture alliance

In many cases, alliances between companies can involve two or more categories or types of alliances. A sales alliance occurs when two companies agree to go to market together to sell complementary products and services. A solution-specific alliance occurs when two companies agree to jointly develop and sell a specific marketplace solution. A geographic-specific alliance is developed when two companies agree to jointly market or co-brand their products and services in a specific geographic region. An investment alliance occurs when two companies agree to joint their funds for mutual investment. A joint venture alliance occurs when two or more companies agree to undertake economic activity together. (Kuglin and Hook, 2002)

See also

Business group
Strategic alliance
Competition regulator
EDS has the EDS Global Alliance program grouped into EDS Agility Alliance, Solution Alliances and Technology Alliances

A Strategic Alliance is a mutually beneficial long-term formal relationship formed between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations. It is a synergistic arrangement whereby two or more organizations agree to cooperate in the carrying out of a business activity where each brings different strengths and capabilities to the arrangement.

Strategic alliances in the European defence industry

Types of Strategic Alliances

Contractual:

Equity:

New entity
- Independent Joint venture
- Dependent Joint Venture of Multinational Corporation
Existing entity
- Purchase of equity share
- Equity swap

External links

Association of Strategic Alliance Professionals, Inc.

A Joint Venture (often abbreviated JV) is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. The venture can be for one specific project only, or a continuing business relationship such as the Sony Ericsson joint venture. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement.

Organizations can also form joint ventures, for example, a child welfare organization in the Midwest initiated a joint venture whose mission is to develop and service client tracking software for human service organizations. The five partners all sit on the joint venture corporation's board, and together have been able to provide the community with a much-needed resource.

The phrase generally refers to the purpose of the entity and not to a type of entity. Therefore, a joint venture may be a corporation, limited liability company, partnership or other legal structure, depending on a number of considerations such as tax and tort liability.

External links

Cornell Law School's Joint Venture Info Page Contains legal information and relevant definitions regarding joint venture partnerships.
SEDA (Small Enterprise Development Agency Definition and attributes of a joint venture.

Studying Mergers and Acquisitions

Tutorials

Readings

The phrase Mergers and Acquisitions or M&A refers to the aspect of corporate finance strategy and management dealing with the merging and acquiring of different companies.

See also

Employing Strategy Implementation Levers

Tutorials

Readings

Change Management can take many forms and include many change environments. The most common usage to the term refers to organizational change management.

Organizational change management is the process of developing a planned approach to change in an organization. Typically the objective is to maximize the collective benefits for all people involved in the change and minimize the risk of failure of implementing the change. The discipline of change management deals primarily with the human aspect of change, and is therefore related to pure and industrial psychology.

Many technical disciplines (for example Information technology) have developed similar approaches to formally control the process of making changes to environments.

Change management can be either 'reactive', in which case management is responding to changes in the macroenvironment (that is, the source of the change is external), or proactive, in which case management is initiating the change in order to achieve a desired goal (that is, the source of the change is internal). Change management can be conducted on a continuous basis, on a regular schedule (such as an annual review), or when deemed necessary on a program-by-program basis.

Change management can be approached from a number of angles and applied to numerous organizational processes. Its most common uses are in information technology management, strategic management, and process management. To be effective, change management should be multi-disciplinary, touching all aspects of the organization. However, at its core, implementing new procedures, technologies, and overcoming resistance to change are fundamentally human resource management issues.

See also

List of human resource management topics
Strategic change for change theories in strategic management
Force field analysis
Change management process
Business Technology Optimization

References

External links

The Critical Path Method, abbreviated CPM, is a mathematically based algorithm for scheduling a set of project activities. It is a very important tool for effective project management. It was developed in the 1950's in a joint venture between DuPont Corporation and Remington Rand Corporation for managing plant maintenance projects. Today, it is commonly used with all forms of projects, including construction, software development, research projects, product development, engineering, and plant maintenance, among others. Any project with interdependent activities can apply this method of scheduling.

The essential technique for using CPM is to construct a model of the project that includes the following:

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 starting and ending times for each activity, determines which activities are critical to the completion of a project (called the critical path), and reveals those activities with "float time" (are less critical). In project management, a critical path is the sequence of project network activities with the longest overall duration, determining the shortest time possible to complete the project. Any delay of an activity on the critical path directly impacts the planned project completion date (i.e. there is no float on the critical path). A project can have several, parallel critical paths. An additional parallel path through the network with the total durations shorter than the critical path is called a sub-critical or non-critical path.

These results allow managers to prioritize activities for the effective management of project completion. Originally, the critical path method considered only logical dependencies among terminal elements. Since then, it has been expanded to allow for the inclusion of resources related to each activity. This capability allows for the exploration of a related concept called the critical chain, which determines project duration based upon both time and resource dependencies.

Since project schedules change on a regular basis, CPM allows continuous monitoring of the schedule, allows the project manager to track the critical activities, and ensures that non-critical activities do not interfere with the critical ones. In addition, the method can easily incorporate the concepts of stochastic predictions, using the Program Evaluation and Review Technique (PERT).

Currently, there are several software solutions available in industry today that use the CPM method of scheduling, see list of project management software. However, the method was developed and used (for decades) without the aid of computers (with pencil and paper).

However, there are drawbacks of this technique, as estimations are used to calculate times, if one mistake is made the whole analysis could be flawed causing major upset in the organisation of a project.

Considering New Ventures and Corporate Renewal

Tutorials

Readings

Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities. Entrepreneurship is often a difficult undertaking, as a majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities.Many "high-profile" entrepreneurial ventures seek venture capital or angel funding in order to raise capital to build the business. Many kinds of organizations now exist to support would-be entrepreneurs, including specialized government agencies, business incubators, science parks, and some NGOs.

History The Entrepreneur Characteristics of entrepreneurship See also
- Entrepreneur
Entrepreneurs have many of the same character traits as leaders. Similarly to the early great man theories of leadership, however, trait-based theories of entrepreneurship are increasingly being called into question. Entrepreneurs are often contrasted with managers and administrators who are said to be more methodical and less prone to risk-taking. Although such person-centric models of entrepreneurship have shown to be of questionable validity, a vast but clearly dated literature studying the entrepreneurial personality found that certain traits seem to be associated with entrepreneurs:

1. for example, in 1961, David McClelland described the entrepreneur as primarily motivated by an overwhelming need for achievement and strong urge to build.Collins and Moore (1970) studied 150 entrepreneurs and concluded that they are tough, pragmatic people driven by needs of independence and achievement. they seldom are willing to submit to authority.Bird (1992) sees entrepreneurs as mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness. they are cunning, opportunistic, creative, and unsentimental.Busenitz and Barney (1997) claim entrepreneurs are prone to overconfidence and over generalisations.According to Cole (1959), there are four types of entrepreneur: the innovator, the calculating inventor, the over-optimistic promoter, and the organisation builder. These types are not related to the personality but to the type of opportunity the entrepreneur faces.

2. Burton W. Folsom, Jr. distinguishes between what he calls a political entrepreneur and a market entrepreneur. The political entrepreneur uses political influences to gain income through subsidies, protectionism, government-granted monopoly, government contracts, or other such favorable arrangements with government(s) (see crony capitalism and corporate welfare). The market entrepreneur operates without special favors from government

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Business Incubators are organizations that support the entrepreneurial process, helping to increase survival rates for innovative startup companies. Only entrepreneurs with feasible projects are admitted into the incubators, where they are offered a specialized menu of support resources and services. The resources and services open to an entrepreneur include: provision of physical space, management coaching, help in making an effective business plan, administrative services, technical support, business networking, advice on intellectual property and sources of financing. The incubation process is intended to last around 2-5 years.

Business incubators can be private or public. Private incubators are for-profit firms that take equity or receive a fee for the business services they provide to their clients. In essence, they are a consulting firm that is specialized in new firm creation. In the last twenty years, many developed and developing countries have started large systems of public business incubators to encourage and assist entrepreneurship. In many cases, public incubators are designed to stimulate the development of new products and services in high-tech industries. For science-based business incubators, an effective collaboration with universities and research institutions is essential to motivate researchers into taking the risk of initiating a company.Incubators have many partners in addition to universities. Since new firms require finance to grow, incubators have close relationships with many kinds of investors. Seed capital and venture capital funds, business angels, and banks provide most of the seed and start-up capital for incubated companies. Since business incubators are powerful economic development tools, they collaborate actively with regional and national government agencies, from which they often receive financial grants. In many countries, business incubators have national associations to represent their interests and organize meetings where best practices are disseminated.Evaluations of business incubators in Europe and the U.S. suggest that 90% of incubated startups were active and growing after three years of operation, which is a much higher success rate than that observed in startups launched without assistance. Science-based business incubators are thought to be particularly useful from a policy perspective because they can simultaneously promote knowledge diffusion, technology transfer and high-tech firm creation.

As corporate America evolves, wordsmiths create new labels to describe the process. Downsizing. Re-engineering. Synergy. Boundrylessness. Empowerment. Crisis Management. Each label describes an idea with the potential to improve organizational productivity. Yet for many, the labels are painful euphemisms for costly and destructive events, leaving loyalties and a sense of community shattered.

While it is fashionable to hang new terms on corporate evolution, the wax and wane of companies has existed since the beginning of commerce. The differences in the success of one company compared to another in the same industry and environment is remarkable. Large or small, companies are not immune to the problems that prompt the creation of labels.

Crisis Management involves identifying a crisis, planning a response to the crisis and confronting and resolving the crisis. Crisis management can be applied in almost any field of endeavor, but it is most commonly used in international relations, political science, business and management. For more about crisis management in international relations, see International crisis.Many school districts have developed crisis response guides, which identify potential situations such as fires and other disasters, bomb threats, confronting unwelcome visitors, violence (and threats thereof) and the death of a student.In general terms, the theory of crisis management can be divided into crisis bargaining and negotiation, crisis decision making, and crisis dynamics.