Published on March 16, 2014
2 1. STRATEGIC MANAGEMENT Strategic management is a system approach focused on the identification and realization of the necessary changes and keeping up with the performance of the organization as it evolves in the direction of the proposed long-term vision (De Backer, 2002). You can say that strategic management involves daily elaboration and development of the management idea. It has to be remembered that strategic management is a process, what means that it is a lot bigger then just drawing the lines of a management plan, besides it is a repetitive process what implies that when a planning cycle is completed, the company has to decide when they will start with the next one. As noted by Naylor (1999), strategic management has four core activities: - Strategic analysis: is the stage of data collection and interpretation. - Strategy selection: involves the generation of possible choices for the future. - Strategy implementation: means taking the chosen pattern and ensuring that it is carried out through the organisation. - Strategic control: is required just as control is needed in any management process. We can apply the theory of strategic management on the Belgian supermarket group Delhaize, which has also shops in the USA, Albania, Greece, Indonesia, etc. Delhaize’s previous image was one of being more expensive than other supermarkets, but offering a big assortment of quality products. In their strategic analysis they try to make a profile of their customers. Results show us that Delhaize customers have fast changing needs and therefore like new products. Trying to get rid of the image of being more expensive, Delhaize chose for a new price image. They want to be the cheapest concerning the vegetables and fruit and attract more families with children. To achieve these goals Delhaize dropped the prices of 1.000 products in 2008 and continued doing so in 2009. They also created a house brand that is cheaper than Aldi’s or Lidl’s and to attract the families they started with “collecting campaigns” of Pixar or The Smurfs gadgets for the kids. After some period of time Delhaize evaluated its new strategy selection and the results were positive, their market share has grown (Ref 1)! So strategic management helps focusing the energy within the organisation to obtain the long-term development. It also increases the capacity of the company to achieve the management plan in certain time schedule. The organisation learns as well to work better
3 with its environment and it gives the company the opportunity to, at least annually, adapt to the change of circumstances (De Roeck, 2002). We can conclude that when clear fixed goals are made, companies achieve better performances and are better prepared to meet their competitors.
4 2. PROJECT MANAGEMENT In general projects are usually implemented to achieve the strategic plan of an organisation. Project management is the application of knowledge, skills, expedients and techniques on project activities to fulfill the project requirements. Project management is executed with the help of processes such as: initiating, planning, executing, controlling and closing. Projects’ characteristics: - executed by humans - they are unique and temporal - they are planned, executed and controlled - they are limited because of limited resources Projects may not be confused with operations, because in contrast with projects, operations have a continuous and repetitive character. Because projects are unique creations they hold a high degree of risk. That is why projects are divided into several phases that are called together ‘project lifecycle’ to boost the control of the management and to provide links between the ongoing operations (Vanlanduit, n.d.). source: Vrije Universiteit Brussel, Ontwerpmethodologie, S. Vanlanduit When the chocolate manufacturer Côte d’Or wants to bring out a new product on the market the project manager needs to investigate what the project budget and the available time to achieve the goal will be. The next step will be to define and plan the project in more detail and investigate the risk it will take. This work is done by the team and coordinated by the project manager. When the new product is created they can start with testing it. Côte d’Or invented a nice system for this. On their website you can become a ‘official taster’ of Côte d’Or, this
5 implies that Côte d’Or sends you their new products before they are available on the market, so you get change to taste them. If you reply to them, giving your opinion about the product you will be able to win nice prizes or get discount coupons for their products. How more you do this how better the rewards get and meanwhile Côte d’Or receives feedback about their new product before launching it so they still have the opportunity to do some adjustments. After bringing the new product on the market, Côte d’Or investigates if the new product has achieved the expectations and they draw their conclusions (Ref 2). We can say about project management that it entails balancing a project’s timeframe, budget and overall scope as the team works to meet its objectives. Excellent use of project management results in higher morale, a greater sense of ownership and professionalism among team members and increase productivity and profitability (Ref 3).
6 3. FEEDBACK CONTROL “Feedback control involves reviewing information to determine whether performance meets established standards” (Wouters, n.d.) Cybernetics experts refer to the control activity as based on negative feedback what is not an unfavourable response. It means that the control unit responds to errors so as to reverse them. The elements of such control are shown in the figure below (Naylor, 1999). source: Management, J. Naylor, 1999 - Goals: a precondition of any control is setting out standards. - Monitor Performance: measuring process outputs. - Comparison: compares the monitoring results with the goals. - Control Action: the corrective action to be taken depends on the details of the control system. For example, in 2011 Jetair established the goal to increase their bookings with 5 percent. To make sure that this goal would be reached, the organization monitored its bookings every month. After four months, the results of the bookings increased by 1.75 percent. So the management staff assumed that the plans were going according schedule. No corrective actions had to be taken (Ref 4). Feedback control has an important advantage. Every process copes with a changing environment by which it is affected, but with feedback control errors and changes can be
7 followed up very frequently and in detail and the company can respond quickly and make adjustments easily before it is to late.
8 4. UPWARD COMMUNICATION “Upward communication is the information flow from the lower levels of a hierarchy to the upper levels” (Ref 5). The communication that flows within the organisations from the authorities to the subordinates is in general more used than the upward communication. Lack of upward communication (from employees to executives) can cause problems. The top layer may interpret the silence as a sign of satisfaction. Employees choose to keep quiet because they believe it is useless to mention problems or because of the fear they will be seen as complainers. By seeking the opinion of employees it gets clearer to the leading figures of a company what is really going on among their people: what is going well and what should change. With more input from the employees more ideas and possible solutions will arise. Advantages of upward communication (Ref 6): - Feedback: It provides feedback from the employees. As a result the communication cycle completes and management can realize the reactions of the employees. - Constructive ideas: Upward communication allows the employees to inform their views regarding the implementation of company policies. - Helps decision making: Through upward communication top management can know the views of lower level employees which help them to make more realistic decision. - Establishment of a good relationship: Upward communication brings executives and employees close to each other. - Mutual trust: For the success of any sort of communication trust is an essential element. As a relationship develops through upward communication mutual trust is created as well. Some companies like General Electric, Anheuser-Bush and McDonald’s have an upward communication system that uses a corporate “ombudsperson” position. A highly placed executive who is available outside the formal chain of command to hear employees’ complaints usually holds this position. The system provides an opportunity for disgruntled employees to complain without fear of losing their jobs and may help some companies achieve a balanced communication system (Griffin-Moorhead, 2010). From my own experience I can tell that within the electronics supermarket chain Saturn the department managers meet at least once a month with their salesmen on an individual basis to discuss how everything is going, informing if they have any concerns. Even if the meeting is just a chit-chat, it creates an important relationship between supervisor and employee.
9 REFERENCES 1 Het Nieuwsblad. (2009) Delhaize [online] 16 September 2009 Available at: http://www.nieuwsblad.be [Accessed 12th November, 2012] 2 Côte d’Or (n.d.) Officiële Proever [online] Available at: http://www.cotedor.com [Accessed 13th November, 2012] 3 Villanova University (n.d.) Advantages of having a project manager [online] Available at: http://www.villanova.com [Accessed 14th November, 2012] 4 Evenpoel, K. (2012) Jetair weer goede leerling in Tui-klas. De Tijd, [online] 9 August 2012 Available at: http://www.detijd.be [Accessed 15th November, 2012] 5 Business Dictionary (n.d.) What is upward communication? Definition and meaning [online] Available at: http://www.businessdictionary.com [Accessed 16th November, 2012] 6 Business Communication Dergree Solutions (n.d.) Advantages and disadvantages of upward communication [online] Available at: http://www.communication-business.blogspot.co.uk [Accessed 17th November, 2012]
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