Strategic management is the conduct of drafting
implementing and evaluating cross-functional decisions that will enable an
organization to achieve its long term objectives, developing policies and
plans, specifying the organization’s mission, vision and objectives. Often in
terms of programs and projects which are designed to achieve these objects and
then allocating resources to implement the policies and plans, projects and
programs (Mulcaster 2009).
According to Kim and Man Borgne(2005), that strategic
management is an ongoing process that evaluates and controls the business and
the industries in which the company is involved, assesses its competitors, set
goals and strategies to meet all existing and potential competitors, and then
reassesses each strategy annually or quarterly (i.e. regularly) to determine
how it has been implemented and whether it has succeeded or needs
replacement by a new strategy to meet changed circumstances, new technology,
new competitors, a new environment or a new social, financial or political
environment.
Strategy formulation is adopted before any
implementation, in which is a combination of three processes which are as
follows;
• Performing
a situation analysis, self evaluation and competitor analysis, both internal and
external, both micro-environment and macro environment.
• Concurrent
with this assessment, objectives are set, which are parallel to a time line,
some are short-term and others on long-term. This involves crafting vision
statements (long term views of possible a future) mission statement (the role
that the organization gives itself in society).
• These
objectives should in the light of he situation analysis, suggest a strategic
plan, which provides the details of how to achieve these objectives.
Strategy valuation involves measuring the
effectiveness of the organization’s strategy, in which a SWOT analysis is
conducted to figure out its strength, weaknesses, opportunities and threats
both internal and external. This may require taking certain precautionary
measures or even changing the entire strategy (Muicaster 2009).
As noted by Johnson, Schools and Whittington (2008)
that strategic
options are evaluated against three key success criteria.
options are evaluated against three key success criteria.
• Suitability,
which deals with the overall rationale of the strategy, if the strategy will
make an economic sense, would the organization economies of scale and would it
be suitable in terms of environment and capabilities.
• Feasibility,
which is concerned with weather the resources required to implement the
strategy are available, can be developed or obtained. Resources include
funding, people, time and information. Certain tools such as breakeven
analysis, cash flow analysis and forecasting are used to evaluate feasibility.
• Acceptability
is concerned with the expectations of the identified stake holders, (mainly
shareholders, employees and customers) with the expected performance out comes,
which can be return, risk and stakeholders reactions.
The industrial organizational approach strategies are
based on the assumptions-rationality; self discipline behavior, profit
maximization and economic theory which deal competitive rivalry, resource
allocation (Christopher 2009).
As noted by Christopher (2009), industrial
organizations such as Pz industries may adopt certain strategies such as
process improvement strategy to improve its production excellence through Total
quality management. Process improvement approach which forms the basis of ISO
9001:2008 quality management
standard duly driven from the eight principles of quality management, which
process approach, is one of them. The process approach may be limited in words,
but not in applicability, while it fulfils the criteria of all-round gains in
terms of competencies and seeks newer direction to the business success
(Thareja 2008).
Process improvement strategy involves a lot of
activities that directly add values to the overall objectives and set goals of
the organization in achieving higher performance and products/services which
conforms to customers’ requirements. Process improvement is necessary in
organizations and industries, it is a matter of making sure each process and
system is in control and capable. This involves the machineries, plants and
equipments, operators. Doing it right, this means the process is consistent and
predictable, capable means the process can consistently produce products that
meet customer’s requirements (Godfrey 2009).
As noted by Elliot (2001), that the best way to
produce the highest quality products is simply to run the equipment or process
the way it was designed to run. Once a process is under control and capable,
doing it rig1nt means maintaining a consistent and predictable process, in
manufacturing is only part of the equation. People are the other part, people
maintain the equipment, people changes the equipments, and people run the
process and people determine daily performance. Therefore, people require as
much attention or more, as a complex piece of equipment. Their knowledge and
understanding, decision making, problem solving and daily performance must
achieve the same consistency and capability as any other complex process
(Elliot 2001).
Organizations seeks consistency, they
simultaneously encourage and mandate variation. In the absence of strict
process control and operational consistency, most organizations strive for
optimal cost through project work aimed at continuous improvement,
unfortunately the only consistent things about this approach is the high degree
of inconsistency and variation generated within the system. In different
situations different operators, crews, engineers run the same process
differently and run things differently on different days.
Eliminating structural work will enable the
organization to stop doing as many things as possible that do not directly
contribute to daily performance. These include those things that built into the
system by the vast and current management decisions made around products,
customers and systems (Traverso 2000).
People based improvement approach is another strategy
which will improve the production excellence through Total Quality Management
of this study.
As noted by Elliot(2001), that in any manufacturing
organization, the process involves the people operators, crews, engineers) and
the plant equipments, to produce the highest quality products that meet
customers requirements. People are the citadel of this approach in every
organization, ones knowledge and skills determines the level of performance.
Any organization that would achieve sustainable production
excellence should have an extra ordinary level of knowledge, discipline, and
self awareness of knowing that if we already knew how, it would already be
clone. The result of extreme discipline, driven by comprehensive knowledge,
extreme capability with intense commitment and understanding the task. Most
important of all, however it requires an unrelenting leadership commitment to
productively master those elements of process, plants/machinery, equipments,
that need to be achieved through the execution of the basics (Godfrey 2009).
As noted by Shipiro and Varian (2009), that
information and technology gives rise to the “knowledge worker”. Some workers
would be applying their effort and initiative, while others apply their minds
with good information technology. People based improvement approach would be
largely driven by information, organizations that manages information well
could obtain advantage, however the profitability which is called information
float.
However “automating technology” and “information
technologies” have effects on individual workers, managers and organizational
structures, the importance of flexible decentralization structure, work teams,
knowledge sharing and the central role of knowledge worker. Organizations that
have the ability to gather analyze and uses information is a necessary
requirement for business success in the information age. In order to achieve
this organizations need to be structured such that
• People
can continuously expand their capacity to learn and be productive.
• New
patterns of thinking are natured,
• Collective
aspirations are encouraged,
• People
are encouraged to see the “whole picture” together (Sveiby 1999). Organizations
could adopt the five learning organization discipline to achieve people based
improvement;
1.
Personal responsibility, self reliance and mastery. Since human beings are the
masters of our destiny. We make decisions and live with the consequences, when
a problem needs to be fixed, or an opportunity exploited we take the initiative
to learn the required skills to get it done.
2. Mental
model; we need to explore our personal mental models to understand the subtle
effect they have on our behaviour,
3. Shared
vision; the vision of where we want to be in future is discussed and
communicated to all; it provides guidance and energy for the journey ahead.
4. Team
leading; we learn together in teams, which involves a shift from a “spirit of
advocacy to a spirit of enquiry”
5. Systems thinking; looking at the whole rather than the
parts, it is the glue that integrates the other four into a coherent strategy
(Shapiro and Varian 2009).
Information technology sector has provided some
software development in production industries, access to information systems
have allowed senior managers to take much more comprehensive views of strategic
management than ever before. Quality information should be passed on to every
crew, operator or engineer in the process line about new plants / machineries
and equipments. There should be workshops, seminars and training of crew
members in the production line about newest technology and advances in their
respective field and new equipments (Glad well 2000).
However, this will enable them run the equipment or
process the way it was designed to run, to produce higher quality products that
meet customers’ requirements. People maintain the equipments and
plant/machineries, people change those equipments, people run the equipment and
determine the performance daily, and therefore people require much attention,
knowledge and information technology to maintain a sustainable performance in
achieving production excellence (Gladwell 2000).
Management
According to Gomez-Mejia and Cardy (2008), notes that
manage merit in all business areas and organizational activities are the acts
of getting people together to accomplish desired goals and objectives.
Management comprises planning, organizing, staffing, leading or directing, and
controlling an organization or effort for the purpose of accomplishing a goal.
Because organizations can be viewed as a system, management could be seen as
human action, including design, to facilitate the production of useful outcomes
from a system.
The verb manage comes from the Italian maneggiare (to
handle especially tools) which in turn derives from the Latin maims (hand). The
French word management influenced the development in meaning of the English
word management in the 17th and 18th Centuries. Management is often considered
as a factor of production along with machines, materials and money (Drucker
2005). Directors and managers who have the power and responsibility to make
decisions to manage an organization, in large firms the board of directors
formulates the strategy which is implemented by the chief executive officer.
According to Luis and David (2008), management
functionality as the action of measuring a quantity on a regular basis and
adjusting some initial plans. This implies in situations where planning does
not take place, from this perspective, Frenchman Henri Fayol considers
management to consist of seven functions;
• Planning
• Organizing
• Leadership
• Co-ordinating
• Controlling
• Staffmg
• Motivating
A Scottish moral philosopher Adam Smith in his write up the wealth of the Nations aims for efficient organization of work through specialization of labour, Smith described how changes in processes could boost productivity. Mathew Boulton developed elements of technical production such as standardization, quality control procedures, interchangeability of parts and work planning (Wikipedia 2010).
• Organizing
• Leadership
• Co-ordinating
• Controlling
• Staffmg
• Motivating
A Scottish moral philosopher Adam Smith in his write up the wealth of the Nations aims for efficient organization of work through specialization of labour, Smith described how changes in processes could boost productivity. Mathew Boulton developed elements of technical production such as standardization, quality control procedures, interchangeability of parts and work planning (Wikipedia 2010).
As noted by Craig (2009), from Taylor’s scientific
management attempts to take a scientific approach to solving management
problems, particularly in the areas of logistics and operations. Management
operates through various functions, to achieve its organizational objectives
and laid down plans or strategy, such as planning;
• Planning,
deciding what needs to happen in the future and generating plans for action,
the time limit may vary from today, next week, next month, next year or even
the next five years etc,
• Organizing,
implementing and making optimum use of the resources required to enable the successful
carrying out of plans.
• Leading/Directing,
Determining what needs to be done in a
situation and getting people to do it.
• Staffing,
involves jobs analyzing, recruitment and hiring individuals for appropriate
jobs.
• Motivation
is also a kind of basic function of management, because without motivation
employees cannot work effectively. If motivation doesn’t take place in an
organization then employees may not contribute to other functions.
The management of any organization are usually
involved in any business strategy formation, which is the mission of the
business or its most obvious purpose, the vision of the business reflects
aspirations and specifies its intended
direction or future destination. The objectives of the business refers
to ends or activity at which a certain task is aimed, the policy must be flexible,
easily interpreted and understood by all employees (Kotter and Cohen 2002).
As noted by Richard (2003). that all policies and strategies must be discussed with all managerial personnel and staff, managers must understand where and how they can implement their policies and strategies. A plan of action must be devised for each department, policies and strategies must be reviewed regularly.
As noted by Richard (2003). that all policies and strategies must be discussed with all managerial personnel and staff, managers must understand where and how they can implement their policies and strategies. A plan of action must be devised for each department, policies and strategies must be reviewed regularly.
Contingency plans must be devised in case the
environment changes, assessments of progress ought to be carried out by
top-level managers regularly. A good environment and team spirit is required,
the missions, objectives, strengths and weaknesses of each department must be
analyzed to determine their roles in achieving the business mission. The
forecasting method develops a reliable picture of the business future
environment; a planning unit must be created to ensure that all plans are
consistent and that policies and strategies are aimed at achieving the same
mission and objectives (Craig 2009).
According to Kotter and Cohen (2002), organizational
change is strategically achieved through the implementation of the eight step
plan of action;
• Increased urgency
• Get the vision right
• Communicate the buy-in
• Empower action
• Create short term wins
• Don’t letup
• Make change and stick
• Increased urgency
• Get the vision right
• Communicate the buy-in
• Empower action
• Create short term wins
• Don’t letup
• Make change and stick
Where policies and strategies fit into the planning
process, they give the mid and level managers a good idea of the future plans
for each department in an organization.
However in large organizations, where there is a
multi-divisional management hierarchy may have about five levels, senior
management, middle management, low-level management such as supervisors,
foreman, rank and file. The top management requires an extensive knowledge of
management roles and skills, their decisions are generally of long term natured
and are made using analytical, directive, conceptual and behavioral
participative process. They are responsible for strategic decisions; they chalk
out the plan and see the plan may be effective in future.
The middle management has a specialized understanding
of certain managerial tasks. They are responsible for carrying out the
decisions made by top management, finance; marketing etc comes under middle
level management.
The lower management ensures that the decisions and
strategies are taken by the other two are carried out.