Wednesday, March 10, 2010

Management issues

- Annual Objectives
- Policies
- Resources
- Organizational Structure
- Restructuring
- Reward/Incentives
- Resistance to change
- Supportive culture
- Production/Operations

Annual Objectives:Annual objectives are short term milestones that organizations must achieve to reach long term objectives
 Decentralized activity
 Directly involve all managers in the organization

Purpose of Annual Objectives:
 Basis for resource allocation
 Mechanism for management evaluation
 Metric for gauging progress on long-term objectives
 Establish priorities (organizational, division, & departmental)

Requirements of Annual Objectives:
 Measurable
 Consistent
 Reasonable
 Challenging
 Clear
 Understood
 Timely

Policies Establish:• Refer to specific guidelines, methods, procedures, rules,
forms, and administrative practices established to support
and encourage work toward stated goals.
 Boundaries
 Constraints
 Limits

Policies examples:
• To promote on the basis of merit or on the basis of seniority.
• To use one or more suppliers.
• To buy, lease or rent new production equipment.
• To promote from within or to hire from outside.

Resource Allocation:• Resource allocation is a central management activity
that allows for strategy execution.
• Strategic management enables resources to be
allocated according to the priorities established by
annual objectives.

4 types of resources:
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources

Managing conflict:
 Conflict: is a disagreement between two or more parties on one or more issues.
 Conflict not always “bad”
 No conflict may signal apathy (boredom)
 Can energize opposing groups to action
 May help managers identify problems

Conflict Management & Resolution:
 Avoidance
 Diffusion
 Confrontation

1. Avoidance Ignoring the problem and hoping that the conflict will resolve itself or physically separating the conflicting individuals (groups).
2. Diffusion: Playing down differences between conflicting parties and while emphasizing similarities and common interests, compromising so that there is no clear winner or loser.
3. Confrontation Exchanging members of conflicting parties or holding a meeting at which conflicting parties present their views and work through their differences.

Matching Structure with Strategy:-- Changes in strategy = Changes in structure

Structure & Strategy:
 Structure dictates how objectives & policies will be established
 Structure dictates how resources will be allocated

Restructuring:-- Reducing the size of the firm – # of employees, divisions and/or units, # of hierarchical levels
It is also called:
 Downsizing
 Rightsizing
 Delayering
Involves reducing the size of the firm in terms of number of employees, number of divisions or units and number of hierarchical levels in the firm’s organizational structure.
It is concerned primarily with shareholder well being.

Reengineering:-- Reconfiguring or redesigning work, jobs, & processes to improve cost, quality, service, & speed
Reengineering is concerned more with employees and customer.
Also called:
 Process management
 Process innovation
 Process redesign

Linking Pay/Performance to Strategies:
 Dual bonus systems (Based on both annual objectives and long term objectives.
 Profit sharing systems (DuPont Canada has a 16 percent return on equity objectives. If these objectives is met, the company’s 400 employees receive a “performance sharing cash reward.
 Gain sharing systems (Requires employees and departments to establish performance targets; if the actual results exceeds objectives, all members get bonus.


  1. Thanks for the posts and i should tell you that strategic management is a hard and very difficult subject. these notes you are posting is very good because they are easy for somebody to learn. keep it up.

  2. yes satar jan, thanks for the comment.