Business Management And Strategy 1

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Action Plans

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The specific steps a department or team will pursue to achieve objectives, usually short-term objectives.

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Benchmarking

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The activity of comparing an organization's own approaches and processes to the industry's best practices.

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Budget

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The financial blueprint and action plan for an organization, expressed in monetary terms.

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Budgetary Control

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The process of monitoring how an organization's budget plans have worked in practice. For example, if an HR department's activities are exceeding its allocated budget, it should be investigated to determine the causes, and corrective actions should be taken.

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business case

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A rationale and a financial reasoning for making a business decision or an investment, or initiating a project or task. A business case document typically presents a comprehensive view of the proposal and provides adequate financial and market analysis for it.

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business drivers

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A set of factors – including employees, processes, and functions – that are used to achieve the strategic goals of an organization. Examples of business drivers are intellectual capital, return on investment, diversity, new technology, mergers and acquisitions, and work-life balance.

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centralization

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The process that concentrates the activities of an organization, like planning and decision-making, within a particular location or group within the organization

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chains of command

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An advantage that gives an organization an edge over its rivals and an ability to generate greater value for the corporation and its shareholders. According to Michael Porter, two basic types of competitive advantages organizations might have are cost advantage and differentiation advantage.

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corporate governance

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The term used to encompass rules, processes, or laws by which a corporation is managed, regulated, and controlled, and that define the relationship between its stakeholders – principally the shareholders, board of directors, and management.

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corporate social responsibility

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Abbreviated to CSR, a reference to the way corporate citizens manage their businesses and their interrelationships with all their stakeholders in order to produce an overall positive impact on society.

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corporate strategy

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A systematic and long-term organizational plan that defines the objectives and goals of an organization in terms of its mission, vision, and values. The corporate strategy of an organization typically focuses on what financial goals to establish, where businesses will be located, how they'll be managed, and how resources will be allocated to various organizational activities and projects.

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cost-benefit analysis

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A structured process for calculating and comparing the benefits and costs of a certain decision or project in order to determine whether it's worthwhile and to compare the project with other similar initiatives.

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cost-benefit ratio

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An indicator used in cost-benefit analysis. The cost-benefit ratio is determined by dividing the total value of benefits by total costs.

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decentralization

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An organizational structure based on horizontal authorities of equal power, control, and resources. Decentralization can be contrasted with centralization, where authority is hierarchical.

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departmentalization

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The basis by which jobs are grouped together so that common tasks can be coordinated.

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direct costs

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The obvious, visible, and financial costs associated with alternatives – for example, machinery and equipment, materials, and personnel cost

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diversity

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A description of the variety and balance of race, ethnicity, gender, culture, ability, sexual orientation, and social characteristics of an organization's stakeholders.

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divisional organizational structure

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An organizational structure made up of various market segments, product segments, customer segments, or regional segments. Group various employees into strictly defined divisions, by location, product, or service. Used by larger organizations that encounter diverse competition and opportunities.

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due diligence

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The investigation and auditing of one organization by another, especially in the instances of mergers and acquisitions

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employer branding

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A tool designed to attract high-quality job candidates to an employee-seeking organization. An employer brand is designed to reflect the organization's image and reputation. Underlying an employer brand are four key elements, each of which is found in most marketing campaigns: product, price, place, and promotion.

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enterprise management

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The processes, tools, and strategies to promote and facilitate the sharing of information and key process management across multiple functions, often in partnership with external partners.

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environmental scanning

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A method of researching the internal and external factors affecting an organization. The method includes both qualitative and quantitative measures.

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external environmental factors

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A set of variables stemming from outside an organization that affects the organization's strategic goals and which should be included in the organization's strategic planning.

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formalization

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A method that determines the degree of adherence required to formal procedures and policies.

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formula budgeting

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A budgeting approach that applies an average cost to comparable expenses.

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functional organizational structure

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The grouping of activities by the services they contribute to an organization's overall mission. More common. Works well for small organizations or large organizations with simple operations. Employees are grouped by task or function. low degree of staff division, wide span of control, centralized authority, high degrees of specialization and low standardization

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functional strategy

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The strategy created to develop and manage resources to support corporate level strategies so that they run smoothly and effectively. They are rooted at the functional level of an organization – operating divisions and departments.

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human capital

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The total knowledge, skills, abilities, and experience of an organization's employees.

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human resource strategy

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A strategy that outlines how to bring in the right people and the necessary number of people, how to develop these people to the best of their abilities, and how to keep these people with the organization.

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incremental budgeting

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A budgeting approach that takes into account an organization's historical budgetary numbers and combines them with current budgetary considerations.

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indirect costs

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The costs not directly identifiable with specific activities, usually based on estimating or prorating shared resources, such as a portion of infrastructure maintenance.

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internal environmental factors

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A set of variables stemming from inside an organization that are capable of affecting the organization's strategic goals and which should be included in the organization's strategic planning.

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legislative laws

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Actions passed by Congress, state legislatures, or local governments, such as those in cities and counties.

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matrix organizational structure

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A structure that combines aspects of functional and divisional structures to gain the benefits of both. Results in duel COC. Employees may report to two managers. Works well with highly technical organizations. Extent of control can range form wide to narrow.

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mission statement

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A framework of what activities an organization will engage in and what direction the leadership intends to take the organization. The mission statement explains who the organization is, what the organization does, and who the organization serves.

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operational planning

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A short-range planning approach that is designed to develop specific action steps that guide department's day-to-day operations.

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opportunity costs

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The net benefits forgone by not choosing a competing alternative.

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organizational culture

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The set of values, traditions, knowledge, attitudes, and customs within an organization. The culture creates the character of the organization and should support the organization's strategic goals.

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organizational life cycle

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The four stages organizations experience: start up, growth, maturity, and decline.

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organizational structure

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ThThe formal reporting relationships, procedures, controls, authority structure, and decision-making process of an organization. Organizational structure can evolve organically as the organization moves through various stages of its life cycle shaped by forces in its internal and external environments.

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performance management

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The process of seeking to improve or maintain job performance by using assessment tools, coaching employees, and providing ongoing constructive feedback.

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regulations

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Rules made by regulatory agencies regarding how to comply with laws that were passed by the legislature. These are proposed, adopted, and enforced by government agencies delegated with specific rule-making authority. Regulations put laws to work.

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return on investment

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Abbreviated to ROI, determines how many dollars are received for every one invested after all costs are recovered. ROI is the amount of net profit expressed as a percentage of the total investment made.

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risk management

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The identification, evaluation, and control of risks that might impact an organization, through the use of risk management strategies.

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shareholders

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The investors in an organization as determined by their holdings, such as stock or bonds.

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SLEPT model

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The model that categorizes forces in the external business environment into social, legal, economic, political, and technological factors. It helps organizations in gathering information, scanning the external environment, and improving organizational knowledge of the potential impact of these external business environmental forces on their business.

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span of control

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The number of employees reporting to a manager. The more employees, the greater the span of control and vice versa.

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specialization of work

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The degree to which tasks in an organization are subdivided into separate jobs.

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stakeholders

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The people affected by an organization's strategy. Normally includes employees, shareholders, customers, suppliers, and other third parties.

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strategic planning

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A systematic process used by organizations to help ensure future success by evaluating an organization's current status, where it wants to be, and how exactly it will get there.

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strengths, weaknesses, opportunities, and threats analysis (SWOT).

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Abbreviated to SWOT analysis, a strategic planning tool that helps to analyze an organization's strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are factors internal to an organization and are somewhat under an organization's control. Opportunities and threats are external environmental factors and mostly beyond an organization's control.

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tactical goals

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The short-term objectives often concerned with a business unit or a department.

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The Sarbanes-Oxley Act, 2002

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The act that sets new auditing, ethics, quality-control, and reporting standards to ensure corporate responsibility and the independence of auditors. The act created the Public Organization Accounting Oversight Board to oversee the auditors of public companies and protect interests of investors and the general public

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values

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The core of what is important to an organization. Values form the foundation of the corporate culture.

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vision statement

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A strategic statement that provide an inspiring and guiding image of where an organization would like to be in the future. This statement guides the organization's strategic goals and planning.

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zero-based budgeting

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A type of budgeting requiring the justification of expenditures for each new period

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What are the three basic questions of Strategic Planning

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Where is the organization now?

Where does it want to go from here?

How will it get there?

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4 stages of Strategic Planning Process

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1 strategy formulation

2 strategy development

3 strategy implementation, and

4 strategy evaluation

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Strategic Planning Process: Strategy Formulation

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the organization's vision and mission statements are developed and the organization's values are defined

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Strategic Planning Process: Strategy Development

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requires a thorough analysis of factors found inside and outside of the organization. Long Term goals and objectives are set.

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Strategic Planning Process: Strategy Implementation

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Short-term goals are set based on long term goal--then broken down to tactical goals--action plans are created, resources are allocated to various business activities, and jobs are defined for employees, employees are motivated.

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Strategic Planning Process: Strategy Evaluation

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involves the assessment and evaluation of strategies and performance and any necessary modifications needed to ensure the achievement of organizational goals.

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What is the Vision Statement

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The leadership team's view of what the organization will look like in the future. The vision statement must be inspiring and inform its employees, customers, and other stakeholders what long-range success looks like for the organization.

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What is the Mission Statement

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it describes how the organization will achieve its vision – what activities it intends to pursue. An effective mission statement attempts to answer questions, such as who the organization is, what it does, and who its customers are.

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Values

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define the organization's standards for conducting business, and set the standards for employee behavior and conduct. These values should be relatively sustainable, and do not usually change with changes in product lines or business processes. Organizational values are at the heart of any organization, though in many organizations they may be informal or unwritten.

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Long Term Objectives

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These are specific, measurable, action-oriented, realistic, and time-based, or SMART, goals that the organization will seek to achieve in pursuit of its vision and mission in the long-term. SWOT and SLEPT analysis takes place.

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How does HR align with the strategic plan?

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1 understand the industry and the business environment

2 gain a working knowledge of the roles and processes in the functional areas

3 use knowledge of the organization and other functions to fulfill HR's functional mission

4 build partnerships and alliances with key individuals inside and outside the organization, and

5 offer insightful suggestions and feedback supported by facts and objective data

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HR Strategic Roles

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1. Develop action plans for employees to meet organizaitoal goals.

2. Recruitment and retention plans

3. Performance Management

4. Change Management

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Organizational Life Cycle Stages

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1. Startup

2. Growth

3. maturity

4. decline

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Startup

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small, geared towards surviving and growing. Focus on getting market share, gaining customers, and securing funding and resources. Overlapping tasks. Nonbureaucratic and centralized. non existent internal systems, few rules and procedures, no formalization.

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Growth

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maintain employees while attracting more employees. Training become important. Shift towards bureaucratic form. Growth in sales and customers, budgetary system put into place.

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Maturity

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Refine strategies to maintain market shares. HR creates employee stability by standardizing policies, processes, and practices. Extensive departmentalization, several small jobs. Concerned with internal efficeny and control mechanisms and procedures.

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Decline

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resistance to change, fewer employees take on more responsibility. Decision making is centralized and streamlined. More flexible with fewer rules and procedures. Controlling costs and employees cross train

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Elements of Organizational Structure

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1. Specialization of work

2. Departmentalization

3. Centralization

4. formalization

5. Chain of Command

6. Span of Control

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Organizations can departmentalize in different ways

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1. Functional

2. Divisional

3. Matrix

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Advantage of functional organizational structure

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encourage effective communication, improve teamwork, support quick decision making.

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disadvantages of functional organizational structure

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poor interdepartmental communication and a focus on departmental, rather than higher-level, organizational goals.

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Advantage of Divisionall organizational structure

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provide clear employee accountability and encourage hands-on problem solving. They also encourage teamwork, and support delegation of responsibility

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disadvantages of Divisional organizational structure

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Could result in a lack of employees who are sufficiently specialized to train others. This type of structure can also result in the duplication of tasks across divisions and potential conflict between divisions over resources.

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Advantage of Matrix organizational structure

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etter access to resources and shared expertise, and improved technology sharing. This structure also allows more democratic decision making and more hands-on management

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disadvantages of Matrixl organizational structure

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A potential disadvantage of this type of structure is that it can result in employees having to report to more than one manager – potentially resulting in confusion and conflict.

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Span of Control

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1. Flat Organization Structure.

2. Tall or Hierarchical Organizational structure

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Flat Organization Structure.

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1 wide span of control

2 many employees report to a supervisor

3 employees are skilled or work and supervision is simple, and

4 employees generally interact directly with supervisors

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Tall or Hierarchical Organizational structure

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1narrow span of control

2 fewer employees report to a supervisor, and

3 tasks are complex or employees are poorly trained or inexperienced

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What can a budget help you do?

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As a strategic planning tool, a budget enables your organization to identify tactical goals and allocate organizational resources to activities that help achieve those goals. As a strategic control tool, a budget facilitates comparison of actual results with budgeted numbers, evaluation of the differences, and taking corrective measures, if necessary.

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What do budgetary control involve?

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monitoring how your organization's budget plans have worked out in practice. For example, if the HR department's activities are exceeding its allocated budget, it will be investigated to determine the causes and corrective action will be taken.

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Types of Budgeting Methonds

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1. Incremental budgeting

2. Formula budgeting

3. Zero-based budgeting

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Budget Planning six key activities

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1. Establish

2. Set department Objectives

3. Estimate resources and expenses

4. Prepare draft individual and master budget

5. Review and implement changes

6.Approve and allocate budgets

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Base information needed for human capital planning

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1. the total number of people currently working for the organization

2. their department-wise break-down

3. their make up in terms of gender and ethnicity (for compliance purposes), and

4. the skill mix and inventory based on their role and function.

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Human Capital protection aims to respond to these questions

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1. How many people will be needed over the next one, two, or three years?

2. Which department or business unit needs them?

3. What skills would be needed of this work force?

4. How much will the new work force cost (hiring, orientation, salary, benefits and bonus)?

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Human capital projections are based off what information?

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1. The organization's strategic plan provides a qualitative and quantitative indication about human capital requirements for the coming period

2. this leads to a projection about demand of human capital in specific areas

3. a current analysis of the existing supply from within and outside the organization is done, and

4. the required skills mix are determined

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HR provides the following information for the budget

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1. Info involving all employees in the organization (payroll, traveling, maintenance cost, and other cost.)

2. Costs and expenses related to HR department

3. IT Hardware

4. Insurance

5. and more..