Introduction to Management Study Guide Chapter 3 PDF

Dhruv Chaudhari 09/04/2024 Chapter 3: Identifying the “Right Work” There are five parts to finding the “Right Work”: Vision, Mission, Goals, Strategy, Plans ○ These different parts are not always done in sequential order, but variations of them help to grow a business V...

Dhruv Chaudhari 09/04/2024 Chapter 3: Identifying the “Right Work” There are five parts to finding the “Right Work”: Vision, Mission, Goals, Strategy, Plans ○ These different parts are not always done in sequential order, but variations of them help to grow a business Vision: The organization’s purpose for existing ○ It is embodied in the products and services that the company sells to its customers Mission: Includes the products that the company sets to provide and the different sets of consumers they want to serve. ○ Often more descriptive than the vision, elaborating on how the organization will try to approach its vision ○ The mission can not be too broad or narrow because it could lead the business to falter Understanding what makes a mission too broad or narrow is key to making a proper mission Goal: outcomes the organization wants to reach ○ A reliable indicator that a business is successful ○ For-profit organizations have two goals: Financial goals: strengthening the business financially Focusing on return on capital employed (ROCE), sales, Profits, net cash flow, days inventory on hand, days sales outstanding Operational Goals: efficiency of the work that gets done within the company including Market share vs competitors, number of returning customers for a given period, number of new customers for a given period, service levels, customer satisfaction, production level, and error Strategy: Actions taken by the managers to achieve set goals. Some categories include. ○ Differentiation Strategy: differing products and services from a competitor to gain customers ○ Low-Cost Strategy: trying to develop the least expensive way, vs competitors, to produce a deliver products and services. Allowing a business to develop a higher profit margin than competitors. ○ Combination strategy: Comines differentiation strategy and low-cost strategy to accrue lower costs and differentiate themselves from other organizations to succeed. ○ Focus strategy: targeting a part of the market that the business will serve more effectively than the rivals  Focus on geographical location, demographic, or specialized parts of a certain market ○ Distinctive competencies help a business differentiate from its rivals and help a company become a leader in the sector ○ Development process: Step 1: Develop/review/update the vision, mission, and goals Step 2: Conduct an external analysis of the business environment Step 3: conduct an internal analysis of products/ services and capabilities vs competitors Step 4: Based on outcomes in previous steps select the best strategy Implement the strategy Plans: outline of the specific actions taken, resources required, and the timeline of various goals in support of the organization's strategy to achieving its goals. They should be consistent with the specific goals that are set and should align with the strategy. ○ Strategic plans: core strategy and step-by-step initiatives the organization undertakes for its strategy ○ Business plans: identifies goals, key initiatives, and timeline the organization will undertake to pursue marketing goals ○ Marketing Plans: marketing-related goals, how to attract customers ○ Operational Plans: how the company will produce products and services ○ Functional Plans: how everything will function in the organization ○ Financial Plans: resource requirements for business units and functions within the organizations ○ R&D plans: various initiatives to grow the organization and maintain competitiveness. Looking at resources and key initiatives for R & D projects ○ Technology plans: key technologies necessary to support products and services and resources required to maintain key technologies ○ Human Resource Plan: identifies talent that is required for each part of their business Important Notes: ○ Few Businesses identify the “Right Work” in a sequential, stepwise fashion ○ Sometimes organization’s success does not how well it identifies the “Right Work” ○ May be successful because of the industry it is in and not the steps it has taken Identifying Work - In Practice- Tesla: ○ Conventional Logic is creating a ‘minimal viable product which means creating a product that just gets the job done ○ Telsa ended up doing the just the opposite, which is a differentiating factor, and tried to make the higher more luxurious electric sports car. ○ They knew that they couldn’t turn a profit but years later they ended up doing better than General Motors, which is one of the biggest competitors in the car space. Meaning their different strategy worked