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Page 1: 06 business challenge
Page 2: 06 business challenge

Business Challenges

Impact of Globalization

Managing Across Borders

Revolution of Information Technology

Security Issues.

Increasing demand of Knowledge Worker

Individual and Leadership Challenges..

Stressful Environment..

Page 3: 06 business challenge

MANAGEMENT CHALLENGES IN THE NEW MILLENNIA (21ST CENTURY)

Impact of Globalization - leads to strategic challenges of mixed cultures and languages in the business environment.

Managing Across Borders – the ability of an organisation to survive and succeed in the 21st century transnational workforce and borderless business environment. Challenges in managing enterprise-wide production environments.

Revolution of Information Technology – supported by a new world infrastructure of data communications and telecommunications i.e. use of internet, wireless, e-commerce as part of management tools and easing of technology transfer.

Security Issues with wide usage of internet platform in business transactions.

Increasing demand for knowledge-worker in the knowledge driven organizations.

Page 4: 06 business challenge

The Knowledge-Worker “These new industries differ from the

traditional 'modern' industry in that they will employ predominantly knowledge workers rather than manual workers.” ~ Peter Drucker in The Age of Discontinuity (1969)

Peter Drucker predicted that the major changes in society would be brought about by information. He argues that knowledge has become the central, key resource that knows no geography. According to him, the largest working group will become what he calls knowledge workers. The defining characteristic of these knowledge workers is the level of their formal education. Thus education and development, and to some degree training, will be the central concern of a knowledge society.

Page 5: 06 business challenge

The Key to Organisation Survival & Prospering in the 21st Century

Corporate Strategy - Organizations must have a structure that help to unleash the power of their professionals and to capture the opportunities of today's economy.

Ethical Issues – Understanding the new ethical issues emerged from changes in the social and political landscape and from the development of new technologies.

Social Responsibility – The issues of privacy and confidentially, accessibility to technology issues, property right and ownership issues, freedom of speech…etc

Global Challenges – impact of globalisation and cross-border work culture.

Ecological Issues – Oil exploitation and land rights, food security, mining in Africa, climate vulnerability and ecotourism.

Workforce Diversity - Cultural Awareness/Acceptance (i.e. Ethnic Minorities, Multilingualism, Individual Differences)

Page 6: 06 business challenge

Changes in Workplace Environment

• Change from fixed contracts to more

negotiated relationships

• Large rise in part-time and temporary

workers

• Employees demand greater flexibility

and work/life balance

• Office structures are moving towards

‘club’ environments

– Space for meeting, brainstorming, etc.

– Leisure facilities, shops, eateries, dry-cleaning, crèche facilities (day care).

Source: ONS; Henley Centre, PCC 2001; DTI projections

Change in Employment Status, 1971-2005 (UK)

-2461

1046

-1415

1381

2792

4173

776 629

1405

-3

-2

-1

0

1

2

3

4

5

Male Female Total

Full time Part time Self-employed

000s

Page 7: 06 business challenge

ORGANISATION CHALLENGES IN MANAGING BUSINESS IN THE NEW MILLENNIA (21ST CENTURY)

Enterprise Mobility: is commonly defined as the process of extending business applications / solutions through the use of wireless technology, which can be wireless LAN (WLAN), cellular / mobile, or

other technologies, such as wireless broadband.

Page 8: 06 business challenge

ORGANISATION CHALLENGES IN MANAGING BUSINESS IN THE NEW MILLENNIA (21ST CENTURY)

Maintain and contribute to a sustainable socioeconomic environment: recycle waste and control pollution in the physical environment.

Importance of "human capital“: to create an organisations which

support the workers in their cooperative endeavors.

Improve organisation management (leadership): Eliminating

internal competition, alignment of measurement and reward systems, training and empowering employees to act on the scene and communicate critical problems without delay and to get rapid organisational response.

Page 9: 06 business challenge

Consumers’ Trend in the 21st Century

More affluent

More

educated Quality of

life

More

feminised Older

More

fragmented

households

Less

happy

Fewer

children 1 in 4 women born in 1972 will

not have children

40% of the population over 50 by

2010

Disposable incomes have doubled since

1971

Only 1 in 3 households contain a ‘nuclear’

family

35% of 24 year

olds are graduates

40% of workforce are

women

Over half of adults are ‘unhappy with their standard of living’

38% would take a pay cut for less

stress

Adapted from: www.henleycentre.com

Page 10: 06 business challenge

STRESSFUL ENVIRONMENT Working on parallel projects, tight schedules and deadlines, high workload,

demanding customers and clients, increasing global competition, high degree of flexibility and availability - those are important key factors that characterize and coin the dynamic work environment of the 21st century.

International competition, globalization and modern technology have prompted

organizations to consider downsizing, restructuring, and outsourcing as

business strategies and hence, making the work environment more competitive

than ever before.

Working under these “conditions” will lead to higher pressure that is burden on

professionals within an organisation; no matter if the individual is employed or

self-employed.

Page 11: 06 business challenge

INDIVIDUAL & LEADERSHIP CHALLENGES

To bear the pressure and

face the challenges,

workers/professionals need

to be flexible and able to

adjust to the changing

conditions.

Page 12: 06 business challenge

INDIVIDUAL & LEADERSHIP CHALLENGES

• Generational leadership - managing an older workforce, as well as the digital

generation

• Sustainability - protecting today's environment and addressing consumers' needs

• Virtual leadership - leading an internet-based environment

• The developing world - responding to a changing economy

• Diversity - leading a workforce comprising ethnic minorities, mature workers, etc

• Globalisation - managing an extended workforce, and social responsibility.

Page 13: 06 business challenge

Implication to HR & Challenges in 21st Century HR must understand the cultures around the world and think of itself and

operate as a business globally.

With the unemployment rate standing at 4.1%, "the type of worker being sought in the new millennium are more skilled or higher educated than in the past. The pool of such people is running dry.

Putting together programs that help employees find the right balance between home and work.

Using best practices to create an environment that attracts people and makes them want to stay.

Effective handling of company downsizing and retrenched workers.

Technology, as well as the change in the traditional workweek and how jobs are defined, will combine to give employees more autonomy over when they work.

Dealing with a diverse workforce and will find a way to direct these workers toward a common purpose.

Change of workplace to ‘club’ environment requires HR professionals to have extra skills in determining the design and layout of offices and meeting areas.

Page 14: 06 business challenge

SUMMARY

• New and faster technology, redefined values, and shifting

customer demands are changing the way businesses operate

in the twenty-first century.

• The delivery of goods, services, and spare parts will be done

by e-commerce organizations.

• In the majority of developed countries, the population is

aging.

• Human resources is being transformed from a specialized,

stand-alone function to a broad, corporate competency.

• HR policies and program initiatives will have to be responsive

to market conditions and global business structures.

• Importance of Global Leadership in the 21st century

Page 15: 06 business challenge

Business Vision

Definition

Explain Our Direction

Explains what makes us unique

More Broad and Future Oriented.

Clearly States the Reason for being in Business.

Page 16: 06 business challenge

Business Mission

Definition

Why Do we Exist?

States the purpose and identity of the organisation.

Defines Institution’s Values and philosophy.

States what organisation is to achieve.

Examples.

Page 17: 06 business challenge

Business Core Competency

What are Core Competency?

Defining What you need?

Measuring What you have.

Filling Gaps.

Oportunities for developing current People

Engaging the focus.

Page 18: 06 business challenge

Business Strategy

Develop

Translate

Plan.

Monitor and Learn.

Test and Adapt

Page 19: 06 business challenge

Working out a Business Strategy

Closed-Loop Management System1

1

2

3

4

5

1

Develop the Strategy Define vision, mission and values

(Conduct strategic analysis)

Formulate strategy

Translate Plan Monitor and Learn Test and Adapt Robert Kaplan & David Norton (2008). “Mastering the Management

System”. In: Harvard Business Review. January 2008, Vol. 86 Issue 1 (2008): 62-77

29 / 30 Mission - Vision - Strategy

Page 20: 06 business challenge

Working out a Business Strategy

Closed-Loop Management System1

1

2

3

4

5

1

Develop Translate the Strategy Define strategic objectives and themes

Select measures and targets

Select strategic initiatives

Plan Monitor and Learn Test and Adapt Robert Kaplan & David Norton (2008). “Mastering the Management

System”. In: Harvard Business Review. January 2008, Vol. 86 Issue 1 (2008): 62-77

29 / 30 Mission - Vision - Strategy

Page 21: 06 business challenge

Working out a Business Strategy

Closed-Loop Management System1

1

2

3 4

5

1

Develop Translate Plan Operations Improve key processes

Develop sales plan

Plan resource capacity

Prepare budgets

Monitor and Learn Test and Adapt Robert Kaplan & David Norton (2008). “Mastering the Management

System”. In: Harvard Business Review. January 2008, Vol. 86 Issue 1 (2008): 62-77

29 / 30 Mission - Vision - Strategy

Page 22: 06 business challenge

Working out a Business Strategy

Closed-Loop Management System1

1

2

3

4

5 1

Develop Translate Plan Monitor and Learn Hold strategy reviews

Hold operational reviews

Test and Adapt Robert Kaplan & David Norton (2008). “Mastering the Management

System”. In: Harvard Business Review. January 2008, Vol. 86 Issue 1 (2008): 62-77

29 / 30 Mission - Vision - Strategy

Page 23: 06 business challenge

Working out a Business Strategy

Closed-Loop Management System1

1

2

3

4

5 1

Develop Translate Plan Monitor and Learn Test and Adapt the Strategy Conduct profitability analysis

Conduct strategy correlation analysis

Examine emerging strategies

Robert Kaplan & David Norton (2008). “Mastering the Management

System”. In: Harvard Business Review. January 2008, Vol. 86 Issue 1 (2008): 62-77

29 / 30 Mission - Vision - Strategy

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Case Study “Project Scorpio”

Abstract

Background Note

Rethink.

Project Scorpio

Marketing Strategy.

Success.

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Vision/Mission Statements Statements that explain who we are

Type of organization

Products/services

Needs we fill

Statements that explain our direction, our purpose, our reason for being What difference do we make?

Statements that explain what makes us unique Values

People

Combination of products and services

Page 26: 06 business challenge

Business Vision Statement A statement that clearly defines the firm’s “reason” for

being in business

Should significantly stretch the resources and capabilities of the farm

Should inspire people in the organization to achieve things they never thought possible

Should unite people in the organization toward the pursuit of one common goal

Page 27: 06 business challenge

Business Vision Statement A guiding philosophy

Consistent with organizational value

Influenced by the strengths and weaknesses of the business

Page 28: 06 business challenge

Components of a Vision Statement Core ideology

Core Values - timeless guiding principles Core Purpose - reason for being

Envisioned future Big Hairy Audacious Goals (BHAG) -

clearly articulated goals Vivid description - a graphic description of what

success and the future will be like

Recognition of service to stakeholders Owners/creditors Employees Customers

Page 29: 06 business challenge

Mission Statements

The mission statement of an organization is normally short, to the point, and contains the following elements: Provides a concise statement of why the organization

exists, and what it is to achieve;

States the purpose and identity of the organization;

Defines the institution's values and philosophy; and

Describes how the organization will serve those affected by its work.

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Vision vs. Mission The vision is more broad and future oriented – the

goal on the horizon

The mission is more focused – how you will get to the horizon

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Examples of Vision Statements Ben & Jerry’s

Product: To make, distribute, and sell the finest quality all natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products.

Economic: To operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders and creating career opportunities and financial rewards for our employees.

Social: To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community: local, national, and international.

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Examples of Mission Statements Wyffels Hybrids

Wyffels Hybrids is a regional agricultural seed company providing elite corn hybrids, high oil corn seed blends, and premium alfalfas to farmers of the U.S. midwest.

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Cornelius Farms

To be a farm business that farms and/or manages land to best satisfy the landowner. To be one of the very best farmers and farm managers in our region. To rent farm land by striving to obtain maximum income per acre, thus creating maximum profits for the landlord and tenant, through the use of distinguished management of the land. We also have the motto that “appearance is everything,” that goes for our equipment to your land. We make every effort to ensure that the landowner’s land is virtually weed free and well kept.

Examples of Vision Statements

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April 11, 2006 LIS580- Spring 2006 34

Roadmap The strategic management process

Mission and vision statements

Analyzing strategic drivers and core competencies

SWOT analysis

Scenario planning

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April 11, 2006 LIS580- Spring 2006 35

Checklist 5.1 The Strategic Management Process

Define the business and its mission.

Perform external and internal audits.

Translate the mission into strategic goals.

Generate and select strategies to reach strategic goals.

Implement the strategy.

Evaluate performance.

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 36

A Comprehensive Strategic-Management Model

FIGURE 5–1 Source: Adapted from Fred David, Strategic Management (Upper Saddle River, NJ: Prentice-Hall, 2001), p. 77. G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 37

Vision and Mission A vision statement tells people

Where we want to go

What we want to become

What we want to accomplish

Why it is important

And a mission expresses the organization’s:

Purpose - the needs we exist to address

Business - what are we doing to address these

Values - what principles or beliefs guide our work

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April 11, 2006 LIS580- Spring 2006 38

Examples of Mission Statements

FIGURE 5–2

APEX ELEVATOR To provide a high-reliability, error-free method for moving people and products up, down, and sideways within a building.

UNITED TELEPHONE CORPORATION OF DADE To provide information services in local-exchange and exchange-access markets within its franchised area, as well as cellular phone and paging services.

JOSEPHSON DRUG COMPANY, INC. To provide people with longer lives and higher-quality lives by applying research efforts to develop new or improved drugs and health-care products.

GRAY COMPUTER, INC. To transform how educators work by providing innovative and easy-to-use multimedia-based computer systems.

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 39

FIGURE 5–3

Strategies in Brief

Source: Arit Gadiesh and James Gilbert, “Frontline Action,” Harvard Business Review, May 2001, p. 74.

COMPANY STRATEGIC PRINCIPLE

America Online Consumer connectivity first—anytime, anywhere

Dell Be direct

eBay Focus on trading communities

General Electric Be number one or number two in every industry in which we compete, or get out

Southwest Airlines Meet customers’ short-haul travel needs at fares competitive with the cost of automobile travel

Vanguard Unmatchable value for the investor-owner

Wal-Mart Low prices, every day

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 40

Checklist 5.2 How to Test the Quality of Your Strategy

Does your strategy fit with what’s going on in the environment?

Does your strategy exploit your key resources?

Will competitors have difficulty keeping up with you?

Are the elements of your strategy internally consistent?

Do you have enough resources to pursue this strategy?

Can your strategy be implemented? G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 41

FIGURE 5–4

Relationships Among Strategies in Multiple-Business Firms

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 42

Strategy Types Corporate

Concentration Vertical integration Diversification Status quo Investment reduction Strategic alliances/joint ventures

Competitive Cost leadership Differentiation Focus

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April 11, 2006 LIS580- Spring 2006 43

FIGURE 5–5

Forces Driving Industry Competition

Source: Reprinted with the permission of The Free Press, a division of Simon & Schuster from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980 by The Free Press. G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 44

FIGURE 5–6

How the Internet Influences Industry Structure

Source: Adapted from Michael Porter, “Strategy and the Internet,” Harvard Business Review, March 2001, p. 67.

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 45

FIGURE 7–7

Examples of a Company’s Strengths, Weaknesses, Opportunities, and Threats

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 46

FIGURE 5–8

Worksheet for Environmental Scanning

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 47

Checklist 5.3 How to Benchmark

Focus on a specific problem and define it carefully

Use employees who will actually implement changes to identify the best-practices companies and to conduct on-site studies.

Be willing to share information with others.

Avoid sensitive issues such as pricing, and don’t look for new product information.

Keep information you receive confidential.

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 48

FIGURE 5–9

Cineplex Odeon TOWS Matrix

Source: Fred David, Strategic Management (Upper Saddle River, NJ: Prentice-Hall, 2001), p. 207.

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 49

FIGURE 5–10

BCG Matrix

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 50

Checklist 5.4 Scenario Planning Principles

Scenarios have value only to the extent that they inform decision makers and influence decision making.

Scenarios add value to decision making only when managers and others use them to systematically shape questions about the present and the future, and to guide how to go about answering them.

In each step of developing scenarios, the emphasis must be on identifying, challenging, and refining the substance of managers’ mindsets and knowledge.

G.Dessler, 2003

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April 11, 2006 LIS580- Spring 2006 51

Checklist 5.4 (cont’d) Scenario Planning Principles

Alternative projections about a given future must challenge managers’ current mental models by creating tension among ideas, hypotheses, perspectives, and assumptions.

The dialogue and discussion spawned by the consideration of alternative futures should directly affect managers’ knowledge.

Scenarios should include enough indicators so that managers can track how the future is actually evolving so that the learning and adaptations stimulated by the scenarios are continuous.

G.Dessler, 2003