04 - Business structure and PM.

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Information needs in Functional* organisations:
*centralised
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Data aggregated at the highest level before feedback given.
Performance information required by entity's top for planning and control.
Information needs in Divisional* organisations:
*decentralised
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Information needs to be available lower down organisation due to the high level of autonomy.
Advantages for PM in Functional organisations:
*centralised
3
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Path of career defined and sense of belonging for specialists. | Standardisation and control better. The IS should aid this communication. | Lower costs since roles are not duplicated.
PSL
Advantages for PM in Divisional* organisations:
3
*decentralised
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Local needs tailoring of PM| Assessment of divisional performance easier*. | Growing and diversifying of organisation easier.
LAG
*The IS should deliver the correct information to divisional managers, in an appropriate form on timely basis.
Problems for PM in Functional organisations:
#
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Dysfunctional behaviour of managers. | Individual products or market performance difficult to assess. | Growing and diversifying harder. | Slow decision making.
DIGS
Problems for PM in Divisional organisations:
3
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Transfer pricing.| Duplication of functions.| Goal congruence lacking.
TDG (Transport Development Group)
Network organisation - Information needs.
3
3
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Feedback of own performance for each party. | Establishing of shared goals agreements. | Decision making information for those responsible for regulating performance.
FED
The Information system need to be sophisticated with the ability to gather and process the information from all parties.
Network organisation - Advantages for PM:
#
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Larger organisation competition enabling. | Infrastructure costs lower. | Flexibility to meet project needs. | Exploitation of market opportunities.
LIFE
Network organisation - Disadvantages for PM.
#
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Competitive advantage loss if partner works for competitors. | Agreeing of the common goals. | Planning. | ISs not compatible. | Employees monitoring difficult.
CAPIE
Reasons for creating Joint venture structures:
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Costs and risks sharing. | Resources of partner tapping. | Expertise of partner tapping. | Markets and products expanding.
CREM
to tap - wykorzystać
Join venture - difficulties:
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Decisions about items* sharing.| ISs incompatible.| Accountability attributing. | Legal requirements. | Opinions different**. | Goals. | Security of information. | Culture, language, time or currency differences.
DIALOGS-C
*Sharing of profits, costs, resources, decision making, etc. | **Opinions about quality, cost control or risk management.
Strategic alliance - reason for establishing:
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Similar to joint venture* but a separate business entity is not formed, allowing greater flexibility.
*CREM
Strategic alliance - difficulties:
2
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Independence is retained, making it difficult to put common performance measures in place and to collect and analyse management information. | Plus many of the difficulties of Joint ventures (DIALOGS-C)...
Problems of multinational organisations:
3
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Co-ordination of subsidiaries. | Exchange rates and other uncertainties. | Measuring of performance difficult if common systems don't exist.
CEM
Business integration definition:
2
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All aspects of the business aligned to secure the most efficient use of the entity's resources so that it can achievable its objectives effectively. | Processes are viewed as complete entities from initial order to final delivery.
'aspects of the business aligned' | 'Processes viewed as complete entities'
Value chain analysis
#
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Inbound logistics. | Operations. | Outbound logistics. | Marketing and sales. | Service.
and secondary activities: Firm infrastructure. | HR management. | Technology development. | Procurement. (FHTP)
The value chain model is based around ACTIVITIES rather than functional departments. It shows how each activity adds to competitive advantage. The model emphasises linkages and CSFs within activities and for the value chain as a whole.
McKinsey's 7s model:
#
McKinsey's 7s model describes an organisation as consisting of seven interrelated internal elements:
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Shared valueS. | SystemS. | SkillS. | StructurE. | StylE. | Staff. | Strategy.
SSSEEFY
Business process re-engineering (BPR) definition:
3cz
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The fundamental rethinking | and radical redesign | of business processes.
BPR cuts across traditional departmental lines:
4 (imformative)
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Change to process view will require change in culture with a move to process teams and not functional departments. | Employees will need to retrain. | Communication and leadership from senior management essential. | Results in more use of IT.
BPR may result in improved organisational performance:
5 (informative)
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Core processes adapted to achieve corporate goals. | Resolves around customer needs - key to competitive advantage. | Allows workers more autonomy. | Can help eliminate unnecessary activities. Process should be made cheaper.
Practical problems of BPR:
6 (informative)
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Additional costs.*| Perception that BPR is all about cost cutting.| Staff may feel devaluated if role changes.| Less of control if middle managers removed.| May utilise outsourcing.**| May result in automation of processes but not redesign.
*such as new IS or training. | **With potential quality and flexibility problems.
BPR - Changes to PM system:
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Systems redesignated to capture new PM data in real time. | Reward system aligned to new measures.
RR
BPR is intended to achieve dramatic improvements in critical, contemporary measures of performance such as:
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quality* | costs, | and speed.
QCS
*also quality of service.

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