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ENGINEERING MANAGEMENT

SCIENCE

Chapter # 5

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REFERENCE CHAPTER 5 : Engineering Management by Fraidoon

Mazda

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World of Manager

Managers

Ow

ne

rs/

Sto

ckh

old

ers

Em

plo

yee

sCustomersSuppliers

The Public at

Large

Trad

eA

ssoc

iatio

ns

Local

Com

munity

Governments

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Strategy is a common vision

that unites an organization, provides consistency in decisions,

and keeps the organization moving in the right direction

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Strategy

• Action plan to achieve mission• Shows how mission will be achieved• Company has a business strategy• Functional areas have strategies

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Strategy Concept of strategy - different

meanings to different people. “A strategy is a pattern or plan that

integrates an organization’s major goals, policies, & action sequences into a cohesive whole”

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How It WorksCompany

Mission

Business

Strategy

Functional Area

Strategies

Marketing

Decisions

Operations

Decisions

Fin./Acct.

Decisions

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Strategy FormulationStrategy Formulation Managers analyze current situation to

develop strategies achieving mission. SWOT analysis: a planning to identify:

Organizational Strengths and Weaknesses.○ Strengths: manufacturing ability, marketing

skills.○ Weaknesses: high labor turnover, weak

financials. Environmental Opportunities and Threats.

○ Opportunities: new markets.○ Threats: economic recession, competitors

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Planning & Strategy FormulationPlanning & Strategy Formulation

Corporate-level strategydevelop a plan of actionmaximizing long-run value

Business-level strategya plan of action to take advantage of opportunitiesand minimize threats

Functional-level strategya plan of action improving department’s ability to create value

SWOT analysisidentifies strengths & weaknesses inside the firm and opportunities& threats in the environment.

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Strategy Formulation

Define the primary task

Assess core competencies

Determine order winners & order qualifiers

Position the firm

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Activities that Lead to Core Competencies

Core competencies

Shared problem solving

Rapid Integrationof new technologies& methodologies

Experimentation

Importing knowledge

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Activities that Reinforce Core Rigidities

Limited problem solving

Inability to innovate

Biased experimentation

Screened knowledge Core

rigidities

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What’s the most difficult part about strategy?

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Focuses employees on common goals & priorities

Translates strategy into measurable objectives

Aligns day-to-day decisions with the strategic plan

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Organization Life CycleOrganization Life Cycle

Reflects changes take place in industry over time. Birth stage: firms seek to develop a winning

technology. VHS vs. Betamax in video, or 8-track vs. cassette

in audio. Expansion stage: Product gains customer

acceptance & grows rapidly. New firms enter industry, production improves,

distributors emerge.

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Diversification stage: Competitor rivalry increases, prices fall. Grow in other related areas

Decline and Renewal stage: falling demand for product.Prices fall, weaker firms leave industry.

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Assignment #

Write down the lessons from Beer Game Length of assignment should be no

more than 3 pages Submission Date: 22 Dec. 2014

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