Management Tools and Trends
-
Upload
kangaroobubbles -
Category
Documents
-
view
219 -
download
0
Transcript of Management Tools and Trends
-
7/28/2019 Management Tools and Trends
1/58
Management Tools and Trends
Balanced Score Card
Balanced Scorecard is a managementperformance tool
It creates four categories of performance
which together provides a balancedintegrated picture of results
Its major contribution is in moving away
from an exclusively financial performanceevaluation environment that has beenprevalent in business and industry
-
7/28/2019 Management Tools and Trends
2/58
What is the Balanced Scorecard
It is a Management System(not only ameasurement system developed by RobertKaplan and David Norton of HBS in the 1990s
It enables organizations to clarify their vision andstrategy and translate them into action
It retains financial measures which only detailthe past. This system focuses on the future and
specifically the long term Through it, future value can be created through
investment in customers, other stakeholdersspecially employees and vendors and in
processes, technology and innovation
-
7/28/2019 Management Tools and Trends
3/58
The 4 Categories
Financial performance is given its due with appropriatemetrics for capital structure, profit/profitability and cashflow. Return on Investment using DCF the final indicator
Customer Satisfaction is the next and incorporates all
the relevant aspects of creation, servicing and retentionof customers
Business processes highlights the emphasis on systemswhich are critical for both short and long termperformance
Finally learning and growth with focus on Innovationpoints to the need to succeed competitively by beingpositively different.
-
7/28/2019 Management Tools and Trends
4/58
The Balanced Scorecard
-
7/28/2019 Management Tools and Trends
5/58
Financial Performance
In addition to the historical performance, thefocus must be on desired future performance.The advantage of financial indicators is that theyare the most convenient to measure and report
We must incorporate the concept of opportunitycost as the benchmark
We must use the time value of money
We should also prioritize the areas formeasurement(project implementation time forcapital intensive industries and optimum capitalstructure, managing cash flows for low value,
high throughput industries like personal care)
-
7/28/2019 Management Tools and Trends
6/58
Customer
orientation/satisfaction The customer is the most important stakeholder,
without whom an organization cannot survive letalone thrive
Serve the customers wants in the best way I.e.max convenience, maximum choice and atlowest prices
Identify your customers/segments and satisfy
the above wants in the best manner andcertainly better than its competitors
Good reliable and honest after sales service isthe key to customer satisfaction, builds loyalty
and ensures highest retention. Repeat purchaseis the onl reliable indicator
-
7/28/2019 Management Tools and Trends
7/58
Internal Business processes
Processes are parts of systems I.e conversion ofinputs into the desired outputs.
In business where the key to success is to
perform repetitive activities uniformly andconsistently. Relevant, related activitiesconstitute processes
Normally processes are associated with
functional processes including marketing,logistics, manufacturing.
The better way is to understand processes interms of the progressive value addition, and
value delivery to the customer
-
7/28/2019 Management Tools and Trends
8/58
Internal Business Processes
systems approach needed i.e. understandinglinkages between system objectives,outputs,inputs and processes
Data entry/ updation simultaneous to thephysical events e.g. material receipt to beupdated at the point of physical entry of thematerial
Identifying customer wants, developing newproducts, manufacture, delivery to customer andfulfillment of promise through after sales serviceconstitute the major organizational processes
Support processes include supply chain, Humanresource rocesses bud etin ualit control to
-
7/28/2019 Management Tools and Trends
9/58
-
7/28/2019 Management Tools and Trends
10/58
Learning and Growth
We all learn from our mistakes, we growby avoiding mistakes(which we made andwhich we see others making)
We grow by doing existing things betterand by starting better things.
Enormous scope in organizations to
improve efficiency and effectiveness Innovation is doing things differently with a
positive result.
-
7/28/2019 Management Tools and Trends
11/58
Some bare truths about
Innovation Most business processes are the same across
Industries and business types
Logical analysis of systems requirements and
there from developing progressively bettersystems is something anyone can and everyoneshould do
Left brain thinking is paramount contrary to
popular management thinking Creativity can be taught and learnt by Panchvi
class intelligence
Japanese approach to Inventory management
and vendor management two excellent
-
7/28/2019 Management Tools and Trends
12/58
Assignment of Weightages
We have four factors in the balanced score card.Do we assign equal or unequal weightages tothe various factors?
Depending on the competitive situation and thefirms required priorities we assign weightages.
Start with 25% weightage, then establish therelative priorities. For small and start up firms,
financial and innovative factors would have moreweightage say 30% each and the other twocould be 20% each. For mature firms incompetitive situations, learning and growth andinternal processes would have higherweightages
-
7/28/2019 Management Tools and Trends
13/58
Conclusion
Balanced score card moves organizationalthinking from the historically conventional to therelevant present
In an increasingly globalized world strategicthinking and sound implementation vital
A sound framework which if understood andused effectively could make the difference
between victors and vanquished in business Needs to be supported by progressive
management focused on optimizing long termbusiness performance
-
7/28/2019 Management Tools and Trends
14/58
Consumer Ethnography
Ethnography is the descriptive study of humansocieties based on fieldwork(interaction andobservation)
It makes use of conceptual knowledge frompsychology, economics and cultural studies
This field has become increasingly relevant andusefully applicable in the context of increasing
globalization It is being applied in studies of consumer
behaviour and buying preference ingeographically and culturally diverse markets
-
7/28/2019 Management Tools and Trends
15/58
Understanding Culture
Societies are differentiated by race, creed,physical and behavioural characteristics
More importantly they are differentiated by the
system of beliefs, values and social practices. These beliefs,values and practices transmittedand sustained through several generationsconstitute Culture
Culture is evidenced by dress, food, attitude toeducation,symbols of economic and socialsuccess and family orientation.
-
7/28/2019 Management Tools and Trends
16/58
Significance of Culture in
understanding Consumers Popular perception is that consumer behaviour
is culture specific and always varied
Universal customer expectation over the long
term is maximum, convenience, maximumchoice and minimum prices on mass market
products/services(niches will exist but fade
away)
Key is to understand the technology cycle and
the reach of technologies over various societies
-
7/28/2019 Management Tools and Trends
17/58
Cultural differences in consumer
expectation Food preferences are explainable by the level of
development of a country and the availability oftechnology
Table bread produced by large baking ovenscame from the western countries. The easternworld had different types of unleavened breadbaked in small household ovens
As mass baking technologies aided by powerfulleavening agents becomes widespread bakedbread(in the form of loaves) will become thefood of the masses all over the world(next 100years)
-
7/28/2019 Management Tools and Trends
18/58
Cultural differences in consumer
expectation Indians for centuries have eaten hot meals
mainly because refrigeration facilities were notavailable
As refrigeration becomes universally available,Indians will adapt to warmed up cold food whichNRIs in the U.S. or Europe already are used to.
Increasing adaptation of western clothes(jeans
and Tshirts) point to the same thing. IndianSarees will never become a mass marketproduct in any other country and is already wornless even in India for obvious reasons
-
7/28/2019 Management Tools and Trends
19/58
Key for Marketers
Understand the universal long expectations ofcustomers
Assess the current availability of relevant
technologies. Be realistic in creating andpromoting products relevant to the currenttechnology capability.
E.g. Broad band in telecommunication is limited
in India and therefore high bandwidth devicesshould be introduced carefully and withminimum hype
-
7/28/2019 Management Tools and Trends
20/58
Key for Marketers
While the prosperous nations will movegenerally upmarket in new technologyareas(telecom, biotech, nanotech), there ispotential for down market stuff(small cars)whichdeveloping countries can export
Some products will be unique to some countriesfor the next few hundred years e.g. Sun tan forthe Caucasians and Fairness creams for the
Asian and Africans
However in the really long term the sameproducts and services will be available to theundifferentiated human race
-
7/28/2019 Management Tools and Trends
21/58
Conclusion
Understanding ethnic and cultural differences isimportant
These studies and recommendations arising
there from can point to useful marketingconclusions in terms of what will sell where
In the short and medium term exploiting ourknowledge of differences will give marketing
advantage In the long term all markets would move touniversal products and services that wouldreflect current technological capabilities and
meet the universal expectations of customersvis. Max choice and convenience at lowest rice
-
7/28/2019 Management Tools and Trends
22/58
Core Competences
Concept first introduced in a HBR paper1991by Gary Hamel and C.K. Prahlad
Deals with hard competency i.e. relating to
technical processes in Engineering,Electronics, Optics to name a few
It argues that superior competence in a
technology as opposed to focusing onproducts would lead to long termcompetitive advantage.
-
7/28/2019 Management Tools and Trends
23/58
Conceptual framework
C.C. framework can be compared to thestructure of a tree viz. roots, trunk and branchesand finally leaves, flowers, fruits
Core competence can be likened to the rootswhich sustain the structure and contribute to itslongevity
Trunk and branches can be compared to core
products which form part of the final products Leaves, flowers and fruits represent the finalproducts including product variants
-
7/28/2019 Management Tools and Trends
24/58
Understanding the framework
Let us take examples: Core competency ofMatshushita is in small compressor technology(less than 1hp)
Refrigerator compressors constitute the core
product of which Matshushita has a globalmarket share of 50%
Refrigerators, freezers are the finished product.World has several hundred brands and variants
accounting for millions of sale units and billionsof dollars of sale value
Half of these use the Matsushita compressor
-
7/28/2019 Management Tools and Trends
25/58
More Examples
Canons reinvented itself from a camera company to apioneer in Imaging technology
Its core competence is Imaging which encompassesMicro electronics, laser technology, material flow
technology and display technology Core products include the Laser imaging heads and
printer heads used on millions of copiers, fax machines,printers
Result Canon has grown from a small company to agiant with revenues exceeding the total of its formergiant rivals in their respective businesses viz. Kodak inphotography and Xerox in Photocopying
-
7/28/2019 Management Tools and Trends
26/58
Honda
Started by a brilliant mechanic Soichiro Honda,the companys first product was a small enginethat powered an agricultural sprayer
The company developed its core competence inPower train technology
Honda is a global leader in motor cycles, carsand portable generators
Core products are engines, gearboxes and axles Finished products cover the entire automobile
and powered portable devices field
-
7/28/2019 Management Tools and Trends
27/58
Kyocera the small giant
Kyocera has developed core competence inprecision ceramics technology
Its core products are ceramic holders forcomputer processor parts
The company has 55% of the world marketshare in these parts which are used in anincreasing world market for mainframe andpersonal computers
Even with this dominant global market share,Kyocera offers unparalleled customer serviceresponding to emergency requests for suppliesand rushing to attend customer complaints
-
7/28/2019 Management Tools and Trends
28/58
Core competence in Soft
technologies
Hamel and Prahlad have not extended the CC
logic to soft areas
We define these areas as encompassing the key
management sub processes vis planning,organizing, controlling and leading
They also include functional competences such
as marketing, manufacturing, logistics,
Information storage and processing
-
7/28/2019 Management Tools and Trends
29/58
Examples of Soft CCs
Reliance industries has world class project
management capabilities as a core competence
This competence has been applied to various
primary projects including petro chemicalcomplexes, oil refineries, oil exploration
These projects produce world class products
enjoying prominent market share and
contributing towards the firms profitability and
growth and sustained market leadership
-
7/28/2019 Management Tools and Trends
30/58
Examples of Soft CCs
Googles core competence is in informationaccessing technologies
Over a brief period of a single decade the firmhas put in place several core products such assearch engines, micro locating tools like Googleearth and map extension and reading tools
The end products are individual information
packages customized to hundreds of millions ofcustomers across the globe and marketinformation reach and access to firms andcustomers
-
7/28/2019 Management Tools and Trends
31/58
Timex Watches Ltd.
The core competence was technology absorbtion
Complex technologies including precision tool designand manufacture, Injection molding, Vacuum platingwere adopted, and mastered in extremely short time
frames Products and processes including precision dies for a
variety of industries, plating of industrial and consumerproducts and precision plastic products
The firm was able to utilize the core processes describedabove to make superior cost effective products in house
The core processes were leveraged into reproducingthese on a customized basis for several customers
-
7/28/2019 Management Tools and Trends
32/58
Conclusions
Core competences enable superior competitivecapabilities
Development of core products are the logical outcome
The firms creative and productive energy is focused on
a few products that dominate the relevant market spaceand enable it to avoid the energy sapping marketcontests in the end product field
The CC concept is applicable to hard technology (Hameland Prahlad)
The CC concept is equally applicable in soft technologyareas (R.J.M.)
-
7/28/2019 Management Tools and Trends
33/58
Growth Strategy
Every organization must seek continuous growth
to fulfill its purpose of long term profit
maximization
It is important to understand the process ofgrowth and the alternatives available
A firm has to facilitate first growth in demand for
its products/services existing as well as planned
This is done by expanding existing markets and
creating or entering new ones
-
7/28/2019 Management Tools and Trends
34/58
Alternative growth paths
Organic or internal growth is the first andobvious opportunity
Inorganic or external growth is the otheropportunity
Organic growth is achieved by capacityexpansion (domestic and global) and then byprogressive integrationforward and backward
on the value chain External growth is achieved throughdiversification -related and unrelated
-
7/28/2019 Management Tools and Trends
35/58
An Example- Organic Growth
An automobile co. like Maruti which
started by assembling cars from fully
assembled imported aggregates (engines,
gearboxes---)
First increase assembly capacity, then go
for backward integration i.e. components
Go for global expansion through exportsand setting up manufacturing abroad
-
7/28/2019 Management Tools and Trends
36/58
Inorganic Growth
Once the potential for Organic growth is fullyexploited Maruti could consider diversifying intotwo wheelers or commercial vehicles
When the automobile space is saturated,
domestically/internationally, Maruti couldconsider acquiring other auto cos
Following this the co. could consider otheropportunities in the transportation space
Only if and when all of these possibilities areexhausted, the firm can consider unrelateddiversification
-
7/28/2019 Management Tools and Trends
37/58
Facilitating market growth
At every stage, the firm should attempt to
expand and extend its market penetration
This would include new products and new
markets
The firm should also improve market share
in existing markets through more focussed
marketing and selling efforts
-
7/28/2019 Management Tools and Trends
38/58
Conclusion
Growth is an absolute imperative for everyfirm
Organic and Inorganic growth are the two
routes for growth There is a logical pattern (first organic then
inorganic: ensure full exploitation of
potential at every stage Opportunities for market expansion andextension at every
-
7/28/2019 Management Tools and Trends
39/58
Knowledge Management
knowledge is the understanding of a subject gainedthrough experience or study
it can also be described as know how which enables aperson to perform a specialized task
it can also be viewed as an accumulation of factsprocedures and heuristics
facts are true statements about a subject matter
procedures are uniform consistent and documented
activities heuristics are rules of thumb developed over years ofvalidated experience
intelligence is the ability to acquire and apply knowledge
-
7/28/2019 Management Tools and Trends
40/58
Some More Definitions
memory is the ability to store and retrieve relevantexperience at will and is part of intelligence
learning is knowledge or skill acquired by instruction orstudy
instruction and study refer to the formal excercisedealing with exploration and understanding of concepts
experience is the validation of theoretical conceptthrough active or passive practical application and whatwe learn from it.
common sense is the innate ability to sense judge orperceive situations acquired initially in childhood anddeveloped progressively as one gets older
-
7/28/2019 Management Tools and Trends
41/58
Understanding Knowledge
first we understand what data and information are. dataare facts.
information is data processed for use by an individual oran organization
knowledge is the understanding of information based onits perceived relevance/importance to a specific subject
data information and knowledge are related with dataforming the base of the pyramid, information the middleand knowledge the top of the pyramid
knowledge can be summed up as the integrate ofperceptions, skills, common sense and experience
-
7/28/2019 Management Tools and Trends
42/58
Types of Knowledge
there are four basic ways of categorizing knowledge procedural knowledge deals with performance of a standard tasks
e.g. making and sending an appointment letter
declarative knowledge is routine awareness short term knowledgee.g. memorizing a phone no. from a directory to dial the no.
semantic knowledge is knowledge of major concepts and hierarchicknowledge e.g. understanding McGregors theory X and theory Yand how it is to be applied
episodic knowledge is deep personal knowledge based onexperience and resides in the mind. e.g. sacking a senior unionoffice bearer for gross misconduct
procedural and declarative knowledge are short term and shallow.semantic and episodic knowledge are deep and long term anddifferentiate the expert from the novice
-
7/28/2019 Management Tools and Trends
43/58
What is Knowledge
Management(k.m) k.m. is an inter disciplinary model that has knowledge
within an organization as its focus
it uses accessible knowledge from outside sources
it captures and stores knowledge in existing business
processes, products and services it enhances data bases and documents with additional
knowledge
transfers and shares knowledge throughout theorganization
promotes knowledge growth through the orgn.s cultureand incentive systems
-
7/28/2019 Management Tools and Trends
44/58
The k.m Process
k,m. is the process of capturing and making use of afirms collective expertise spread throughout the orgn.
the expertise may be available in documents ordatabases( called explicit knowledge)
it may be resident in individuals minds(this is called tacitknowledge)
tacit knowledge is the more precious and accounts forthe greater part of knowledge in most orgns.
a competitive orgn. should view all its processes asknowledge processes and continuously enrich eachprocess with explicit and tacit knowledge
-
7/28/2019 Management Tools and Trends
45/58
Explicit and Tacit Knowledge
explicit knowledge is codified and stored and therefore widely andeasily available. e.g. personnel data incl employee personal andsalary related data
tacit knowledge is knowledge embedded in the human mind throughpersonal knowledge, experience and discrimination e.g. theknowledge of characteristics of people who are not team players
and in fact destructive personalities tacit knowledge is not only accumulation of and mastery of facts but
involves beliefs and values gained through years of worthwhileexperience (positive and negative
it has been established that 90% of knowledge that will enable a firmto become and remain a superior competitor is tacit knowledge
the aim of every firm should be to access, store and use as much ofits potential wealth of tacit knowledge as it possibly can
-
7/28/2019 Management Tools and Trends
46/58
expertise and experts
knowledge developed over time throughsuccessful experience leads to expertise
an expert is a person with advanced knowledgewho can solve difficult problems swiftly andaccurately
an expert is characterised by attention to detailand quality results
experts are adept at problem solving withresults far above the ordinary
an expert is usually a perfectionist and wants thesolution to be exactly what is called for by the
problem
ifi liti f
-
7/28/2019 Management Tools and Trends
47/58
some specific qualities of an
expert uses chunked knowledge i.e. large
patterned chunks of knowledge(facts,circumstances, people involved etc)
sees the big picture e.g. people will jumpbonds dont count on them for retention:trysomething better
thinks creatively i.e. thinking differentlywith a positive outcome. e.g. how Timexwatches avoided a union
ifi liti f
-
7/28/2019 Management Tools and Trends
48/58
some specific qualities of an
expert possesses good communication skills i.e both
conveying and receiving viz verbal as well aslistening skills
exhibits confidence and is able to maintaincredibility judged by the people who sheinteracts with
is a good teacher and by implication is a goodlearner
the greatest advantage possessed by experts isthe ability to spot patterns that are relevant to aproblem and therefore to its solution
-
7/28/2019 Management Tools and Trends
49/58
capturing tacit knowledge
the goal of knowledge capture is to extractproblem solving knowledge from the humanexpert to build the k.m. system
apart from the skills previously discussed theexpert should have motivation, enthusiasm andwillingness to share his knowledge
three levels of experts: the highly expert person,the moderate expert and the novice expert
where the domain knowledge is concentrated, asingle expert is accessed. where the d.k. isdiffuse multiple experts will be accessed
-
7/28/2019 Management Tools and Trends
50/58
capturing tacit knowledge
the primary instrument for accessing e.k. theinterview: may be structured or unstructured:approach to be logical and properly sequenced.
be prepared for the experts pattern matchingand analogies which may seem like fuzzyreasoning
ambiguities of language to be considered andaddressed
reliability of experts information can be affectedby question construction and by perceptual slant
other problems include response bias, and
hostile attitude.
-
7/28/2019 Management Tools and Trends
51/58
things to avoid
generalizing conclusions on the basis of a fewsessions. Always verify with expert
do not force the expert to repeat anythingbecause of poor recording of previous sessions
avoid taping: good listening and recording willensure good coverage
avoid videotaping: unfavourable with most
experts do not interrupt the expert nor convert the
interview into an interrogation session
problems that ma be
-
7/28/2019 Management Tools and Trends
52/58
problems that may be
encountered in interviews
response bias of expert due to selectiveinterpretation, lack of time, motivation, andhostility
inconsistency specially where more than oneexpert is involved and poor questioningtechnique
communication problems between expert andinterviewer
Required a competent and sensitive k.d. askingthe right questions, being a good listener and
disciplined recorder
-
7/28/2019 Management Tools and Trends
53/58
other k.c. techniques
on site observation observing, interpreting andrecording an experts problem solving behaviouron site.
brainstorming two or more experts in an ideageneration and opinion sharing session.
protocol analysis where experts articulate the
process of specific problem solving. the Delphi method is a progressive way of
generating ideas among the experts involved:working towards convergence and consensus
Blackboarding is a collaborative approach where
A practical application:Using spare tool room
-
7/28/2019 Management Tools and Trends
54/58
A practical application:Using spare tool room
capacity to build a world class tool room
Timex Watches was equipped with a toolroom to maintain precision watchassembly line tooling(repair and rebuild)
We used Marketing, technical and R&Dand resource optimization expertise withinthe company
Our tool room became the foremost toolroom in North India, then the wholecountry and finally a global player
-
7/28/2019 Management Tools and Trends
55/58
The resources and the process
Experts included, tool room senior managers,machine and tooling marketers and resourceand logistics experts
Senior Manager tool room, Vice presidentoperations and the Managing Director all usingexpertise gained during their respective careers
Approach was collaborative and proactive,driven by top management with intent to improveresource utilization, profitability and exploitpotential growth areas for the company
Time frame was aggressive but realistic.Information gathering was informal butdisci lined
Another Example World class
-
7/28/2019 Management Tools and Trends
56/58
Another Example. World class
info systems Starting with 1 PC and 1 incompetent IT
professional Timex in 3 years was ready with itsin house third generation info system
Initially we worked with standard functionalsoftware packages like Tally
Encouraged key employees to leverage theirknowledge of simple RDBMS packages tooperate and build integrated systems
Managed the teething problems of duplicatedatabases and conflicting info between deptslike Accounts and Materials
Another Example World class
-
7/28/2019 Management Tools and Trends
57/58
Another Example. World class
info systems Established responsibility for dbase building and
maintenance and encouraged interactiveprocessing and info sharing
After three years the company had developedcapability for introducing its third generationRDBMS comparable to Oracle RDBMS
The company throughout kept accurate and uptodate information as the objective going beyondconventional claims of superior hardware andsoftware availability
-
7/28/2019 Management Tools and Trends
58/58
The resources and the process
The expertise was from the IT area, the userareas starting with the materials and finance andaccounting area
Key experts included the heads of IT,accounting, Materials, Operations and the topmanagement
Experts used past experience as well as theshared and integrated knowledge of thePrecision Engineering industry of which thewatch industry is a member
Data collection, problem solving was again acollaborative exercise informal but disciplined