Modern Approaches to Management
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Transcript of Modern Approaches to Management
Modern Approaches to Management
Frederick A. IgnacioDanang University of Economics
The Old Organization
Hierarchal
Tall Structure
Single function specialisms
Focus on tasks and responsibilities
Systems
The New Organization
Everything is international
Everything is new
Everything is faster
Everything is turbulent
Dimensions of Modern Management
Market-driven Cultures - From competitive individualism
to teamwork and co-operation
- From security to flexibility
Flexibility
Empowerment
Social responsibility
I. Management by Objectives
A system that was originally conceived at DuPont and General Motors in the early twentieth century under the name "MBO and self-control“. Its most important proponent is Peter Drucker.
Core Concepts of MBO
All managers should:
participate in the strategic planning process, in order to improve the implementability of the plan, and
implement a range of performance systems, designed to help the organization stay on the right track.
II. Total Quality Management
Focuses on managing the total organization to deliver quality to customers.
Requires a shift from an inspection-oriented approach to employee involvement in the prevention of quality problems.
Elements of TQM
EMPLOYEE INVOLVEMENT TRAIN, INVOLVE, EMPOWER WORKERS
FOCUS ON THE CUSTOMER FIND OUT WHAT THE CUSTOMER WANTS
BENCHMARKING COMPARE PRODUCTS/SERVICES
WITH COMPETITORS
CONTINUOUS IMPROVEMENT SMALL, INCREMENTAL IMPROVEMENTS ALL THE
TIME
III. Michael Porter: Strategic Management
Competitive Rivalry, eg:
number and size of firmsindustry size and trendsfixed v variable cost basesproduct/service rangesdifferentiation, strategy
Supplier Power, eg:
brand reputationgeographical coverageproduct/service level qualityrelationships with customersbidding processes/capabilities
Product and Technology Development, eg:
alternatives price/quality market distribution changesfashion and trendslegislative effects
Buyer Power, eg:
buyer choicebuyers size/numberchange cost/frequencyproduct/service importancevolumes, JIT scheduling
New Market Entrants, eg:
entry ease/barriersgeographical factorsincumbents resistancenew entrant strategyroutes to market
5 Forces Model
IV. Activity-based Costing
Activity-Based Costing (ABC) is a method of allocating costs to products and services. It is generally used as a tool for planning and control.
ABC allows managers to attribute costs to activities and products more accurately than traditional cost accounting methods.
V. Balanced Scorecard
A strategic planning and management system that is used extensively by organizations worldwide to align business activities to its vision and strategy, improve internal and external communications, and monitor organization performance against strategic goals.
Traditional Measures
Return on Investment
Profit Margin
Acid test ratio
Turnover ration
Management: Japanese Style
VI. Japanese Style of Management
STRATEGIES
1. Development of an internal (closed) labor market
2. Employee Oriented
3. Cooperative company philosophy
4. Careful socialization and development of personnel
SPECIFIC TECHNIQUES USED
Job Rotation Slow evaluation and promotion Group and team emphasis Open, face-to-face
communications Consultative decision making Intimate employee concern
Japanese Style of Management
Japanese Style of Management
KEYS TO SUCCESSFUL APPLICATION
1. Articulate a company philosophy2. Provide long tenure3. Practice job rotation4. Practice consultative decision-making
Theories in Practice
Surveyed 475 companies in 1999
Results:
Benchmarking – first in Europe, third in North America
Strategic Planning- first in US (89%)
Mission/Vision- second in both continents
Activity
Do you agree that “the end justifies the means” or “the means justify the end”. Explain your answer