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Summative Assessment: Project Scoping Outline: Part 2

 

Using the project you outlined in Part 1, evaluate a competitor product or service that can be found in the marketplace. 

( Note: See Week 2 for Part 1 – Navigate to Course Content…> Week 2….> Wk 2 – Integration…> Wk 2 – Apply: Summative Assessment: Project Scoping Outline: Part 1 )

  • Analyze how this product or service aligns with the competitive landscape.  
  • Assess how it aligns with organizational strategic objectives.  
  • Create an initial stakeholder register identifying the key stakeholder roles by organization. It should include the following:  
  • Describe the key stakeholders. 
  • Evaluate each stakeholder’s level of power and influence over the project along with each one’s level of interest.  
  • Analyze what will happen with the project if they are not engaged and become distracted by other business needs. 

    7031SR- GROUP- 1

     

    1. A 10-15 slide PPT.
    2. Prepare a presentation script for the PPT that is under 20 minutes (it should be edited in a conversational style and submitted to me as a Word document).
    3. "Assignment Submission Form AS1 MN7031SR Aug 24" is the grading rubric for this assignment.
    4. The rest of the content consists of teaching PPTs.
    5. I need you to complete the task strictly according to the grading rubric.
    6. You must read all the course materials before completing the task.
    7. If the submitted content does not meet the requirements, I will request unlimited revisions until I am satisfied.
    8. If the content is not up to standard or you refuse to revise it, I will request a refund.
    9. If you cannot accept the above conditions, please do not place a bid.

    Feedback/Feedforward Coversheet

    MN7032SR

    Global Strategy and Innovation

    Academic Year 2024/25

    Assessment 1

    Group Presentation

    Ppt slides 10 to 15 slides

    First Marker:

    Second Marker:

    Title of presentation: Group Presentation on The Virgin Group

    Assessment criteria

    Level of achievement

    1st

    Marker

    2nd

    Marker

    An introduction of The Virgin Group

    (10 marks)

    To analyse and summarise Virgin Group and present an Executive Summary

    Past and Current Performance

    (20 marks)

    An analysis report on

    · Revenue and profit (by products/regions)

    · Production strategy

    · R & D activities

    · Marketing strategy

    · Financial report (return on capital and shareholders)

    Competitive Position

    (20 marks)

    An analysis report on competitors

    · Financial performance

    · Production capacity

    · Marketing strategy

    · Prediction of their future strategy

    Your strategy

    (30 marks)

    A business plan consists of

    · Vision and mission

    · Market and sales forecast

    · Financial forecast

    · Product roadmap and R & D strategy

    · Manufacturing and suppliers

    · ECG strategy

    Group Reflection

    (10 marks)

    Provide a report of your group member’s reflection

    Presentation

    (10 marks)

    Structure and format

    In text citation and references

    Total marks

    Areas for improvements

    From First Marker

    Knowledge and understanding

    Analysis and evaluation

    From Second Marker

    Knowledge and understanding

    Analysis and evaluation

    Agreed Mark

    First marker’s marks/date:

    Second marker’s marks/date:

    Please upload the Turnitin Report

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    ,

    MN7031 Topic 7 – How Is Your Company Performing and What Is Your Strategy?

    londonmet.ac.uk

    Maurizio Sammarco

    Module Overview

    Business Simulation – Cesim Global Challenge

    1. How and Why Do Businesses Grow?

    2. How Do We Diagnose Company Strategy?

    5. How Do We Make Sense of the VUCA External Environment?

    8. Does Your Simulation Company Need A New Strategy?

    10. Why DO Firms Undertale Acquisitions, Mergers and Alliances?

    7. How Is Your Simulation Company Performing?

    11. How Do Companies Innovate Successfully?

    12. Does Strategic Alignment Matter?

    4. Why Are Some Industries More Profitable Than Others?

    3. How Does A Company Create Competitive Advantage?

    6. How Do We Identify future opportunities and threats?

    9. Summative Assessment Presentations

    Strategic Diagnosis

    External

    Internal

    Global

    National

    Regional

    Local

    PESTEL

    5 Forces

    Blue Ocean Theory

    Industry Lifecycle

    Competitor Analysis

    Scenario Planning

    Resource Based View

    Core Competencies

    Organisational Structure

    Culture

    Systems

    Market Analysis

    Red Queen Theory

    Theories and Frameworks

    Business Model

    We will look at competitors in a later topic.

    Industry (or Sector)

    Development stage

    Markets and Competitors

    Market Segments

    Scope of activities

    The Organisation

    Resources

    Capabilities

    Competencies

    Politics

    The Macro-environment

    Concentration

    Value network

    Products and/or services

    Critical success factors

    Resource commitment

    Economics

    Social

    Technological etc.

    Business Model

    Business Model – How A Firm Makes Profit

    Resource Base:

    Manufacturing plants – number and location, environmental impact

    Technologies and Features

    People (HR)

    Brand/Reputation

    Activity System:

    Use of outsourcing

    Logistics

    Product Offering

    Techs

    Features

    Price

    The Simulation Value Chain

    R&D Headcount, Training and Policies

    Component Suppliers

    In-house R&D or Licence

    Product

    Price

    Promotion

    Make or Buy

    Capacity

    Plant Location

    Plant Activity

    Priorities

    Financing

    Tax

    Environmental Impact

    Product and Service Offerings

    The key question is which products and services should be developed and which markets should be served

    Companies that do not focus on a limited set of product-market combinations risk:

    low economies of scale

    Reduced experience curve effects

    slow organisational learning

    unclear brand image

    unclear corporate image

    high organisational complexity

    limits to flexibility

    Resources, Capabilities and Competencies

    Resources, Capabilities and Competencies and the Link to Strategy

    Hill et al, 2015

    Able to do things

    Able to do things successfully or efficiently

    Distinctive Competencies

    Competitive advantage is based upon distinctive competencies. Distinctive competencies are firm-specific strengths that allow a company to differentiate its products from those offered by rivals, and/or achieve substantially lower costs than its rivals.

    Resources

    A company’s resources can be divided into two types:.

    Tangible resources are physical entities, such as land, buildings, manufacturing plants, equipment, inventory, and money.

    Intangible resources are nonphysical entities that are created by managers and other employees, such as brand names, the reputation of the company, the knowledge that employees have gained through experience. We could also include the intellectual property of the company, including patents, copyrights, and trademarks.

    Valuable resources are more likely to lead to a sustainable competitive advantage if they are rare, in the sense that competitors do not possess them, and difficult for rivals to imitate; that is, if there are barriers to imitation.

    Capabilities

    Capabilities refer to a company’s resource-coordinating skills and productive use.

    These skills reside in an organisation’s rules, routines, and procedures.

    More generally, a company’s capabilities are the product of its organisational structure, processes, control systems, and hiring strategy. They specify how and where decisions are made within a company, the kind of behaviours the company rewards, and the company’s cultural norms and values.

    Resources, Capabilities, and Competencies

    The distinction between resources and capabilities is critical to understanding what generates a distinctive competency.

    A company may have firm-specific and valuable resources, but unless it also has the capability to use those resources effectively, it may not be able to create a distinctive competency. Additionally, it is important to recognize that a company may not need firm-specific and valuable resources to establish a distinctive competency so long as it has capabilities that no other competitor possesses.

    In sum, for a company to possess a distinctive competency, it must—at a minimum— have either:

    (1) a firm-specific and valuable resource, and the capabilities (skills) necessary to take advantage of that resource, or

    (2) a firm-specific capability to manage resources (as exemplified by Nucor).

    Distinctive competencies shape the strategies that the company pursues, which lead to competitive advantage and superior profitability. However, it is also very important to realise that the strategies a company adopts can build new resources and capabilities or strengthen the existing resources and capabilities of the company, thereby enhancing the distinctive competencies of the enterprise.

    I worked for 10 years for Capgemini, a firm that had a wide range of technology capabilities that enabled it to provide the design and build large and complex IT systems successfully. These capabilities, combined with the intangible resources of the firm, gave Capgemini a distinctive competence in Systems Integration. At the time. however. Capgemini lacked the ability to win large IT service contracts and was losing market share in services to EDS.

    I moved to EDS to understand the companies deal making Competence, which was very strong, but embedded in a relatively small number of people. Unfortunately the EDS delivery capability, particularly System Integration, was far less strong than Capgemini.

    Ultimately Capgemini acquired the deal making competence mainly through selective recruitment of key people, but EDS failed to with a number of over-ambitious projects because it lacked the necessary capabilities and some key resources; for example the right project management culture, to create the necessary delivery competence.

    Types of Firm Resources

    Not All Resources Are Equal

    Asian Plants

    Techs 3 and 4

    Short Term Debt

    High Debt

    Low Share Price

    US Plants

    Two Perspectives On Shaping The Business Model

    Strategic Analysis of A Firm

    Holistic Models

    An alternative approach is to start by looking at the ‘big picture’ before drilling down to explore particular components in more detail.

    This might be by a series of executive and senior management interview to gain an overview of possible problems as perceived from above.

    Management

    practices

    Work unit

    climate

    Motivation

    Individual and

    organizational performance

    Structure

    Systems

    (policies and procedures)

    Tasks and individual roles

    Individual needs and values

    External

    environment

    Leadership

    Mission

    and

    strategy

    Organization

    culture

    Strategy Diagnosis – An Iterative and Incremental Process

    Start with the 7 areas in the diagram, beginning with financial performance over the last 5 years:

    Is the business profitable?

    Is it growing or declining?

    How does it compare with the rest of its industry?

    Share price and capitalisation

    Investigate the other 5 areas

    The process of diagnosis may lead to questions in other areas e.g.:

    Leadership

    Ownership

    Information Systems

    Acquisition Integration

    Culture

    Sustainability

    Etc..

    Strategy

    Diagnosis

    Financial Performance

    Competencies

    Industries, Product Offerings and Market Segments

    Resources – Tangible and Intangible

    Business Model and Value Network

    Capabilities

    Competitive Advantage

    The Components of Competitor Analysis

    PORTER, M.E., 2004. Competitive strategy. 1. Free Press export ed. edn. New York, NY [u.a.]: Free Press.

    Competitors Response Profile

    Future Goals

    Current Strategy

    Assumptions

    Capabilities

    Strengths

    Weaknesses

    About itself

    About its industry

    How is the business competing?

    All levels of management

    Multiple dimensions

    Sources of Competitive Advantage

    Hill et al, 2015

    What Is Quality and How Does A Firm Deliver It Consistently?

    Strong governance to define the organisation's aims and translate them into action

    robust systems of assurance to make sure things stay on track

    a culture of improvement to keep getting better.

    Fit for purpose

    Intangibles

    Four factors help a company to build and sustain competitive advantage:

    superior efficiency

    quality

    innovation

    and customer responsiveness

    I am going to focus on quality and innovation.

    Firstly quality – a simple way to understand quality if “fitness for purpose”. Does the product have the necessary attributes to satisfy my needs?

    When customers evaluate the quality of a product, they commonly measure it against two kinds of attributes: those related to quality as excellence and those related to quality as reliability.

    From a quality-as-excellence perspective, the important attributes are things such as a product’s design and styling, its aesthetic appeal, its features and functions. This is an are that Apple particularly understand.

    With regard to quality as reliability, a product can be said to be reliable when it consistently performs the function it was designed for, performs it well, and rarely, if ever, breaks down. Apple in recent years have been less successful in this respect, as have a number of highly respected firms – Boeing, Toyota and Samsung currently to name but a few.

    When products are reliable, less employee time is wasted making defective products, or providing substandard services, and less time has to be spent fixing mistakes—which means higher employee productivity and lower unit costs. Thus, high product quality not only enables a company to differentiate its product from that of rivals, but, if the product is reliable, it also lowers costs.

    Innovation refers to the act of creating new products or processes. There are two main types of innovation: product innovation and process innovation.

    Product innovation is the development of products that are new to the world or have superior attributes to existing products.

    Process innovation is the development of a new process for producing products and delivering them to customers.

    Innovation is linked very much to culture. In an organisation where there is a strong desire for centralised control, innovation will be less likely to occur. There is a tension then between control and creativity.

    Positioning A Business

    Where and How to compete?

    Bases of competitive advantage:

    Price, Features, Bundling

    Efficiency

    Quality

    Innovation

    Customer responsiveness

    Availability

    Image and relations

    Porter’s three generic competitive advantages:

    operational excellence

    product leadership

    customer intimacy

    Stuck in

    the Middle

    Efficiency and Economies of scale

    Efficiency – Measured by the quantity of inputs that it takes to produce a given output

    Economies of scale: Reductions in unit costs attributed to a larger output

    Ability to spread fixed costs over a large production volume and produce in large volumes

    To achieve greater division of labor and specialization

    Diseconomies of scale: Unit cost increases associated with a large scale of output

    Learning Effects

    Cost savings that come from learning by doing

    More significant when a technologically complex task is repeated, as there is more to learn

    Diminish in importance after a period of time

    Triggered by changes in a company’s production system

    Simulation

    Developing and launching new products or features

    Manufacturing a new phone

    Commissioning new plants

    Experience Curve

    Systematic lowering of the cost structure, and consequent unit cost reductions – occur over the life of a product

    A product’s per-unit production costs decline each time its accumulated output doubles – accumulated output – Total output of a product since its introduction

    Useful in industries that mass-produce a standardised output

    Hill et al, 2015

    Examples of Price Declines

    What’s Your Strategy?

    SALES REVENUE

    There are clearly two strategies in the game, which are visible from the turnover:

    1. Volume-directed, based on economies of scale and learning effects in production that enable lower pricing.

    2. Premium-price strategy, based on the launching of new technologies and higher pricing that covers the higher production costs.

    Which of these two strategies is better, or any intermediate strategy in between, depends on the implementation of the strategy and the development of the markets.

    The relevant target is to maximize the profit, i.e. the difference between turnover and costs.

    VARIABLE PRODUCTION COSTS

    Production costs are influenced by the location of plants, the capacity usage and the learning curve (production of new technologies is initially more expensive until learning curve starts reducing the average production costs).

    Initially there are plants only in the U.S. and hence the variable production costs are all incurred in the USA. It is possible to reach lower production costs in Asia, especially in older technologies. Starting the production of a new technology in Asia is poor judgment, because initial competence is lower there and thus initial production of a new technology is costly. However, utilizing the lower production costs in Asia through more established technologies is worthwhile in Asia.

    R&D

    As the technological evolution forms an essential part of the simulation, R&D decisions are of great importance. There are two ways of developing new products: own development and technology license purchases. Difference between these two is in the costs and time-to-market. In-house R&D yields results with one period delay, whereas licensed technology becomes available immediately.

    License purchases are paid as a lump sum. No annual fees are related to license purchases. Moreover, using in-house resources to develop technologies and features does not make license purchases more affordable.

    It is notable that all R&D costs are expensed to the income statement immediately during the period when the investment is made. This can cause large fluctuations in the periodical results.

    ADVERTISING

    Marketing expenses are completely under the management's control through decisions. The amount spent on promotion should be in line with the company's volume of operations and the product contribution margin. A useful rule-of-thumb is:

    [Marketing budget = product contribution margin*elasticity]

    The advertising elasticities of demand in this case range from 0.1 to 0.3. Therefore, the amount spent on advertising should be on average 10-30% of product contribution margin.

    Companies that have chosen an aggressive technology-strategy should also use relatively large investment-like advertising efforts when launching new products. This helps to create a positive image of the product to customers, and also has long-term effect. Despite the long-term impact, all advertising costs are expensed during the period when the investment is made.

    Marketing affects not only the demand for the product being advertised but also the company's image in the particular market area. There are positive long-term effects associated with advertising.

    OPERATING PROFIT (EBIT)

    EBIT, earnings before interest and taxes, indicates the company's operating efficiency. Generally a team that has the highest EBIT relative to the capital employed makes the best results in the simulation, assuming that they have not jeopardized the future cash flows in order to maximize short-term wins. It should be noted that in the short-run (one or two periods) differences in marketing and R&D efforts affect the EBIT a great deal. These investment-like costs are reported as costs in the year in which they occur even though they have long-term impact. Normally the effect of these factors towards the end of the game tends to be much less than in the first few rounds.

    NET FINANCING EXPENSES

    Financing costs depend on the chosen leverage and the effectiveness of treasury management (one can move and repatriate funds to and from Europe and Asia). Interest rates vary between countries and the moving cash between group companies can be used to place the company debt wherever it is the cheapest. This requires both careful sales budgeting and cash flow budgeting.

    It is easy to get into a situation where you have excess cash in some areas and debt in other areas. In such a situation the company is losing the difference between the cost of debt and the interest rate earned for cash (i.e. takes debt in one area and saves it in a bank account in another area).

    Management of the debt-to-equity ratio is important. The objective is not to minimize the explicit financing expenses, which could be done with 100% equity. The leverage effect of debt should be taken into account when aiming for a high share price. The company can use share issues and buybacks to manage the company capital structure. Additional leverage can be searched through buying own shares when they are undervalued and selling when they are overvalued. Note that shares can be repurchased only if the company has accumulated sufficient funds in retained earnings.

    Equity is an expensive method of financing growth. Not only will you dilute your control of the business, but the investors will also expect healthy returns. Injecting money into a business is a risky prospect for an investor, so they’ll typically expect to see a return of at least 10 percent to compensate for the risks. Debt can usually be sourced at a much lower rate.

    Financial leverage has value due to the interest tax shield that is afforded by the U.S. corporate income tax law.

    The use of financial leverage also has value when the assets that are purchased with the debt capital earn more than the cost of the debt that was used to finance them.

    Blue Ocean Strategy

    Companies can build competitive advantage by redefining their product offering through value innovation – creating a new market space

    Blue Ocean – Wide open market space where a company can chart its own course

    Red Ocean – fiercely competitive

    W. Chan, K, & Mauborgne, R 2005, 'Blue Ocean Strategy: FROM THEORY TO PRACTICE', California Management Review, 47, 3, pp. 105-121, Business Source Complete, EBSCOhost, viewed 10 August 2016.

    A New Value Proposition

    Reduce

    Create

    Raise

    Eliminate

    Bibliography

    De Wit, R & Meyer, R, (2017) Strategy, An International Perspective, Andover, Hampshire: Cengage Learning, 6th ed.

    Prahalad, C. K. and Hamel, G. (1990) ‘The Core Competence of the Corporation’, Harvard Business Review, 68(3), pp. 79–91. Available at: http://0-search.ebscohost.com.emu.londonmet.ac.uk/login.aspx?direct=true&db=bth&AN=9006181434&site=ehost-live (Accessed: 10 May 2021).

    Joseph, G. (2009) ‘Mapping, Measurement and Alignment of Strategy using the Balanced Scorecard: The Tata Steel Case’, Accounting Education, 18(2), pp. 117–130. doi: 10.1080/09639280802436731.

    Osterwalder, A, & Pigneur, Y 2010, Business Model Generation : A Handbook for Visionaries, Game Changers, and Challengers, John Wiley & Sons, Incorporated, Chichester. Available from: ProQuest Ebook Central. [11 July 2019].

    ‘Porter’s generic strategies’ (2005) A to Z of Management Concepts & Models, pp. 272–277. Available at: http://0-search.ebscohost.com.emu.londonmet.ac.uk/login.aspx?direct=true&db=bth&AN=22366647&site=ehost-live (Accessed: 12 April 2021).

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    MN7031 Topic 3 – How Does A Company Create Competitive Advantage?

    londonmet.ac.uk

    Daniel Jones

    Module Overview

    Business Simulation – Cesim Global Challenge

    1. How and Why Do Businesses Grow?

    2. How Do We Diagnose Company Strategy?

    5. How Do We Make Sense of the VUCA External Environment?

    8. Does Your Simulation Company Need A New Strategy?

    10. Why DO Firms Undertale Acquisitions, Mergers and Alliances?

    7. How Is Your Simulation Company Performing?

    11. How Do Companies Innovate Successfully?

    12. Does Strategic Alignment Matter?

    4. Why Are Some Industries More Profitable Than Others?

    3. How Does A Company Create Competitive Advantage?

    6. How Do We Identify future opportunities and threats?

    9. Summative Assessment Presentations

    Today’s Agenda

    Lecture

    Sources of competitive advantage

    Positioning – Porter’s Generic Strategies

    Low cost and differentiation

    Efficiency and economies of scale

    Learning effects

    Strategy creation

    Mature industries

    Declining Industries

    Blue Ocean Theory

    First mover advantages

    Simulation

    Round 1

    Strategy in Firms

    1st Goal of a firm: survive

    Rate of return above the cost of capital

    How do we make money?

    Industry Attractiveness

    Where do we compete?

    Competitive Advantage

    How do we compete?

    Corporate Strategy

    Scope of business

    Big choices; sustainability, structure etc

    (Top management)

    Business Strategy

    Markets, segments, (Divisional

    management)

    Resources, Capabilities and Competencies and the Link to Competitive Advantage

    Hill et al, 2015

    Able to do things

    Able to do things successfully or efficiently

    Distinctive Competencies

    Competitive advantage is based upon distinctive competencies. Distinctive competencies are firm-specific strengths that allow a company to differentiate its products from those offered by rivals, and/or achieve substantially lower costs than its rivals.

    Resources

    A company’s resources can be divided into two types:.

    Tangible resources are physical entities, such as land, buildings, manufacturing plants, equipment, inventory, and money.

    Intangible resources are nonphysical entities that are created by managers and other employees, such as brand names, the reputation of the company, the knowledge that employees have gained through experience. We could also include the intellectual property of the company, including patents, copyrights, and trademarks.

    Valuable resources are more likely to lead to a sustainable competitive advantage if they are rare, in the sense that competitors do not possess them, and difficult for rivals to imitate; that is, if there are barriers to imitation.

    Capabilities

    Capabilities refer to a company’s resource-coordinating skills and productive use.

    These skills reside in an organisation’s rules, routines, and procedures.

    More generally, a company’s capabilities are the product of its organisational structure, processes, control systems, and hiring strategy. They specify how and where decisions are made within a company, the kind of behaviours the company rewards, and the company’s cultural norms and values.

    Resources, Capabilities, and Competencies

    The distinction between resources and capabilities is critical to understanding what generates a distinctive competency.

    A company may have firm-specific and valuable resources, but unless it also has the capability to use those resources effectively, it may not be able to create a distinctive competency. Additionally, it is important to recognize that a company may not need firm-specific and valuable resources to establish a distinctive competency so long as it has capabilities that no other competitor possesses.

    In sum, for a company to possess a distinctive competency, it must—at a minimum— have either:

    (1) a firm-specific and valuable resource, and the capabilities (skills) necessary to take advantage of that resource, or

    (2) a firm-specific capability to manage resources (as exemplified by Nucor).

    Distinctive competencies shape the strategies that the company pursues, which lead to competitive advantage and superior profitability. However, it is also very important to realise that the strategies a company adopts can build new resources and capabilities or strengthen the existing resources and capabilities of the company, thereby enhancing the distinctive competencies of the enterprise.

    I worked for 10 years for Capgemini, a firm that had a wide range of technology capabilities that enabled it to provide the design and build large and complex IT systems successfully. These capabilities, combined with the intangible resources of the firm, gave Capgemini a distinctive competence in Systems Integration. At the time. however. Capgemini lacked the ability to win large IT service contracts and was losing market share in services to EDS.

    I moved to EDS to understand the companies deal making Competence, which was very strong, but embedded in a relatively small number of people. Unfortunately the EDS delivery capability, particularly System Integration, was far less strong than Capgemini.

    Ultimately Capgemini acquired the deal making competence mainly through selective recruitment of key people, but EDS failed to with a number of over-ambitious projects because it lacked the necessary capabilities and some key resources; for example the right project management culture, to create the necessary delivery competence.

    Sources of Competitive Advantage

    Hill et al, 2015

    What Is Quality and How Does A Firm Deliver It Consistently?

    Strong governance to define the organisation's aims and translate them into action

    robust systems of assurance to make sure things stay on track

    a culture of improvement to keep getting better.

    Fit for purpose

    Intangibles

    Four factors help a company to build and sustain competitive advantage:

    superior efficiency

    quality

    innovation

    and customer responsiveness

    I am going to focus on quality and innovation.

    Firstly quality – a simple way to understand quality if “fitness for purpose”. Does the product have the necessary attributes to satisfy my needs?

    When customers evaluate the quality of a product, they commonly measure it against two kinds of attributes: those related to quality as excellence and those related to quality as reliability.

    From a quality-as-excellence perspective, the important attributes are things such as a product’s design and styling, its aesthetic appeal, its features and functions. This is an are that Apple particularly understand.

    With regard to quality as reliability, a product can be said to be reliable when it consistently performs the function it was designed for, performs it well, and rarely, if ever, breaks down. Apple in recent years have been less successful in this respect, as have a number of highly respected firms – Boeing, Toyota and Samsung currently to name but a few.

    When products are reliable, less employee time is wasted making defective products, or providing substandard services, and less time has to be spent fixing mistakes—which means higher employee productivity and lower unit costs. Thus, high product quality not only enables a company to differentiate its product from that of rivals, but, if the product is reliable, it also lowers costs.

    Innovation refers to the act of creating new products or processes. There are two main types of innovation: product innovation and process innovation.

    Product innovation is the development of products that are new to the world or have superior attributes to existing products.

    Process innovation is the development of a new process for producing products and delivering them to customers.

    Innovation is linked very much to culture. In an organisation where there is a strong desire for centralised control, innovation will be less likely to occur. There is a tension then between control and creativity.

    Components of A Business Model

    Determining Competitive Scope

    Positioning A Business

    Where and How to compete?

    Bases of competitive advantage:

    Price, Features, Bundling

    Efficiency

    Quality

    Innovation

    Customer responsiveness

    Availability

    Image and relations

    Porter’s three generic competitive advantages:

    operational excellence

    product leadership

    customer intimacy

    Stuck in

    the Middle

    Low Cost Airlines

    “What is the key indicator of an airline's cost efficiency?”

    cost per available seat kilometer is the main cost indicator, i.e. the cost of flying one passenger, one kilometer.

    Business Model Canvas – Low Cost Airline

    Key Partners

    Terminal Operators

    Aircraft Maintenance

    Catering

    Aircraft suppliers

    Air traffic control

    Government

    Key Activities

    Marketing

    Scheduling

    Aircraft turnaround

    Staff training and motivation

    Key Resources

    Staff – non-unionised, flexible

    Terminal slots

    Aircraft

    Reputation

    Value Propositions

    Low seat price

    Every thing else is an extra

    High seat density

    Transparent pricing

    Friendly staff

    Reliable

    Safe

    Cost Structure

    Low fixed cost

    Outsource for scale economies

    Low margins – utilisation is key

    Above average staff rewards

    Revenue Streams

    Ticket sales

    Seat reservation

    Baggage

    In-flight Sales – food, drink, duty free, entertainment

    Customer Segments

    Price sensitive

    Business travellers

    Families

    Young Independent Travellers

    Channels

    Online only

    Customer Relationships

    Online

    Inflight – cabin crew

    Terminal Staff

    Are there Really Only 3 Business Level Strategies?

    Strategies of Differentiation

    Price Differentiation – charge a lower or higher price

    Image Differentiation – marketing is sometimes used to feign differentiation where it does not otherwise exist

    Support differentiation – during selling e.g. fast delivery, after-sales service, or providing a related or complementary product or services

    Quality Differentiation – make it better

    Design Differentiation – offer something truly different

    Undifferentiation Strategy – the copycat approach

    Scope Strategies

    Unsegmented – one size fits all

    Segmentation – comprehensive or selected segments

    Niche – focus on a single segment

    Customising – each customer represents a unique segment

    Lampel J, Mintzberg H, Quinn J, and Ghoshal S. (2014). The strategy process. 5th ed. Harlow: Pearson.

    Low Cost Versus Differentiated Companies

    Low-cost companies

    Charge low prices and still make profits

    Absorb cost increases from suppliers

    Offer deep discount prices for buyers

    Differentiated companies

    Withstand pricing pressure from powerful buyers and increase prices without buyer resistance

    Absorb price increases from suppliers and pass them to customers without losing market share

    Withstand substitute goods, as a result of brand loyalty

    Comparison of Market Segmentation Approaches

    Standardisation Strategy

    Associated with lower costs than a segmented strategy

    Segmentation

    Strategy

    Involves customisation of product offerings, which drive up costs as:

    Focus

    Strategy

    Attempts to attain economies of scale through high sales volume

    Achieving economies of scale is difficult

    Production and delivery costs tend to be high

    Have a higher cost structure as:

    New product features and functions need to be added

    Attaining economies of scale is difficult

    Lowering Costs Through Functional Strategy and Organisation

    Achieve economies of scale and learning effects

    Adopt lean production and flexible manufacturing technologies

    Implement quality improvement methodologies to produce reliable goods

    Streamline processes

    Use information systems to automate business process

    Differentiation Through Functional-Level Strategy and Organisation

    Customise product offering and marketing mix to different market segments

    Design product offerings that have a high perceived quality regarding their:

    Functions

    Features

    Performance

    Reliability

    Handle and respond to customer queries and problems promptly

    Efficiency and Economies of Scale

    Efficiency and Economies of scale

    Efficiency – Measured by the quantity of inputs that it takes to produce a given output

    Economies of scale: Reductions in unit costs attributed to a larger output

    Ability to spread fixed costs over a large production volume and produce in large volumes

    To achieve greater division of labor and specialization

    Diseconomies of scale: Unit cost increases associated with a large scale of output

    Learning Effects

    Cost savings that come from learning by doing

    More significant when a technologically complex task is repeated, as there is more to learn

    Diminish in importance after a period of time

    Triggered by changes in a company’s production system

    Simulation

    Developing and launching new products or features

    Manufacturing a new phone

    Commissioning new plants

    Experience Curve

    Systematic lowering of the cost structure, and consequent unit cost reductions – occur over the life of a product

    A product’s per-unit production costs decline each time its accumulated output doubles – accumulated output – Total output of a product since its introduction

    Useful in industries that mass-produce a standardised output

    Hill et al, 2015

    The Origins of the BCG Matrix

    Examples of Price Declines

    The BCG Matrix – Market Share Leadership = Profit Leadership?

    Flexible Production Technology

    Reduces setup times for complex equipment

    Increases the use of individual machines through better scheduling

    Improves quality control at all stages of the manufacturing process

    Increases efficiency and lower unit costs

    Enables better customisation of product offerings

    Tradeoff Between Costs and Product Variety

    Hill et al, 2015

    3D Printing – Additive Manufacturing

    Adidas Printed Trainers

    Aerospace Components

    Strategy Creation

    Two Perspectives On Shaping The Business Model

    The Outside-in Perspective

    Firms should take their environment as the starting point when determining their strategy – externally oriented and market-driven

    Strategy begins with an analysis of the environment to identify market opportunities

    Insights into markets and industries is essential

    Firms that are market-driven are often the first

    to realise that new resources and/or activities need to be developed – ‘first mover advantage’

    We take portable music for granted these days. Any commuter in any big city in the world is more likely than not to have a pair of earbuds or headphones on as they walk, bike, or ride to their destination. The thing is, personal portable music didn't exist for most of human history, at least not in any mainstream fashion. Not until the Sony Walkman came along.

    The first of Sony's iconic portable cassette tape players went on sale on this day, July 1st, back in 1979 for $150. As the story goes, Sony co-founder Masaru Ibuka got the wheels turning months before when he asked for a way to listen to opera that was more portable than Sony's existing TC-D5 cassette players. The charge fell to Sony designer Norio Ohga, who built a prototype out of Sony's Pressman cassette recorder in time for Ibuka's next flight.

    After a disappointing first month of sales, the Walkman went on to become one of Sony's most successful brands of all time, transitioning formats over the years into CD, Mini-Disc, MP3 and finally, streaming music. Over 400 million Walkman portable music players have been sold, 200 million of them cassette players. Sony retired the classic cassette tape Walkman line in 2010, and was forced to pay a huge settlement to the original inventor of the portable cassette player, Andreas Pavel. But the name lives on today in the form of new MP3 players and Sony's Walkman app. They heyday of the Walkman may be over, with kids today baffled and disgusted by the relative clumsiness of cassettes. But the habit it spawned — listening to music wherever and whenever you want — is bigger than ever.

    http://www.theverge.com/2014/7/1/5861062/sony-walkman-at-35

    The Inside-Out Perspective

    Strategy should be built around a company’s strengths

    Successful companies build up a strong resource base which offers them access to unfolding market opportunities in the medium and short term

    The starting point is which resource base it wants to have

    Importance of a firm’s competences over its physical assets

    But – companies with competence specialisation may be locked in by past choices and cannot adapt to a changing market

    Fragmented Industry

    Composed of a large number of small- and medium-sized companies

    Reasons for fragmentation

    Lack of scale economies

    Brand loyalty in the industry is primarily local

    Low entry barriers due to lack of scale economies and national brand loyalty

    Focus strategy works best for a fragmented industry

    Can competitive advantage in the industry be created by consolidation e.g. by chaining and franchising?

    Stages in the Industry Life Cycle

    Hill, C., Jones, G. & Schilling, M. (2015) Strategic Management; Theory & Cases: an integrated approach, 11e, Stamford, Cengage

    Embryonic Industries

    An embryonic industry refers to an industry just beginning to develop (for example, personal computers and biotechnology in the 1970s, wireless communications in the 1980s, Internet retailing in the late 1990s, and AI today).

    Growth at this stage is slow because of factors such as buyers’ unfamiliarity with the industry’s product, high prices due to the inability of companies to reap any significant scale economies, and poorly developed distribution channels.

    Rivalry in embryonic industries is based not so much on price as on educating customers, opening up distribution channels, and perfecting the design of the product.

    Growth Industries

    Once demand for the industry’s product begins to increase, the industry develops the characteristics of a growth industry. In a growth industry, first-time demand is expanding rapidly as many new customers enter the market. We can see this happening today in the taxi ride platform industry, with now numerous companies seeking to grow their marker share – Uber, Gett, Juno, Kabbee, Hailo etc

    Industry Shakeout

    Explosive growth cannot be maintained indefinitely. Sooner or later, the rate of growth slows, and the industry enters the shakeout stage. In the shakeout stage, demand approaches saturation levels: more and more of the demand is limited to replacement because fewer potential first-time buyers remain.

    Expect this soon in taxi app platforms!

    Mature Industries

    The shakeout stage ends when the industry enters its mature stage: the market is totally saturated, demand is limited to replacement demand, and growth is low or zero. Typically, the growth that remains comes from population expansion, bringing new customers into the market, or increasing replacement demand.

    As a result of the shakeout, most industries in the maturity stage have consolidated and become oligopolies.

    Declining Industries

    Eventually, most industries enter a stage of decline: growth becomes negative for a va- riety of reasons, including technological substitution (for example, air travel instead of rail travel), social changes (greater health consciousness impacting tobacco sales), demographics (the declining birth rate damaging the market for baby and child products), and international competition (low-cost foreign competition helped pushed the U.S. steel industry into decline).

    It is important to remember that the industry life-cycle model is a generalization and that the time span of these stages can also vary significantly from industry to industry.

    A criticism of industry models is that they overemphasize the importance of industry structure as a determinant of company performance, and underemphasize the importance of variations or differences among companies within an industry or a strategic group.

    Research by Richard Rumelt and his associates, for example, suggests that industry structure explains only about 10% of the variance in profit rates across companies.

    Strategies to Deter Entry In Mature Industries

    Product proliferation strategy – Catering to the needs of all market segments to deter entry by competitors

    Limit price strategy – Charging a price that is

    lower than that required to maximise profits in the short run

    above the cost structure of potential entrants

    Strategic commitments – Investments that signal an incumbent’s long-term commitment to a market or a segment of the market

    Strategies to Manage Rivalry

    Price signaling – Companies increase or decrease product prices to:

    Convey their intentions to other companies

    Influence the price of an industry’s products

    Price leadership – When one company assumes the responsibility for determining the pricing strategy that maximises industry profitability

    Non-price competition – Use of product differentiation strategies to deter potential entrants and manage rivalry within an industry

    Market penetration – a company concentrates on expanding market share in its existing product markets

    Product development – Creation of new or improved products to replace existing products

    Market development – When a company searches for new market segments to increase the sale of its existing products

    Product proliferation – Large companies in an industry have a product in each market segment

    Capacity Control

    Companies devise strategies to control or benefit from capacity expansion programs

    Factors causing excess capacity

    New technologies that produce more than the old ones

    New entrants in an industry

    Economic recession that causes global overcapacity

    High growth of demand in an industry that triggers rapid expansion

    Strategy Selection in a Declining Industry

    Hill et al, 2015

    Cheque Processing

    Camera Film

    Blue Ocean Strategy

    Companies can build competitive advantage by redefining their product offering through value innovation – creating a new market space

    Blue Ocean – Wide open market space where a company can chart its own course

    Red Ocean – fiercely competitive

    W. Chan, K, & Mauborgne, R 2005, 'Blue Ocean Strategy: FROM THEORY TO PRACTICE', California Management Review, 47, 3, pp. 105-121, Business Source Complete, EBSCOhost, viewed 10 August 2016.

    A New Value Proposition

    Reduce

    Create

    Raise

    Eliminate

    References

    De Wit, B. (2017). Strategy An International Perspective. 6th ed. Andover: Cengage

    Grant, R.M. 2012. Contemporary strategy analysis : text and cases 8th ed. New York: John Wiley and Sons Ltd.

    Hill, C., Jones, G. & Schilling, M. (2015) Strategic Management; Theory & Cases: an integrated approach, 11e, Stamford, Cengage

    Porter, M.E., 2008. The Five Competitive Forces That Shape Strategy. Harvard Business Review 86, 78–93.

    Reeves,M, Moose,S and Venema,V. (2014). BCG Classics Revisited: The Growth Share Matrix. Available: https://www.bcg.com/publications/2014/growth-share-matrix-bcg-classics-revisited.aspx. Last accessed 26th November 2019.

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    ,

    MN7031 Topic 4.2 – Successful Innovation and Strategic Renewal

    londonmet.ac.uk

    Daniel Jones

    Module Overview

    Business Simulation – Cesim Global Challenge

    1. How and Why Do Businesses Grow?

    2. How Do We Diagnose Company Strategy?

    5. How Do We Make Sense of the VUCA External Environment?

    8. Does Your Simulation Company Need A New Strategy?

    9. Why Do Firms Undertale Acquisitions, Mergers and Alliances?

    7. How Is Your Simulation Company Performing?

    10. How Do Companies Innovate Successfully?

    12. Does Strategic Alignment Matter?

    4. Why Are Some Industries More Profitable Than Others?

    3. How Does A Company Create Competitive Advantage?

    6. How Do We Create Strategies?

    11. Summative Assessment Presentations

    Today’s Agenda

    Innovation

    Definition

    Four dimensions

    Process

    Innovation and the free market

    Government organisations as engines of innovation

    Global innovation

    New Product Development

    Strategic Innovation

    Strategic renewal

    Exploitation and Exploration

    First mover advantages

    Dominant Designs and Technical Standards

    Organisations, Culture and Innovation

    Innovation

    What Is Innovation?

    “the generation, acceptance, and implementation of new ideas, processes, products, and services.”

    “conceptually a process beginning with an original idea and concludes with a market introduction”

    “Innovation is a multi-faceted process, not a single or discrete act”

    “Innovation must add value to meet customer’s unique needs”.

    Roach, O. O., McLaughlin, G. C. and McLaughlin, H. M. (2020) ‘Innovation and Value: Customer Perception, Application, and Concept’, Journal of Management & Public Policy, 12(1), pp. 4–16. doi: 10.47914/jmpp.2020.v12i1.001.

    W. Chan, K, & Mauborgne, R 2005, 'Blue Ocean Strategy: FROM THEORY TO PRACTICE', California Management Review, 47, 3, pp. 105-121, Business Source Complete, EBSCOhost, viewed 10 August 2016.

    Four Dimensions of Innovation Space

    Tidd and Beasant state that there are “Four Dimensions of Innovation Space”:

    Product innovation (a new product / service)

    Process innovation (a new process, or a change to a process)

    Position innovation (adapting to your industry / market – business model)

    Paradigm innovation (a new concept altogether)

    Each of these four ‘dimensions’ can either apply to:

    ‘incremental development’ (i.e. improving something to make it better, easier, simpler, more efficient), or (ii)

    ‘radical development’ (i.e. coming up with something radically new)

    Simplified Model of the Innovation Process

    The Simplified Model of Innovation is in Four Stages:

    Search

    Select

    Implement

    Capture

    The Theory And Practice Of ‘Innovation’ Has Many Paradoxes:

    is ‘innovation’ a personal thing, i.e. it resides in the individual, or is an ‘organisational’ thing, i.e. it resides in the ‘collective’?

    can innovation be taught and developed, or is something that some individuals and organisations have, and others do not have?

    does innovation reside in the organisation, or can it reside in a whole nation / country?

    Is Innovation Best Left to the Free Market?

    But one thing almost all economists, business analysts, technology theorists, and philosophers agree on is that innovation, and its associated areas (creativity, artistry, invention, enterprise), is at its best when it is left to the ‘free market’, and not run by the ‘state’.

    In other words, the state ‘gets in the way’ of innovation, as it is too bureaucratic, slow, dull, and lacks the spark of ideas that true innovation processes require…

    …on the other hand, the free market of hi-tech-savvy individuals, entrepreneurs, venture capitalists, crowd-funders, and designers are creating a dynamic economy and culture, based around innovation, and leaving governments a step behind…

    “Governments have always been lousy at picking winners, and they are likely to become more so, as legions of entrepreneurs swap designs on-line, turn them into products, and market them globally. As the business –technology revolution rages, governments should stick to the basics, like schools. Leave the rest to the revolutionaries.” (Economist, 2012)

    Government Organisations as Engines of Innovation

    But one person who disagrees with this is Professor Mariana Mazzucato, see: http://marianamazzucato.com

    Mazzucato says the reverse: the State (or the government, or government departments) are the true ‘engines’ of innovation, and the ‘free market’ companies simply reap the financial / commercial benefits.

    The Entrepreneurial State

    And in her influential book, The Entrepreneurial State, Mazzucato explains that Apple (yes Apple!) is not innovative, and that the technology behind it was actually developed in the publically-funded State / university world, not within the ‘free market’.

    “Without the frequently targeted investment and intervention of the US-government it is likely that most would-be Apples, would be losers in the global race to dominate the computing and communications age…it is indisputable that most of Apple’s best technologies exist because of the prior collective and cumulative efforts of the driven by the State.” (Mazzucato, 2014: 112)

    Is the idea then that the ‘free market’ is more innovative than the State a complete myth?

    Innovation, Like Many Things, Is Increasingly ‘Global’.

    This means that organisations and firms involved in innovation are doing so across nation states, across continents, and across industries.

    This has changed the research and development (R&D) function of many organisations and industries, as R&D is no longer ‘located’ in one place, but is ‘networked’ across a range of organisations, places, and nations, and is also ‘virtual’ or ‘digital’, making its location on-line only.

    Clustering

    One of the paradoxes of ‘globalisation’ is clustering’. For firms to ‘cluster’, they need to be close to each (finance in the City; retail in the West End; digital start-ups in Shoreditch; jewellers in Hatton Garden; the ‘Garment District’ in NYV; Silicone Valley in California; car manufacturing in Wolfsburg). But this ‘paradox’ goes against ‘globalisation’ and ‘digitisation’.

    Michael Porter (one of the advocates of ‘clustering’), recognises this paradox: “In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transformation and high-speed communications should allow any company to source any thing from any place at any time. But in practice, location remains central to competition…” (from Trott, page 243)

    Innovation networks: some critics say that contemporary-sounding phrases such as ‘innovation networks’ is just a new term to describe old things that have been going on for years (such as supply chains; import-export; cartels; access to markets; trade quotas; vertical integration).

    New Product Development

    “conceptually a process beginning with an original idea and concludes with a market introduction”

    Prod-ject

    Albaidhani et al (2018)

    New Product Development Stage Gate Process

    Smolnik and Bergmann (2020)

    Stage Gate Process

    Smolnik and Bergmann (2020)

    Strategic Innovation and Strategic Renewal

    Nokia – A Long History Of Strategic Renewal

    1865 – Nokia founded as a wood-pulp mill making paper.

    1922 – partnership with Finnish Rubber Works and Kaapelitehdas (the Cable Factory)

    1967 – new Nokia Corporation, restructured into four major businesses: forestry, cable, rubber and electronics.

    1981 – builds world’s first mobile network

    1982 – launches its first mobile phone

    1992 – sell off of the non-tech businesses

    1998 – the best-selling mobile phone brand in the world

    2007 – Apple launches the iPhon

    2008 – first Android device launched

    2011- Strategic partnership with Microsoft to adopt Windows Phone 7

    2014 – sells mobile phone business to Microsoft to focus on Network equipment

    2016 – licensing deal with HMD Global, who now make Nokia mobile phones

    2020 – New business groups are Mobile Networks, IP and Fixed Networks, Cloud and Network Services and Nokia Technologies

    Innovation

    Resources and Capabilities growth and contraction

    Turnaround

    Partnerships

    Mergers and Acquisitions

    Licensing

    Outsourcing

    Disruption

    The Issue Of Strategic Renewal

    There are 4 different processes for strategic renewal:

    Strategising

    Entrepreneuring

    Changing

    Investing

    Strategising and Entrepreneuring

    Strategic innovation as a Strategising Process

    Strategising managers must be aware of the unfolding opportunities and threats in the environment and the evolving strengths and weaknesses of the organisation

    Strategists are working in a context of ‘bounded creativity’, constrained by, e.g. lead time and resource availability

    Strategic innovation as an Entrepreneurial Process

    Companies make use of entrepreneurial managers for strategic activities e.g. finding new markets for existing products and services, applying new technologies in current markets and setting up new businesses

    Changing and Investing

    Strategic Innovation as a Change Process

    The company’s business model needs to be adjusted.

    Some strategic innovation processes require organisational restructuring

    Organisational processes may need to be redesigned and a change of the firm’s culture may be needed.

    Strategic innovation as an Investing Process

    Strategic innovation requires resources

    Investments in innovation compete with mergers, acquisitions and entering new countries

    Investments that promise to generate returns in the long term are riskier than short-term options

    Managers must think of the entire process of change

    Strategic innovation combines: Strategising, Entrepreneuring, Changing and Investing processes

    Inhibitors of Strategic Innovation

    Effects of innovation results – strategists may be reluctant to explore alternatives which have not been successful in the past

    Effects of inertia and bias

    Effects of feedback – when innovation results are satisfying strategists are not challenged to explore innovations that could be even more successful

    Business Model Renewal

    In order to prepare for a competitive future, strategising managers may need to renew several elements of the business model

    Strategists can renew each element of the company’s business model:

    resource base

    value chain

    product offering

    The Issue of Strategic Renewal

    Outside-in Renewal – Managers can renew their value proposition by increasing the perceived product and service value and lowering prices, e.g. improve reliability of its products or create new markets or market segments with existing products

    Inside-out Renewal – Managers can renew the company’s resource base to create new products and services and improve existing ones e.g. invest in technological R&D, marketing campaign and training of staff

    Value Chain Renewal – Managers can renew some or all elements of the value chain e.g. IKEA has redesigned its processes, from standardising production processes, developing flat pack designs and lowering transportation costs.

    The Paradox of Exploitation and Exploration

    Should the company renew itself by improving the current organisation (exploitation) or by radically rejuvenating the organisation through disrupting technologies and processes (exploration)?

    Renewal processes of exploitation can be measured in terms of realised client value (lower price and higher quality).

    Radical renewal by exploration is measured by the extent to which a new industry is created or new customer value is realised.

    Innovators, Followers and Winners

    The Demand for Sustained Renewal

    Refers to the process of permanently improving products and services to strengthen the company’s competitive position

    Standards are continuously raised

    Based on factual information e.g. customer feedback and market research as well as ideas from within and outside the firm

    The Demand for Disrupting Renewal

    Refers to the process in which current competitive positions are challenged by introducing new technologies and business models

    Disruptive innovations do not follow from the facts but need to be invented

    Creative thinking is necessary

    2005: Steven Sasson poses with his 1975 prototype and Kodak’s latest digital camera offering, the EasyShare One

    The Strategic Improvement Perspective

    Companies should focus on improving their business model

    All employees should be committed to improving all elements of the business model

    Radical innovation initiatives are risky and absorb the most precious resources for corporate renewal

    The Radical Rejuvenation Perspective

    Companies should focus on breakthrough innovations

    The more radical the departure from the industry rules, the more difficult it will be for competitors to follow and the higher the benefits for the innovator will be

    Old ways must be discarded before new methods can be adopted – ‘creative destruction’

    Strong company leadership is essential

    Sustained improvement comes at the expense of strategically more effective innovations

    The Emergence of Dominant Designs and Technical Standards

    Emergence of a dominant design paradigm

    Model T in autos

    IBM 360 in mainframes

    Douglas DC3 in passenger aircraft

    Emergence of technical standards

    Emerge in industries where they are network externalities

    Entrenchment of the dominant designs and technical standards

    Learning effects: incremental improvement of the dominant design

    Switching costs

    Need for coordinated action by multiple players

    Dominant Design – Cars

    1886 – Benz No.1

    Companies that Own or Owned Technical Standards

    Company Product Category Standard
    Microsoft PC operating systems Windows
    Intel PC microprocessors X86 series
    Sony/Philips Compact disks CD-ROM format
    ARM (Holdings) Microprocessors for mobile devices ARM architecture
    Oracle Corporation Programming language for web apps Java
    Rockwell & 3Com 56K modems V90
    Adobe Systems Common file formats for creating and viewing documents Acrobat Portable Document Format
    Adobe Systems Web page animation Adobe Flash
    Adobe Systems Page description language for document printing PostScript
    Bosch Antilock braking system ABS & TCS (Traction Control System)
    IMAX Corporation Motion picture filming/projection system IMAX
    Apple Music downloading system iTunes/iPod
    Sony High definition DVD Blu-ray

    Parallel Processing

    Involves separating exploitation and exploration processes in different organisational units while integration takes place at a different (higher) organisational level – ‘spatial separation’

    Parallel processing internally – build a separate R&D unit that develops new technologies – outcomes are then transferred to other organisational units

    Parallel processing with external partners

    Navigating – the entrepreneur explores and then exploits – navigates over time ‘temporal separation’

    Balancing – processes can be combined in the same unit

    Apple, Alphabet, Microsoft, IBM and Facebook

    Global Revenue

    Apple 2001 2002 2003 2004 2005 200 6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 5363 5742 6207 8279 13931 19315 24006 32479 42905 65225 108249 156508 170910 182795 233715 215639 229234 265595 Alphabet 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 86.4 439.5 1465.9 3189.2 6138.6 10604.9 16594 21795.6 23650.6 29321 37905 50175 59825 66001 74989 90272 110855 136819 Microsoft 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 25296 28365 32187 36835 39788 44282 51122 60420 58437 62484 69943 73723 77849 86833 93580 91154 96571 110360 IBM 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 85866 81186 89131 96293 91134 91424 98786 103630 95758 99871 106916 102874 98367 92793 81741 79919 79139 79591 Facebook 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3711 5089 7872 12466 17928 27638 40653 55838

    Strategic Innovation – an International Perspective

    Countries differ in the strategies they prefer. Japanese companies generally favour the gradualist approach while Western companies generally favour the leap forward.

    Geography and individual brilliance – differences in developmental trajectories are determined by the possibilities to foster technologies that enabled progress.

    Governmental support – proactive governmental support is often crucial, e.g. development of aviation to support the war.

    Culture and Technology

    Tangible knowledge can be codified and transferred but culture plays an important role and its values are intangible

    Countries that are considered to be the most individualistic, US and UK, are capable of great innovations. The US leads the world ranking of Nobel Prizes.

    Collectivist cultures have different merits, e.g. Japanese very good at improving processes and products.

    Different cultures deal differently with time – Kaizen sees time as a circle improving production methods also seen as a circle.

    Ownership of inventions – Eastern societies have a different attitude towards private intellectual ownership. The teachings of Confucius stress that knowledge is for the benefit of everybody – an obligation to share your wisdom with others. What in the West is considered to be stealing intellectual property rights, in the East is seen as copying and improving on the findings of an honorable father figure.

    Innovation In Practice

    Paradox Of Control And Chaos

    Managers want to control the development of the organisation but understand that letting go of control is often beneficial

    Need for top-down imposition and bottom-up initiative

    Demand for top management control – top managers need to be able to direct developments in the organisation and to have the power to make the necessary changes. They need strategic control.

    Demand for organisational chaos – a period of disorder is often a prerequisite for strategic renewal, allows experimentation, pilot projects, encourages self-organization and frees the way for bottom-up ventures

    WLGore

    References

    Chandler-McDonald, K (2013) Innovation: How Innovators Think, Act, and Change our World, Kogan Page

    De Wit, B. (2017). Strategy An International Perspective. 6th ed. Andover: Cengage

    Grant, R.M. 2012. Contemporary strategy analysis : text and cases 8th ed. New York: John Wiley and Sons Ltd.

    Hill, C., Jones, G. & Schilling, M. (2015) Strategic Management; Theory & Cases: an integrated approach, 11e, Stamford, Cengage

    Reeves,M, Moose,S and Venema,V. (2014). BCG Classics Revisited: The Growth Share Matrix. Available: https://www.bcg.com/publications/2014/growth-share-matrix-bcg-classics-revisited.aspx. Last accessed 26th November 2019.

    Tidd, J and Bessant, J (2013) Managing Innovation: Integrating Technological, Market and Organizational Change, 5th Edition, John Wiley & Sons, (Chapter 1)

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    FINC311 Unit 5 – Individual Project

     

    Assignment Details

    The Federal Reserve, as the central bank of the United States, holds considerable sway over both domestic and international financial markets.

    One of the key areas of its influence lies in shaping foreign exchange rates, which in turn have significant implications for international trade dynamics. This assignment prompts you to delve into the mechanisms through which the Federal Reserve influences foreign exchange and to evaluate the resulting impact on international trade critically.

    Write a 3–5-page paper addressing the following:

    • Explain how the Fed’s monetary policy tools are used to influence domestic economic conditions.
    • Analyze how the decisions and announcements made by the Fed affect foreign exchange markets and exchange rates.
    • Evaluate how exchange rate volatility influences the competitiveness of exporters and importers and global trade relationships.
    • Assess the challenges and criticisms of the Fed’s influence on foreign exchange and international trade.

      FINC311 Unit 4 – Individual Project

       

      Assignment Details

      The U.S. Treasury Department and state and local governmental units play crucial roles in raising funds within the financial system through various mechanisms, such as treasury bonds and municipal bonds. This assignment prompts you to conduct a comprehensive analysis of their activities and assess the impact of their fundraising endeavors on the broader financial landscape.

      Write a 3–5-page paper addressing the following:

      • Explain the functions and responsibilities of the U.S. Treasury Department in raising funds for the federal government.
      • Discuss how state and local governmental units raise funds by issuing municipal bonds.
      • Contrast the different types of municipal bonds and what they are used for.
      • Evaluate the challenges faced by the U.S. Treasury Department and state and local governmental units in raising funds within the financial system, such as fiscal constraints, debt sustainability concerns, and market volatility.
      • Propose strategies to mitigate these challenges and capitalize on opportunities for optimizing fundraising efforts and achieving fiscal sustainability.

        Topic 2

        Please view attachment!! 

         Lewis, W.E., & Strong, J.Z. (2021). Literacy instruction with disciplinary texts: Strategies for grades 6 –12. Guilford Press. ISBN 978-1-4625-4468-4 ISBN 9781462530083 

        RED 585

        Topics for Week 2

        Directions: Respond to the following topics:

        Lewis & Strong Ch. 3:

        1. What is reading volume and how is it related to comprehension?

        2. What are the limitations of a single text?

        3. What is the relationship between multiple texts and background knowledge?

        4. How do readers comprehend text?

        5. Evaluate the B-D-A Framework and the Quad Text Set. How could you use this in a content area?

        6. Give an example of how you could use a quad text set in a content area.

        7028SR- GROUP- 1

         

        • A PPT with around 1000 words.
        • Prepare a presentation script for the PPT that is under 20 minutes (it should be edited in a conversational style and submitted to me as a Word document).
        • "Assignment Submission Form AS1 MN7028SR Aug 24" is the grading rubric for this assignment.
        • The rest of the content consists of teaching PPTs.
        • I need you to complete the task strictly according to the grading rubric.
        • You must read all the course materials before completing the task.
        • If the submitted content does not meet the requirements, I will request unlimited revisions until I am satisfied.
        • If the content is not up to standard or you refuse to revise it, I will request a refund.
        • If you cannot accept the above conditions, please do not place a bid.

        Feedback/Feedforward Coversheet

        MN7028SR

        Breakthrough Leadership Skills

        Academic Year 2024/25

        Assessment #1

        Group presentation (30%)

        Ppt slides with maximum 1,000 +/- 10% words

        First Marker:

        Second Marker:

        Title of presentation: Group Presentation on Case Study (Transferring the Toyota lean cultural paradigm into India: implications for human resource management)

        Assessment criteria

        Tasks

        1st Marker

        2nd

        Marker

        Critically evaluate approaches to leadership within business organisations

        1. The management practice favoured by Toyota and how it undertakes international expansion. Impact on employee and human resources.

        2. Relevant theories of management and leadership and their application to the case study.

        3. How Toyota undertook the expansion into India; theories of diffusion and cross border leadership.

        4. Cultural aspects of cross border organisation culture and leadership.

        5. Differences in organisational and employee culture between India and Japan.

        6. The challenges faced by Toyota, the outcome and the changes made.

        (50 marks)

        Write a brief introduction background of the “given” case

        (5 marks)

        1. Explain the involved “international, human resources” management practices

        (10 marks)

        2. Explain the involved “management and leadership” theories

        (10 marks)

        3, 4, 5. Explained the theories of diffusion and cross border leadership in term of cultural aspects, differences between India and Japan

        (20 marks)

        6. Outlines the challenges, outcomes, changes made by Toyota

        (5 marks)

        Quality of empirical evidence

        1. Where are theories and facts sourced from

        2. Have you considered the most relevant theories

        (20 marks)

        Provide evidences to support the

        1. Sources of your theories (with references)

        (10 marks)

        2. Relevancy of the used and quoted theories

        (10 marks)

        Clarity and quality of presentation skills

        1. The professional nature of the slides and supporting notes

        2. The video delivery of the presentation.

        (30 marks)

        Demonstrate by showing the

        1. Quality of the presentation

        2. Quality of the ppt slides’ contents

        3. Evidence of team work

        (30 marks)

        Total Marks (100 marks)

        Areas for Improvements

        From First Marker

        Knowledge and understanding

        Analysis and evaluation

        From Second Marker

        Knowledge and understanding

        Analysis and evaluation

        Agreed Marks

        First Marker’s marks/date:

        Second Marker’s marks/date:

        ,

        Topic 1: Introduction to Leadership

        Breakthrough Leadership Skills

        MN7028

        1

        Learning outcomes for the session

        Explore some theories of management

        Identify some of the components/styles of management

        Compare the terms “management” and “leadership”

        Explore some theories of leadership

        Conclusions: developing theories on leadership?

        Introduction to module assessments (and team allocation)

        2

        Discuss in pairs (10 mins)

        What do managers do?

        What are their key activities/functions?

        3

        Fayol’s (1949) five activities of managers

        •

        Forecasting & Planning – examine the future and decide on what needs to be achieved and develop a plan of action

        Organising – providing material or resources & build a structure to carry out the activities Command – getting the best out of the staff

        Co-ordination – harmonising activities Control – ensures everything goes according to the plans, instructions

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        •

        3

        Drucker on management (1954, 1974, 2005)

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        3

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        They have three tasks (all important but essentially different):

        Achieve the mission of the organisation Ensure performant, contented workers

        Manage social impacts/responsibilities Five basic operations of the manager:

        Sets objectives

        Organises Motivates Communicates Measures

        These require combination of: analytical ability

        Integrity

        human perception and insight social skills

        Theories X and Y (McGregor, 1961)

        6

        The style of management is a function of the managers attitudes towards people and assumptions about people

        Theory X: workers dislike working, need to be watched; motivated by physiological and security needs

        Theory Y: given responsibility workers have potential to add creativity and value; motivated by esteem and self- actualisation

        Theory Z (Ouchi, 1985): focus on long term well being of the employee; consensus decision making and strong company culture

        The different roles of a manager: Mintzberg (1973)

        Interpersonal

        Informational

        Decisional

        Figurehead Leader

        Handler

        Liaison

        Monitor Disseminator

        Entrepreneur Disturbance

        Spokesperson

        Resource allocator Negotiator

        7

        Mullins (2013) philosophy for the successful management of people

        10

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        consideration, trust and respect recognition and credit involvement & availability

        fair and equitable treatment

        positive action on an individual basis – not blanket treatment

        emphasis on end results

        staff and customer satisfaction

        What are the measures of effectiveness?

        •

        Mullins believes that managers are judged on the performance of their staff, which therefore makes these aspects critical:

        –

        –

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        strength of motivation and morale of staff success of training and development

        creation of positive culture but these are hard to measure

        •

        These can be measured as follows:

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        –

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        staff turnover absenteeism sickness time keeping

        accidents at work

        •

        And in some workplaces can be measured as follows:

        –

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        meeting deadlines accuracy or recorded errors

        level of complaints from clients, other departments, suppliers etc

        keeping within budget productivity

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        10

        Some observers perceive differences between managing in the public and private sectors (Mullins, 2013)

        •

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        aims concerned with providing a service for and for the well being of the community rather than just commercial nature

        scale, variety and complexity of operations (arguably)

        high media profile (scrutiny)

        political make up (elected members and permanent officers) Higher level of unions involvement

        difficulty in measuring standards of performance compared with profitability

        demand for uniformity of treatment

        more rigid personnel policies and specific limitations on authority

        10

        … but they still face same general problems of management (Mullins, 2013)

        •

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        efficiency and effectiveness of their operations

        clarification of aims and objectives

        design of suitable structures and carrying out essential admin functions

        basic principles of management apply in any organisation

        10

        Key management skills may be contingent on the stage and context of the organisations

        Different skills are required to manage (lead?) start-up organisations, maturing organisations, failing organisations.

        10 minute discussion in small groups:

        What do you think those different skills are?

        Would you use a former Marketing Director to conduct a turnaround or a former FD to create a start-up?

        10

        Managers of the future? (Heller, 1997)

        10

        Heller identified ten key strategies for Europe’s new breed of managers including:

        develop leadership

        drive radical change

        reshape culture

        divide to rule

        ensure the competitive edge

        manage the motivators

        ensure team working

        achieve TQM

        Small Group Discussion (15 mins)

        10

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        Who do you consider to be a great leader?

        Why have you chosen the person(s) you have identified?

        What traits, abilities or skills do they possess?

        As a class consider if the people you have identified/share any common traits, abilities or skills

        Kotter on Leadership v Management

        15

        Kotter’s (1990) Distinction Between Managers and Leaders

        Planning and budgeting (deductively producing orderly results)

        Motivating people (creating Involvement, emphasising values, building informal networks of relationships)

        Controlling and problem solving (comparing behavior with plan, taking action to correct deviations)

        Aligning people to the vision (emphasising communication, credibility, and Empowerment)

        Setting a direction (inductively creating a vision and strategies to provide focus for planning)

        Organising and staffing (structuring jobs and reporting relationships to efficiently implement plans)

        Managers

        Coping with complexity

        Leaders

        Coping with change

        3 Basic Tasks

        Deciding what needs to be done

        Creating networks and relationships

        Ensuring people do the job

        15

        Managers versus Leaders

        17

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        Managers have formal power and authority to be in charge. Leaders influence others to follow and have personal power

        “Managers do things right while leaders do the right thing” (Bennis & Nanus, 1985)

        The leader establishes vision & direction, influences others to sign up to that vision, inspires them to overcome obstacles, and produces positive, radical change. The manager establishes plans & budgets, designs & staffs the organisation structure, monitors & controls performance and delivers order & predictability (Kotter, 1990)

        The leader is prophet, catalyst, mover-shaker, focused on strategy. The manager is operator, technician and problem solver, concerned with the “here and now of goal attainment” (Bryman, 1986)

        Some Theoretical Approaches to Leadership

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        •

        The traits/qualities approach

        Behavioural approach (focus on leader as key actor)

        Situational (focus on follower as key variable)

        Contingency approach

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        •

        17

        Traits approach: distinguishes leaders from non-leaders by their traits

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        Self-confidence

        Drive for achievement Honesty & integrity

        Ability to motivate people towards a common goal

        Intelligence

        Creativity Ability to adapt

        Clegg et al (2005) in Watson and Reissner (2016)

        17

        Behavioural approach to leadership (Likert, 1961)

        •

        Relationship orientated leaders (managers)

        Task orientated leaders (managers)

        •

        Emphasise the technical or task aspects of the job: people are means to an end

        Emphasise interpersonal relations and accept individual differences

        Production Oriented

        Employee Oriented

        Behavioral Theories:

        University of Michigan Studies and Ohio State University studies

        Developed two dimensions of leadership behavior:

        22

        Where X axis measures ‘concern for production’ and y axis measures ‘concern for people’

        •

        •

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        Impoverished management

        Produce or perish (Authority/compliance) management Country club management

        Middle of the road Team management

        Blake & Mouton Management and Leadership Grid (1964)

        Distinguishing between leadership for stability and leadership for change (Burns, 1978)

        Transactional Leader:

        •

        •

        Determines what subordinates need to do in order to achieve both their own and organisational objectives.

        Helps subordinates reach their objectives. Focussed on exchanges between leader and follower

        Transformational Leader:

        Uses his/her personal vision and energy to inspire people to exceed their own expectations

        Raises motivation and stresses the value of team member contributions to the organisation.

        23

        Transactional Leadership

        •

        Uses reward and coercive powers to encourage high performance

        Problem-solving and implementing If subordinates do what is required by leader then given rewards

        Tend to support and maintain a ‘status quo’ and promote stability within organisations

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        23

        Transformational Leadership (Burns, 1978)

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        Leading for change

        Broadens and elevates the interests of their employees – more visionary Work through social and emotional

        behaviours in order to create awareness and commitment

        Stirs employees to look beyond their own self-interest for the good of the group/organisation

        Have ability to energize others to follow a particular direction – influences using charisma and personal power

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        23

        Components of Transformational Leadership Style (Burns 1978, Bass 1985, Bass and Ovolio 1994)

        Individualised consideration

        Leader treats each follower on his/her own merits, seeks to develop followers through delegation and coaching/mentoring

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        Intellectual stimulation

        Encourages free thinking and emphasises reasoning before taking any actions Inspirational motivation

        Creates an optimistic, clear and attainable vision of the future, encourages others to raise their expectations

        Idealised influence

        Makes personal sacrifices, takes responsibility for actions, shares credit and shows determination

        23

        Situational theory of leadership (Fiedler, 1971 in Watson and Reissner, 2016)

        The leader’s effectiveness will depend on these variables:

        Relationships structure (how much workers trust and like the leader)

        Task structure (how clear workers are about the task)

        The power of the leader to influence the workers (whether legitimate power, coercive power, or reward)

        The leader can influence these variables by

        •

        •

        Presenting clearly defined job outcomes Rewarding in line with motivators of the worker (i.e. bundling outcomes with rewards)

        Removing obstacles to effective performance

        Showing confidence in the worker

        23

        In Situational Leadership Theory

        Leaders are diagnosticians and are capable of changing their style.

        The “right” style leadership style will depend on the degree of the workers’ readiness and commitment, or levels of competence to do the task.

        The leader should assess workers’ needs and adapt his/her style to those needs.

        Hersey et al (2001) propose four different styles according to the circumstances: Telling, Selling, Participating and Delegating.

        Kreitner (2001) suggests that deploying these different approaches might be especially relevant in cross-cultural management contexts

        28

        Hersey & Blanchard’s Situational

        Leadership Theory (1988):

        •

        Belief: Right leadership style must depend on the level of the followers’ readiness or maturity.

        Premise: The leader should assess follower needs and adapt the style to those needs.

        Assumption: Leaders are diagnosticians and are capable of changing their style.

        •

        •

        Situational Leadership Model

        A leader is expected to use the appropriate style based on the subordinate’s readiness & willingness to be led by others.

        Four leadership styles or roles

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        Delegating (S4) Participating (S3) Selling (S2) Telling (S1)

        To be used according to follower readiness

        Willing & able (R4): Delegating style

        Unwilling & able (R3): Participating style

        Willing & unable (R2): Selling style

        Unwilling & unable (R1): Telling style

        Contingency Approaches (after Fiedler, 1971)

        •

        Examines the impact of the leader’s style and the situation on desired outcomes.

        All contingency theories define:

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        –

        –

        Leader’s behaviour or style The situation (context) Outcome(s) that are desired

        •

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        There must be a match between the leader’s style and the demands of the situation for the leader to be effective.

        Snowden and Boone (2007) offers a framework for decision-making.

        Snowden (2007): ‘A leader’s framework for Decision-making’

        Contingency approach continued:

        “Contingency theory of leadership (is) a perspective which argues that leaders must adjust their style in a manner consistent with aspects of the context” (Huczynski & Buchanan, 2007 p. 695)

        Aspects include

        •

        •

        the relations structure (how much workers like the leader)

        The task structure (how clear workers are about the task)

        The power of the leader to influence the actors

        (Watson and Reissner, 2016)

        Fiedler’s contingency model can be applied to this approach where:

        Job outcomes are clearly defined

        Rewards are correlated to performance

        Obstacles to performance are removed

        Leader-confidence in employees’ abilities is evident

        Moorcroft (2000) – ‘new principles’ for ‘managing in the 21st Century’

        33

        •

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        Manage information through people Change is constant, and must be managed Technology is the future

        Relationships matter

        Investment in Training and Development is important

        Measure only against the best The market is global

        Unity of Direction is important

        Equity is expected Initiative is important

        The Most Frequently Cited Skills of Effective Managers/Leaders (Carlopio and Andrewartha, 2011)

        33

        •

        Verbal communication (including listening)

        Managing time and stress

        Managing individual decisions

        Recognizing, defining, and solving problems Motivating and

        influencing others

        Delegating Setting Goals and

        articulating a vision

        Self-awareness Team building Managing conflict

        •

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        Any conclusions about the emerging perspective on the concept of leader?

        Change (whereas management is about stability)

        Process (not personality)

        Interactive

        Goals

        ‘Leadership is a process whereby an individual influences a group of individuals to achieve a common goal’ (Northouse, 2019)

        33

        Talking through the assessments

        33

        Useful Resources

        33

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        Hamel G. Moon Shots for Management. Harvard Business Review. 2009;87(2):91-98. Accessed November 13, 2020.

        Kotter, John P. (1996). Leading Change. Harvard Business School Press

        Mintzberg, H. (2013) Simply Managing. London: FT Publishing

        Mullins L (2013) Management & Organisational Behaviour, 10th ed. FT Prentice Hall, Essex Northouse, P.G. (2018) Leadership: Theory and

        Practice (8th ed.) Sage: London

        Perkins, S. J., & Arvinen-Muondo, R.

        (2013). Organizational behaviour: [people, process, work and human resource management]. London, Kogan Page. (ch.5)

        Uhl-Bien, M & Arena, M 2018, ‘Leadership for organizational adaptability: A theoretical synthesis and integrative framework’, Leadership Quarterly, vol. 29, no. 1, pp. 89–104.

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        ,

        Breakthrough Leadership Skills MN7028

        Topic 2: Organisational Design

        1

        1

        Learning Outcomes

        To contrast “Classical” models with human relation models of management

        To trace some of the corresponding changes from traditional to contemporary models of organisational design

        Explore the emergence of autonomous work teams (drivers?)

        2

        Some alternative schools of management and some advocates

        Classical: Taylor, Fayol, Weber

        Human Relations: Mayo, (later McGregor, 1960s)

        (Communication) Systems: Barnard

        Learning Organisation (Senge, 1990)

        3

        Job design in the context of personnel as a ‘cost’ to the business

        Taylorism and Fordism

        management studying the work methods for each job

        establishing the most efficient methods

        Scientific management: time and motion studies

        Fordism; increased division of labour

        4

        Fayol (1949)

        Refocused attention away from the shop-floor toward management itself

        ‘General and Industrial Management’ pamphlet (1949) presented the functions of management as:

        Planning: (including forecasting, setting goals, determining actions)

        Organising: (designing a suitable organisational structure to effectively harness the HR and non-hr elements required)

        Co-ordinating: uniting activities and providing required resources

        Commanding (and directing): Including leadership and motivation towards goals

        Controlling: ensuring they stick to the plan

        5

        Fayol (continued)

        Fayol’s 14 Principles of management (1949) implied :

        a rigorous hierarchy (Unity of Command/Unity of Direction/line of command)

        But also encouraged the nurturing of initiative in their workers by managers

        Esprit de corps (Teamwork).

        6

        Max Weber

        Bureaucracy Theory (1947) emphasised:

        ‘order’

        ‘focus on authority’.

        It can be seen as limited in the context of organisations viewed as social systems

        It can also be seen as limited in the context of societal embeddedness

        7

        Job design begins to recognise needs and broader contribution of the worker

        Early industrial revolution: personnel had a welfare role

        Consider origins Cadbury, Rowntree.

        Rise of trade unionism: industrial relations role

        The Hawthorne studies

        ‘soft’ HR tracks through to Mayo (1933), who founded the Human Relations school and McGregor (1960) who recognised that the needs of both the organisation and the individual need to be recognised

        8

        Brings us to a consideration of Organisational Design (OD)

        OD is the ‘process of assigning responsibilities and structuring work to support enterprise goals, objectives and strategies’ (Bloisi, 2007)

        It is reflected in the title of Chandler’s iconic book: ‘Strategy and Structure: Chapters in the history of Industrial Enterprise’ (1962)’,

        Two contrasting perspectives about the design of the organisation emerged in the 60s largely influenced by the works of Burns and Stalker (1966) and Lawrence and Lorsch (1969)

        9

        Mechanistic structure

        Hierarchical structure

        Well-defined roles and responsibilities

        Highly specified tasks

        This form lends itself to organisations operating in stable marketplaces with little external change and low levels of uncertainty. Work efficiencies can be achieved through the structure but the design does not offer much versatility or flexibility.

        10

        Organic structure

        Knowledge is valued at all levels of the firm

        Tasks are continuously being redefined in processes of collaboration

        Knowledge may be found anywhere in the organisation and equates to power

        Communications in the organic organisation serve to build knowledge rather than give orders

        11

        Four basic organisational structures spanning 50 years

        Since the 1960s organisations have been structured according to the following criteria:

        Function

        Geography

        Product

        Customer

        Each of these designs ‘produces different behaviours and different outcomes’ (Bloisi, 2007) and also requires different trade-offs.

        Whitbread

        https://www.youtube.com/watch?v=6h3ngHtoMO0

        12

        Contemporary organisation beyond the team level (work system design)

        By Function

        By Product

        By Customer

        Matrix Structure

        Lattice structure

        13

        Greater emphasis on the HRM orientation is further stimulated by:

        The Great Depression (1929-1939)

        ‘Loss of faith’ in traditional mass-production techniques (Henderson, 2017)

        The eclipse of US management practices by those used in Japan in the 80s.

        E.g. Pascale, Managing on the Edge (1990)

        14

        The Autonomous Work Group (AWG)

        Tavistock Work Organization Model (e.g. Trist and Bamfoth 1951; Emery, 1963)

        Work should be organized in teams.

        Individual jobs should provide:

        Variety;

        A meaningful task;

        An optimum work cycle;

        Worker’s control over work standards;

        Feedback of results;

        A perceived contribution to end product.

        The AWG concept is not dependent on any specific technology so it applicable in virtually all work situations.

        (Henderson, 2017)

        15

        Maslow and self-actualisation

        ‘Maslow’s influence is clearly stamped across the work design theories and practices of the latter half of the twentieth century.’

        (Buchanan, 1994)

        Theory of Motivation’ (1954) was the study of ‘ultimate human goals’.

        Maslow’s work:

        Emphasised primacy of individual needs

        16

        General principles derived from ‘motivation theory’ (Maslow, 1954)

        Importance of ‘self-actualisation’ of workers at an individual level

        Set goals.

        Involve the employees concerned in designing and agreeing the goals.

        ‘Stretch’ goals lead to significant increases in employee performance.

        Link rewards to performance when possible.

        Increase employees’ sense of ‘self-efficacy’ (confidence that they can perform the job or task well).

        17

        General principles derived from motivation theory (cont’d)

        Let employees know the expected level of performance and give them accurate and timely feedback.

        Giving positive rewards for good performance is more effective in motivating people then punishing them for poor performance.

        Perceived fairness or equity is vital to the motivation.

        18

        McGregor (1961)

        Influenced by Maslow’s theme of self-actualisation. Douglas McGregor wrote The Human Side of the Enterprise’ (1961). McGregor’s perspective embraced the themes of ‘participation, openness, trust, exchange and a resolution of the conflict between personal and organisational goals’ (ibid, foreword by G.Bennis).

        McGregor developed the concepts of Theory X and Theory Y

        Theory x: ‘people are a cost that must be monitored and controlled’

        Theory Y: ‘people are an asset that should be valued and developed’

        Also made the following observation: ‘The capacity to exercise a relatively high degree of imagination, ingenuity and creativity in the solution of organizational problems is widely, not narrowly distributed in the population.’ (ibid)

        19

        Job Design

        ‘Job design specifies the contents of jobs in order to satisfy work requirements and meet the personal needs of the job holder, thus increasing levels of employee engagement.’

        Armstrong (2014, p. 145)

        20

        Work Design

        ‘Work design is the creation of systems of work and a working environment that enhance organizational effectiveness and productivity, ensure the organization becomes a “great place in which to work” and are conducive to the health, safety and wellbeing of employees’.

        Armstrong (2014, p. 136),

        21

        Intrinsic Motivating through job design

        Lawler (1969) identifies three elements to job design which are necessary to make a job ‘intrinsically’ motivating:

        Feedback relating to performance: this should be meaningful (Armstrong, 2010). Armstrong also states that this means they be able to see more of the picture, i.e. how their role fits into the whole process.

        Abilities: the jobholders must feel that they are making use of those abilities which they values.

        Self-control (autonomy): the jobholders must feel they have discretion

        Increased focus on ‘job characteristics’ in job design (Hackman and Oldham, 1976)

        Hackman and Oldham, 1976, propose a ‘job characteristics model’ (ibid), comprising five key elements:

        Skill variety (the range of skills and talents required)

        Task identity (the breadth within the task)

        Task significance (in relation to the “bigger picture”)

        Degree of autonomy (discretion, e.g. in methods)

        Feedback (clarity on performance)

        If jobs are designed in a way that maximises these dimensions then three psychological states can occur:

        Experience of meaningfulness at work

        Experience of responsibility for work outcomes

        Knowledge of results of work

        Managing the intrinsic element through job design contd.

        Robertson and Smith (2005) propose five similar aspects of the job design which can influence intrinsic motivation:

        Skill variety

        Pooling tasks together

        Task significance

        Degree of autonomy

        Feedback (delivered through ‘good relationships and opening feedback channels’) (Armstrong, 2010)

        Armstrong advocates adopting these approaches when setting up new work-systems or jobs, but he also stresses that ‘the greatest impact on the design of work systems or jobs is made by line managers on a day-to-day basis’

        Job Design: The Job Characteristics Model (JCM) and how it relates to EE

        Job Characteristics Model (Hackman and Oldham, 1976)

        Skill variety: the extent to which a jobholder is required to use a range of different skills.

        Identity: the extent to which a job involves the completion of a ‘whole’ piece of work with end-to-end responsibility.

        Significance: the amount of impact that a job has, and the contribution that the job makes.

        Autonomy: the amount of discretion that the jobholder has in making decisions about what to do and how to do it.

        Feedback: direct information about the performance requirements of the job.

        25

        Toyota Production System (TPS)

        Features of both AWG and Taylorism?

        Just–in-Time (JIT) production processes.

        Teamwork

        Jidoka quality principle (error-free processes)

        Standardized work and kaizen (continuous improvement )

        26

        Sparrow on Lean management

        ‘building people, then building products’

        Toyota build teams of ‘skilful systems thinkers’ and build a culture of ‘challenge the status quo’ or continuous improvement (or Kaizen)

        27

        Some mechanisms (largely driven by HR) which can help deliver lean management

        ‘genchi genbutsu’ (trans.: going to the real place of work)

        ‘Out-learning’ (matrix teams, action learning)

        ‘Yokoten’ (Communities of practice)

        Finding the root cause of problems (facilitated by cultures of empowerment, collaboration, and challenging the status quo)

        Retrospectives (frequent events to analyse and design activities) Maximising “pull” and minimising “push” activities (by a rigourous focus on quality and ‘perfection’ (Sparrow)

        28

        Learning Organisation (Senge, 1990)

        Personal Mastery

        Mental Models

        Shared Vision

        Team Learning

        … and the Fifth Discipline:

        Systems thinking

        29

        McDonaldization (Ritzer, 1993)

        Efficiency

        Calculability

        Predictability

        Control

        30

        Smart working (CIPD, 2008)

        Self-management

        Virtual teams

        Outcome-based performance criteria

        High performance working

        Flexibility in both hours and locations

        Use of more advanced technology

        Hot-desking and working from home

        Trust

        Alignment to business objectives

        31

        Flexibility

        Employers pursue flexibility to:

        minimize human resource costs in both the short and long run.

        protect the core from short term, fluctuations in market demand.

        respond to the demands of an increasingly diverse workforce in terms of (i) legal compliance and (ii) discretionary entitlement to attract/retain Core employees.

        32

        Types of flexibility (Henderson, 2017)

        Functional flexibility

        employees can be redeployed quickly to new tasks and activities (e.g. multi-skilled craftsmen and team-workers).

        Numerical flexibility

        enabling the organisation quickly to increase and decrease the numbers employed in response to market demand.

        Financial flexibility

        pay systems that reinforce the requirement for flexibility (e.g. performance-related pay, pay-for-skills).

        33

        Some alternatives to full-time permanent employment

        Temporary working

        Part-time working

        Job-sharing

        Home-working

        34

        New forms of employment (Henderson, 2017)

        Employee sharing, where an individual worker is jointly hired by a group of employers.

        Interim management, in which highly skilled experts are hired temporarily for a specific project or to solve a specific problem

        Casual work, where an employer is not obliged to provide work regularly to the employee but has the flexibility of calling them on demand.

        Voucher-based work where the employment relationship is based on payment for services with a voucher purchased form an authorised organisation that covers both pay and social security contributions.

        Portfolio work where a self-employed individual works for a large number of clients

        35

        New forms of employment (Cont’d)

        New forms of employment which utilize Information and Communications Technology (ICT), such as ‘crowd working’ (Henderson, 2017)

        36

        Contemporary ideas about Organisational Structure and Work Design

        Greater emphasis on organisations as a social system, especially in contexts where “soft” HR practices are suitable.

        Progression from control to enablement

        Learning Organisation

        Greater emphasis on organisations as a part of set of social relations outside the immediate organisation, e.g. Granovetter (2002), e.g. Teece’s concept of the business eco-system (e.g. 2007) in dynamic capability theory

        37

        Selected References

        BLOISI, W., COOK, C. W., & HUNSAKER, P. L. (2006). Management and organisational behaviour. Maidenhead, McGraw-Hill Education.

        BUCHANAN, D. A., & HUCZYNSKI, A. (2019). Organizational behaviour. Part 4

        CLEGG, S., KORNBERGER, M., PITSIS, T., & MOUNT, M. (2019). Managing and organizations: an introduction to theory and practice.

        SENGE, P. M. (2010). Fifth Discipline: the Art & Practice of The Learning Organization. New York, Random House US.

        38

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        ,

        Breakthrough Leadership Skills MN7028

        Session 10: Negotiation: Priorities, Processes, Strategies

        1

        1

        Learning Outcomes

        Define Negotiation

        Characteristics of successful negotiation

        The importance of questioning, probing and listening

        Needs, wants and influencing

        The importance of a continued listening actively

        Getting to Yes / BATNA

        Explore related processes

        Exercise on Interim Recruitment Negotiations

        William Ury : Getting to Yes – YouTube

        2

        Definitions of negotiation

        ‘An extended communication created in dialogue by two sides’ (Mead 2005)

        ‘A process of discussion between 2 or more parties with the aim of achieving a satisfactory agreement’ (Tayeb 2003)

        ‘Requires parties with opposing interests to get together to make a decision’ (Elahee and Brooks 2004)

        frances tomlinson

        3

        Negotiator skills

        Research and Planning skills

        Ability to think clearly under stress

        Practical intelligence

        Verbal ability

        Product knowledge

        Personal integrity

        Ability to perceive and exploit power

        Understand the issue

        Negotiator skills

        Is prepared

        Recognises key issues quickly

        Seeks the win-win

        Has stamina

        Knows when (if) to compromise

        Tolerates conflict and stress

        Listens well

        Has sensitivity to other‘s needs

        Shows patience

        In the room

        Confident (tone, handshake, eye contact)

        First impressions count (appearance)

        6

        The £150 Game

        “I will give a prize of £150 to each of the first two people who can persuade another MBA student to get up, run around Holloway campus, return to the class and stand behind his or her chair.”

        What would you do?

        You have to move quickly

        What is your instinct?

        7

        The £150 Game

        Option 1: don’t play

        This is the approach of the Avoider

        • Prefers not to get involved at all

        • Dislike stress

        • Avoids situations with “winners” and “losers”

        • Can be (surprisingly) very difficult to negotiate against

        8

        The £150 Game

        Option 2: Run and stand behind the chair of the person opposite you, trusting that she will give you a fair share of the cash

        This is the approach of the Accommodator

        Resolves conflict by solving the other party’s problem

        If the counterpart is similar, he shares the wealth

        But if the counterpart has another approach, the Accommodator may end up with nothing

        9

        The £150 Game

        Option 3: Shout to the person sitting across from you that he should run over and get behind your chair and that you’ll share the money with him if he does

        This is the approach of the Competitor

        • First instinct is to see “zero sum” allocations

        • Likes to “win”

        • May even lie if he’s asked to get up and move, claiming he has a sprained ankle

        10

        The £150 Game

        Option 4: If the person across from you is offering you £75 to stand behind her chair, take the deal (even if you made the same offer to her)

        This is the approach of the Compromiser

        • Favours deals that give something to each party

        • Interested in maintaining relationships

        • Tends to “split the difference”

        11

        The £150 Game

        Option 5: Suggest to the person opposite you that you BOTH get up and stand behind each other’s chair, so you BOTH get £150

        This is the approach of the Collaborator

        • Tries to find a way for both parties to get the best outcome

        • Willing to be creative and brainstorm

        • May not be successful against a strong competitor

        12

        The £150 Game: Conclusions?

        • There is no one “right” way to negotiate

        •We must learn to be conscious of our own style

        • Five basic types of negotiators

        • Competing

        • Accommodating

        • Avoiding

        • Collaborating

        • Compromising

        13

        Negotiation styles

        •Most people use a combination of these styles

        •Be aware of your “default” style

        • Recognising it will allow you to move away from knee-jerk responses

        •Be aware of your counterpart’s style

        •Be tactical about altering style as appropriate

        14

        Communication styles

        How We Communicate Could Determine How Persuasive We Are

        • Verbal (the words)

        • Vocal (the tone)

        • Silence

        • Facial (the expressions)

        • Non-verbal ( the body movements)

        15

        Cultural Patterns/styles

        How We Perceive the word “negotiation” could dictate your approach

        Japan, China: negotiations are part of relationship building process (there is no getting to yes in the room)

        Spain: it’s the deal that matters

        Germany: formal

        Mexico/USA: informal

        Netherlands/Israel: direct

        May show video on cross cultural negotiation

        16

        BATNA

        “Best Alternative To a Negotiated Agreement.”

        It is defined as the most advantageous alternative that a negotiating party can take if negotiations fail and they do not secure the desired agreement

        The BATNA is a party’s best alternative is if negotiations are unsuccessful.

        It helps clarify alternative agreements proposed by the other party that you should reject.

        It underpins the art of letting them have your way.

        May show video on cross cultural negotiation

        17

        BATNA

        So, generate possible BATNAs:

        • Invent a list of actions you might take if no agreement is reached

        • Improve some of the better ideas and convert them into options

        • Select your Best Alternative To a Negotiated Agreement

        • Then, consider what the other side’s BATNA might be…

        May show video on cross cultural negotiation

        18

        19

        Key Negotiation Strategies

        Time issues and Deadline strategies

        • Conceal your real deadline

        • Declare an earlier deadline

        • Find the other side’s deadline

        Information

        • Considered the heart of negotiations – shapes strategy, reality • Preparation is key – side with more info. has edge

        • BATNA

        Power

        • Is it about power, ego, leverage • Balance between parties is a key factor

        20

        Key Negotiation Strategies

        Getting to Yes, key elements:

        Focus on interests, not positions:

        • Interests = needs, desires, concerns, fears that lead to “why”

        • Positions = specific demand

        Separate people from positions

        • People negotiate – are affected by egos, feelings, anger

        • “Step into their shoes” to discover their reasoning

        Focus on objective criteria

        • Facts, principles, standards can be used to frame an offer Develop mutual-gains options

        A settlement must be better than no agreement for both parties

        • Propose options with gains for both parties

        21

        Interests, not positions

        The basic problem in a negotiation lies not in conflicting positions, but in the conflict between each side’s needs, desires, concerns and fears. So, identify the Interests of the other side:

        Ask why they take a particular position [to understand]

        Isolate the other side’s choices [how do you want to affect them?]

        Analyse the consequences of accepting or rejecting your request

        22

        Options for mutual gain

        Is this distributive (win lose/zero sum) or integrative(win win) negotiation? How can you expand the pie? How can you have your cake and eat it? Invent solutions which are advantageous to both sides.

        But beware of :

        • Premature judgment

        • Searching for a single answer

        • The assumption of a fixed pie

        • Believing that ‘solving their problem is their problem’

        Story about cooks arguing over the orange. Do we chop it in half or does one of use want the peel.

        23

        Objective criteria

        Frame each issue as a search for objective criteria

        What objective standard might be relevant?

        Be open to reasoned persuasion on their merits

        Never yield to pressure, only to principle

        24

        True or false?

        “In Business As in Life, You Don't Get What You Deserve, You Get What You Negotiate” (Chester Karrass, 1996)

        25

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        ,

        Breakthrough Leadership Skills MN7028

        Topic 11: Diversity and Inclusive Leadership

        1

        1

        Learning Outcomes for this session

        Compare/Contrast Equality agenda with Diversity agenda

        Current situation

        The business case

        Solutions

        2

        Equality and diversity – background and context

        Societal context – landmark legislation in UK includes: Race Relations Act, 1965; Equal Pay Act 1970; Sex Discrimination Act 1975; Disability Discrimination Act 1995; Equalities Act 2010…. Extension to organisational users/customers as well as employees.

        Equal opportunities policies

        Managing diversity – origins in radical social movements in USA; ‘diversity’ a multiplicity of differences beyond gender and race; concept of diversity adopted and promoted in late 20th century as a response to challenges presented by demographic change

        3

        Consolidation: Equal Opportunities under Equality Act 2010

        Acknowledgement that some groups in society face discrimination.

        Legislation by Government

        The Equality Act (2010) brings together the legislation governing all forms of discrimination in the workplace and established the right of everyone ‘to be treated fairly’ and ‘in exactly the same way’ (CIPD, 2017)

        Fair access, treatment and promotion (orgs)

        Equal Opps. policies (orgs)

        Positive actions encouraged (orgs)

        Positive discrimination illegal

        4

        Scope of legislation:

        Some areas of discrimination covered by law include

        age

        disability

        gender reassignment

        marriage and civil partnership

        pregnancy and maternity

        race (including ethnic origin, colour, nationality and national origin)

        religion or belief (including philosophical belief)

        sex

        sexual orientation

        5

        The equal opportunities approach

        Concern of social justice and equality in line with the humanistic tradition of HRM

        Employers’ responsibility to ensure legal compliance and counter discrimination

        ‘Equality proofing’ of organisational policies and practices – e.g. in recruitment and selection

        Targeted groups and positive action (e.g. Police Force).

        6

        Managing Diversity

        ‘The basic concept of managing diversity accepts that the workforce consists of a diverse population of people. The diversity consists of visible and non-visible differences which will include factors such as sex, age, background, race, disability, personality and workstyle. It is founded on the premise that harnessing these differences will create a productive environment in which everybody feels valued, where their talents are being fully utilised and in which organisational goals are met’. (Kandola & Fullerton, 1998)

        7

        The “Managing Diversity” approach

        Link with a more strategic model of HRM

        Intended to engage and interest everyone (particularly managers) in promoting organisational inclusion and equality

        Focus on individual, rather than group, differences.

        Encompass all the ways that people differ, not just those associated with discrimination and disadvantage

        Push the centrality of the ‘business case’ – economic, rather than moral, rationale for diversity

        8

        Current context

        References to equality or diversity may create competing discourses

        Distraction of working towards a target > tokenism?

        9

        Processes for achieving equality/diversity

        Equality agendas:

        Equal chance

        Equal access to (all) opportunities

        Equal mechanisms to progress

        The short versus the long agenda

        Human Capital agendas:

        As above but beyond compliance with law) they may be fragile, and influenced by commercial expedience.

        10

        Positive Action for achieving equality/diversity

        Encourage applicants from an under-represented group to apply for roles

        Encourage applicants from an under-represented group to take training and development opportunities which will increase access to roles

        Build mentoring schemes inside firms.

        11

        Links with HRM

        Social justice

        Humanistic traditions of HRM

        Commitment

        Transcends legal compliance

        Human capital

        Economic expediency

        Driven by business interests

        Concerned with maximising efficiency

        12

        Alignment with HR strategy

        Recruitment and selection

        Appraisal and reward

        Training and development

        Culture change

        How realistic is a strategic approach to equality?

        13

        Key elements of the business case

        Enables organisations to recruit employees from the widest pool of talent

        Diversity is linked in some studies with greater creativity and innovation and superior performance

        People are more engaged in organisations with a diverse set of employees

        14

        Enables organisations to recruit employees from the widest pool of talent …

        Neurodiversity

        Movement to work

        Older employees

        Ex convicts?

        15

        People are more engaged in organisations which encourage a diverse set of employees

        Culture

        Networks

        Safe environments where people can be authentic and self-actualised

        16

        Stonewall, 2010

        17

        Employee engagement

        Stonewall (2010) ‘concealing sexual orientation at work reduces productivity by up to 30%’

        Catalyst (2009) LGBT employees in organisations with networks, resource groups and/or mentoring programmes are 7% to 16% higher in their workplace experience scores.

        18

        Managing Diversity

        What do you think the figures are in terms of women and ethnic minorities in the workplace?

        19

        Continued under-representation of women and ethnic minorities…

        Gender split in the UK workplace is now around parity.

        However in the board room there is still a gender imbalance (circa 33% women to 77% men) ( www.gov.uk, 2020)

        Over half of FTSE 100 firms have no ethnic minorities on their boards at all and they occupy 2% of the positions overall (City AM 2017).

        Male BAMEs 6% and female BAMEs 3.8% of FTSE100’s board roles (DiversityQ, 2020)

        Pay discrepancy: https://www.theguardian.com/uk-news/2018/mar/10/top-paid-men-women-gender-gap

        20

        Managing cultural diversity

        Impact of globalisation, increased movement of people and internationalisation of business

        Focus on ‘culture’ as a key dimension of difference

        Emergence of cross-cultural management as a distinctive field of theory and practice

        Key theorists include: Hofstede, Trompenaars, Hall…

        21

        Selected references

        CIPD (2018) Diversity and Inclusion at Work. Facing up to the Business Case

        Accessed 13/03/19 at CIPD website

        Cockburn, C. (1989) ‘Equal opportunities – the short and long agenda’ Industrial Relations Journal 20/3 213-25

        French, R. (2015) Cross-Cultural Management in Work Organisations (3rd edition) London: CIPD

        Kirton, Gill, and Anne-Marie Greene. The Dynamics of Managing Diversity : A critical approach, Taylor & Francis Group, 2015. ProQuest Ebook Central, https://ebookcentral.proquest.com/lib/londonmet/detail.action?docID=2126963.

        Noon, M. (2007) ‘The fatal flaws of diversity and the business case for ethnic minorities’ Work Employment and Society 21/4 773-84

        22

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        ,

        Breakthrough Leadership Skills MN7028

        Topic 3: Transformational Leadership – Harnessing Motivation

        1

        1

        Learning Outcomes

        Situating Transformational Leadership

        Organisational culture and the implications for leadership and management.

        To examine the main sources of power in organisational settings and the methods by which power and resources can be enhanced to increase effectiveness in such contexts.

        To analyse authority, power and politics as sources of control.

        To clarify any queries related to assessments

        2

        ‘Transforming leadership’ (Gregor Burns 1978)

        View of the leader as a transformer (visionary) and as a motivator rather than simply as a transactor (day to day operations) (Burns, 1978; Peters and Waterman, 2004)

        ‘leadership builds on man’s need for meaning’ (Peters and Waterman, 2004, p.82)

        ‘leadership creates institutional purpose’ (ibid)

        Has a moral component in that it transcends personal interests of leader and meets those of others

        3

        ‘Transforming leadership’ contrasted with power

        Leadership is exercised when leaders ‘arouse, engage and satisfy the motives of followers’ (Burns cited in Peters and Waterman, 2004)

        ‘Leadership, unlike naked power wielding, is thus inseparable from followers’ needs and goals’ (ibid)

        Power bases therefore become ‘mutual support for common purpose’

        Transforming people ‘from neutral, technical units into participants who have a particular stamp, sensitivity and commitment’ (Selznick, 1957)

        ‘reworking of human and technological materials to fashion an organism that embodies new and enduring values’ (ibid)

        The ‘dynamic’ outcomes from transformational leadership (contrasted with power)

        ‘Transforming leadership is dynamic leadership in the sense that the leaders throw themselves into a relationship with “followers” who will feel “elevated” by it and often become more active themselves, thereby creating new cadres of leaders’ (Peters and Waterman, 2004, p.83)

        5

        What values?

        Peters and Waterman, 2004 offer some examples from business:

        ‘beauty in a hamburger bun’ (Ray Kroc. McDonalds)

        ‘48 hours parts service anywhere in the world’ (Caterpillar)

        However a more critical challenge of the leader is to ensure that the vision is enacted/lived by employees and that such values are indeed transforming the organisation.

        Problems of over-simplifying definition of culture

        The ‘Excellence’ school (Peters and Waterman, 1981) certainly popularised the notion of culture and Marvin Bower (also CEO of McKinsey) coined perhaps the most famous definition of culture as ‘the way we do things around here’.

        Yet Schein (1992) distinguishes different depths to the concept: ‘a pattern of shared basic assumptions (that the group learned as it solved its problem of external adaptation and internal integration)’

        https://www.youtube.com/watch?v=gPqz315HSdg

        Organisational Culture: What are your perceptions about/definitions of culture? 10 Minute discussion

        Definitions: Culture as cohesive (“glue”)

        Culture is ‘how things are done around here’. (Drennan, 1992:3 after Bower)

        Culture…is a pattern of beliefs and expectations shared by the organization’s members. These beliefs and expectations produce norms and powerfully shape the behaviour of individuals and groups in the organization. (Schwartz and Davis, 1981:33)

        By culture I mean the shared beliefs top managers have about how they should manage themselves and other employees, and how they should conduct business(es) (Lorsch, 1986: 95)

        Mintzberg et al: ‘tissue’

        Definitions: Culture as Constraining (“glue”!)

        Culture represents an interdependent set of values and ways of behaving that are common in a community and that tend to perpetuate themselves, sometimes over long periods of time. (Kotter and Hesketh, 1992:141)

        Because…

        Common values and beliefs which can increase ‘the level of inertia and breed similarities in “strategic postures” (Abrahamson and Fombrum, 1994, cited in Mintzberg et al, 2005)

        This Photo by Unknown Author is licensed under CC BY-NC-ND

        10

        Value of culture in HR terms

        Alvesson talks about some other common metaphors for change:

        As a “regulator”: i.e. an unwritten element of company policy, which influences and directs aspects such recruitment/rewards

        As a “compass”: helping to draw attention to the values, behaviours which are “right” for the organisation

        As “glue”: encourages teamwork, cohesion.

        Challenges of culture in HR terms

        As “glue” again: but this time inhibiting necessary change

        As “blinkers” but also may blinker people to new ideas (Leonard Barton talks of ‘core rigidities’).

        Culture as a mechanism for leadership

        Cultural ‘schools’ of strategic management (Mintzberg et al, 2005)

        Mintzberg et all (2005) describe a number of schools of strategy including the Cultural School. Within the Cultural school are two perspectives which reflect a strong human relations orientation:

        The ‘Excellence’ school (Peters and Waterman, 1981)

        Resource based View of the Firm (Wernerfelt 1984 and Barney (1991)

        Drucker said ‘culture eats strategy for breakfast’. What do you think he meant by that?

        14

        Culture and Performance

        The ‘excellence’ school (Peters and Waterman, 1985). Developed a blueprint for high performing organisations, which consisted of 8 ‘attributes’ shared by their ‘excellent’ organisations:

        Bias for action

        Close to the customer

        Autonomy and entrepreneurship

        Productivity through people

        Hands on/value driven

        Stick to the knitting

        Simple form/lean staff

        Loose-tight properties

        Culture and Performance?

        Culture may be easily “linked” to superior performance (e.g. Peters and Waterman, 2004)

        But there is an issue about causality

        Compare with the ‘black box’ relating to contribution of HR to performance (e.g. Purcell et al, 2003)

        Compare with the challenge of “proving” value of Employee Engagement (what comes first?)

        What has happened to many of the organisations studied by Peters and Waterman?

        Depths of Culture

        Artefacts: ‘the visible products of the group … That one sees, hears, feels’

        Espoused beliefs and values: e.g. “our customers come first”, “innovation drives our business”

        Basic Underlying assumptions: e.g. engineers do not deliberately design a product that is unsafe

        (Schein, 2004)

        17

        Matching up the artefacts, the espoused values and the behaviours

        Schein (1992) distinguishes in the video between the artefacts, the espoused values and the behaviours/assumptions of the members of a firm

        Northern Rock ‘Mission Statement’ from 2006

        ‘superior value to customers .. through excellent products, efficiency and growth’ (2006 Annual Accounts)

        RBS Values: https://www.rbs.com/rbs/about/our-values.html Accessed 24/10/17

        ‘we want to be trusted, respected and valued by our customers, shareholders and communities’

        Compare with the notion of ‘due diligence light’ (2011) which was applied to the acquisition of ABN AMRO Bank

        Challenges with/critiques of organisational culture

        You cannot just “implement” culture or culture change. It takes time.

        Paradoxically it is fragile and easy to destroy (e.g. at the whim of a new CEO)

        One critique of the culture school is that it renders firms vulnerable to change and indeed many of the firms identified in Peters and Waterman’s classic text have since struggled or gone out of business.

        Why?

        It can discourage necessary change because the ‘common values and beliefs’ embedded in people also ‘increase their levels of inertia and breed similarities in “strategic postures” (Abrahamson and Fombrun, 1994, cited in Mintzberg et al, 2005)

        It is inwardly focussed (‘inside-out’) and explains ‘too easily what already exists, rather than tacking the tough questions of what can come into being’ (Mintzberg et al, 2005). So it is valuable for HRM but is it valuable for strategic HRM?

        Other notions of values

        In 2016, financial and insurance services contributed £124.2 billion in gross value added (GVA) to the UK economy, 7.2% of the UK’s total GVA. London accounted for 51% of the total financial and insurance sector GVA in the UK in 2015. There are over one million jobs in the financial and insurance sector (3.1% of all UK jobs). The UK had a surplus of over £60 billion on trade in the financial and insurance sectors in 2016. In 2015-16, the banking sector alone contributed £24.4 billion to UK tax receipts in corporation tax, income tax, national insurance and through the bank levy.

        Commons Briefing papers SN06193

        Author: Gloria Tyler

        Topics:  Economic situation,  Financial services

        http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06193

        Accessed 24/10/17

        20

        Power

        ‘Power lies in the acceptance of your authority by others – their knowledge that if they try to resist you, they will fail and you will succeed.’ Jay, A. (1967)

        ‘Power is the capacity to impress the dominance of one’s goals or values on others.’ (Armstrong, 2001)

        21

        Sources of Power

        Reward – being able to give the other what he or she wants

        Coercive – forcing him or her to do it

        Referent – having desirable attributes that make people wish to refer to the leader

        Legitimate – as opposed to illegitimate in the eyes of the followers

        Expert – having an expertise that others want to use.

        French and Raven (1958)

        Informational – (added in 1965)

        22

        Sources of Power (2)

        Source of Power Referred to as:
        Ability to apply sanctions Status and formal position Ability to give valued resources Superior knowledge & experience Personal relationships: charisma Access to inside information Coercive Legitimate Reward Expert Relationship Connection

        23

        Authority is… (1)

        Definitions:

        The power or right to enforce obedience (Oxford English Dictionary);

        Power made legitimate by position or expertise (Weightman, 2004)

        24

        Authority is… (2)

        Distinctions:

        In authority – relies on control over resources to influence people; it confers the right to control and judge the actions of others

        An authority – based on personal attributes, credibility or ability to influence people; it is the basis of credibility that you must earn and maintain for yourself

        Moral authority – based upon equity, ethics and fairness

        Authority to act

        Authority to authorise

        25

        Legitimacy of power?

        Not all power is legitimate

        “persuasion” of the Mafia

        Gotti and Machiavelli

        26

        Some Theories of Power relevant to HR

        Culture as power: ‘it’s the way we do things around here’ (Bowers).

        ‘the greatest conceivable power lies in the possibility to preform somebody in such a way that, of his own accord, he does what one wants him to do, without any need for domination … or for explicit power’ (Castoriadis, 1992 in Alvesson, 2002)

        Clegg (1987) states that ‘the most important kinds of power’ consist of ‘those occcasions when A’s didn’t have to get B’s to do things because B’s would do those sort of things anyway.

        Power/dependence theory (Emerson, 1962)

        Social Exchange theory (Blau, 1964)

        27

        Some Theories of Power relevant to HR contd:

        Persuasion is more effective than exercise of power through coercion

        Power/dependence theory (Emerson, 1962)

        Social Exchange theory (Blau, 1964)

        28

        Gaining and Retaining Power

        “Generally dominance is manifested not in significant political acts but rather in the day to day taken for granted nature of organizational life. As such the exercise of power and domination exists at routine level, further protecting certain interests and allowing the order of organizational life to go largely unquestioned by its members” (Deetz and Mumby, 1986 in Alvesson, 2004)

        29

        Empowerment

        Empowerment is a concept whereby employees at all levels are responsible for their actions and should be given authority to make decisions about their own work.

        It concerns the ownership of problem and solution

        Empowerment requires training for employees and their managers – previous managers need to give up some of their power.

        30

        Power and Politics

        Political behaviour in organisations has been described as ‘a process, that of influencing individuals and groups of people to get your own point of view, where you cannot rely on authority’ (Kakabadse, 1983)

        31

        Playing Politics

        Power is a property of all organisations – politics reflects how power is put into action

        Ethical or unethical behaviour?

        Ends versus means?

        The nature of competition

        32

        Control versus Participation

        Scientific management – control

        Continuum of behaviour depending on control of leader over the led

        Unitarist and pluralist perspectives

        Tells, sells, consults, joins

        33

        Selected reference list (online options in red)

        Alvesson, M. (2002) Understanding Organizational Culture. London: Sage

        CIPD (2014) ‘Keeping culture, purpose and values at the heart of your SME’

        Collins, J. (1995) ‘Building Companies to Last’. Available at ‘https://www.jimcollins.com/article_topics/articles/building-companies.html

        Emerson, R.E. (1962) ‘Power-Dependence Relations’, American Sociological Review, vol. 27, pp. 31-41.

        French, J and Raven, B (1958) ‘The Bases of Social Power’ in Cartwright, D. (ed.) Studies in Social Power, Ann Arbor, Mich: University of Michigan Press.

        Hofstede, G. (1990) ‘The Cultural Relativity of Organizational Practices and Theories’, in Wilson, D.C. & Rosenfield, R.H. (eds.), Managing Organizations: Text, Readings and Cases, London: McGraw-Hill.

        Peters, T. and Waterman, R.H. (2004) In Search of Excellence: Lessons from America’s Best-Run Companies, Exmouth: Profile

        Schein, E.H. (1985) Organizational Culture and Leadership: A Dynamic View, San Francisco, CA: Jossey-Bass

        34

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        Breakthrough Leadership Skills MN7028

        Topic 8: Interpersonal Communication

        1

        1

        Learning Outcomes

        To understand communications channels and barriers to effective communications.

        To explore some of the particular challnges of cross cultural business communication.

        To consider the importance of influence, persuasion, assertiveness and negotiating in communicating with others.

        To examine the sources and nature of conflict within organisations.

        To describe the importance of networking within and between organisations.

        2

        The Communication Process

        An interpersonal process of sending and receiving symbols with messages attached to them.

        The exchange of messages between people for the purpose of achieving common meanings (Guirdham, 1995)

        Communication is effective when the intended meaning of the sender is identical to the interpreted meaning of the receiver.

        3

        The Interactive Process of Interpersonal Communication

        4

        4

        ‘Noise’: Distortions in the Communication Process

        Poor written or oral expression.

        Failure to recognize nonverbal signals.

        Physical distractions.

        Status effects.

        Using the wrong “channel”

        5

        Typical applications for Written versus Face to Face communication

        Written channels work best when:

        Messages are simple and easy to convey.

        Require extensive dissemination quickly.

        Convey formal policy or authoritative directives.

        Spoken channels work best for messages that:

        Are complex or difficult to convey where immediate feedback is needed.

        Attempt to create a supportive, even inspirational, climate.

        6

        One Way and Two Way Communication

        One way

        Fast

        Looks efficient but often inaccurate

        Needs planning

        Less threatening to the sender

        Receiver can feel frustrated

        Guirdham, 1995

        Two way

        Slow

        Looks inefficient but often more accurate

        Planning is less essential

        Sender is more vulnerable

        Receiver more likely to feel confident

        7

        Richness

        Channel richness is the capacity of a communication channel to carry information in an effective manner.

        Low channel richness is impersonal, one-way, and fast.

        High channel richness is personal, two-way, and slow.

        Managers need to choose a channel with the appropriate richness for the communication.

        8

        8

        Communication Media: Examples of Media Richness

        Face-to-face dialogue *

        Videoconference *

        Telephone conversation *

        * Voice mail

        * E-mail

        * Informal letters/memos

        * Organization’s own videos

        * Formal written documents

        * Formal numerical documents

        Single

        Multiple

        Fast

        Slow

        Speed of

        Personalized Feedback

        Cues and Language

        * Organization’s Web site

        9

        Some other causes of noise in communication

        Hearing what we expect to hear

        Perceptions about the communicator (status/non-verbal)

        Influence of own reference group

        Different meanings (cultural or semantic)

        Emotional context

        Organisational size

        10

        Overcoming Communications Barriers

        Adjusting to the world of the receiver (put yourself in their shoes if you can)

        Using feedback

        Using reinforcement

        Using direct, simple language

        Reinforcing words with actions

        Using multiple channels

        Reducing problems of size

        11

        Vertical (one way) communication in Organisations

        Common in traditional (more hierarchical) organisations.

        Delivers organisational efficiencies (can be done in volume and with weight of authority)

        Top down but may be too blunt a vehicle for the message and sometimes polyphasic (so slow and/or unpredictable to reach conclusion)

        Impersonal

        12

        Other issues with Vertical (one way) communication

        Interpretive perspective of communication

        Employees may react differently to the same messages

        Language and symbols used to create and shape peoples social realities

        Communication is not a linear process – many variables affecting process

        Organisational members capture complex experiences that are a combination of sense, emotion, reason and imagination using narration and story telling to impart meaning

        13

        Communications Media

        Written systems

        These include reports, magazines, newsletters, bulletins,

        New technologies for communication

        Informational databases, electronic mail systems, voice mail systems, cellular/smart phone systems

        Text

        14

        Communication Technologies and Behaviour in “busy” contexts

        Communication can become more impersonal

        Interpersonal skills may diminish – less tactful, less graciousness

        Non-verbal cues lacking

        Altered social context

        Information overload – email?

        Email -encourages polyphasic activity

        15

        Communicating across cultures

        “Communication is only possible between people who to some extent share the same system of meaning” (Trompenaars and Hampden-Turner, 1997)

        “It is possible to know the language, and even have in one’s possession adequate translations, without grasping the meaning of what is being said and done” (Much, 1995)

        16

        Culture and communications

        Language and communication issues are intertwined with cultural differences

        Culture represents shared ways of life and understanding, thus culture is itself a process of communication

        Culture is reflected in language, but language is not necessarily tied to a specific culture e.g. versions of English

        Interconnections of language and culture – Japanese language ‘too polite’ and decision made to use English as language of key meetings and documents at Nissan (FT 5th May 2001)

        17

        Language issues

        The significance of language is a relatively neglected area in the study of MNCs …

        Language a barrier, resource or source of power

        Important role of ‘language mediators’

        Importance of language fluency for career progression

        Competence may be masked behind language barrier

        Different levels of language competence – ‘proportional facility’

        Cognitive strain

        18

        Vaara et al (2005): case study of a cross-border merger between Finnish and Swedish banks

        Swedish was originally chosen as the ‘senior management language’ of the new company

        Interpreted by Finnish speakers as sign of Swedish dominance, placed them at linguistic disadvantage

        Language training was limited to those in daily contact with Swedes

        Situation further complicated by the existence of two versions of Swedish

        Efforts by Swedes to learn some Finnish symbolically important and appreciated by Finns

        Corporate language changed to English…

        19

        Model of cross-cultural communication (from Haworth and Savage, 1995)

        Area of common understanding

        Person from culture A

        Person from culture B

        20

        Phenomenal

        Field

        Phenomenal

        Field

        Dynamics of cross-cultural communications

        Explicit/implicit messages (sender)

        Apprehended/inferred messages (receiver)

        Speech pragmatics or characteristic communication patterns – including conventions and rituals (e.g. greetings), jokes, emotional expression, tolerance of silences, pace or ‘music’ of speech

        21

        High & low context communication

        Context: information that surrounds an event

        High context communication

        Assumes the listener is already ‘contextualised’ ; reliance on the overall situation to interpret messages

        The explicit messages can be elliptical

        Low context communication

        Relying more on the explicit verbal content of messages; context less important than content

        Associated with more accessible, fluid, cultural environments

        Hall, E. (1976)

        22

        Communicating between High and Low context environments

        In low context environments, communicators tend to:

        Avoid ambiguity

        Come to the point quickly

        Fill silences where possible

        In high context environments, communicators tend to:

        Talk indirectly (and so may be ambiguous to outsiders)

        Use silence to convey a range of meaning.

        23

        Different principles underpinning management feedback

        Down-graders, understatement, hedgers (UK?)

        Upgraders (Germany?)

        Directness (NL?)

        Sparing with compliments (Fra?)

        Confidentiality (Asia)

        24

        Active Listening

        The process of taking action to help someone say exactly what he or she really means Understand the feeling and respond to this – patience/simple acceptance.

        Focus on the content and avoid making judgements

        Understand the feeling and respond to this

        Paraphrase and restate the message

        Don’t interrupt

        Don’t question the facts

        Listen to what isn’t said –note all cues, verbal and non-verbal

        25

        Selected references

        Brannen, M.Y., Piekkari, R. and Tietze, S. (2014) ‘The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance’ Journal of International Business Studies 45, 495–507

        Guirdham, M. (1996) Interpersonal Skills, Hemel Hempstead: Prentice Hall.

        Hall, E. (1976) Beyond Culture. New York: Doubleday

        Harzing, A-W and Feely, A. (2008) ‘The language barrier and its implications for HQ-subsidiary relationships’ Cross-cultural Management 15/1 49-61

        Meyer, E. (2015) The Culture Map. New York: Public Affairs

        Thomas, K.W., 1974. Thomas-Kilmann conflict mode survey. Tuxedo, NY: Xicom.

        Vaara, E., Tienari, J., Piekkari, R. and Santti, R. (2005) ‘Language and the circuits of power in a merging multi-national corporation’ Journal of Management Studies 42/3 595-623

        26

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        ppt/slides/slide1.xml

        Breakthrough Leadership Skills MN7028 Topic 9: Coaching 1

        ppt/slides/slide2.xml

        Aims & Objectives 2

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        The Vision accessible through the medium of coaching “What lies behind you and what lies in front of you, pales in comparison to what lies inside of you” Ralph Waldo Emerson 3

        ppt/slides/slide4.xml

        Definition: What is Coaching? “ Coaching could be seen as a human development process that involves structured, focused interaction and the use of appropriate strategies, tools, techniques to promote desirable and sustainable change for the benefit of coachee and potentially for other stakeholders.” (Cox E., Bachkirova .,Clutterbuck D., (2011) The Complete Handbook of Coaching, p1)

        ppt/slides/slide5.xml

        Coaching "Coaching is unlocking a person’s potential to maximise their own performance. It is helping them learn rather than teaching them" Whitmore, J., Coaching For Performance, (2004) 3rd edition published by Nicolas Brealey Publishing ISBN: 1-85788-303-9. In quoting this he is referring to the original writing of Timothy Gallway in the Inner Game Of Tennis in which he takes what was seen by many as a ground breaking approach to improving performance i.e. the individual’s internal obstacles are often more daunting than external ones, therefore what is more important is the individual’s own learning, rather than teaching from an external source. The (Inner Game of Tennis by W.Timothy Gallwey (Paperback – 5 Sep 1986) ISBN: 978-0330295130

        ppt/slides/slide6.xml

        Coaching Coaching is recognised as a powerful vehicle for increasing performance, achieving results and optimizing personal effectiveness (Cox E., Bachkirova.,Clutterbuck D., (2011) The Complete Handbook of Coaching, p211) 6

        ppt/slides/slide7.xml

        Key issues when Coaching Coaching is not Counselling (you are not qualified!) Ethical practice : as it uses psychology: Role of Power and Influence Coaching relationship is key : Have clear boundaries/ parameters: Coach – not the expert Coachee is always in control and decides which topic and action to take and when Coach is facilitator- Must be objective – Removes their own opinions/ideas/limitations/ bias/prejudice from coaching session – it’s not about the coach, so avoid it becoming ego-based Clarity – be clear on what can be achieved in 1 session /X number of sessions. Usually short term. However CEO’s often have regular coaching sessions

        ppt/slides/slide8.xml

        8 Coaching requires : Emotional Intelligence The ability to monitor one's own and others' feelings and emotions, to discriminate among them and to use this information to guide one's thinking and actions. According to John D. Mayer and Peter Salovey , two of the leading researchers on the topic, emotional intelligence (EI) Coaching People Skills Motivating others. Interacting with peers, employees, clients, superiors

        ppt/slides/slide9.xml

        Some categories of coaching 9

        ppt/slides/slide10.xml

        Coaching Relationship Model (5 elements of successful and effective coaching) Coachee Coach Beliefs/ experience/ background Organisation/ Environment/ Stakeholders Setting ethical standards (Cox E., Bachkirova .,Clutterbuck D., (2011) The Complete Handbook of Coaching,) RELATIONAL

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        Which COACHING STYLE? 11

        ppt/slides/slide12.xml

        CORE Coaching Skills:

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        13 Coaching Checklist: Build Rapport: Are you the right ‘fit’ as a coaching team? You can only coach someone who A) Wants to be coached and B ) Gives permission to be coached so check they really want to be coached Use Listening / Questioning Create Empathy ( not sympathy) to Empower Disclosures : Legal requirements Let the Coachee lead – they are in control – ALWAYS This is about them – not you The Coachee can change goal/ end coaching relationship Ask before you Challenge – calmly, respectfully. E.g may I challenge you on that? With your permission.. Always get permission before progressing You can end coaching relationship if coaching is not being effective or you are uncomfortable

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        14 (T-)GROW Model Sir John Whitmore from his classic coaching book, "Coaching for Performance."

        ppt/slides/slide15.xml

        Considered best practice by successful coaches It was advocated by Sir John Whitmore in his classic coaching book, "Coaching for Performance.“ You will practice using this model for your coaching role play The T- GROW model presents a way of identifying an issue, working on the issue and finding a way forward. It stands for… 15 What is the (T-)Grow model?

        ppt/slides/slide16.xml

        TOPIC The topic is actually the starting point. The client sets the topic and has full control of session. Be clear what you can and cannot ‘coach’ someone on, i.e. coaching is not counselling. The GROW model is the T-GROW model. Before you find the goal, establish the topic. This can relate to the longer term coaching goals that the client is working on. Be clear on this before moving onto the next stage. The topic will give the overall context to the coaching. 16

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        The Model 17

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        18

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        Reality 19

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        Reality Activity – do a “Reality Check” on where you are with regard to the goal you have just identified. Where are you currently with it? Is your goal “realistic”? What evidence is there that you can achieve it? 20

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        Options 21

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        Options Activity – think of as many options as you can for your coaching topic – even/ especially outrageous ones! what is available for you to do? Now? In a month? – write down 10 options 22

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        The Wrap-up 23

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        It’s not linear 24

        ppt/slides/slide25.xml

        Coaching Issues Coaching is not Counselling Ethical practice: as it uses psychology Have clear parameters: Role of Power and Influence Coach – not the expert Coachee is always in control and decides which topic and action to take when Coach is facilitator- Remove your own opinions/ideas/limitations/ bias/ prejudice from coaching session – it’s not about you! Can become ego-based Clarity – be clear on what can be achieved in 1 session / number of sessions. Usually short term however CEO’s often have regular coaching sessions

        ppt/slides/slide26.xml

        Coaching Activity: 45 Mins Now, in trios you are going to do a role-play scenario Coach – Coachee – Observer (15 mins each) Use the T-GROW model to see how well you can coach your colleague Take turns to coach each other The Observer will give feedback to both – using the feedback improve your skills Write down what you learn to feedback in main group

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        Coaching Reflections 27

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        Relevant Reading: Carnegie, D. (2007) How to Win Friends and Influence People, Vermilion Clutterbuck, D. Megginson, D. (2009) Further Techniques for Coaching and Mentoring, Butterworth Heinemann Covey, R, S. (2004) The 7 Habits of Highly Effective People, Simon & Schuster Cox E., Bachkirova T., Clutterbuck D., (2011)The Complete Handbook of Coaching Downey, M. (2003) Effective Coaching Lessons from the Coach’s Coach, Texere Fitzgerald, C and Garvey Berger, J. (2002) Executive Coaching: Practices and Perspectives, Davies- Black Garvey, R.Stokes P and Megginson D. (2012) Coaching and Mentoring: Theory and Practice 28

        ppt/slides/slide29.xml

        Relevant Reading (contd.): Gallwey, T. (1986)The Inner Game of Tennis, Pan Books Gallwey, T. (2000)The Inner Game of Work, Pan Books Harvard Business Essentials, (2004) Coaching and Mentoring, How to Develop Top Talent and Achieve O’Connor, J. (2004) Coaching with NLP: How to be a Master Coach, Element Stronger Performance, Harvard Business School Press Whitmore, J. (2009) Coaching for Performance, 4th Ed. Nicholas Brealey Publishing Whitworth, L. Kimsey House K. and Kimsey House, H. (2004) Co-Active Coaching, Changing business; Transforming Lives, 4th Ed. Nicholas Brealey Publishing; 29

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        Introduction to the practice of coaching and the theoretical frameworks which underpin coaching and practice: T-GROW Model Coaching as part of Leadership ‘Toolkit’. It is also a Leadership approach To provide an overview of the principles and practices of business coaching To develop key coaching skills to use in the workplace Coaching in Practice: Learn to coach and be coached in an ethical and respectful manner

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        Introduction to the practice of coaching and the theoretical frameworks which underpin coaching and practice: T-GROW Model Coaching as part of Leadership ‘Toolkit’. It is also a Leadership approach To provide an overview of the principles and practices of business coaching To develop key coaching skills to use in the workplace Coaching in Practice: Learn to coach and be coached in an ethical and respectful manner

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        Sports coaching Life coaching Executive Leadership coaching Neuro -linguistic Programming (NLP) Coaching

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        Sports coaching Life coaching Executive Leadership coaching Neuro -linguistic Programming (NLP) Coaching

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        DIRECTIVE? Experienced coach NON-DIRECTIVE? More explorative

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        DIRECTIVE? Experienced coach NON-DIRECTIVE? More explorative

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        Behavioural Approach LISTENING 1950 – 1970 EMPATHY REFRAMING: CREATE SHIFT FROM FAILURE TO SUCCESS QUESTIONING

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        LISTENING Behavioural Approach QUESTIONING 1950 – 1970 EMPATHY REFRAMING: CREATE SHIFT FROM FAILURE TO SUCCESS

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        G- oal – what is the goal? R – eality What’s the reality? O- ptions What options? W-rap up the session/ Way forward.

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        G- oal – what is the goal? R – eality What’s the reality? O- ptions What options? W-rap up the session/ Way forward.

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        Goal Goal definition is essential – it needs specifics/ clarity / detail/ timing – can relate to SMART objectives ACTIVITY : Write a goal for yourself now e.g. presentation skills

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        Goal definition is essential – it needs specifics/ clarity / detail/ timing – can relate to SMART objectives ACTIVITY : Write a goal for yourself now e.g. presentation skills Goal

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        The R of the Grow model stands for REALITY. Before you can achieve your goal. You first need to know where you are. In NLP 'reality' is referred to as the 'present state’. The job of the coach is to ask clarifying questions. Don't judge, don't try to fix. Focus is on the where the coachees see themselves. The purpose is to become clear of the starting point.

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        The R of the Grow model stands for REALITY. Before you can achieve your goal. You first need to know where you are. In NLP 'reality' is referred to as the 'present state’. The job of the coach is to ask clarifying questions. Don't judge, don't try to fix. Focus is on the where the coachees see themselves. The purpose is to become clear of the starting point.

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        Once you know where you are – i.e. REALITY- then consider the OPTIONS. Client must be really be open to possibilities Expand ideas – V Imp often need to challenge client – respectfully EXPLORE – Find out what is available for the client to do – ALL possibilities Identify ALL key options to be actioned Client COMMITS to taking specific action on specific date – must be written

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        Once you know where you are – i.e. REALITY- then consider the OPTIONS. Client must be really be open to possibilities Expand ideas – V Imp often need to challenge client – respectfully EXPLORE – Find out what is available for the client to do – ALL possibilities Identify ALL key options to be actioned Client COMMITS to taking specific action on specific date – must be written

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        Finally the W of the GROW model stands for WRAP-UP . Client agrees on an option and commits to take action Way Forward ACTION- What will the client do/ Commitment is vital/ When?

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        Finally the W of the GROW model stands for WRAP-UP . Client agrees on an option and commits to take action Way Forward ACTION- What will the client do/ Commitment is vital/ When?

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        The GROW model is not a strictly linear process. You can move around it as you clarify things. It's quite likely that when you get to 'WRAP-UP' you will return to REALITY and/or OPTIONS to move things forward- or even review the Goal

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        The GROW model is not a strictly linear process. You can move around it as you clarify things. It's quite likely that when you get to 'WRAP-UP' you will return to REALITY and/or OPTIONS to move things forward- or even review the Goal

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        Reflect on your Coaching What key coaching skills have you learned – what did you find easy/ hard? How might you integrate Coaching into your future leadership?

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        Reflect on your Coaching What key coaching skills have you learned – what did you find easy/ hard? How might you integrate Coaching into your future leadership?

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        Coaching Catherine Heming Natalie Langley 7 2020-11-30T21:44:35Z 2023-09-27T18:38:57Z

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        0 1879 Microsoft Office PowerPoint Widescreen 238 29 12 0 0 false Fonts Used 7 Theme 2 Slide Titles 29 Arial Calibri Calibri Light Lucida Sans Unicode Rockwell Times New Roman Wingdings Atlas 1_Default Design Breakthrough Leadership Skills MN7028 Aims & Objectives The Vision accessible through the medium of coaching Definition: What is Coaching? Coaching Coaching Key issues when Coaching PowerPoint Presentation Some categories of coaching PowerPoint Presentation Which COACHING STYLE? CORE Coaching Skills: PowerPoint Presentation PowerPoint Presentation PowerPoint Presentation PowerPoint Presentation The Model Reality Reality Options Options The Wrap-up It’s not linear Coaching Issues Coaching Activity: 45 Mins Coaching Reflections Relevant Reading: Relevant Reading (contd.): false false false 16.0000

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        ,

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        Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level ‹#›

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        MN7128 Breakthrough Leadership Skills Topic 6 Working Across Cultures: The Global Context for Leadership

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        Learning Outcomes Distinguishing between Emic and Etic perspectives Exploration of landmark work on socio-cultural theories: Hofstede, Trompenaars & Hampden-Turner, Hall, Schwartz Consider some different values underpinning societies. Globe Project Leadership dimensions Managing across cultures (exercise)

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        Approaches to exploration of the concept of culture Emic approaches: which investigate phenomena within their specific cultural context (e.g. inside one organisation) Etic approaches: which attempt to generalise theories and concepts to other cultures and examine similarities and differences…

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        Some definitions of the concept of culture ‘the way we do things around here’ (Drennan, 1992, after Bower) ‘By culture I mean the shared beliefs top managers have about how they should manage themselves and other employees, and how they should conduct business(es)’ (Lorsch, 1986) ‘the collective programming of the mind that distinguishes the members of one group or category from another’ (Hofstede, 2001)

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        Hofstede’s Dimensions of Culture Power distance Individualism/collectivism Masculinity/femininity (or Quantity of Life vs Quality of Life ) Uncertainty avoidance Long term Orientation (Confucian dynamism) Indulgence

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        Criticisms of Hofstede Methodology Data Collection Generalisability Unrealistic to think of uniform national cultures

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        Power Distance Power distance – the extent to which the members of groups (workplaces/countries) expect and accept power to be distributed unequally

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        Uncertainty Avoidance Uncertainty avoidance – the extent to which the members of a culture feel threatened by uncertain or unknown situations or prefer structure

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        Individualism/Collectivism Individualism – societies in which ties between individuals are loose – everyone is expected to look after themselves or their immediate family Collectivism – societies in which people from birth onwards are integrated into strong cohesive groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty

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        Masculinity/Femininity Masculinity – societies in which social gender roles are clearly distinct Femininity – societies in which social gender roles overlap

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        Confucian dynamism This time dimension or long term orientation (LTO) was added by Hofstede later and was influenced by the work of Hofstede and Bond (1988) in the context of Chinese society.

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        Cross country comparisons: www.geerthofstede.com Country comparison tool: https://www.hofstede-insights.com/country-comparison/ Geert Hofstede

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        Trompenaars and Hampden-Turner (1993,1997, 2011) Developed database of responses from over 5,000 managers from 50+ countries over 15 years. Their responses are compared along seven dimensions: Universalism/particularism Individualism/communitarianism Affective/neutral Specific/diffuse Achievement/ascription Orientation towards time Internal/external orientation

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        High & low context communication Context: information that surrounds an event High context communication Assumes the listener is already ‘contextualised’ ; reliance on the overall situation to interpret messages The explicit messages can be elliptical Low context communication Relying more on the explicit verbal content of messages; context less important than content Associated with more accessible, fluid, cultural environments Hall, E. (1976) Beyond Culture . New York: Doubleday.

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        Schwartz (2012) Power Achievement Hedonism Stimulation Self-direction Universalism Benevolence Tradition Conformity Security

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        Quality of life? Attitudes to work and employment Working hours, holidays and quality of life Job satisfaction The intensity, direction and duration of employees’ behaviour in relation to organisational goals http://uk.businessinsider.com/happiest-countries-best-quality-life-2016-11

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        Cross-country comparisons Long hours and hard work culture: Japan – ‘karoshi’ (death from overwork); reported average working day of over 12 hours; S Koreans averaged 2,316 annual working hours (OECD average 1,768) (WSJ 2010) Japanese on average take 8.8 days annual leave per year (half their allowance) (Guardian 5.10.17) Statutory leave entitlement: paid vacation days (excluding public holidays): Finland, Austria, Denmark 25 days; Russia 20; India 12; Taiwan 7; China 5…. USA no statutory agreement (OECD 2014) According to a 2001 survey job satisfaction levels in S Korea only 14% (compared to Denmark 61%, USA 50%, France 24%….)

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        Motivation theories Content theories – include Maslow, Herzberg, McClelland (what motivates…) Process theories – include equity and expectancy theories (how people become motivated…) Questioning the universal application of these theories Hofstede: management by objectives Triandis : horizontal collectivism; Ubuntu in southern Africa Impact of more externally oriented cultures e.g. relevance of expectancy theories in Muslim cultures

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        Transactional and transformational leadership (Bass 1997) Transactional leadership – focus on mutual exchange, fulfilling role expectations Transformational leadership – leaders who inspire others with their vision, successfully implement their vision, show personalised concern…. How universally appealing is the transactional model?

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        Leadership and culture ‘Leading from the front’: strong, individualised leadership, focus on corporate heroes… favoured in USA, UK, Ireland, Spain but not universally regarded as the ‘best’ Finland and Sweden favour more consensus oriented leadership; common goals more important in Germany; in France leaders regarded more strategic thinkers… Paternalistic model favoured in SE Asian countries – social distance, harmony, humane, personalised relationships (see Aycan et al (2014; chapter 7)

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        The Contingency Approach to Leadership ‘Leaders cannot chose their styles at will. They are constrained by the cultural conditions that their followers have come to expect’ (Robbins, 2005) In France they want directive leaders ‘Korean leaders are expected to be paternalistic’ ‘Arab leaders who show kindness or generosity without being asked to do so are seen as weak’ ‘Japanese leaders are expected to be humble and speak infrequently’ (French, 2015) (see French (2015; p.146)

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        Different principles underpinning management feedback Down-graders, understatement, hedgers (UK?) Upgraders (Germany?) Directness (NL?) Sparing with compliments (Fra?) Confidentiality (Asia)

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        The GLOBE Project G lobal L eadership and O rganizational B ehaviour E ffectiveness project. Started in 1991 and continues today – 17,000 participants from 950 countries and counting (French, 2015)

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        GLOBE: CEOs/Leaders were compared on nine cultural dimensions: performance orientation future orientation assertiveness uncertainty avoidance power-distance institutional collectivism family collectivism gender egalitarianism human orientation

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        Six leadership attributes (House et al, 2004) Charismatic/value-based Self-protective Autonomous Humane Participative Team-orientated dimension

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        Universally positive leadership attributes Attributes that reflected good leadership across all country clusters included trust, integrity, charisma Charismatic/value based dimension Attributes that reflected good leadership across all country clusters included those related to building supportive team Team-orientated dimension

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        GLOBE project on leadership – country clusters (House et al, 2004)

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        Universally negative leadership attributes Attributes that reflected poor leadership across all country clusters: malevolence, face-saving > Self-protective dimension

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        Some cultural variations Nordic and Anglo cluster : emphasise team orientation Southern and East European cluster: diplomacy, face saving, following procedures is more important than in other European countries Leaders in the Middle East should be familial, humble, religiously observant (outside values framework) USA: managers are more confrontational and critical in contrast to Japan where feedback is more indirect People in cultures which have low tolerance for ambiguity and risk taking (e.g. Japan), prefer major decisions to be taken by their leaders Those in cultures with a higher tolerance for ambiguity (e.g. US and UK) prefer to participate in decisions Scandura , T. and Dorfman, P (2004) ‘Leadership research in an international and cross-cultural context’ The Leadership Quarterly 15/2, 277-307

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        Selected References and some primary sources to explore Browaeys , Marie-Joelle.  Understanding Cross-Cultural Management , Pearson Education Limited, 2019.  ProQuest Ebook Central , https://ebookcentral.proquest.com/lib/londonmet/detail.action?docID=5742188 Deresky , H. (2017).  International management: managing across borders and cultures : text and cases ., pp.223-232 http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=1419482. French, R., 2015.  Cross-cultural management in work organisations . Kogan Page Publishers. Globe Project – various publications online at Hofstede, G., Hofstede, G.J. and Minkov, M., 2010.  Cultures and organizations: software of the mind: intercultural cooperation and its importance for survival . McGraw-Hill. Meyer, E. (2015).  The culture map: decoding how people think, lead, and get things done across cultures . Trompenaars, F. and Hampden-Turner, C. (1999) Riding the Waves of Culture, 2 nd Ed, Nicholas Brealey Publishing: London

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        Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level ‹#›

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        MN7028: Topic 12 Cross-cultural Negotiations and Trust-building/ Ethics in the context of international business

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        Breakthrough Leadership Skills MN7028 Topic 12 : Cross-cultural Negotiations and Trust-building/ Ethics in the context of international business 2

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        Session Overview Defining cross-cultural negotiation Negotiation as a staged process Cross-cultural issues at different stages of negotiation Ethics and corporate social responsibility Ethical issues in international business Western theories of ethics Universalism or relativism? Cultural differences in ethics and values – implications for management and international business practice.

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        Negotiating Give examples of different situations or contexts in which people engage in negotiations What do these situations have in common? What is the purpose of negotiation?

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        Definitions of negotiation ‘An extended communication created in dialogue by two sides’ (Mead 2005) ‘A process of discussion between 2 or more parties with the aim of achieving a satisfactory agreement’ (Tayeb 2003) ‘Requires parties with opposing interests to get together to make a decision’ (Elahee and Brooks 2004)

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        Cross-cultural negotiation ‘Discussions of common and conflicting interests between persons of different cultural backgrounds who work to reach an agreement of mutual benefit’ (Chaney and Martins (2004) cited in Zhu et al (2007)) Perceived as more difficult and complex because of differences in language and culture. ‘Promising partnerships fail to get off the ground due to conflicts and misunderstandings during the negotiation process’ (Steers et al, 2010: 321) Literature on cross-cultural negotiation tends to focus on contrasts between ‘Western’ (typically USA) and ‘Eastern’ (typically Chinese or Japanese) styles of negotiating

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        Issues in cross-cultural negotiation What are aspects of cultural difference are highlighted in the following video? https://www.youtube.com/watch?v=rSDntIn6ekE

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        Cross-cultural factors that impact on negotiations include: Individualism and collectivism High and low power distance High and low context Uncertainty avoidance Polychronic and monochronic Harmony or mastery Specific and diffuse….. Different assumptions about time and the importance of personal relationships are seen as key cultural factors in negotiating…

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        Stages of negotiation (Tayeb 2003; Adler 2002) Preparation Non-task sounding Task-related exchange of information Persuasion Concessions and agreement There are different cultural understandings about the degree to which these stages are differentiated and their relative importance.

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        Preparation Information gathering (national and cultural context; company information) Where to negotiate, physical arrangements (choice of 3 rd country in Middle East….) Expectations re time needed Who to include in negotiating team, what rank, how many Establishing own priorities, trying to predict others’ priorities

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        Non-task sounding stage Focus on relationship and trust building Arab negotiators – greet foreign visitors at airport; invite them to private residence before formal negotiations begin ( Khakhar and Rammal 2013) Business in China is based on interpersonal trust; the importance of ‘old friend’ status and ‘banqueting’ (Miles 2003), in Mexico business relationships are more personalised than in USA ( Elahee and Brooks 2004) Monochronic and low context cultures want to ‘get down to business’… confusion between Chinese and Australian/American negotiators re when to end this stage (Zhu et al 2007)

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        Task related exchange of information Parties make their presentation and state their position US negotiators: this stage is straightforward objective process, the aim is to exchange information. Chinese negotiators: ask questions rather than give information, get other party to take initiative and state position (Miles 2003)

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        Persuasion Each party tries to persuade the other to give up part of their demands and make concessions: the use of negotiating ‘tactics’ Zhu et al (2007): US/Australian unable to pursue their persuasion strategies because Chinese had not provided them with essential information Arab managers – emphasise personal contacts (‘Wasta’) that can facilitate implementing agreement ( Khakar and Rammall , 2013) Importance of non-verbal cues at this stage (readiness to compromise/agree) Contrasting styles – study of UN Security Council in 1970s revealed USA negotiators made more use of factual/inductive arguments; Syrians used emotional appeal; Russians used ideological arguments…

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        Different understandings/assumptions about conflict during negotiation (Lee 1998): Negotiation is a competitive game, involving open confrontation. Conflicts are short term and can be resolved OR: Conflict represents a fundamental threat that is long-term and cannot be resolved. Collectivists – prefer accommodation and avoidance strategies, believe in patience and harmony; individualists are more confrontational. High individualism and high uncertainty avoidance (Eastern and Southern Europe) associated with greater emphasis on rules and regulatory frameworks as a means to resolve conflict.

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        Concessions and agreement Collectivist cultures may take longer, need to achieve consensus Concessions may be made throughout process – according to Adler (2008) Russians and Arabs make more extreme initial offers; Russians see concessions as a weakness. Miles (2004) when negotiating with Chinese – expect negotiator to confer with superiors; do not count on signing a contract on particular trip (ideas about time)

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        Finalising the negotiation Different understandings of what constitutes a contract – cultures favouring Western-style contracts emphasise the importance of ‘getting it in writing’ as the basis for mutual trust, in contrast cultures favouring oral agreements (typically Chinese and Japanese) see trust as mostly personal ( Usunier , 2013) USA – negotiators assume that agreeing the deal is the end of the negotiating process, whereas in Thailand the process of negotiation goes well beyond this stage (Mead, 2005)

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        References Elahee , M and Brooks, C (2004) ‘Trust and negotiation tactics: perceptions about business-to-business negotiations in Mexico’ Journal of Business and International Marketing 19/6 397-404 Khakhar , P and Rammall , H (2013) ‘Culture and business networks: International business negotiations with Arab managers’ International Business Review 22, 578-590 Lee, M (1998) ‘Understandings of conflict: a cross-cultural investigation’ Personnel Review 27/3, 227-242 Miles, M (2003) ‘Negotiating with the Chinese: lessons from the field’ Journal of Applied Behavioural Science 39/4, 453-472 Usunier , J-C (2013) ‘International negotiations’ in Chanlat et al (eds) Cross-cultural Management, Routledge Zhu, Y., McKenna, B. and Sun, Z (2007) ‘Negotiating with Chinese: success of initial meetings is the key’ Cross Cultural Management 14/2, 354-364

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        Ethics and values in international business

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        Overview Ethics and corporate social responsibility Ethical issues in international business Western theories of ethics Universalism or relativism? Cultural differences in ethics and values – implications for management and international business practice.

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        Ethics and business in western society The Protestant ethic Free market economics: ‘There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud’ (Friedman 1970: 6) Increasing recognition of the social impact of business Stakeholders and interest groups Moral capital, mission statements and ethical codes

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        Examples…. https://corporate.primark.com/en-gb/a/primark-cares/our-approach https://www.ikea.com/gb/en/this-is-ikea/sustainable-everyday/

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        Ethics and international business Class discussion: Examples of issues?

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        Are there universal rules which can/should be applied to ethical dealings? Deontological perspectives: things are good or bad. Murder? Kant’s categorical imperatives. Consequential perspectives: focussing instead on the effects and results of actions. Whose murder? Bentham and Mill utilitarianism

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        Bribery and corruption ‘Corruption is rife and getting worse in high-growth export markets promoted by the Foreign Office and Downing Street’ (The Guardian 28.8.12) Countries with highest perceived levels of public sector corruption: Somalia, S Sudan, N Korea, Syria, Yemen, Sudan… Countries with lowest perceived levels…: Finland, Sweden, Switzerland, Norway, Singapore… https://www.transparency.org/news/feature/corruption_perceptions_index_2016 (accessed 09/12/20)

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        The basis of moral behaviour….. Influence of religious laws and beliefs Behaviours: specific and diffuse (Trompenaars) Whistle-blowing: Purity or loyalty ( Chanlat et al, 2013, p.169)

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        Contextualism in Japanese business (Taka 1998) The belief in the importance of social context (stemming from Confucianism): 'external' rather than 'internal’ Positive influences include: Consensus and avoidance of conflict Respect for seniors Respect for employees – lifetime employment Shareholders should not intervene Companies refrain from excessive competition and … Some act against exposure of corruption – in 1980s, employees of Green Cross Corporation did not raise concerns relating to unsafe blood products

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        Universalism vs Relativism Universalism: belief in a set of universally applicable ethical principles Relativism: ethical principles cannot be applied universally Parochialism and ethnocentrism – tendency to see one’s own culture as morally superior People within the same society do not all share the same values and moral beliefs

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        Ethics values and cultural difference Implications of… Individualism or communitarianism High and low context – giving and receiving gifts Inner – outer direction (contextualism)

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        Exposure of corporate fraud at Olympus April 2011: appointment of Michael Woodford as first foreign president of Olympus Later that year he was fired for ‘failing to adapt to Japanese corporate culture’ But Michael Woodford claimed he was fired for initiating investigation into corporate fraud going back to late1980s Cultural factors that Woodford argued undermine Japan’s strengths include ‘tribalism’, misplaced loyalty and self-reinforcing networks amongst managers…. Pilling, D (2012) ‘A gaijin blows the whistle’ FT 28 November

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        Different perspectives on gift giving: ethics at Citicorp (from Schneider and Barsoux , 2002) After successfully completing a complex deal for a Japanese client, he presents you with an expensive vase to express his appreciation. Although accepting a gift of such value is clearly against Citicorp policy returning it would insult your client. Would you: return the vase [..] explaining tactfully that it’s against Citicorp policy to accept gifts accept the gift because you can’t risk insulting an important client accept the gift on behalf of Citicorp… display it in a public area accept the gift and use it as a reward for an employee who displays service excellence? style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y

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        Universal ethical standards? Guirdham proposes charting a route to an ‘ethical minimum’, agreed by partners from the different cultures involved in a process of concensus -building (see French, 2015, p.246) Schneider and Barsoux (2003) identify three components which might serve to underpin universal standards: Honesty Integrity Protection of stakeholders

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        Dealing with dilemmas? Kohls et al (1999) gathered data from (mainly) US students asking them how they would deal with a situation where the other party had breached their own standards: Avoiding Forcing Educating Negotiating Accommodating Collaborating Adoption of one of the above may be influenced by these factors: Moral significance (actual significance to the host culture and how common it is) Power (evenly distributed or is there dependency?) Urgency (is there time to discuss/negotiate?)

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        Ethics, values and cultural differences? Ethics are defined as ‘ a set of moral principles  :  a theory or system of moral values’. They are ‘ the principles of conduct governing an individual or a group’ (Merriam-Webster Online) Or as the ‘social organising of morality’ (Clegg et al, 2007) Try to consider how your moral principles might be influenced and moulded by, for example: Individualism/Collectivism High/Low Context Inner/Outer Direction

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        Further reading on effects of social culture in business ethics: Akbar, Y.H and Vujić, V. (2014) "Explaining corruption: the role of national culture and its implications for international management", Cross Cultural Management 21/2,191-218 Chanlat, J.F., Davel, E. and Dupuis, J-P. (2015) Cross Cultural Management: Culture and Management across the World. Routledge: London Crawley, E., Swailes, S. and Walsh, D. (2013) Introduction to International Human Resource Management. OUP: Oxford

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        Synthesising leadership – Ethical Leadership? Ethical egoism: transactional, focus on maximising profits Utilitarianism: best outcome for the greatest number of people Altruism: authentic transformational leadership in which ‘leadership has a moral dimension’ (Northouse, 2019, on Burns)

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        Synthesising leadership – Global Leadership? Global leaders must develop five cross-cultural competencies (Adler and Bartholemew , 1992, in Northouse, 2019) Grasp of business, politics and cultural environments Grasp of perspectives, tastes, trends and technologies across many cultures Ability to communicate with people from different cultures (Hall, 1976) Ability to relate to people from different cultures from a position of equality rather than ethnocentric superiority (French, 2017) Ability to work with people from different cultures In addition they need to be able to Create transcultural visions (Ting-Toomey, 1999 in Northouse, 2019)

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        Breakthrough Leadership Skills MN7028 Topic 4: Motivation, Reward and Engagement at Work 1

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        Learning Outcomes To understand the importance of work to individuals and functions it performs. To understand, explain and critically evaluate major theories of motivation. To relate the contribution of employee motivation to commitment and engagement. To explore the concept of Total Reward To understand and explain the nature of the psychological contract and its role in forging commitment and engagement. To consider several HR strategies in relation to building greater employee engagement: case study of M&S

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        The Importance of Work Motivation Central role in management Integral to performance Permeates many sub-fields in the study of management Research history Research future

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        Origin and Definitions From the Latin – Movere ‘The contemporary (immediate) influence on direction, vigor, and persistence of action’ (Atkinson, 1964) ‘A process governing choice made by persons…among alternative forms of voluntary activity’ (Vroom, 1964)

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        Early History of Motivation Research Scientific Management movement (Taylor, 1911) Human Relations movement (Mayo, 1933) Theory X and Theory Y (McGregor, 1960)

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        Theory X (McGregor, 1961) People inherently dislike work and, whenever possible, will attempt to avoid it. Since people dislike work, they must be coerced, controlled, or threatened with punishment to achieve goals. People will avoid responsibilities and seek formal direction whenever possible. Most people place security above all other factors associated with work and display little ambition

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        Theory Y (McGregor, 1961) People will exercise self-direction and self-control if they are committed to the objectives of their work. The average person wants to accept responsibility and will seek it as well. The ability to make innovative decisions is widely dispersed throughout the population and is not necessarily the sole province of those in management positions.

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        Theory Z (Ouchy, 1980) Elements of this are now considered outdated (e.g. the job for life) However Ouchy places profound emphasis on the notion of Trust

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        Content Theories Individual differences/needs: Hierarchy of needs (Maslow, 1954) Three needs: components of ERG Theory (Alderfer, 1972)

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        Maslow’s Hierarchy of Needs Physiological needs Safety needs Social needs Ego/esteem needs Self-actualisation needs

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        Applying Maslow’s model to the context of work Physiological – pay, pleasant work conditions, dining facilities Safety – health and safety, job security Social – cohesive work group, friendly supervision, professional associations Esteem – social recognition, job title, high-status job, feedback from job itself Self-actualisation – challenging job, opportunities for creativity, achievement in work, advancement in the organisation

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        Content theories (2) Defined needs of achievement, affiliation, power, and autonomy (McClelland, 1961, 1971) Work activities/nature of job: Motivation-hygiene (Herzberg, 1966)

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        Herzberg’s two factor theory Hygiene Factors Company policy & administration Supervision Working conditions Salary Relationship with peers Personal life Relationship with subordinates Status Security Satisfiers Achievement Recognition Work itself Responsibility Advancement Growth

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        Process Theories The ‘golden age’ of cognitive motivation theories Expectancy Theory (Vroom, 1964; Porter and Lawler, 1968) Goal-setting (Locke, 1968; Locke and Latham, 1990)

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        Expectancy Theory (Vroom, 1964; Porter and Lawler, 1968) Effort expended Effective level of performance Rewards (desired outcomes) related to performance Availability of rewards

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        Equity Theory Equity (Adams, 1963) Animals share this sense of equity Individual exercise – how fair is your employer?

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        Recent Developments 1960s and 1970s research extended and refined in the 1980s 1990s research into motivation has declined World of work has changed dramatically Future of motivation research? Academy of Management Review (2004) Special Topic Forum on the Future of Work Motivation Theory , Vol. 29, No. 3, July 2004, pp. 339-499.

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        Roots of the concept of Employee Engagement Kahn (1990) was the first to propose that individuals could become personally engaged in their work. He defined ‘personal engagement’ as ‘the harnessing of organization members’ selves to their work roles : in engagement, people employ and express themselves physically, cognitively, emotionally and mentally during role performances”.

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        Levels of engagement Engaged employees work with passion and feel a profound connection to their work and company. They drive innovation and move the organisation forward. Disengaged employees are essentially ‘checked out’. They’re ‘sleep walking’ through their work- day putting time (not energy or passion)into their work. Actively disengaged employees aren’t just unhappy at work: they’re busy acting out their unhappiness. These employees can often undermine what their engaged colleagues accomplish. See :Engaged employees inspire company innovation (2006) Gallup management Journal; http://gmj.gallup.com

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        Commonly recognised Components of Employee Engagement (e.g. Armstrong 2017) Commitment Organizational Citizenship Behaviour Motivation Job Satisfaction (critiqued by Macey and Schneider, 2008)

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        Some antecedents of EE might be Satisfaction (although dismissed by Macey and Schneider). Social Exchange Theory (SET) is presented by Saks (2006) who believes it poses a strong case A basic principle of SET is that ‘relationships evolve over time into trusting, loyal and mutual commitments as long as the parties abide by certain rules of exchange’ (Kular et al, 2008, referencing Cropanzano and Mitchell, 2005) So … In both SET and EE mutuality is required (and mutuality we agreed last week is one of the factors distinguishing EE from some closely related concepts such as Motivation) Trust

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        Elaborating on SET ‘when individuals receive economic and socio-emotional resources from their organisation, they feel obliged to respond in kind and repay the organisation (Kular, 2008 referencing Cropanzano and Mitchell, 2005) We may conclude that the concept of SET represents at least one factor explaining why employees chose to engage or disengage at work.

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        Trust Erosion of trust evident at societal level in ‘distrust of political elites’ (The Economist, 2017). ‘Rising distrust of … big business, banks and the media’ (ibid). Erosion of ‘public confidence in major companies’ (CIPD, 2014a). Two thirds of employees no longer trust senior management, influenced by recession, cost reduction programs, reduced working hours, freezes on payrises/benefits/promotions.

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        Erosion of the trust which is/was implicit in the ‘psychological contract’ (Rousseau, 1995) The most important trust relationship for HR is that between employees and management (CIPD, 2012). The increasing ‘personalisation of trust’ through social media channels (CIPD, 2013) means that scrutiny of the behaviours of the organisation is more intense. When HR adopts a ‘hard model’ of HRM ( Legge ) and aligns itself to ‘organisational aims’, it will also suffer from an erosion of trust and a breakdown of the psychological contract. HR professionals may need to recalibrate toward a ‘soft’ model (ibid) which emphasises elements like socialisation, training and transparent communication with employees.

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        The psychological contract Definitions: A set of perceived reciprocal promises and obligations between the individual and the organisation (Makin, P., 1999) The perceptions of both parties to the employment relationship, organisation and individual, of the reciprocal promises and obligations implied in that relationship (Guest, D. 2004)

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        The “deal” Employer delivers on promises Employee delivers on promises = fairness, trust, commitment, well-being, performance.

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        The Changing Nature of the Psychological Contract Old deal v. new deal (Ref: Guest, D. 2004) Breakdown of the traditional ‘deal’ A career in return for loyalty A fair day’s work for a fair day’s pay Individualisation of the employment relationship Organisational change and violation

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        The impact of the psychological contract Fulfilling the psychological contract is important – it influences: Performance Extra role behaviour Job satisfaction Organisational commitment Intention to quit Source: Makin, P. and van Ruitenbeek, D., 1999

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        Reward Understand the concept of financial rewards. Have an appreciation of the main types of payment Understand the concept of non-financial rewards. Understand the concepts of new reward and total reward.

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        Reward or ‘compensation’? Marchington et al (2016) refer to the negative connotations related to compensation for ‘something bad happening to you’ Contrast with the more positive ‘rewards’, which may include ‘money, activities, variety, status, social contacts’ (ibid)

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        Performance and Rewards Rewards are of obvious concern to both employers and employees. The emergence of HRM has produced or coincided with great expansion of both: Performance-related pay (a culture of “pay for contribution not pay for position”) Performance management

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        Philosophy of Pay/Reward Systems Management will normally seek a pay system which they believe will give: the best balance between cost and supervisory control, and; provide the best incentive for employees. Marchington et al (2016) stress the importance of the reward philosophy in reflecting the overall objectives of the employer. Likewise the different elements of the package should all coherently ‘send a clear message to employees’

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        Employer’s Assumptions about Reward Systems That the HR processes are a strategic fit for the business strategy Unitarist perspective which assumes that employees will endorse the business strategy Deterministic assumption that reward will have a direct impact on organisational performance Assumption that employees will work in a way that, in the absence of the reward system, they would not

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        Employee’s Assumptions about Reward Systems Expectancy Theory (Vroom, 1964; Porter and Lawler, 1968) Motivational Force (MF) = Expectancy x Instrumentality x Valence

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        Fairness Any pay system will fail if it is perceived to be unfair by the employees. Fairness of pay is a comparative concept not an absolute one. Equity Theory tells us that people will be better motivated if they feel that they are fairly paid – called the ‘felt-fair’ principle (Jacques, 1962) But fair in relation to what or whom? Usually the person at the next desk!

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        Types of Payment Systems (e.g. Gilman, 2016) Payment by time. Performance-related pay or “Incentive Pay Schemes”: Payment by Results (PBR) – a variable element is determined by some ‘objective’ measure of the work done or its value. In the UK, this is losing favour in the shadow of the pension selling scandals. Merit-based systems – the variable element is related to an assessment of overall job performance

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        Benefits of Payment by Results (PBR) according to Armstrong (2010) Motivate employees Serve as a lever for innovation and change (through modifications of processes to achieve performance) Send a message about the importance of good performance Link rewards directly to performance (and perhaps also to organisational goals) Help attract and keep the best staff Diminish the possibility of “golden handcuffs” where under-performers linger Meet the fundamental human need for achievement.

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        Flaws of Payment by Results (PBR) according to Marchington et al (2016) Demotivate other employees Generally cost more to implement than they generate in increased revenue. Assume everyone works for/is motivated by money

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        Payment by Results policies are growing in popularity NHS, teachers, Civil Service in the UK Asian countries – even Japan (which historically has paid on seniority)

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        Case study of Payment by Results (Marsden, 2015) A PBR was rolled out in USA in certain schools who allocated part of their budget to spend on high performing teachers. The plan failed, arguably because: They didn’t give it enough time (2 years) There was a lack of understanding about how it worked There was a lack of money motivation in the targets (who instead focused on other more pastoral priorities) The PBR did not “create new budget”. The money had to be taken from somewhere else, creating tensions.

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        Reasons to Pay well: Delivers a better choice of applicant Reduces performance ‘issues’ (Marchington et al, 2016) Reduces staff turnover May increase effort/contribution (in line with Social Expectancy Theory)

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        ‘New rewards’ (Lawler, 1990) Asserted that reward: Can (and should) align with the business strategy Can therefore help deliver the business strategy Offer the potential to lever/deliver cultural change Yet two‐thirds of organisations in the United Kingdom do not have a reward strategy (Chartered Institute of Personnel and Development 2008)

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        Rejection of ‘new rewards’ logic CIPD (2015) report suggests that strategies of ‘new rewards’ are being ‘set aside or at least tempered by contemporary operating conditions’ Individual pay schemes are being used despite ambitions to promote a team ethic Such schemes ‘frustrate team cooperation’ HR prescriptions around team based logic has not gained traction.

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        Nature of rewards: Financial Job-based pay Person-based pay Pensions Financial recognition schemes (bonuses?) Share schemes

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        Financial “benefits” ‘Fringe’ or ‘employee’ benefits: to ensure that a competitive total remuneration package is provided to attract, retain and motivate staff. to increase the employee’s commitment to the organization. to take advantage of tax efficient methods of rewarding employees.

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        Typical Non-Pay (but still Financial) Benefits Pension schemes Share schemes Company car Personal security E.g. extra-statutory sick pay; death in service benefits; personal accident cover; medical insurance etc Financial assistance

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        Pension schemes Around half of employees in the UK are in occupational pensions schemes Pension schemes are the single most costly element in remuneration (notably in relation to workers with longer service) Two types: Defined benefit (DB): where the risk is taken by the employer Defined contribution (DC): where the risk is taken by the employee DC is on the increase but DBs are being wound up. (Antunes, 2016)

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        Share ownership schemes Benefits? Education Motivation Recruitment and retention Performance Paternalism Drawback? Lack of direct correlation between effort and reward

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        Cafeteria Approach to Rewards Management (Perkins and White, 2011) Allows employees a degree of choice in their total remuneration package, e.g. by permitting them to take less in non-pay benefits and more in pay, or vice versa The core benefit element will be salary The costed benefits will be elements such as car, Health Insurance, Childcare, extra holiday Employees chose the package” they wish to “construct”. The total overall value of their compensation will be the same whatever choices they make. This allows the individual to tailor their rewards to their particular needs and alter these as their needs change.

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        Non financial rewards and recognition ‘managers do not motivate employees by giving them higher wages, more benefits, or new status symbols. Rather, employees are motivated by their own inherent need to succeed at a challenging task. The manager’s job then is not to motivate people to get them to achieve; instead, the manager should provide opportunities for people to achieve so they will become motivated.’ (Herzberg, 1987) ‘The desire of many individuals to seek opportunities for personal growth through their work is very powerful’ (Marchington et al, 2016, citing Giancola , 2010)

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        Armstrong on Non-financial rewards ‘Financial incentives may increase engagement for some people in the short run, but the greatest impact on engagement is made by non-financial rewards, especially when they generate intrinsic motivation through the work itself and the work environment, and when they are provided by line managers’ (Armstrong, 2017, p.132).

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        Reilly and Brown (2008) propose an engagement model for the Reward Strategy Examine the current strategy and structure Decide on the desired strategy and structure Understand ‘what brings people to work, keeps them with the organisation and motivates them to perform while there …’

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        Non financial rewards and recognition ‘managers do not motivate employees by giving them higher wages, more benefits, or new status symbols. Rather, employees are motivated by their own inherent need to succeed at a challenging task. The manager’s job then is not to motivate people to get them to achieve; instead, the manager should provide opportunities for people to achieve so they will become motivated.’ (Herzberg, 1987) ‘The desire of many individuals to seek opportunities for personal growth through their work is very powerful’ (Marchington et al, 2016, citing Giancola, 2010)

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        Nature of rewards: Non-financial (after Armstrong, 2017) Recognition in looser sense Achievement Personal growth Learning and Development opportunities Enhancement of well-being Some are extrinsic (e.g. verbal encouragement from manager) Some are intrinsic (e.g. job content)

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        ‘Total rewards’ defined. The CIPD define total reward as encompassing ‘all aspects of work that are valued by employees, including elements such as learning and development opportunities and/or an attractive working environment, in addition to the wider pay and benefits package’ (CIPD, 2015)

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        Elements of ‘Total rewards’ The CIPD (2015) cite the US organisation  WorldatWork  as identifying six separate components of the work experience in addition to pay and benefits:  performance and recognition work/life balance organisational culture employee development and career opportunities business strategy human resource strategy.

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        Elaboration of ‘Total rewards’ concept Zingheim and Schuster (2001) suggest that the concept of total rewards has four components: Compelling future Individual growth Positive Workplace Total Pay. Towers and Perrin and Hay Group have adopted this model

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        Managing the intrinsic element through job design Lawler (1969) identifies three elements to job design which are necessary to make a job ‘intrinsically’ motivating: Feedback relating to performance: this should be meaningful (Armstrong, 2010). Armstrong also states that this means they be able to see more of the picture, i.e. how their role fits into the whole process. Abilities: the jobholders must feel that they are making use of those abilities which they values. Self-control (autonomy): the jobholders must feel they have discretion

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        Increased focus on ‘job characteristics’ in job design (Hackman and Oldham, 1976) Hackman and Oldham, 1976, propose a ‘job characteristics model’ (ibid), comprising five key elements: Skill variety (the range of skills and talents required) Task identity (the breadth within the task) Task significance (in relation to the “bigger picture”) Degree of autonomy (discretion, e.g. in methods) Feedback (clarity on performance) If jobs are designed in a way that maximises these dimensions then three psychological states can occur: Experience of meaningfulness at work Experience of responsibility for work outcomes Knowledge of results of work

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        Motivation alone is not enough Marchington et al (2016) argue that people with a high ‘growth need’ will be more likely to experience changes in their psychological contract as a result of exposure to such job design However they also need abilities. As with performance more generally AMO seems to apply: Performance = Ability x Motivation X Opportunity

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        Recurrent theme in the EE literature: ‘The line manager relationship is crucial’ (Robinson and Hayday, 2009) ‘Leaders and leadership can influence each facet of engagement through a range of processes’ (Soane, E (Leadership and Employee Engagement. in Truss et al, 2014, Employee Engagement in Practice)

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        Selected Bibliography Armstrong, M. (2017) Armstrong's Handbook of Human Resource Management Practice. 14 th Edition. London: Kogan Page Armstrong, M. (2010) Armstrong's Handbook of Reward Management Practice. London: Kogan Page (available as ebook through Lonmet catalogue) CIPD (2015) Reward Strategy and Total Reward Factsheet (updated 2016) accessed 31/10/17 at https://www.cipd.co.uk/knowledge/strategy/reward/strategic-total-factsheet#7370 Henderson, I. (2010) Human Resource Management for MBA Students. London: CIPD Institute for Employment Studies (IES) (2016) The Relationship between Total Reward and Employee Engagement. Accessed 31/10/17 at http://www.nhsemployers.org/~/media/Employers/Publications/Reward/Total%20reward%20and%20employee%20engagement%20report.pdf Marchington, M., Wilkinson, A., Donnelly, R. and Kynighou , A. (2016) Human Resource Management at Work. 6 th Edition. London: CIPD

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        Breakthrough Leadership Skills MN7028 Topic 5: Organisational Performance 1

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        Learning Outcomes To evaluate contemporary debates in – and models of – HRM and HRD to explain current practice employed in organisations for managing people. To define and explore the concepts of performance and performance management To discuss High Performance Work Systems (HPWS) To evaluate the role of effective people management policies and practices in enhanced organisational performance. To contribute to the effective implementation of systems and enhanced organisational performance. To explain the main factors that can facilitate or impede effective organisational performance.

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        Hard versus soft HRM Hard HRM: focus on profitability and well-being of the organisation; stresses the ‘resource’ aspect of HRM Soft HRM: associated with the human relations movement; employees are valued assets and a source of competitive advantage Short-term versus long-term focus? A false dichotomy?

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        Ulrich’s (1997) Four Roles of HR Professionals People Future/ strategic focus Day to day /operational focus Processes Employee Champion Administrative expert Strategic Partner Change agent

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        What is Performance? ‘the outcomes of work’ or ‘a record of a person’s accomplishment’ ( Bernadin et al, 1995) and Kane, 1996) Or alternatively ‘the ways in which organizations, teams and individuals get work done’ (Campbell, 1990) Or maybe a combination of outcomes and behaviours: ‘Performance means both behaviours and results … behaviours are also outcomes in their own right – the product of mental and physical effort applied to tasks – and can be judged apart from results’ (Brumbach, 1998 in Armstrong, 2012)

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        What are the components of Performance? Job-specific task proficiency Non-job specific task proficiency (e.g. Organizational Citizenship Behaviour) Written and oral communication proficiency Demonstration of effort Maintenance of personal discipline Facilitation of peer and team performance Supervision/leadership Management/administration (Campbell et al, 1993)

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        Three dimensions of Performance Management (after Shields, 2007) ‘Individual results flow into group results, which in turn contribute to organization-wide results’ ( Shields 2007, cited in Armstrong, 2017) So Armstrong (2012) argues that you need to look at it at individual, team and organizational levels. Performance culture High Performance Work Systems (HPWS)

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        Four perspectives of Performance Measurement (after Kaplan and Norton 1992) Financial Perspective– how do we look to shareholders? Customer Perspective – how do customers see us? Internal Business perspective – what we need to excel at? Innovation and Learning Perspective – can we continue to create value?

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        Performance Management ‘A systematic process for improving individual, team and organisational performance’. (Armstrong, 2014 p.331) The continuous process of improving performance by setting individual teams and goals whiah are aligned to the strategic goals of the organization, planning performance to achieve the goals, reviewing progress, and developing the knowledge, skills and abilities of the people.’ (Armstrong, 2017 p.391)

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        Best practice HRM Definition: “The best practice view identifies a set of HR policies that, it is argued, is associated with improved performance in all types of organisations and, by implication, for all types of employees” (Kinnie et al, 2005: 9) Note: other terms – high commitment HRM, high involvement HRM, high performance work systems all embody the notion of Best Practice.

        ppt/slides/slide11.xml

        Best practice HRM and organisational performance Assumption that particular bundles of HR practices have the potential to contribute to: improved employee attitudes and behaviours lower levels of absenteeism and labour turnover higher levels of productivity, quality and customer service in all types of organisation. This has been argued to have the effect of generating higher levels of profitability (Marchington and Wilkinson, 2009)

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        Components of best practice HRM Employment security and internal labour markets Selective hiring and sophisticated selection Extensive training, learning and development Employment involvement and participation: worker voice Self-managed teams/team-working High compensation contingent on performance Performance review, appraisal and career development Reduction of status differentials/harmonisation Work-life balance (‘adapted significantly’ from Pfeffer, 1998 and cited in Marchington et al, 2016)

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        ‘Bundles’ of HR practices Long history researching individual best practices Best practice HRM is about combining these together into ‘bundles’. Based on the idea that investment in individual practices will have limited effect whereas making changes together will have a more powerful effect . This suggests there is a specific set of practices which can and should be adopted by firms which will lead to universal improvements in performance. (Wilkinson and Redman, 2009)

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        The People and Performance link (Purcell et al, 2003) Research programme to explain ‘how and why HR practices impact on performance’ ( p.ix ) Starts with the framework of AMO: ‘performance is a function of Ability + Motivation + Opportunity’ A key to the HR- Performance link is the existence of a ‘Big Idea’ in the org. with ‘a clear mission, underpinned by values and a culture expressing what the company stands for and is trying to achieve’ The big idea displays 5 common characteristics: ‘embedded, connected, enduring, collective and ‘measured and managed’’

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        The People and Performance link (Purcell et al, 2003) Bringing policies to life: the critical role of line managers ‘the exercise of employee discretion is crucially affected by the way in which managers exercise their own discretion’ (p.37) Model for ‘Front-line management’ Implementing Enacting Leading controlling

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        High Performance Work Systems (HPWS) and performance ‘HPWS are bundles of HR practices that facilitate employee involvement, skill enhancement and motivation. HPWS provide the means for creating a performance culture’ (Armstrong, 2017) Definitions vary but Shih et al (2005) identify the following components: Job infrastructure (AMO) Training Programmes to enhance employee skills Information sharing and worker involvement mechanisms Reward and promotion opportunities that provide motivation

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        Characteristics of a high-performance work culture (Armstrong, 2010) Management defines what it wants in terms of performance and its goals, with a ‘clear line of sight’ between strategic aims of org and team and individual levels Job redesign, autonomous work teams, improvement groups, team briefing, flex work Clarity on goals, underpinned by the PM processes Cultural fit between org goals and individual capabilities Empowered workforce Strong leadership engendering shared belief in continuous improvement Engaged, committed, motivated employees Capacities of people are developed through learning Climate of trust and teamwork aimed at delivering to the customer People are valued according to their contributions There is a steady pool of talent available from which to identify high performers

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        Three theories underpinning Performance Management Goal Theory (Latham and Locke, 1979) Reinforcement Theory (Skinner, 1938) Social Cognitive Theory (Bandura, 1986)

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        Four elements of Performance Management Agreement Feedback Positive reinforcement Dialogue (Capelli: 2008)

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        Principles of Performance Management (after Egan, 1995) Performance Management should provide: Direction Freedom to get their work done Encouragement (and not control) Leading to growth Leading to strategic collaboration (Egan cited in Armstrong, 2017)

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        Principles of Performance Management (after Strebler et al, 2001) Performance Management systems should: Have clear aims and measurable success criteria Be designed and implemented with the involvement of the employee Be simple Be aligned (and contribute to) organisational goals, ‘line of sight’ Focus on role clarity and performance improvement Be aligned with complementary L and D initiatives Explain rationale which links them to rewards Be equitable, transparent Be regularly assessed themselves against success criteria ( Strebler et al cited in Armstrong, 2017)

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        People Managers are a crucial element Reinforce the link between organizational objectives and individual ones Give feedback Keep employees on course, or steer them back on course Hold employees ‘accountable’ (CIPD, 2017) Senior leaders meanwhile define and demonstrate the desired culture, mission, vision and values

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        Why Manage Performance? Individual goals can be aligned with organizational goals and specifically (according to Jones et al, 1995) to: Build a Shared vision Avoid ambiguity by clearly defining roles of all employees Provide an unambiguous framework for individuals Provide an unambiguous framework for teams Provide an unambiguous framework for rewards Key notion of ‘accountability’ (CIPD, 2017)

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        Why Manage Performance? (after Henderson, 2010) Motivation to perform is increased. Self-esteem is increased. The job definition and criteria for job success are clarified. Managers gain insight about subordinates, which helps the manager build relationships with their staff.

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        Why Manage Performance? (Henderson, 2010, cont’d) Self-insight and development are enhanced. Employees become more competent. HR actions are likely to be fairer (and perceived as such) There is better protection from lawsuits. There is better and more timely differentiation between competent and poor performers.

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        Why Manage Performance? (Cont’d) Supervisors are forced to address performance problems before they become too costly, and cannot be remedied. Supervisors’ views of performance are communicated more clearly. Organizational goals are made clear. Organizational change is facilitated.

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        Typical Performance Management System An agreement between individual and manager setting out objectives and development needs. Performance is continually monitored , assessed and reacted to. Regular formal review of performance against objectives, and setting of new performance agreement . ‘holds people to account’ (CIPD, 2017)

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        Planning for Performance The manager must know the criteria for success or failure, in order to assess performance. Specifically, the manager must be aware of the knowledge, skills and abilities (KSAs) needed to do the job competently. The KSAs and criteria for job success should be explicit in the relevant job descriptions.

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        Supporting Performance Maintaining continuous awareness of how the employee is performing, and giving feedback on this on a mainly informal basis. Revising initial objectives, standards, key accountabilities and competency areas if required without waiting for scheduled formal performance appraisal meetings. Supporting Personal Development Plans.

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        Personal Development Plan Personal Development Plans are a key component of Performance Management (according to Henderson, 2010) A good development plan assist employees to: do better in the future avoid past performance problems

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        Constructive Performance Management ‘Performance management should be a continuous process which links together performance, motivation, individual goals, departmental purpose and organisational objectives; these in turn should be overseen by management but engage the workforce’ (Marchington, 2012)

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        Key components of performance management (Mearns in Watson and Reissner , 2014, p.259) Recruitment and selection Induction Reviewing, appraisal and feedback Reward and reinforcement Training and Development Communication, support and counselling Management of poor performance Organisational Culture

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        Good Induction offers these benefits (Mearns in Watson and Reissner, 2014, p.278) Relaxed and settled employee Employee more open to training and development Retention levels are higher (Fritz and Vonderfecht , 2007) Links between good induction and positive ER/IR

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        Poor Induction risks these outcomes (CIPD in Watson and Reissner , 2014, p.278) Weak integration into team Low morale and low motivation Reduced levels of performance and productivity and if they leave Additional recruitment costs Wasted time/money in training Knock on impact in team productivity/performance

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        Performance Appraisal Process offers these benefits (Mearns in Watson and Reissner , 2014, p.280) Clarify expected standards and measure against them Allocate rewards Identify high performers Highlight training and development needs Discuss career progression Counsel employees (where needed) Give constructive feedback Establish future aims, objectives, targets Motivate employee and increase their morale Improve communication

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        Some conclusions about Performance Research findings as to the links between performance management and performance are mixed and inconclusive. CIPD (Gifford) says their research found no clear evidence. Armstrong argues for Employee involvement in the process on the basis that ‘people are more likely to respond positively and are more likely to work to improve their performance and develop their capabilities if they share in the processes of defining expectations [and] are involved in creating and developing their skills and competencies’ (Armstrong, 2017. p.396) Performance management has benefits for the employer, not least in informing decisions on remuneration for outcomes. From the employee’s point of view it can facilitate rewarding people ‘by recognition through feedback, the provision of opportunities to achieve, the scope to develop skills, and guidance on career paths’ (ibid). These are all non-financial sources of Employee Engagement. Furthermore they all require leadership from the line manager.

        ppt/slides/slide38.xml

        Selected References Armstrong, M and Taylor, S. (2015) Armstrong’s Handbook of Performance Management. 5 th Edn . London: Kogan Page (available online from Lon Met) Boxall, P. and Purcell,, J. (2008) Strategy and Human Resource Management. 2 nd ed. Basingstoke: Palgrave Macmillan Boxall, P. and Purcell,, J. (2015) Strategy and Human Resource Management. 4 th ed. Basingstoke: Palgrave Macmillan CIPD: numerous factsheets and reports available for the CIPD website at www.cipd.co.uk , including Could do better? Assessing what works in performance management . Henderson, I. (2010) Human Resource Management for MBA Students. London: CIPD Kaplan, R. S. and Norton, D. P. (1992) ‘The Balanced Scorecard–Measures That Drive Performance’,  Harvard Business Review , 70(1), pp. 71–79. Available at: http://0-search.ebscohost.com.emu.londonmet.ac.uk/login.aspx?direct=true&db=bth&AN=9205181862&site=ehost-live (Accessed: 31 March 2020). Purcell, J., Kinnie , N., Hutchinson, S., Raylon, B. and Swart, J (2003). Understanding the People and Performance Link: Unlocking the Black Box. London: CIPD. Watson, G. and Reissner , S. (2014) Developing Skills for Business Leadership. London: CIPD

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        Business Finance – Accounting ACC604 Managerial Accounting Signature Assignment

        Home>Homework Answsers>Business & Finance homework help>Accounting homework help

        Signature Assignment

        Creating and Using a Master Budget

        Downloads:  The following downloads include the Case Assignment and Excel workbooks in which to complete the assignment.

        Budget Sample Workbook 

        Case Assignment 

        Starting Excel Workbook 

        Background: This case is intended to help students in a graduate cost or managerial accounting course gain an in-depth knowledge of budgeting by developing and using a multi-product, multi-period master budget. The case consists of two segments that can be used in conjunction or separately. The first segment allows students to create a master budget. The second segment allows students to use their budgets to make recommendations for improving company performance. Only a portion of the first segment will be required in this course. The use of multiple products and introduction of incentives to improve company performance add a degree of complexity above that found in most budgeting problems. Working on this type of case provides you with a greater understanding of both the flexibility of a master budget and of the information, such a budget can provide to decision-makers. In addition, the case illustrates the incentives for budget padding, providing an opportunity to conduct a discussion of ethical budgeting and potential consequences in a rich context.

        Timeline: You will have three weeks to complete this assignment. The depth of this assignment will require you to block 1-3 hours per week to read, analyze, compute, and review the data contained in the narrative. It is highly recommended that you begin the assignment during week two. The Budget Sample Workbook will be discussed in class during week two and will give you a head start understanding how this budget assignment is designed. Chapter 8 in your textbook will also help with your understanding.

        Format: The assignment will be completed in Excel on your computer. Submit the assignment using an Excel XLSX workbook. Each budget schedule is to be contained on a separate spreadsheet tab. You are to utilize the power of Excel for totaling and referencing/linking amounts contained in other spreadsheets. Your grade is based upon the accuracy and formatting of each spreadsheet. Cells must be referenced (aka linked) between cells and tabs; this is how you will show your work and demonstrate comprehension of the use and purpose of budgets. The Signature Assignment will be assessed a 25-pt deduction if cells are not referenced/linked.

        What is Graded? In addition to the spreadsheet tabs, you are expected to provide a narrative recommendation for improving performance. This recommendation will be the last tab in your Excel file. Use Word Wrapping, Alignment, and punctuation for readability. The following spreadsheet tabs will be graded:

        Assumptions

        Sales

        Collections

        Production

        Draft: A draft of this assignment is due by Friday of the third week by 11:59 PM Pacific Time. Upload your Excel workbook to the via the Draft Signature Assignment link in Week 3. Your instructor will review your draft budget and provide feedback. The draft will be lightly graded, the feedback will have a positive impact on your project grade. Use the following file name format: Last name Signature Draft.

        Final Submission: The final version of this assignment is due on Friday of the fourth week by 11:59 PM Pacific Time. Upload your Excel workbook to the Final Signature Assignment link in Week 4. Use the following file name format: Last name Signature Final.

        1

        Juliette’s Pastries: Creating and Using a Master Budget

        BACKGROUND

        Juliette’s Pastries is a medium-sized regional bakery that

        specializes in providing orders to grocery and convenience

        stores. Because of the popularity of its brand, it has also

        opened a small café for walk-in business.

        In order to maintain its high-quality standard, Juliette

        produces only three products: breakfast muffins, fresh bread,

        and chocolate chip cookies. Although business has been good

        in the past few years, a lucky contact with a large chain has

        recently allowed it to expand its brand out of the local region.

        Growth has been high since the new contract went into

        effect.

        Andy Griff, the chief executive officer (CEO) and

        founder, has arranged a meeting with a venture capital

        firm next week. Hopefully the meeting will result in the

        sale of some of Juliette’s stock and an opportunity to

        establish a significant line of credit with the venture capital

        firm. These extra funds, if Andy can secure them, should

        provide sufficient money to meet Juliette’s growth targets for

        the next few years. The venture capital firm’s assessment

        team has asked Andy to provide a quarterly master budget for

        the year that just began, complete with pro forma financial

        statements, at the meeting. They have expressed special

        interest in Juliette’s earnings per share (EPS), cash flow from

        operations, and profit margins, indicating that good numbers

        in these areas will be essential for final approval.

        In typical managerial style, Andy immediately assigned

        the task of creating the budget to Nicole Quarterman, who

        has just been hired as Juliette’s controller. Since this project

        is her first assignment, Nicole started by making appointments

        with each of the divisional managers to gather information

        for the budget and to learn more about the company.

        PART I: CREATING THE BUDGET MEETINGS WITH DIVISIONAL MANAGERS

        MEETING WITH THE SALES DEPARTMENT

        Walking down the hallway towards the office of Jeff Barza,

        the sales manager, Nicole read the results for last quarter

        which ended on December 31, 2015. Juliette’s Pastries sold

        45,000 one-dozen packages of muffins for $5.50 each, 65,000

        one-dozen packages of cookies for $4.75 each, and 85,000

        one-dozen loaves of bread for $5.25 each. When Nicole got

        to Jeff’s office, he motioned her in to have a seat.

        “Is it time for our meeting already?” he asked. “Where

        does the day go?”

        “Who knows? It seems like one minute I’m having my

        morning muffin and the next I’m saying good-bye to

        everyone,” Nicole said with a sigh. “There’s never time to

        get everything done. And now I get to do the budget.” Jeff

        started to laugh. “Thanks,” she muttered. “I knew I could

        count on your support.”

        “I’m sorry. I just laugh at the amount of time you are going

        to put into something that isn’t really used anyway, except for

        setting bonuses, of course.”

        “Not really used? I don’t know how it’s been around here

        in the past, but this year, at least, the budget will prove to be

        a valuable tool.” Nicole waved away Jeff’s retort. “Anyway,

        one way or another I must create one and, as you know, the

        process always starts with projected sales. Do you have a copy

        of last quarter’s results?”

        “Yes, right here somewhere,” Jeff said, shuffling papers

        around on his desk. “Got it!” he exclaimed, waving it gently

        as he pulled it from under a stack of other papers. “Now,

        what do you want to know exactly?”

        “Well, Andy thinks that since we have established a

        strong following both locally and in our new markets, we

        2

        can raise our prices slightly next year without a sharp drop in

        sales. He was thinking $6.00 for muffins, $5.25 for cookies, and

        $5.50 for bread. What do you think?”

        “I agree,” Jeff said eagerly. “I’ve been pushing that for years.

        Of course, I think that sales will drop some in the first quarter of

        next year. They always drop off a bit after the holidays anyway,

        but with the increase in sales price . . . I’d say a 20 percent drop

        from the fourth quarter results we have here.” He looked up

        questioningly and raised an eyebrow.

        Nicole frowned. “That sounds kind of high. Based on

        what I saw in the dairy industry, I was thinking the drop

        would only be about 10 percent.”

        Jeff looked a little uncomfortable and shuffled around in his

        chair. “Well, it’s a little different for a Boulangerie. Our price is

        a little more elastic than dairy products. Besides, 20 percent is a

        more conservative estimate, and, in the past, we wanted no

        surprises.” He looked at her and challenged, “Are you going to

        change that?”

        “Yeah, but we’ll be using this master budget to create a

        cash flow budget and pro forma financial statements to show

        our new investor. We need to look good, not bad.”

        Nicole frowned. She didn’t want to start making changes and

        enemies in her first few months.

        “I guess so. But look—my bonus is tied to how well I meet

        my estimates. If we estimate low results and then go up . . .”

        Seeing the look on her face, he quickly changed direction.

        “Besides, Nicole, we are raising the prices. A 10 percent drop is

        normal after Christmas, but couple that with the increased

        prices, and 20 percent is reasonable.”

        Nicole frowned, and then sighed. She didn’t quite accept his

        reasoning, but it would be better to have him on her side until

        she understood the company politics a bit better. “Okay, Jeff. I’ll

        take your word for it. We’ll use 20 percent. After all, you’re the

        expert.”

        “You’ve got that right!” Jeff said, trying to hide his relief.

        He was obviously really counting on that bonus. He looked at a

        couple of sales reports and market projections on the desk in

        front of him. “After that, I think sales will grow steadily at about

        5 percent a quarter with these new prices. Fourth-quarter sales

        will be high because of the holidays— let’s say 20 percent,

        instead of 5 percent, from the third to the fourth quarter. The

        first quarter of the following year will continue the 5 percent

        growth as though the holiday jump didn’t occur. And I’m not

        messing with those estimates. That’s really my best guess, given

        what I’ve seen in the past.” He looked up. “Does that give you

        all you need?” “Just a few more questions. Have you made any

        changes to the credit policy? The information I have from last

        year says that we make about 10 percent of our sales through

        our café and that we don’t sell to those customers on credit.”

        Jeff smiled. “Yep, but we do sell on credit to the business

        customers. If we didn’t, they’d go somewhere else. So, we give

        our business customers a lot of leeway in paying us. It makes it a

        little hard on us, but it keeps them loyal. Anyway, we collect 30

        percent of the credit sales within the current quarter, 45 percent

        in the following quarter, and 25 percent in the quarter after that.

        The good news is that we don’t have any bad debt. Our

        customers are mostly large chains with strong sales and even

        better reputations. Since they are large companies, they take

        their time paying small companies like us, but we get the money

        from all of them in the end.”

        “Then I have only two more questions. What were total sales

        during the third and fourth quarters of last year, and are we still

        collecting any of that money?”

        Jeff pulled up a file. “Total sales were $802,000 and

        $1,002,500, respectively, and we are still collecting quite a bit of

        that money based on our collection breakdown.”

        “I think that does it, then. If I’ve forgotten something, I’ll

        come back and bug you later. It’s more fun to interrupt you

        several times anyway. And you owe me one now.”

        MEETING WITH THE PRODUCTION DEPARTMENT

        Nicole sighed as she headed to her meeting with Phil Mainster,

        Juliette’s head chef. She wasn’t sure about that large drop Jeff

        wanted her to use, but as the new member of the staff she

        wasn’t sure what she should do. Of course, she didn’t have

        much time to think about it now anyway. She had met Phil

        before, so she knew that it was going to be an interesting

        meeting.

        As she had suspected, she found Phil in the Boulangerie

        instead of his office. “Phil,” she called as she hurried towards

        him, “did you forget our meeting?”

        “Me, forget?” Phil asked in a surprised voice. “I never

        forget anything!” Nicole had to chuckle at the large streak of

        flour across his face. “You said you wanted to see our

        production facility, and I’m ready to show it to you.”

        Nicole shook her head. “No, Phil. I didn’t say I wanted to

        see the production facility; I said I wanted to talk to you about

        the budget for next year.”

        “Oh, of course you did.” Phil’s round face had turned a

        deeper shade of pink. “Then why don’t we go to my office

        and talk?”

        Nicole sighed. “That’s a great idea, Phil.”

        As they sat down, Nicole asked her first question. “Okay,

        Phil, I need to know how much inventory we keep on hand.”

        “Well, we can’t keep much in the way of finished goods

        on hand. My cookies and bread would dry out if we kept them

        too long. I’d say that we normally keep only about two days’

        worth of inventory on hand to avoid shipping issues or

        problems with the café.”

        3

        “Okay and you make your estimates based on a 90-day

        quarter?”

        Phil nodded impatiently. “Please, Nicole, don’t ask

        obvious questions.”

        “I’m sorry. Let’s talk about your pantry. You take care of

        purchasing too, don’t you?”

        “Yessirree. We decided it would be easier for me to run

        purchasing than to have a separate manager do it. After all, I do

        everything else around here.”

        “Well, we want it done right.”

        Phil chuckled. “I’ll have to remember that one. Martha will

        love it. Okay, let’s talk about raw materials. Some days we

        must produce a lot to meet our orders, so I normally try to keep

        15 percent of the next quarter’s raw materials on hand at all

        times.”

        “Is that what we’ve got on hand now for the coming

        year?”

        “Of course. Jeff and I had already talked about the

        possibility of raising prices and his estimate of a 20 percent

        drop in demand, so I’m ready to go.”

        Nicole considered telling Phil that she was unsure the 20

        percent drop would really materialize but changed her mind.

        There would be time to get the extra ingredients ordered if sales

        only dropped 10 percent, and she didn’t want anyone

        to think she had caved in to peer pressure. “Good. Can you

        give me some estimates of how long it takes to make each

        package of cookies, bread, and muffins?”

        “Are you kidding? We don’t really move each item from

        start to finish. We do them in large batches, so I have no idea

        how long each final package takes.” Seeing Nicole’s frown, he

        quickly went on. “But I can tell you that one of my mixers can

        mix either 12 dozen cookies, 8 dozen muffins, or

        4 dozen loaves of bread in 15 minutes. The bakers then take

        another half an hour to get the dough ready and bake it.”

        “The batch sizes are the same for each product?”

        “Yep. I try to keep things as standard as possible.

        The packaging department is the slowest. They must double

        wrap the cookies and muffins—once to keep them fresh and

        once in the fancy packages marketing came up with—so it

        takes 15 minutes to package either two one-dozen packages

        of cookies or two one-dozen packages of muffins. The bread

        is a little faster. In 15 minutes, we can package about eight

        dozen loaves of bread.”

        “Do you happen to know what we are paying each group of

        employees?”

        Phil grabbed a piece of paper. “We pay the mixers $7.50 an

        hour, the bakers $8.00 an hour, and the packers $6.50 an hour.”

        “Perfect. Then I just have one more question.”

        “Let me guess. You want a breakdown of ingredients for

        each item we bake.”

        “You must be psychic, Phil.”

        “No, I just remember being bugged about this by the last

        controller.” He handed Nicole a piece of paper with a table on it.

        “Here they all are. Just make sure you don’t let it out of the

        building! I don’t want my secret recipes to get out.” “Don’t

        worry. I’ll be careful.” Nicole glanced down at the price sheet.

        “Wow. I wish I could buy my groceries at these prices.”

        Phil chuckled. “So, do I. You must remember, though,

        Exhibit 1

        Summary of Ingredients

        Ingredients

        Cost / Lb.

        Cookies Muffins Bread

        Lbs./Dozen

        Total / Dozen

        Lbs./Dozen

        Total / Dozen

        Lbs./Dozen

        Total / Dozen

        Flour $0.15 0.50 $0.08 0.50 $0.08 3.00 $0.45

        Margarine $0.25 0.75 $0.19 0.25 $0.06

        Sugar $0.20 1.00 $0.20 0.50 $0.10 0.25 $0.05

        Eggs (each) $0.05 2.00 $0.10 2.00 $0.10

        Milk (per gallon) $1.25 0.10 $0.13 0.25 $0.31

        Cocoa $1.50 0.25 $0.38

        Peanut Butter Chips $0.75 1.00 $0.75

        Mini Chocolate Chips $0.75 1.00 $0.75

        Shortening $0.50 0.25 $0.13

        Baking Packet* $0.10 1.00 $0.10 1.00 $0.10 1.00 $0.10

        $1.79 $1.31 $1.04

        * The Baking Packet consists of ingredients too small to be purchased by the pound, so the bakery buys them in prepared packets.

        4

        Exhibit 2

        List of Selling and Administrative Expenses

        that we buy in bulk, lots and lots of bulk. That lets us get

        some great deals from our local vendors.”

        “I guess that makes sense. Thanks for taking time to see me.”

        “Just make sure you don’t leave without taking a cookie

        or two.” Phil held out a plate loaded with perfect, if two-day

        old, cookies. “If we don’t eat them, they go into the trash!”

        “My pleasure!”

        MEETING WITH THE ACCOUNTING DEPARTMENT

        Nicole hurried back to her own office. She had a staff meeting

        in 15 minutes. She should be able to get most of the

        information she still needed from Sarah, since she wrote the

        checks. Even though Sarah only worked part-time, she’d been

        with the Boulangerie from the beginning and seemed to know

        just about everything about the accounting system. Anything

        Sarah didn’t know, Bob, their new summer intern, would have

        found out for her by now. He was very good at digging up

        information once he was pointed in the right direction.

        “We thought you were going to stand us up,” Sarah said

        as Nicole hurried into the office.

        “Actually, we hoped you were,” Bob quipped. “We don’t

        want to get stuck doing the budget, so we hoped that you

        would forget to come.”

        “Don’t worry,” Nicole said with a sigh. “Andy wants me

        to take care of it personally. He seems to think it would be

        good for me to get to know the company or something. So,

        have you gathered all the information that I asked for?”

        “Of course,” Sarah said. “Where do you want us to start?”

        “Let’s start with our accounts payable.”

        “That’s me,” Bob said. “Most of our vendors require that

        we pay for everything within 30 days of making our purchase.

        That means that 85 percent of our purchases are paid for

        within the quarter they are made. And, before you ask, we

        ordered $210,984 worth of inventory during the last quarter

        last year, so we still owe 15 percent of that, or $31,648.”

        “Thanks, Bob, but I knew that last part. After all, it’s right

        there in the balance sheet.”

        “Oh, yeah,” Bob said turning pink. “I forgot about that.”

        Sarah laughed. “So, you calculated it by hand?”

        “Well, yeah. I wanted to be prepared for the meeting today.”

        “All right, you two,” said Nicole, jumping in before

        Sarah could pick on the young man anymore. “Let’s move

        on to our overhead assumptions.”

        “Sure,” Sarah said. “Last year we allocated variable

        overhead at $1.50 for each direct labor hour. This year, I

        think that we’re going to need to increase that to $2.00 to

        cover increases in security fees, utility rates, and energy

        prices. We also spend about $160,000 a quarter in fixed

        overhead. Also, don’t forget that we usually use total direct

        labor hours to calculate a predetermined overhead rate when

        calculating the unit cost.”

        “Unit cost?” asked Bob. “Oh, wait,” he said nodding, “I

        remember. We must include direct materials, direct labor, and

        manufacturing overhead to get the cost of producing each

        unit. Direct materials are calculated from the recipe and

        direct labor cost from the employee information that Phil

        gave you. But we need to multiply the number of hours it takes

        to make each product by the predetermined overhead rate so

        that we can figure a per-unit applied overhead amount. Sorry

        to interrupt.”

        “No problem.” Nicole nodded approvingly at the young

        intern while finishing up her notes. “Just one last question,

        Sarah. How much of that overhead is from depreciation?”

        “Eight percent of the fixed amount.”

        “ Bob, tell me about our sales costs.”

        “Well, we don’t really have that much in variable sales

        costs. We give a one percent commission to our sales staff.”

        “Is that based on profit or sales price?” Sarah asked.

        “Total sales price. Sorry, I forgot to mention that. The

        commission is paid both for business sales and sales in the

        café. Also, here’s the table of fixed selling and administrative

        expenses.”

        S&A Expense Cost / quarter

        Advertising $40,000

        Cleaning supplies 1,000

        Janitorial service 6,000

        Office staff salaries 25,000

        Office supplies 3,000

        Rent – Office 9,000

        Sales salaries 35,000

        Top management salar 80,000

        Utilities – Office 1,800

        Total $200,800

        Nicole took the paper. “Thanks. Okay, Sarah, tell me

        about our debt.”

        “Well, at the end of last year, we secured a $1,109,969

        mortgage at 6 percent interest. Our payment each quarter is

        $20,000. Since it’s a mortgage, the calculations are kind of

        fun. Each payment requires us to pay a lot of interest and a

        little bit of principal. To break up the $20,000 into the two

        parts, we have to multiply the current mortgage value by 6

        percent and divide by 4. . .”

        5

        “Divide by 4?” asked Bob.

        “Well, yeah, 6 percent is the annual rate. Since we make

        quarterly payments, we divide the annual rate by 4.”

        “Oh,” Bob said sheepishly. “I should have remembered

        that.”

        “Yes, you should have,” Nicole said with a smile. She was

        very pleased with how well Bob was progressing during his

        summer with the firm. Hiring an intern had been one of her first

        changes, and it seemed to be working out well. If the company

        continued to grow, maybe he could be hired full-time once he

        graduated in a couple of years. “Go ahead, Sarah.”

        “Right. So, our first payment will be made at the end of

        the upcoming quarter. We’ll end up paying $16,650 as

        interest and $3,350 in principal. This means that the value of

        the mortgage in the second quarter will be $1,106,619. That’s

        the original $1,109,969 minus the $3,350, Bob.”

        “Thanks, Sarah. I appreciate the help,” Bob retorted,

        rolling his eyes.

        “I appreciate it, too,” Nicole said. “If I remember right, we

        have to pay the $20,000 each quarter. Our contract prohibits

        us from paying any additional principal for the first three

        years.”

        Sarah nodded. “Yep, kind of a bummer, but that was the

        only way we could get that 6 percent interest rate.”

        “Okay,” Nicole said. “The last thing is a recap of how we

        handle income taxes. I think that has pretty much stayed the

        same?”

        “It sure has,” Bob responded, rifling through a tax folder.

        “Our corporate tax rate is 30 percent, and a portion of our

        estimated taxes must be paid each quarter to avoid late fees. Our

        policy is to pay 110 percent of the taxes that we owed last year

        over the course of the current year. Since we paid

        $15,000 last year, we will need to pay $16,500 this year.”

        “And we’ll pay that equally over the four quarters?”

        “Right. At the end of the year, we calculate our actual

        taxes owed as 30 percent of net income. Any difference

        between the cash we paid for taxes over the year and actual

        income tax expense on the income statement is put into income

        taxes payable if we haven’t paid enough and into deferred tax

        assets if we paid too much.”

        “Right,” Nicole said. “I think that’s about it.”

        “Don’t forget the balance sheet from last year,” Bob said,

        handing her a sheet of paper.

        “Thanks. I’m starting to lose track of everything. I must be

        getting old.”

        “Oh, I wouldn’t say that” Bob quipped, then added with a

        grin, “at least, not as long as you’re my boss.”

        MEETING WITH THE CEO

        “So, how goes the battle, Nicole?” Andy asked as she came

        into his office.

        “Oh, it’s going. Actually, I think we’re just about there. I

        just need to check some numbers with you, and I’ll be all set.

        Then it’s just a matter of actually creating the budget. That’s

        the fun part, you know.”

        Andy laughed. “Right. That’s why you’re the accountant

        and I’m not. So, what do you need?”

        “First, I just want to confirm a couple of things from some

        earlier meetings. You told me a couple of weeks ago that the

        board of directors now wants us to have $40,000 worth of cash on

        hand at all times and to pay $25,000 in dividends each quarter. Is

        that still the plan?”

        “Yes, it is. I think it’s a little restrictive myself, but sometimes we

        Exhibit 3 – Balance Sheet, Dec. 31 1

        6

        must do as we’re told. Because of the expansion, though, we

        are going to have to issue another 50,000 shares of common

        stock to the venture capital firm in the first week of the third

        quarter. We won’t plan on changing our dividend payment

        schedule this year, but we will probably have to increase the

        amount we pay in future years. For now, though, the big

        factor is the capital infusion of $400,000 we’ll get from selling

        our stock.”

        “In the third quarter? Why are they waiting that long?”

        Andy shrugged. “Because that’s when they will have the

        money to make the investment. They’re waiting for another

        deal to go through.”

        “Okay, so increase common stock issued by 50,000 shares

        and paid-in-capital by $400,000 in the third quarter, got it.

        My next question is about the expansion of our PPE that you

        just mentioned. I estimate that we will need to buy $75,000

        worth of new equipment in the first quarter, $100,000 in

        the second, $50,000 in the third, and $35,000 in the fourth.

        Since many of our long-term assets have already been fully

        depreciated, this new expansion shouldn’t significantly change

        my depreciation estimates. Does that sound about right to

        you?”

        “Assuming we get this arrangement settled, it sounds

        perfect.”

        “Can you give me a few more details about what else

        we’re hoping to get from these new investors? I’ll need to

        include those estimates.”

        “Sure. What we are really hoping for, other than the

        purchase of 50,000 shares of stock of course, is a $1 million

        revolving line of credit. Basically, if we need additional

        funding, we can pull on the line of credit. The interest rate

        on the new credit line will be 8 percent and they will require that

        we pay off any accumulated interest before we repay any

        principal.”

        “Well, I think that gives me everything I need. Just so you

        know, I am going to use simple interest calculations for the

        interest estimates. It’s not 100 percent accurate, but it is typical

        for creating a master budget. It also simplifies things

        considerably and ensures that information flows through the

        budget easily. I’ll also assume that any additional debt from the

        line of credit is taken out on the first day of the quarter and any

        payments are made at the end of the quarter. That ensures that

        the interest estimates should be fairly accurate, even with the

        simple interest calculation.”

        “I think you lost me somewhere in there.”

        “Sorry about that. Sometimes I go too fast. To get our

        interest payments when we repay our line of credit (assuming

        that we have any to repay and the funds to make a payment), I

        will multiply the amount I’m repaying times the quarterly

        interest rate times the number of quarters the money has been

        outstanding. So, if we draw $1,000 on the line of credit in the

        second quarter and repay it in the third quarter, I will multiply

        $1,000 by 2 percent and again by 2 percent for the two

        quarters that I assume are outstanding. Does that help?”

        “Not really, but I think I understand enough that I can

        explain your assumptions if I have to.”

        “Well, let me try again . . .”

        “No, don’t worry about it,” Andy said quickly. “As long as

        I know about what you’re doing, and I don’t have to do it

        myself, I’m good with just about anything.”

        Nicole grimaced. “Thanks. I think I’ll estimate my salary up

        a couple hundred thousand,” she said jokingly.

        PART II – USING THE MASTER BUDGET MEETING OF THE SENIOR STAFF (TWO WEEKS LATER)

        “Alright, everyone, let’s settle down and get to work.”

        Everyone took their seats around the table as Andy,

        Juliette’s Pastries CEO, shuffled through his papers. “As you

        know, the venture capital firm we are hoping to work with

        has indicated that it will not approve the deal unless we can

        demonstrate a strong projected EPS, cash flow from

        operations, and profit margin. Since you have all had a

        chance to review our new master budget and our pro forma

        financial statements, you know that we’re in a bit of trouble

        along those lines. To put it bluntly, the numbers we are

        currently showing are not good enough for the deal. No deal,

        no funds. No funds, no growth. No growth, no big bonuses.”

        He paused for a moment. “So, does anyone have any ideas

        for ways that we can legitimately improve our numbers?”

        “What exactly do you mean by ‘legitimately’?” Phil, the

        head baker, asked.

        “I mean ways that we can change our policies or

        procedures.”

        “I guess that means my idea of robbing a bank is out,”

        Phil said dryly.

        “And my idea of simply randomly changing numbers,”

        agreed Sarah, the part-time staff accountant.

        “Well,” Jeff, the head of marketing, said, “I think I have a

        legitimate idea. We could increase our sales commissions by

        2 percent. That should motivate our sales force to sell more.

        7

        This case is based upon an original IMA case written by Jason Porter and Teresa Stephenson.

        About the IMA With a worldwide network of more than 130,000 professionals, IMA is the world’s leading organization dedicated to empowering accounting and finance professionals to drive business performance. IMA provides a dynamic forum for professionals to advance their careers through Certified Management

        Accountant (CMA®) certification, research, professional education, networking and advocacy of the highest ethical and professional standards. For more information about IMA, please visit www.imanet.org.

        I’d say that would increase our sales growth from 5 to 8

        percent each quarter.”

        “For my part,” Phil jumped in, “we could switch to a JIT

        inventory system, keeping only about 3 percent of our needed

        raw materials on hand. That would cut down on some of our

        costs, but it would also require us to pay for our entire

        inventory in the quarter it is purchased rather than paying 15

        percent in the following quarter like we do now.”

        Nicole, Juliette’s new controller, shook her head. “I think

        our best bet is to speed up our collections. We’re too loose with

        our credit. If we were to add an additional collections specialist

        to our office staff, we could improve our collections to be 80

        percent in the first quarter, 15 percent in the second quarter, and

        5 percent in the third quarter. That would certainly improve our

        cash flows. Given the job market right now, I think we could

        hire a good collections specialist for

        $30,000 a year.”

        “They might help collections,” argued Jeff, “but those kinds

        of tactics could hurt our sales. Our relaxed collections policy is

        one of the things that set us apart from other vendors. If you

        decide to try that, Andy, you’d better plan on an additional 3

        percent drop in sales the first quarter.”

        The table started to buzz with conversation as the

        managers discussed the different options that had been

        presented. In the confusion, Nicole took her chance to lean

        over to Jeff. “Don’t you want to tell them?”

        “Tell them what?” he said innocently.

        “That you have us dropping our sales by too much in the

        first quarter! If we changed our current 20 percent estimate to a

        more realistic drop, it would take care of everything! Based on

        the research I’ve been doing in the industry, we could use 10

        percent instead of 20. Think about it. Our EPS would be higher

        and so would our cash flow from operations. Why, even our

        profit margin would increase because our fixed costs would be

        allocated over more units.”

        Jeff frowned at her. “It wouldn’t improve everything,

        Nicole. It would totally kill my bonus. Look, the price rise

        is a good idea with these other changes we are making. I

        mean, we’re going to need the extra cash, but that is going to

        cost us some sales. I’d much rather be conservative and get a

        great bonus than give them a rosy number and get fired.”

        Nicole sighed. “Jeff . . .” she tried again.

        “Another option,” Jeff said loudly, before Nicole could

        start in on him again, “would be to not raise our prices as

        drastically. Let’s say we only increased our prices to $5.75

        for muffins, $5.00 for cookies, and $5.50 for bread. By my

        calculations, that would lead to only a 12 percent drop in

        sales in quarter one with 7 percent growth in each of the

        following quarters.”

        Nicole frowned. Given Jeff’s pattern, it would be more

        like a 2 percent drop, not 12 percent. Then she sighed. She

        couldn’t win this argument with Jeff, especially not in the

        middle of a meeting with everyone else watching and

        listening. Besides, if she brought it up now, they would

        wonder why she hadn’t brought it up before. They might

        even think that she’d been trying to get a bigger bonus for

        herself. And she would certainly make an enemy out of Jeff.

        Their relationship was already strained. No, she couldn’t say

        anything here. She’d just have to let it go and hope that one

        of the other ideas would work out. Besides they really

        would look better if they made a significant improvement

        this first year. And if that happened, would it really matter

        that Jeff had manipulated his way to a nice fat bonus?

        “Well,” she said after a few more minutes, “I think these are

        all good ideas, but I’m not sure that we’ll want to try all of

        them. If we change too much at one time the assessment

        team might think that we are just trying to fake our numbers

        to give them what they want. I would suggest making one or

        maybe two of these changes for now, then provide them

        with a written explanation of the other ideas we want to try

        moving forward.”

        “I agree, Nicole,” Andy said. “Why don’t you run the

        numbers, including how these changes would affect our use of

        the line of credit, to see which of the changes will give

        us the most bang. We’ll go ahead and make that change

        now and add the others to our improvement plan. That way,

        we can go to them with a current improvement and a plan

        to keep improving.” He looked around the table.

        “And if anyone gets any other ideas, let us know. The more

        improvements we take to the table, the better our chances of

        signing the deal.”

        intro to nursing

        Choose a nursing specialty (e.g. oncology, pediatrics, psychiatric) or a role (e.g. school nurse, nurse manager, nurse entrepreneur, nurse faculty). Research the working role and occupational outlook for your selected nursing specialty or role. *Make note of what websites you are using, as you will need to provide them below.

        • In a new Word document, start with your name and date at the top
        • Copy and paste the questions below (keep the numeric question format in your document)
        • Answer each question, avoiding plagiarism. You do not have to use formal APA for this assignment as long as you indicate where your information came from. 
        • You may use list form or bullet points if applicable.
        • Submit the completed Word document to Canvas

        Answer the following questions for this assignment:

        1. What specialty or role did you choose?
        2. What are the educational requirements? You do not have to include basic training like CPR, but include all degree requirements, license requirements, and any other specialized training required.
        3. Describe available certifications specific to that specialty. Include the name of the certification, eligibility requirements, and how the certification is earned.
        4. What does a nurse do in this role? You may include some general nursing roles, but you should include a minimum of 3 things that are SPECIFIC TO THAT SPECIALTY.
        5. Describe possible locations/settings where this nurse can work.
        6. Identify the professional nursing organization that represents this specialty in the United States. Some specialties have more than one associated professional organization. Please choose one to list here, along with their mission or vision statement.
        7. What websites did you use to find your information? Please include both the name of the website as well as the URL address. You may simply list below.

        A word about plagiarism:  When you submit homework to an instructor, you are saying, “Unless I have noted otherwise with a citation, this is my own original work; these are my own words and my own original ideas.”  Reading information online, understanding it, interpreting it, and summarizing in your own words is part of the work of learning.  Using someone else’s words is like saying “I did this work” when you really didn’t. Do not copy and paste information from the internet for this assignment. 

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