“An Overview of the Strategic Management; Concepts & Process”

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Sheikh Naseer-ul-HaqSheikh Naseer-ul-HaqM.A. (Economics), MS Dev. Mgt (USA), PA & ASM.A. (Economics), MS Dev. Mgt (USA), PA & ASFormer Director General, National Institute of ManagementFormer Director General, National Institute of ManagementFormer Additional Secretary, Establishment DivisionFormer Additional Secretary, Establishment DivisionFormer Deputy Auditor-General of PakistanFormer Deputy Auditor-General of Pakistan

MODULE OBJECTIVESMODULE OBJECTIVES

The main objectives of the module are:- To help the students understand the “Strategic

Management” Concepts and processes by highlighting key terms and steps of i) Strategy formulation ii) Strategy implementation iii) Strategy evaluation;

To identify the ever-changing, dynamic and challenging Organizational environment of 21st Century

To help the students understand the characteristics of an effective organization; and to make them aware of the steps required to achieve organizational effectiveness in a 21st Century dynamic managerial environment

Strategic Management; Definition Strategic Management can be defined “as the art

and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives”.(Fred R. David)

As the definition implies Strategic Management focuses on integrating various departmental units like Production/Operations, Marketing/Sales, Finance/Accounting, Research & Development, IT based Management Information Systems to achieve organizational success, goals and objectives

Stages of Strategic Management

The Strategic Management process consists of three stages;

Strategy FormulationStrategy ImplementationStrategy Evaluation

Strategy Formulation

Strategy formulation includes; Developing an organizational “Vision” and “Mission” Identifying an organization’s external “Opportunities”

and “Threats” Determining internal “Strengths” and “Weaknesses” Establishing long term “Objectives” Generating alternative “Strategies” (courses of action) Choosing particular “Strategies to pursue”

Strategy Formulation….cont.

Strategy formulation issues include deciding; What businesses to enter What businesses to abandon How to allocate resources (department-wise) Whether to expand operations or to diversify Whether to enter international markets Whether to merge or form a joint venture How to ovoid a hostile takeover

Strategy Implementation Strategy Implementation includes; Establishing “Annual Objectives” Develop “Policies” supporting new initiatives Motivate employees to pursue renewed objectives Allocate resources so that formulated strategies can

be executed Promote “Organizational Culture” supportive of the

change direction management

Strategy Implementation…cont.

Create effective organizational structures Redirect market efforts Prepare budgets for the change management Develop and utilize effective “MIS” Link “Employee Compensation to Organizational

Performance”

Strategy Implementation is “Action Stage”; most difficult stage in Strategic Management

Strategy Evaluation

Strategy Evaluation includes; Reviewing external and internal factors that

are the bases for current strategies Measuring performance; (Macro and Micro) Taking corrective action where needed

Strategy evaluation is extremely important to know the results of “Strategy Implementation”; success or failure

Other Critical variable of Strategic Management

Integrating Intuition with Analysis Adapting to Change; pro-actively managing

change externally and internally Managing Information Technology; e-

business and e-commerce Managing the natural environment Surviving in the “Global Context”

Key Terms in Strategic Management

Competitive Advantage Strategists Vision and Mission Statements Business ethics and Social Responsibility Operations Management Transition Management

ORGANIZATIONAL GOALS AND RELATIONSHIPS

Subject OverviewSubject Overview What is an Organization by “Definition” ? What are the environmental “Challenges of the

21st Century” for an organization ? What are its Strategic Planning/Management

capabilities to effectively meet these challenges ? How it sets the “Goals & Targets; Long term &

in the Short run” to achieve its “Organizational Objectives” ?

What are its “internal & external relationships” that are critical to its “effectiveness”

Organization; Definitions Definitions

Organization is a System of consciously coordinated activities or forces of two or more persons who get together and formally agree to combine their efforts for a common goals; (Chester Barnard around 1940)

An Organization is a “Structured Process” in which “individuals interact” for the attainment of “Collective Objectives”; (H.R.Hicks around 1970)

Organizations are “Social Inventions” for accomplishing “Common Goals” through “Group Effort”; (Gary Johns around 1990)

Organizational Environment; Internal Whatever resides within the System Structure and Design People; the Management & the Workforce State-of-the-Art; its level of professional work

processes Technology Architecture Systems and Procedure Leadership; the Management Philosophy/Approach Total Organizational Culture

Organizational Environment; External With whoever the Organization interacts at the “Task”

level and in “General” External “Task Environment” External “General Environment” The Clients, the Customers, the Suppliers, the

Regulatory Agencies, the Competitors, the Special Interest Groups constitute the “External Task Environment”

The Political, the Legal, the Social, the Economic, the Technological or even the International factors affect the “General External Environment” of the Organization

Organizational Environment

GeneralExternalEnvironment

Task External Environment

Internal Environment

The Organization; structure,Its people, technology,Systems, managementPhilosophy & Culture

The customers, clients, suppliers,The competitors, special interest groupsRegulatory agencies etc.

The Political, legal, economic,Social, technological,International factors

Major 21st Century Challenges for Organizations

Intense Competition (Bench marking) Globalization Information Technology (IT) Management Workforce Diversity/Morale Change Management Total Quality Management (TQM) Social Responsibility & Ethics

Process of Organization Development

PresentState

FutureState

Transition

ManagementThis is the Placewhere you are.

This is the Placewhere you want be.

OrganizationalStrategic Planning/ManagementCapabilities

PROCESS OF STRATEGIC PLANNING & MANAGEMENT

PRESENTSTATE

FUTURESTATE

TRANSITION MANAGEMENT

OPERATION’SMANAGEMENT

ANALYSIS OF THE PRESENT & THE ANALYSIS OF THE PRESENT & THE FUTURE STATE; and THE WAY FORWARD FUTURE STATE; and THE WAY FORWARD

Vision of the Organisational future state Clear Perception of the organisational present state

with deficiencies & gaps

(Knowledge, Skills and Abilities) Analysis of the organisational Present Strengths,

Weaknesses, Opportunities and Threats (SWOT Analysis)

Develop the Way Forward; the Mission, the Objectives, the Strategies and the Interventions

Strategic Planning/Management Strategic Planning/Management Capacity of the InstitutionCapacity of the Institution Build on all organisational Strengths Challenge, combat and remove all

organisational weaknesses and endeavour to convert them into strengths

Capitalise on all organisational Opportunities Face all organisational Threats with courage,

capability and sagacity to convert them ultimately as opportunities

Organizational Change CharacteristicsOrganizational Change Characteristics

WORLD-CLASS ORGANIZATIONS Today the very best Multi-National Today the very best Multi-National Corporations are going beyond even the Corporations are going beyond even the learning organization and have become learning organization and have become what can be called as “World-class what can be called as “World-class organizations (WCOs)” which are organizations (WCOs)” which are enterprises that are able to compete with enterprises that are able to compete with anybody, anywhere, anytime, anyway.anybody, anywhere, anytime, anyway.(Fred Luthans)(Fred Luthans)

Analysis Focal Point Analysis Focal Point (Step-1)(Step-1)

Visualise the future state in terms of :-» State-of-the Art (Professional expertise)» Technology Architecture

(Hardware/Software)» Management philosophy and Approach» Organisational Structure and Design» Systems and Procedures» Total Organisational Culture

Analysis Focal Point Analysis Focal Point (Step-2)(Step-2)

Analyse the present state in terms of the change parameters identified during step-1 with the following broad criteria in view:-

» Openness; towards all organisational issues» Critique; everything, no sacred cows» Creativity; analyse all situations with creative

inputs &» Personal Efficacy; the confidence among

organisational members to carve their own destiny

Clear Perception & AssessmentClear Perception & Assessmentof the Organisational Change Parametersof the Organisational Change Parameters

As a result of visualising the future state and the analysis of the present state, a clear perception & assessment of the organisational dynamics of the change process would be developed; on the basis of which ‘Strategic Action Planning’ exercise could be carried out to meet future challenges

Analysis Focal Point (Step-3)Analysis Focal Point (Step-3)

— Keeping in view the results of the Keeping in view the results of the SWOT SWOT ANALYSIS, and the dynamics of the Change ANALYSIS, and the dynamics of the Change as perceived; the “Organization” is now in a as perceived; the “Organization” is now in a position to determine its “Long term and position to determine its “Long term and Short run Goals & Targets”Short run Goals & Targets”

— Draw its Strategies to bring about and Draw its Strategies to bring about and manage Changemanage Change

— Use different “Interventions/Projects” to Use different “Interventions/Projects” to implement its change process and to implement its change process and to transform its “Vision” into “Action/Reality”transform its “Vision” into “Action/Reality”

Organizational Goals & Objectives

Goals & Objectives Goals provide a clear, engaging sense of direction

and specify what is going to be accomplished Objectives outline the desired results to be

attained/achieved

(Management Challenges in the 21st Century by Pamela, Goodman & Fandt)

Goals are quite often broken up into “Targets/Milestones” over a period of time

SMART; Goals & Targets

SMART Specific Measurable Achievable Realistic; & Time bound

Goals and Targets provide the Organization with the clear sense of “Direction and what is going to be accomplished over a stated period of Time; Long term or in the Short run”

Goal Setting; a dynamic exercise

Goal setting is a structured process of determining the “Long term and Short run Objectives of the Organization” by specifying the desired outcomes toward which individuals, groups, departments, and organizations should work to achieve “organizational efficiency and effectiveness”

Management By Objectives (MBO)

Given by Peter Drucker in 1954 Considered to be the “Management Technique

of the 20th Century” Effectively and successfully being used around

the world by Multi-National Corporations, Governments for setting Objectives, Goals and Targets

It is a four step process in which Objectives are set at three levels; the Corporate, the Departmental and the Individual level

Management By Objectives (MBO)

Objectives are Negotiated between Supervisor and the Subordinate; written down for a time period

Action Plans and Management Guides are developed to achieve these objectives and

Periodic Review is carried out and final Evaluation at the end of the stated period completes the process

Bench marks for Quality are observed and all compensations are linked to job performance

Organizational Relationships

Purpose

RelationshipsLeadership

Structure

Rewards

HelpingMechanisms Organizational

Environment

6 Box ModelOf OrganizationalDiagnosis by MarvinWeisbord

Organizational Relationships

Structure

Strategy SubordinateGoals

Systems

Style

SkillsStaff

Mckinsey’s 7 S ModelFor Strategy implementation

Japanese Management Style

Life time employment Organizational Commitment among its

workforce Training and skill development Respect for seniority Management philosophy based on core

values of Ethics, honour and Credibility Family type Organizational Culture

HUMAN RESOURCE HUMAN RESOURCE MANAGEMENTMANAGEMENT

Definitions The process of developing, applying, and

evaluating policies, procedures, methods, and programs relating to the individual in the organization. (Miner)

Function in the organization concerned with the staffing, training, development, motivation and maintenance of employees. (Decenzo)

HRM IN A DYNAMIC ENVIRONMENT

Environmental Factors and their HRM implications

Globalization:The introduction and making of goods and services worldwide.

Cultural Environments: The attitude and perspectives shared by individuals from specific countries that shape their behavior and how they view the world.

HRM IN A DYNAMIC HRM IN A DYNAMIC ENVIRONMENT (Contd.)ENVIRONMENT (Contd.) Work-Force Diversity

The varied personal characteristics that make the work force heterogeneous.

Changing Skills Requirements

The lacking of basic abilities to perform many of today’s jobs.

Corporate Downsizing

An activity in an organization aimed at creating greater efficiency by eliminating certain jobs.

The Rationale Behind Downsizing

Making the organization leaner, smarter, reducing the overheads and bringing efficiency/effectiveness among the employees through self-management/ empowerment

Total Quality Management

A continuous process of Quality improvement Reengineering Work Processes for Improved

Productivity

Requires Radical, quantum change in perception of the organizational workforce

HRM IN A DYNAMIC ENVIRONMENT (Contd.)

The Contingent Work Force

The part-time, temporary, and contract workers used by

organizations to fill peak staffing needs, or perform work

unable to be done by regular employees. Decentralized Work SitesWork sites that exist away from an organization’s

facilities. A management culture that brings about

Employee Involvement by affording them more

delegation, participative management, work teams, goal

setting and training.

HRM IN A DYNAMIC HRM IN A DYNAMIC ENVIRONMENT (Contd.)ENVIRONMENT (Contd.)

Dynamics of the HRM Process

Recruitment Selection Training

CareerPlanning

PerformanceAppraisal

Separation

Compensation(Pay for Performance)

Vacancies

CRITICAL ISSUES IN PUBLIC SERVICE HRM PROCESS

An Evaluation of the critical HRM variables in terms of the Johari’s window:-

OK NOT OK

CHANGEABLE

NOT CHANGEABLE

STRATEGIC INTERVENTIONS:-LET US FOCUS ON “NOT OK BUT CHANGEABLE” PARAMETERS IN HRM CYCLE TO EFFECT THE KEY RESULT AREAS (KRA)

Recruitment, Selection, Training, Career Planning, Performance Appraisal,

Compensation

Separation

REQUIRED STRATEGIC/CRITICAL INTERVENTIONS IN HRM PROCESSA PLANNED SYSTEMS CHANGE IS REQUIRED IN THE FOLLOWING HRM AREAS

– RECRUITMENT/SELECTION– TRAINING– CAREER PLANNING/PLACEMENT– PERFORMANCE APPRASIAL – COMPENSATION

THROUGH A STRUCTURED PROCESS OF CIVIL SERVICE REFORMS

THE ABOVE STRATEGIC/CRITICAL INTERVENTIONS ARE PART OF A FIVE YEAR “PUBLIC SECTOR CAPACITY BUILDING PROJECT” IN THE COMPONENT OF ESTABLISHMENT DIVISION LAUNCED BY GOVT OF PAKISTAN IN 2004; but what has it achieved???

FOCUSED CIVIL SERVICE TRAINING “Orientation to public service” focus in the pre-service training at

Civil Service Academy. “Professionalism” at the specialized training institution. Advancement of Knowledge, Skills & Abilities; and Attitudinal

change perspective at the Mid Career Management Course (MCMC)

Senior Management Course for B-19 officers at Senior Management College, Lahore with a focus on “POLICY IMPLEMENTATION” in Public Service.

Training at the National Management College and National Defence University for B-20 officers to focus on “Capacity building for public policy formulation and development options”.

Training of the selected personnel through technical assistance programs abroad

CAREER PLANNING/PLACEMENT

BASED ON: “MAN FOR THE JOB” AND NOT “JOB FOR THE MAN”

JOB DESCRIPTION MATCH JOB SPECIFICATION

DESCRIBE THE JOB REQUIRED KNOWLEDGE CONTENT SKILLS, ABILITIES,

APTITUDE, EXPERIENCE AND BACKGROUNG REQUIRED FOR THE JOB.

COMPENSATION

ANY EFFORT AT CHANGE WOULD LACK IMPEUTS WITHOUT ADDRESSING THE ISSUE OF COMPENSATION.

COMPENSATION MUST BE LINKED TO RESPONSIBILITY AND PERFORMANCE.

JOB DESCRIPTION/JOB CONTENT ANALYSIS.

JOB SPECIFICATIONS.

COMPENSATION/PAY PACKAGE ACCORDING TO JOB CONTENT.

COPENSATION ENDEAVOURS PAY & PENSION COMMITTEE RECOMMENDATIONS

– RATIONALIZATION OF THE PAY & PENSION KEEPING IN VIEW THE CONCEPTS OF “MARKET WAGE” AND “LIVING WAGE”.

– MONETIZATION OF CERTAIN ALLOWANCE.

– INTRODUCE THE CONCEPT OF “PAY FOR PERFORMANCE”.

– PARAMETERIC REFORMS IN PENSIONS BY REDUCING THE PERCENTAGE OF COMMUTATION AND INCREASING TAKE- HOME PENSION.

National School of Public Policy

AIMS & OBJECTIVES

WILL PROVIDE AN UMBERLLA TO THE ENTIRE SPECTURM OF TRAINING FOR CIVIL SERVANTS i.e pre-service & In-service training.

Education in relevant areas of public policy like public finance, economic management, general management. (Eventually NSPP will become a degree awarding institution).

Research in areas of Public Administration i.e PUBLIC POLICY FORMULATION AND IMPLEMENTATION OVERSIGHT, DEVELOPMENT OF HRM CAPACITIES etc.

Research and consultancy of public policy options in critical areas. International level of training/education with standard/quality to

fill the critical gaps in civil servants training/education.

Human Resource Activities for Organizational Development

Organizational Input Transformation OrganizationalInputs Processes Processes Outputs

HumanResources

Merit basedRecruitment &

Selection

AppropriateTraining,

Compensation,Job Security &

Career Planning

Job Performance;Evaluated by

ObjectiveAppraisals to beThe benchmark

Forall compensations,

Promotions etc.

THANK YOUTHANK YOU