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Lecture 2

Week 2 - Environment & Diversity.pdf

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Department
Management
Course
MGC1010
Professor
Various
Semester
Spring

Description
Week 2 MGC1010 – Introduction to Management E NVIRONMENT &D IVERSITY E NVIRONMENT & COMPETITIVE ADVANTAGE  In this ‘information is power’ age, companies need to develop strategic or dynamic capabilities in order to advantageously compete in the face of changes emanating from the environment - Strategic: Difficult to imitate, value to the customer & are better than those possessed by majority of competitors - Dynamic: Physical (advantageous location/equipment), Organisational (outstanding sales force) and human (expertise in a specialised field)  The companies that employ knowledgeable staff with a canny ability to scan the environment for and ideas might gain competitive advantage – Knowledge & speed is indispensable to success. W HAT IS COMPETITIVE ADVANTAGE ? ALLOWS AN ORGANISATION TO DEAL WITH MARKET AND ENVIRONMENTAL FORCES BETTER THAN ITS COMPETITORS  The use of a core competency that sets the organisation apart from its competitors and gives it an advantage over them in the marketplace, through its ability to consistently do something of high value that competitors cannot replicate quickly or do as well. - Can only be achieved in the global economy by continuously scanning the environment for opportunities & taking effective action based on what is learned. - Can be its products, pricing, customer service, cost efficiency & quality. THE GENERAL ENVIRONMENT CONSISTS OF ALL THE BACKGROUND CONDITION– CAN INFLUENCE BUSINESS ACTIVITIES  External conditions vary from one country to another; economic and natural conditions have been much attention recently. (e.g the GFC influenced the economic slowdown in china, reducing demand for Australian mineral exports) & (The world is being more cautious of the need to minimize the impact of human and organisational behaviour on the planet.)  External forces are more noticeable when organisations operate internationally.  Managers of successful international operations understand differences and help organisations make the operating adjustments needed to perform within them. ECONOMIC The general state of the economy in terms of inflation, income levels, gross domestic product and unemployment and related indicators of economic health SOCIOCULTURAL This includes the general state of prevailing social values on matters such as human rights, trends in education and related social institutions and demographic patterns POLITICA-LEGAL This includes laws and government regulations and the general state of the prevailing philosophy and objectives of the political party or parties running the government TECHNOLOGICAL This includes the general state of the development and availability of technology, including scientific advancements N ATURAL ENVIRONMENT This includes the general state of nature and the conditions of the natural environment, including levels of public concern expressed through environmentalism. Bianca Ling Week 2 MGC1010 – Introduction to Management T HE SPECIFIC ENVIRONMENT (TASK ENVIRONMENT ) CONSISTS OF THE ACTUAL ORGANISATIONS ,GROUPS AND PEOPLE WITH WHOM AN ORGANISATION INTERACTS AND CONDUCTS BUSINESS  Stakeholders that are of direct consequence to the organisation as it operates on a day-to-day basis. - Can change over time according to company’s unique customer base, operating needs & circumstances. Customers – Specific consumer or client groups, individuals and organisations that purchase the organisation’s goods and use its services Suppliers – Specific providers of the human, information and financial resources and raw materials needed by the organisation to operate Competitors – Specific organisations that offer the same or similar goods and services to the same consumer or client groups Regulators – Specific government agencies and representatives, at the local, state and national levels, that enforce laws and regulations affecting the organisation’s operations. E NVIRONMENTAL UNCERTAINTY A LACK OF COMPLETE INFORMATION ABOUT THE ENVIRONMENT  Makes it difficult to predict future states of affairs and to understand their potential implications for the organisation.  The greater the environmental uncertainty, the more attention that the management in an organisation must direct towards the external environment and there is a larger need for flexibility and adaptability in organisational design and work practices.  Organisations must continually study environmental uncertainty and monitor emerging trends.  Organisations must also be able to respond quickly to new circumstances arising and information becoming available. Bianca Ling Week 2 MGC1010 – Introduction to Management C USTOMER -DRIVEN ORGANISATIONS  The key in competitive advantage and total quality is customer service W HO ARE THE CUSTOMERS ? The notion of customer service applies equally to workflows within the organisation and to the relationship between the organisation and its ultimate consumers in the external environment.  Suppliers: - Have the responsibility to deliver high-quality and on-time inputs to the next point.  Customers: - Have the right to expect high-quality and on-time inputs from the earlier points in the workflow Internal customers: Found within the organisations (e.g Individuals and groups who use or otherwise depend on the result of others’ work in order to do their own jobs well.) External customers: Purchase goods produced or use the services provided (e.g industrial or retail customers, or clients.) W HAT CUSTOMERS WANT In the goods & services they buy: (If not met, organisations loose competitive advantage) 1. High quality 2. Low cost 3. On-time delivery Successful businesses: (Understand that reputation & customers are hard to get and easy to lose) 1. Always protect their reputation for quality products 2. Always treat your customers right C USTOMER RELATIONSHIP MANAGEMENT STRATEGICALLY TRIES TO BUILD LASTING RELATIONSHIPS WITH , AND ADD VALUE FOR CUSTOMERS .  The CRM is used to competitive advantage with the support of IT that allows organisations to maintain intense communication with customers as well as to gather and use data regarding customers’ needs and desires. - Organisations must find out what customers want and give it to them.  Supply chain management: Involves strategic management of all operations relating an organisation to the suppliers of its resources, including purchasing, manufacturing, transportation & distribution. - The goal of SCM is to achieve efficiency in all aspects of chain while ensuring the necessary flow and on-time availability of quality resources for customer driven operations. (Understanding that organisations are customers of their suppliers) Bianca Ling Week 2 MGC1010 – Introduction to Management Q UALITY DRIVEN ORGANISATIONS  The achievement of quality objectives in all aspects of operations is a universal criterion of organisational performance in manufacturing and service industries. (To gain competitive advantage) - ISO certification indicates conformance with a rigorous set of international quality standards, where ‘world-class’ companies competing have an ISO 9000 certification at various levels. T OTAL QUALITY MANAGEMENT M ANAGING WITH COMMITMENT TO CONTINUOUS IMPROVEMENT ,PRODUCT QUALITY AND CUSTOMER SATISFACTION .  A quality improvement approach begins with the insistence that the total quality commitment applies to everyone in an organisation and to all aspects of operations from resource acquisition through to production and distribution of finished goods and services.  Philip Crosby’s ‘four absolutes’ of management for total quality control: 1. Quality means conformance to standards - Workers must know what performance standards they are to meet. 2. Quality comes from defect prevention, not defect correction - Leadership, training and discipline must prevent defects in the first place. 3. Quality as a performance standard must mean defect-free work - The only acceptable quality standard is perfect work 4. Quality saves money - Doing things right the first time saves the cost of correcting poor work. Q UALITY & CONTINUOUS IMPROVEMENT  Continuous improvement - Always looking for new ways to improve on current performance - Quality is closely tied in with this concept, should always be improved on.  Cycle time - The elapsed time between receipt of an order and delivery of the finish
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