Corporate Management Lecture Two: Developing the Basic Management Framework Dr. Fred Mugambi Mwirigi JKUAT

Introduction  The practice of management requires that the manager develops a basic framework of management as quickly as possible upon taking over a unit or organization  This framework helps him/her to appreciate his management environment and the strategic direction that he may want to steer the firm to 12/11/2015 2

Components of the basic framework Divided into:  Internal environmental factors  External environmental factors  The intra-relationship among internal factors and external factors  The inter-relationship between internal factors and external factors 12/11/2015 3

Internal factors  People  Structure  System  Technology  Equipment  Financial position  Existing plans  Existing strategies  Internal policies  Internal culture  Internal goodwill – management and non-management good will 12/11/2015 4

External factors  Markets (size, proximity, capacity and willingness to buy)  Competition  Supply of basic inputs  Policy (regulatory) framework  National (people’s) cultures 12/11/2015 5

Analyzing the factors  Comparisons  Same period Intra-organizational comparisons  Same period inter-organizational comparisons  Different period Intra-organizational comparisons  Trend analysis  Gap analysis  Benchmarking 12/11/2015 6

Developing internal capacity  Identify missing internal and external capacity  Identify potential interventions  Develop capacity either internally or by tapping external capacity  Roll out interventions effectively and efficiently 12/11/2015 7

Capacity development Lay the basis Identify methods of developing the capacity Identify missing internal and external capacity CAPACITY Interventions 12/11/2015 8

Developing initial plans: the process  Development of the organizational structure  Identification of key issues  Identification of strategic objectives  Identification of strategies for each objective  Identification of activities for each objective  Development of key support policies  Objective resourcing matrix  Compilation of strategic plans and periodical work plans 12/11/2015 9

Key Planning Concepts  Vision  Mission  Core Values  Policies  Strategic objectives  Strategies 12/11/

Vision Answers the question: What will success look like in future? A mental perception of the kind of environment is to be created within a broad time horizon A shared image of what an org. wants to become – resonates with all & helps them feel proud, excited & part of something bigger… A Vision is more emotional than analytical – a dream… 11 12/11/2015

Example of a Vision To be a university of global excellence in training, research, and innovation for development (JKUAT) 12 12/11/2015

Mission  An elaboration of the vision statement  Defines the basic reasons for the existence and helps legitimize existence in society  Common intent to which everyone in the organization can point - captures the broad purpose and functions of the organization  Contents of a mission statement:  Purpose statement – Why do we exist? What is the ultimate result of our work?  Business statement – What activities do we do to accomplish the purpose? 13 12/11/2015

Example of a mission To offer accessible quality training, research, and innovation in order to produce leaders in the fields of Agriculture, Engineering, Technology, Enterprise Development, Built Environment, Health and other Applied Sciences to suit the needs of a dynamic world (JKUAT) 14 12/11/2015

Core values  Guiding values, corporate philosophy or guiding principles Definitions: a.the guiding principles for corporate actions and ethical behaviour b.define the character of relations with stakeholders, and set management style and corporate culture c.the organization’s essential and enduring tenets - a small set of timeless guiding principles that require no external justification d.reflection of the deeply held values and tend to be independent of the external environment 15 12/11/2015

Examples of CVs  integrity  fairness and justice  excellent and friendly customer service  team work  innovation  professionalism, etc 16 12/11/2015

SWOT  S&W are the resources or capabilities that help (S) or deficiencies that hinder (W) an organization to accomplish its mission  O&T are external factors or situations that affect an organization in a favorable (O) or negative way (T)  Usefulness:  clarifies the conditions within which an organization operates  provides good indication of strategies – build on S, take advantage of O & minimize the effects of W&T 17 12/11/2015

Core vs. Non-core Business: the value chain approach  Involves an analysis of 1.Core business of an organization 2.Core competences of the firm 3.Key activities across the value chain 4.Interaction between and among the activities to optimize returns  Decisions finally made on what to retain and what to outsource 18 12/11/2015

Structuring the Organization  Structures reflect various degrees of centralization or decentralization of operations  Centralization- authority to make important decisions is retained by managers at the top of the hierarchy  Decentralization- authority to make important decisions is delegated to managers at all levels in the hierarchy 12/11/

What Is an Organizational Structure?  An illustration showing how job tasks are formally divided, grouped, and coordinated.  Also called an organogram 12/11/

Questions to consider  To what degree are articles subdivided into separate jobs?  On what basis will jobs be grouped together?  To whom do individuals and groups report?  How many individuals can a manager efficiently and effectively direct?  Where does decision-making authority lie? decentralization  To what degree will there be rules and regulations to direct employees and managers? 2112/11/2015

Key pillars of structuring  Work specialization  Departmentalization  Authority vs responsibility  Chain of command  Unity of command  Span of control  Centralization vs decentralization 12/11/

Mechanistic Vs Organic Structures Mechanistic Model A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization. Organic Model A structure that is flat, uses cross-hierarchical and cross- functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making. 12/11/

Mechanistic v/s Organic Structure MechanisticOrganic Individual SpecializationJoint Specialization Simple IntegrationComplex integration CentralizationDecentralization StandardizationMutual Adjustment 12/11/ /11/2015

Integrating controls in the plan Ask Key Questions: What is planned? What could go wrong? How will we ensure things run as per plan? Will our control tools actually work? Incorporating controls 12/11/

Key controls areas  Financial controls  Marketing controls  Human Resource controls  IT  Procurement controls  Production controls  Inventory controls 12/11/

The Support Structure Strategic Direction Strategic Actioning Strategy The environment Expectations, objectives and power Resources Resource planning Organisation structure Selection of strategy People and systems Evaluation of options Generation of options 12/11/

Support Structure  The manager must ensure that support items are constantly realigned, refocused and nurtured  This process must be all-inclusive. It must incorporate both managers and non- management staff  It should be a process of reconciling internal environmental factors with the external factors 28 12/11/2015

29 Reframing the mindset Developing the Framework Charting the Strategic Direction Strategic actioning Goal Achievement The Transition

Thank you 30 12/11/2015