Monthly Archives: May 2008

Personal and management competence.

Integration of learning summaries & personal action plan.

The importance of personal and management competence.

‘Management is the process of achieving organisational objectives, within a changing environment, by balancing efficiency, effectiveness and equity, obtaining the most from limited resources, and working with and through other people’ (Naylor, 1999: p.6). The increase complexity of the working environment and the increase need for better performance highlight the importance of the individual growth and learning processes. In addition, Picket (1998) adds that in today environment, managers, must identify the core competencies of their organisation. This action will ensure the adequate and appropriate corresponding between the organisational and the personal/managerial competences.

Khandwalla (2004) research results outline management competencies which have been highly oriented in successive managers in different organisations around the world. The core competencies seem to be goodwill enhancing” (p.12). Reliability has a great impact on the ability to earn respect which ultimately helps to mobilize scarce resources in tough situations. Planning ability and time management capabilities have shown appositive effect for taking personal responsibilities. Team building skills are a fundamental source for supportive, effective and comfortable environment. Before introducing the manger need for team work competencies. The author strongly declare that personal traits, values, believes and attitudes are the core personal competencies which may enhance or weaken one ability to manage others. Therefore, self awareness, personal orientation, motivation, emotional intelligence etc’ are to be firstly address and training focused in order to increase personal ability to perform, to learn and to enjoy his interaction with the surrounding. (fields supportive concepts from :Bandura, A.(2000);Covey, S. (1988);Gardner, W.L. and Schermerhorn. (2004);Luthans, F. (2002). Myers, L and Tucker, M. (2005);Pajares, F. (2002) Robbins, S.P. (2001) and Updegraff, S. ( 2004).

Dynamic and fast developed working environment demands for skillful and high potential personal traits and skills. Under these circumstances, performance excellence becomes personal and organisational comparative advantage. Khandwalla (2001) suggest, “Performance of the manager depends considerably on how well his/her multiple roles are played. In turn, how well these roles are played by the managers of an organization influences the performance of the organization” (p.11). Updegraff (2004), widen the concept of the managerial competence through join learning and the interaction among people in the organisation. “If employees can help employees maximize their personal effectiveness and success, it than follows that companies would stand to gain as well” (p.43). McLean, J and Davis, P (2000) emphasis the learning process through relationships when they wrote, “It is through our relationships (intrapersonal; inter-personal; intra-organisational and inter-organisational) that we achieve all of our important personal, organisational and societal goals (p.1)

Updgraff (2004) suggest, “The ability to build and sustain professional relationship is a vital component for personal effectiveness” (p.46) Covey (1988) supports another perspective to the management competence when he writes, “When more than two individuals are involved in the win-win agreements the psychological contact becomes a social contract” (p.9). From the above information it is clear that managerial effectiveness is a mixture of personal skills and environmental influence. The need for adequate balance between the two forces tests our personal and managerial competencies almost every day. In order to improve personal effectiveness Covey (1989) provides the concept of the P/PC balance. According to this principal “Effectiveness is a function of two things; what is produced and the producing asset or capacity to produce” (p.54).

Patterns from my learning journals -identified problems and supportive theories

From the summaries of my learning journals I’ve managed to identify several patterns that indicate the need for improvement. The identified skills and attitudes can by divided into two groups. The first one relates to inter personal skills such as motivation, self awareness, time management skills, learning behavior etc’. The second identifies weaknesses relates to my personal interaction and performance in a group. Here I will address issues such as; communication and conflicts and negotiations skills.

My weak communications performance has been identified through events along my learning journals. According to Updegraff (2004) humans have a natural tendency which creates barrier to both listening and communication. (Drucker, 1999 p.45) notes, “The ability to listen and ask questions when appropriate ensures that all parties are on the same page and allows communication to proceed more smoothly. My weak ability to listen well affected my team work performance was also been effected from bad cross-culture communication. This is due to the reason that a culture as the one in my country is collectivist (Samovar Porter, 1994), defined as ‘societies in which a “we” consciousness is emphasized through interdependent values such as cohesive in-groups, mutual obligations and concern for one’s groups with unquestioning loyalty’ (Hofstede, (2001) cited in Fujimoto Hartel , 2004, p. 54). They invovmnet with differnet people from different cultures often creats conflicts which often is a result from miscommunication “Group diffrences can creat discomfort or conflict that comnsumes energy rather than releasing for creativity and new learning” (Seagal & David ,1994, p.35). The cross – cultural communication appears to have a significant influence on the group performance. As research indicates that language barriers are the second largest source of misunderstanding in cross – cultural communication, with ‘assumed similarities’ being the first one (Samovar Porter, 1994). According to Miall, et. al (2001) teams can sometimes have difficulty developing this understanding. Each member’s understanding is colored by his or her views, personal agendas and objectives. Understanding each other must be supported with listening skills.

From my observation of my team work performance and personal communication skills a correlation between communication and responsibilities and relationship has been outlined. Thus trust and personal attitude have a significant impact on my personal communication. The outcome of good communication skills can increase my ability to build and sustain personal relationships. Updgraff (2004) suggest, “The ability to build and sustain professional relationship is a vital component for personal effectiveness” (p.46). The author also relates to personal accountability issue which strongly correlated with. The paper stats that accountability for one action will allow to be “objectively analyze and modify choices and behaviors “(p.49). Drucker (1999) adds to Updgraff (2004) concept by noting, “Even people who understand the importance of taking responsibilities for relationship often do not communicate sufficient with their associates.” (p.72).

The journals also indicated a pattern of weak time management skills. According to Pickett (1998), time management is on of the key factors that increase individual growth and managerial effectiveness. Updergarff (2004) notes that understanding personal values are the driven force behind behavior and choices and it a key step for improvement of self awareness. In relation to understanding personal values, the issues of self awareness and self confidante have been also emerged through the journals. “self awareness is not only an understanding of who a person is and what the person is about, but also how information fits in to his understanding of himself” (Updegraff , S. 2004, p.44). From theories self awareness and self esteem affects personal motivation. Thus the use of self efficacy can increase personal performance and achievement of personal goals. According to Robbins (2001), Motivations theories try to explain what motivates an individual, why, and how this motivation is dependent upon both external and internal factors of the environment in which the individual is acting. Furthermore, according to Pajares (2002), Bandura (2000) and Agrdner & Schermerhorn (2004), self efficacy beliefs provide the foundation for human motivation, well being and personal accomplishment. Luthans (2002) adds that positive perceptions lead to positive choices, motivational effort, perseverance, positive thoughts patterns and resistance to stress. He also notes, “Hope or optimism/self efficacy is a leader in psychological capacity for development and effective performance” (P.59). Furthermore, according to Pajares (2002), “Self efficacy beliefs also influence an individual thought patterns and emotional reactions. High self efficacy helps creating a feeling of serenity in approaching difficult tasks and activities” (p.21).the self efficacy concept can have a significant effect not before a person realize maturity continuum where he distinguished among dependence, independence and interdependence. According Pfeiffer (1991a), as an interdependent person u can share your self deeply, meaningfully with others and have the access to vast resources and potential of other human beings. It becomes clearer when he clarifies that “Self awareness allows an individual to see and identify problems as well as solutions”(ibid, p.44).

My personal learning habits and techniques had surfaces along my learning journals. My learning journal shows that I haven’t established a successful learning technique that suits my learning style. Pfeiffer (1991a) introduced the concept of adult learning concept where it’s based assumption that adults want to learn” (p. 38). The success of managers is not only determined by their knowledge and skills, but also by their ability to learn new things (Kolb, Rubin and Osland, 1991). Hawkins (1994) states that learning is not only happen to children; it is a long live process for individual. However, different from child learning/pedagogy, adult learning/Andragogy requires adults to be aware of their abilities and to draw from their experiences (Pfeiffer, 1991a). Furthermore, adults need involvement and reflection in the learning process (Pfeiffer, 1991a).Hawkins (1994) amplified the significance of learning abilities by suggesting “Learning is a process that permeates not only all of our individual lives but can be seen as a process which is critical for our lives of teams, org and communities” (p. 10). Pfeiffer (1991a) and Hawkins (1994) basic assumption is “Adults are a ware of their abilities and their experience and they require more involvement in their learning process” (Pfeiffer, 1991a, p. 38). My need to learn a suitable learning technique has also effected on my abilities to create a clear action plan. According to Tame (1993), “Personal long-range planning or life planning addresses issues of life dissatisfaction by providing frame work for the individuals to clarify their priorities in life and develop a plan for realizing them. The key is development of inner direction so the values and life goals reflect the individual’s personality rather than external issues” (p.93). However, life planning emphasis action directed toward an outcome. Therefore there is always a danger that too munch focus “is placed on the ends and insufficient attention paid to the process of getting there” (ibid, p.96). Time management technique is an integral part of a personal action plan. Yagan (2001) notes that time management is enables a feel of control of your life. Improvement of time management skills helps to experience fewer stressful situations resulting from procrastination and/or overextending (trying to do too many activities). In addition, Goal et. al (2002) suggested that time management does require self-discipline and control until the behavioral changes are internalized and time management becomes an everyday habit. Plans and schedules for managing time are useless if one does not follow them.

Suggested models and theories to overcome my weaknesses and strengthen my personal effectiveness

Team work strategies.

Seagal & David (1994) suggested that in order to increase team performance it is essential to understand the human dynamic and the members persenolaties types through : systems thinking where “human dynamics looks at people as distinct learning systems”(p.37). the authores suggets the use of the mental model which helps to make the distinctions clearer so the the individuals actions and words would be understood according to the context. This assure greater mautal understanding and emaphtic communication, shared vision. vision must include peopls’ needs, team learning and awarnes of difrences.

Pfeiffer (1991c) manage to widen this perspective by his introduction of the Johari window. Using this model helps people to provide framework in which people can practice giving and receiving feedback. Feedback can be used to measure self communication performance. Therefore training with this model will develop a receptive attitude and encourage feed back. In addition, cultural seminars, multiple communication channels and diversity training can help team members of different nationalities to build better relationships with their colleagues (Barczak & McDonough, 2003). Furthermore, Programs relating to listening skills featuring modules such as evaluating emotions have been deemed important by Neil Thompson (2002). The importance of listening skills has also been emphasized by Updegraff (2004, p.47) in the context of team work effectiveness, where he suggests that ‘listening is just as important as speaking’.

Time management strategies.

Nicholls (2001), suggested the use of “The Ti-Mandi Window”. this model is an extension of the management version of the Johari Window. The model enables to classify management tasks as to whether, or not, they are urgent and/or important. The Ti-Mandi Window distinguishes between four tasks categories: priority for action (I), neglected essentials (II), trivial hot potatoes (III), and — the lighthearted — goofing off (IV). The use of this model managers have to be responsible and alert to the labeling process they choose. By doing soothe confront their tendency and behavior to often use the “urgent” labels and replace them with other labeling options. The model consists two processes: breaking away and reducing fake urgent labels behavior and as a results its permits better time usage to handle the real urgent matters. The processes ensure managers to concentrate on activities that are both urgent and important. Pickett (1998) suggested additional activities such as identify objectives, priorities, assess current performance and analyze the knowledge and skills required to increase time management and performing action plan skills. Teplitz (2002) suggested the S.M.A.R.T method as another tool for strengthen one time management and action planning skills. Under this method, Personal goals must be Specific and clear as possible. They goals also have to be Measurable and Achievable. It also important that the setting goals will be Realistic. Unrealistic goals are doomed for a failure. Finally, one needs to make sure that goals are framed with an appropriate Time limit.

Learning process strategies.

Hawkins (1994) provides the double loop learning concept. The learning under the double loop learning circle occurred when the individual managed to distinguish between the “before theory” (espoused) and theory in use (their real performance) .The learning out come is increases effectiveness in decision-making and better acceptance of failures and mistakes. Smith (1992) also suggested learning diaries as adult learning method. The author notes that dairies “modify previous guides to behavior to suit new situations and observe and learn from the outcomes of these “informed experiments” (p. 149).

Rose and Louise (1992) provide an additional learning strategy through their six stages of accelerated learning process. According to this model getting into the right state of mind is the initial step toward learning, after doing so their is the need to create learning map, explore the subject with the seven intelligences- find your strength and weaknesses ,memories key facts, share the learning and the knowledge with others and finally exercise personal reflection on the learning process.. Pfeiffer (1991b) experiential learning cycle adds the element of the “opportunity to examine feelings and behaviors related to interactions with other individuals” (p. 222).

Motivation, self efficacy/positive thinking and the concept of EQ.

Self efficacy – Bandura (2000) provides four sources for increasing self efficacy: 1. mastery experience through interpreting results 2. Vicarious experiences by observing others perform tasks 3. Creating models to learn of better ways for doing things and 4. Verbal judgments through awareness of social persuasions one receives for others.

Motivation & Emotional Intelligence – According to Salovey & Mayer, (2005) EI is “a type of social intelligence that involves the ability to monitor one’s own and others’ emotions, to discriminate among them, and to use the information to guide one’s thinking and actions”(p.2-3). Furthermore, the authors notes that emotional intelligence is a theoretical model that enable to increase both intrapersonal and interpersonal communication skills through emotions in the workplace because “identifying, understanding, regulating, and expressing one’s emotions are inherently communicative actions.” (ibid, p.50). Goleman (1998) found his research that “EI not only distinguishes outstanding leaders but can also be linked to strong performance” (p.94). According to the author research results, the identified competencies of EI are self awareness, self regulation, motivation, empathy and social skills. He also suggested that improving EI needs to be through breaking old behavior habits and establish new ones, thus it is a long process which required individual approach. The author also suggests the use of the use of coaches/mentors, feedbacks, listening to other’s critics and analyzing one self behavior as useful techniques to increase learning and change behavior.

Motivation Through Positive Thinking – The WIN-WIN approach (Mclean, J. 1992) derive it basic assumption of the differences view between Myopic and Enlightened self interest. The first focused on the short term benefits while the later focused on the broad and long term benefits. The distinction between the two can also be identified egoism vs. altruism. However, according to McLean, the “over all behavior resulting from operating based on Myopic Self interest tend to be aggressive and overly competitive” (p.7) Therefore, the ideal outcome is for a balances of interests – WIN-WIN results. The Enlightened Self-Interest paradigm has been suggested to provide an appropriate theoretical paradigm. According to the author, the self interest paradigm can assist us to criticize and reflect our own underlying assumptions. Therefore it would help us to enhance awareness which later can promote the desire for a behavioral and theoretical change. The final positive outcome from the implementation of the WIN-WIN approach appears in the symbiosis between the (W.I.I.F.M) and (W.I.I.F.Y) approaches. Here individuals as well as organisational practice consider their activities from both outcomes and results perspectives. In that way by considering self and others benefits greater understanding and motivation will develop.

Exercise of my personal action plan.

From my previous action plan I’ve identified my weaknesses in time management ability to write a clear action plan and decision making processes. In order the address this issues, I’ve decided to conduct an analytic dairy (Smith,1992) for informal learning from experience. For the last 2 months I wrote down every weekend a brief description of my weekly experience by analyzing event of learning and personal behavior patterns. By the end of every month I’ve analyze and conceptualize my weekly notes. Through the diaries I’ve managed to understand my decision making behavior. Through the diaries I’ve noticed that my decision making process was weaken because I didn’t search for enough and relevant information. This caused frustration which later lead to unsatisfied outcome. By acknowledging that, I have started to advised friends and colleagues, along to gathering of formal information. I’ve noticed that my decision making has been significantly improved through this process. It has also affected my capabilities to write a clear action plan and time management skills. I’ve learned how to prioritized my tasks (which I consider to be the outcome from strengthen my decisions making). After managing to do so it was much easier to manage my time. My personal acknowledge to my positive progress motivates me for my future accelerated learning. Although I’ve managed to see some progress with my exercise of the action plan I’m aware of the need for my behavioral change in order to make these changes meaningful and a long term ones. My next step for accomplishment of my action plan will be focusing on increasing my networks. At the moment I’ve joined several trade communities. As a member of these communities I will have the opportunities to meet key and interesting people in our future events and gathering. I order to maximize this occasions will concentrate on increasing my communication skills through the use of common feedback from friends and also my personal analysis of my day to day interaction. This process will be supported with a reflection dairy.

Conclusion.

Increasing Managerial effectiveness as well as personal effectiveness is shown to be important not only from a business point of view but also from the influences of our personal achievement and satisfaction from our personal life. As the most theories suggested personal changes in attitudes, values and believes are cognitive and behavior driven. Thus altering or increasing our personal effectiveness requires firstly our cognitive decision to undergo through the process. It has been also stipulated that positive attitude and personal awareness have a significant influence to our successes.

The personal capabilities to exercise changes as been addresses through various theories and concept. Self awareness and self efficacy theories provides an insight to one abilities to modify his behavior through analyze and critical evaluation of one behavior and activities. Furthermore, personal achievement to change is also suggests to be rooted in ones understanding of his emotions. According to the EI theory, understand our own emotion can leverage our abilities to analyze gathered information to guide one’s thinking and actions. The concept of self awareness is also supported by the enlightened self interest paradigm which enables us to reach WIN-WIN relationships. The last adds the relationship importance to the processes. As the theory suggested, positive changes should be supported not only for one personal gain. The supportive assumption stipulates that a successful and positive change have influence on our own environment and relationship. Thus our own decision will eventually affect our surrounding and our relationship development process.

Other managerial and personal competence focuses on our abilities to mange time, learning process, communication skills, leadership skills etc’. However, in order to address these issues we have to make a decision base on our personal values, believes and attitudes. After all, every positive change is an outcome from our own motivation and desires. Hence, positive change can not be exercise without them. This paper has shown that motivation, self awareness and self efficacy have the ability to modify/change ones’ behavior for a long time.

Reference:

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Management styles

Effective management styles.

Introduction

Management in essence is the ability to direct, guide and motivates people to perform their duties effectively, in unison and harmony, and to excel in the performance of those duties. This requires cooperation with the organizational team and others associated with the job to accomplish defined goals and objectives. However, it is style, character and conduct that distinguish a capable administrator and define organizational success. Success is more likely to be achieved through team building, unity of goal and vision, communication, hard work, and mutual respect. It is management that plays the primary role in promoting and fostering those ideals. Therefore, it is imperative to recognize what constitutes winning traits in an effective management style. A basic fact that every administrator must recognize and acknowledge is that the employees constitute the most valuable resource of the organization and deserve to be treated with dignity and respect. The administrator must also recognize that only by earning the trust and confidence of colleagues and subordinates can he or she gain and expect unfeigned cooperation and quality performance. (Arnold, & McClure 1996) The outstanding administrator avoids the ineffective management styles commonly referred to as management by fire, management by crises, management by intimidation, management by command and control, management by caucus, micromanagement, my way or no way management, and management by neglect, that is, no management at all. These obtrusive ‘‘styles’’ may work for a while, but none are propitious for obtaining quality performance. Getting the job done is important, but alienating everyone in the process by creating an atmosphere of confusion, showing disrespect or killing all initiative and creativity is hardly the formula for success or for cultivating leadership. Likewise, ‘‘instilling the fear of God’’ in subordinates or constantly belittling or disparaging others may be appealing to the egoistic mind, but it will not create a healthy work environment. Organizational structures work best when the professional interests of all parties are recognized. While everyone deserves the right to aspire to better opportunities and advancement, such aspirations must not be pursued at the expense of others. Competition through capability and competence is healthy in an organization, whereas suspicion, cynicism or negativism can lead to disruptions and disasters. Team-based leadership requires developing and nurturing the capabilities of each individual to strengthen the team and promote quality performance on the part of all. Effective administrators can facilitate all this. (Grunenwald & Ackerman 1996)Model of effective management. In recent experiments researchers have compared student academic gain in the classes of teachers who received training on research-based teaching practices with that in classes of teachers who received no training. In all of these experiments, some teachers adopted most of the practices, others adopted only a few of them, and some hardly changed. What accounts for these differences in implementation?In 1979, Cruickshank, Lorish, and Thompson reviewed the literature on in-service education and proposed a model similar to Dunkin and Biddle’s (1974) framework for studying the relations between teaching behavior (process) and student learning (product). In Figure 1 I present Cruickshank et al.’s (1979) framework, which specifies teacher change as the desired outcome (product) of in-service education. Trainer characteristics, training processes, and context variables are other elements of the model.

Figure 1 Model for research on inservice education. (Adapted from Cruickshank, Lorish, & Thompson, 1979, with permission)Most researchers studying in-service education have investigated relations among training types (processes), organizational factors (context), and teacher change (product). One area that has received little attention is the teacher’s attitudes toward the practices recommended in the training. (Teachers’ characteristics are included in Figure 1 as context factors.) (Sauter 1997) Even when training processes and context factors are optimal, there still is variation in the degree of teacher change resulting from training. In this study, we examined the relation between teachers’ perceptions of recommended practices and their subsequent use of those practices. Most researchers studying context factors have concentrated on how the organizational characteristics relate to implementation and teacher change. Yet there is another aspect of context that has received less attention: teachers’ characteristics. Teachers’ age and experience have been found to relate negatively to change. (Faranda & Clark 2004)Designing High-Variety Learning Transformations. Teaching and learning are transformations (i.e., changes). When designing a transformation system–a system that converts raw materials into finished goods–there are generally two options. In one option, design begins with consideration of what needs to be transformed and how the conversion can be accomplished. Thus, design begins with inputs or resources and with an understanding of the technology required for change to take place. Resource-based systems capitalize on resources that are valuable, rare, difficult to imitate, and non-substitutable and that an organization knows how to use effectively. Technology-oriented designs typically focus on issues like task sequencing, control, and efficiency. Resource and technology-oriented designs promote both efficiency and effectiveness in using a system’s core capabilities.

Alternatively, design can begin with consideration of the people who are responsible for doing the work. With this second approach, primary concern rests with the knowledge, skills, abilities, and motivations of workers. Proponents have argued that an employee-focused design encourages innovation, change, and problem-solving activities to take place throughout the organization. They contend that links between customers and the work to be done are more direct, and therefore, information is more readily available for making crucial decisions. In addition, worker-centered designs encourage learning and growth. A concern with fit is common to both designs. Regardless of whether the primary concern is with resources and conversion technology or with those who must implement work activities, effectiveness depends on how well various parts of a system fit together. In the educational setting, an additional communality is evident: students are the primary resource, the carriers of core technologies such as learning know-how, and the workers most responsible for ensuring the conversion takes place. Therefore, students are the key for designing variety into a learning system. Concentrating on students allows educational design to focus on the most critical resource and the primary worker, as well as on individual differences in conversion (learning) processes. (Oakland 2001)Elements of Co-production. Drawing from Lawler’s (1992) work with high-involvement firms, we identified three aspects of co-production that we believed had a strong influence on students’ abilities to access and effectively capitalize on the variety offered in the design of a course. These three elements were (1) a desire to engage in co-production, (2) a learning focus in co-production, and an expediency focus in co-production. (Kim 2006)Desire to engage in co-productionAs discussed previously, motivation is a key factor influencing the effectiveness of co-production activities. Students who enjoy taking responsibility for customizing their educations, who like deciding whether to work alone or in groups, and who want to select how they will learn and what vehicles they will use to demonstrate their performance are expected to be more effective co-producers than students who do not want such responsibility. A number of factors shape motivation toward co-production. Some students, like some employees, welcome the challenge offered by self-management, and others see structuring the educational experience as someone else’s (i.e., the teacher’s) responsibility. Not all students are equally confident of their ability to make wise choices regarding co-production. Less confident students may prefer to have such decisions made for them. Students enter a class with different levels of experience in alternate course designs. Their early socialization experiences in a classroom setting may have shaped their receptivity toward co-production in learning environments. It seems quite plausible that the seeds of an interest in co-production in the classroom can be planted or uprooted during a student’s formative years. In addition, students at the upper-division or graduate level may have experienced greater variety in course design and learning opportunities than freshmen. This experience enables advanced students to know which learning processes work well for them and which learning processes are less effective for them. Advanced students may also feel more competent in the co-production role and therefore, more willing to become co-producers. (Forsyth et all 21005)Learning focus in co-productionStudents enroll in a course for different reasons. Some students, for example, are very interested in learning the subject matter covered by the class; others may enroll only to meet a degree requirement. Students who are interested in the subject matter and oriented toward learning are expected to have goals that are more congruent with those embedded in the learning transformation than students who are less focused on learning, personal challenge, or creative expression. Goal congruence is important for nurturing effective co-production. (Bargerstock 2000)Expediency focus in co-production. One of the inducements for co-production suggested by Lovelock and Young (1979), Schneider and Bowen (1995), and Lengnick-Hall (1996) is reduced waste and enhanced efficiency and productivity. In the educational setting, efficiency often means students only spend time on activities they consider relevant or related to career or personal goals. Efficiency can also mean convenient scheduling, smooth interfaces with other demands on their time, and large payoffs for investment of time and effort. Co-production offers the opportunity for students to select assignments and course activities that fit well with other life and school demands on their time and attention. It also offers the opportunity for students to select those assignments that allow them to more readily apply course material in a specific work setting. One of the key factors constraining students’ time is their employment status. Many of the students enrolled in the courses included in this study were employed part- or full-time. A positive relationship may exist between employment and a tendency to focus on expediency in co-production choices. Although efficiency is beneficial in a manufacturing setting, it is not always desirable in a learning environment. If expediency becomes a primary concern for students and dominates their choices as co-producers, their satisfaction with a course may be high, but their quality as products of the educational process may be lower. Moreover, in order to be successful administrator must be adept in the following areas. (Greengard 2007)The basics. It is a necessity that the manager have a working knowledge of what he or she is managing, be able to communicate the technical and esoteric jargon and be aware of the nuances associated with the profession. Only through defining and understanding the work scope, complexity of the job and clients’ expectations can a manager determine the level of expertise needed to perform the tasks and be able to assign work accordingly. The manager must also recognize that establishing interpersonal rapport with internal as well as external clients is conducive to a healthy and harmonious work environment. Informal coffee get-togethers and group luncheons are ways for accomplishing such objectives. Clients and client representatives can also be invited to attend these gatherings. Their participation in these functions helps cultivate rapport and facilitate job coordination. (Conant et all 2003)Accessibility and planning. Invariably, many issues arise on a daily basis that require management’s input and direction. Management accessibility is therefore of vital importance to the speedy resolution of these concerns. Otherwise, progress will be stalled and time wasted. Delegating authority can facilitate decision making but cannot result in effective decision making on a regular basis. One common mistake made by managers is defining task duration based on the capabilities of strong performers. However, those individuals may not be the ones actually performing the work. Another common mistake is not taking into account the unexpected, such as maternity leave or illness that may prevent some members of the team from being on the job. Employees are dedicated not only to their work but also to their families. They must not be compelled to choose between the two. (Smart 1999)Staffing and job criteriaThe right staff must be assigned to the job, keeping in mind their capabilities and interests, and making sure they have all the necessary means at their disposal. There must be criteria, guidelines, standards and procedures that are precise and relevant to performing the job. This will add uniformity and consistency to work and work products.

Schedule and milestones. The work schedule should be developed with direct involvement of the leads and must not be dictated. As work proceeds and experience is gained, this schedule should be refined and resource needs reevaluated. Instituting meaningful milestones is a way in which progress can be measured. Achieving these milestones will provide a sense of accomplishment and enhance morale, In the event milestones are not attained, remedial measures can be taken to rectify the situation. Good planning, however, requires recognizing problems before them surface and mushroom into nightmares. (Sethi & King, 2001)Clerical support. Providing administrative and clerical support and maintaining a meticulous filing system will free everyone from spending precious time on maintaining their own files and will facilitate accurate and timely document retrieval. (Hill & Herche 2001)Communication and continuous improvement. Communicating openly, directly and sincerely and avoiding false promises and hollow threats are indispensable to performing quality work. Establishing clearly what is expected of the employees, both collectively and individually, and helping them accomplish these expectations will lead to performance par excellence. Using threats is definitely counterproductive and unsuited to a professional work environment. A good manager is personally committed to the success and well-being of the organization and will not tolerate or acquiesce in any form of communication that would be insulting, disparaging or demoralizing. Often during the work process more efficient approaches to performing the tasks are discovered. Managers should encourage innovation in the workplace and be receptive to new ways of doing things. Professional growth cannot be achieved solely by ‘‘osmosis.’’ In order to develop state-of-the-art expertise and refined work skills, training is an absolute necessity in the modern work environment. It is very gratifying to receive acknowledgment of one’s good efforts and to be guided on how to perform to one’s full potential. (Simon 2004) However, when counseling is necessary, it is much more effective when it is done in a constructive manner—not by saying things behind the employee’s back that cannot be said in his or her presence. Managers should apprise the team of the reasons their tasks or assignments are important to the success of the project. Each person’s role is fundamental to successful completion of the job, and understanding this fact increases job satisfaction and enhances morale. Management by cliques and conclaves can lead to misunderstandings, rumors and the alienation of those excluded. Confidentiality must not be misunderstood as secrecy. When private counsel is necessary, it should be held in a discreet manner. (West 2005)Courtesy and professionalism. Extending basic courtesy to others, for example, saying thanks for a job well done, and not insisting on one’s own opinions show maturity and civility. Often, it is better to accept sound ideas on a consensual basis and have wide support than to insist on ‘‘best’’ ideas that lack support. Managers must have appreciation for employee loyalty, professionalism, service and dedication since job stability is vital and a requisite to quality performance. Reward the true performers, especially the deserving that do not magnify their own accomplishments and are often denied the fruits of their toil by more visible and aggressive colleagues who have played only marginal roles. (Leary & Schlenker 2000)Principal working styles.

The basis of the present work is the conceptual and practical separation between functional job competences and personal working styles which was introduced above. The former are identified as key elements in effective performance of the job in question, trainees can in principle be assessed in terms of criterion behaviors linked to each competence. And those assessments can provide evidence towards the award of a National Vocational Qualification. Working styles are considered to embrace competences over and above those specific job skills. They are less open to criterion-referenced assessment, since they tend to be identifiable only after observation of a person’s behavior in different (often non-routine) situations, and explicit behavioral criteria are difficult to define. Within that framework, a particular aspect of behavior may in some jobs emerge as a functional competence, open to criterion-referenced assessment, whereas in other jobs it is better viewed as a working style. An aspect of behavior may be treated as a specific job competence when it is necessary for competent performance in a particular job; or is better seen as a working style when, although not central to basic-level performance of the job, it leads to enhanced effectiveness over and above a functional competence. For example, in a job dealing primarily with customers, maintaining effective social relationships would be considered to fall within essential functional competences, and be assessed through interpersonal criterion behaviors. However, for employees primarily working with machinery, functional competences would concern machine operation; and effective social relationships would be a specific job competence in the first case, but an aspect of working style in the second situation. In attempting to characterize working styles that are widely effective in different types of employment, a large number of documents by trainers and other practitioners have been reviewed. Suggested features can almost always be fitted into the simple framework as either intellectual or non-intellectual behavior. That categorization is adopted in the studies to be described here. It is not single `correct’ account of working styles; other frameworks may be more appropriate in certain situations. (Challis 2001)Consider first the intellectual working style that is likely to be effective in most jobs, especially those at entry level for both young workers and older people. Practitioners’ suggestions in this area are consistent with recent research developments, which have pointed to the value of separating two levels of cognitive functioning. This distinction is sometimes described as being between `Meta cognitive’ processes, which are executive skills used to control the ways in which information is handled, and other cognitive processes, which are non-executive and are used to implement task strategies.

The non-cognitive processes include particular features of learning, retention, retrieval, and the transfer of knowledge. Examples include inferring specified relations between two stimuli, encoding the salient aspects of a stimulus, and applying a previously observed relationship in a new situation. Those processes are more likely to be tapped by conventional rests of, for example, intelligence than are Meta cognitions. On the other hand, the intellectual working styles measure developed here is aimed particularly at executive cognitive processes. Brown and Campione have identified Meta cognitive processes thought to be of particular importance. These include the planning of future steps within a strategy, and revision of the strategy as needed. Sternberg’s componential theory’ of intelligence embraces eight higher-order control strategies governing intelligent behavior, under the label of `Meta components’ These are used for executive planning and monitoring and evaluation of one’s performance. Illustrative Meta components are the selection of a performance strategy, into which to combine the lower level components and deciding how to allocate attention resources. Meta components are viewed as particularly relevant to a wide range of activities, whereas lower-level cognitive features tend to be restricted to more localized tasks. (Sengupta & Hamid 2003)It seems clear that some Meta cognitive processes are required in the successful performance of most job functions, but that they will be especially implicated in an effective intellectual working style of the broad kind examined here. A second relevant aspect of recent theorizing about cognition is the expansion of concepts of intelligence to include more practical rather than merely abstract thinking. For example, Scribner has analyzed practical intelligence in terms of identification of problems (rather than merely the solution of those predefined by someone else), flexibility in behaviors, exploitation of environmental features for problem solution, and use of effort-saving procedures to free personal resources for additional actions. An associated development is in terms of the examination of `tacit knowledge’ that which is usually not openly expressed or taught. Wagner and Sternberg have investigated differences between novices and experts in particular professions, by exploring the tacit knowledge each can bring to bear on a task and the structure of that knowledge. (Seeley 1999) The use of this type of knowledge is seen as a key feature of practical intelligence quite different from those aspects of intelligence which are measured by conventional psychometric tests. The latter is focused upon information processing in a constrained task environment, whereas practical intelligence is observed more in wider cognitive processes within less structured settings. This gradual broadening of factors studied under the heading of `cognition’ has brought about an increases interest in relationships with motivational, effective and interpersonal processes. For example, Sternberg’s model of creativity includes within the concept aspects of motivation, willingness to surmount obstacles, and desire for recognition. In the same way, tacit knowledge (a component of practical intelligence, as described above) includes knowledge about social processes and structures. Intellectual and non-intellectual processes are thus likely to covert in day-to-day activities. (Sainfort 2004)From these several developments, an intellectually effective working style may be suggested to incorporate processed such as effective planning, prioritizing, decision making in multi-task and varying situations, monitoring behavior, adapting to novelty, thinking ahead and anticipating problems, discovering new procedures, and acquiring useful information on one’s own. In studying performance during training, those features need to be examined, as well as the more easily assessed functional competences which are central to the job in question. Aspects of non-intellectual working style that have been proposed as important by practitioners seeking to enhance `personal effectiveness’ include proactively, social competence and self-confidence. As such they pick up particularly on themes common in psychological literature, of social competence and motivation. Particularly close links exist with `self efficacy,’ the belief that one can perform the activity in question. There are also overlaps with social effectiveness in the working situation and more generally, and with the idea of social intelligence. The development of the measure of non-intellectual working style was in part based upon those themes, but more importantly upon the ideas of practitioners and what they considered a competent trainee should be able to achieve. Practitioners tend to emphasize proactively, self-confidence and social competence. (Weaver 2005) Proactively includes working hard even when not being supervised, using initiative, meeting deadlines, being determined and enthusiastic, and making useful suggestions. Self-confidence includes working well by oneself, taking responsibility, being confident and cheerful, coping with difficulties and trying out new things. Social competence includes getting on with other people, communicating with others, being helpful, and being confident with other people. (Clarke et all 2001)

Conclusion

Modern-day management requires a broad spectrum of knowledge and expertise, including interpersonal skills and the ability to motivate and challenge people. It also requires leadership by example, with objectivity and candor. Perpetual reliance on the use of epithets does little in establishing a manager’s moral authority and undermines his ability to command respect. Nothing is more important than maintaining the dignity of the pen and the nobility of the word. According to an Afghan poet, ‘‘the honor and dignity of man are evident from his words.’’ General George Washington is reported to have issued a general order in 1776 in New York that is quite fitting: The General is sorry to be informed that the foolish and wicked practice of profane cursing and swearing, a vice heretofore little known in an American army, is growing into fashion. (Sage 2001) He hopes the officers will, by example, as well as influence, endeavor to check it, and that both they and the men will reflect that we can have little hope of the blessings of Heaven on our arms if we insult it by our impiety and folly. Added to this, it is a vice so mean and low, without any temptation, that every man of sense and character detests and despises it. These are in essence the winning traits in cultivating human relations, organizational success, productivity and profitability, that is, in achieving an effective management style. It must be remembered that the client’s role is also very important, as successful completion of the project cannot be fully achieved without the client’s full cooperation. Success is measured in job performance and is based on the outcome of the project. The surest way of winning client satisfaction and ensuring continued business from that client is by delivering a product that is on schedule, within budget and of the highest quality. With commitment, effort, professionalism and accessibility and by encouraging feedback, managers can coach and stimulate both employees and clients into creative, high-performance teams that definitely will be successful. (Kelley et all 2001)

References

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Evaluation of strategic management

Introduction

“Strategic management is the process of decision making which have high medium term to long term impact on activities of the organization including the implementation of those decisions to create value for customers and key stakeholders and to outperform the competitors”(Hubbard, G., 2000, p-2).

Strategic management has three elements such as strategic analysis, strategic choice and strategic implementation. Strategic analysis gives the idea to understand the strategic position of the organization. It is an ongoing activity of organization. Strategic analysis gives the clear picture of the changes in the environment and how these changes affecting the organization and its activities. It gives idea about the resources and competencies present and their contribution to competitive advantage and development of new opportunities. Also it produces the idea about the people and groups such as manager, shareholders, union, stakeholder etc. associated with organization and their contribution for the development of organization.

Basically strategic analysis develops the relationship between different forces influencing the organization and its choice of strategies. These forces are environment, resource and competences etc.

Corporate level strategy

It is an overall strategy that the organizations are follow. Its development involves a grand strategy and using portfolio strategy approaches to determine the various businesses making up organizations. A grand strategy provides basic strategic direction at corporate level. There are several three basic categories: growth, stability and defensive. Growth strategy – these are the grand strategy which says organizational expansion as a major element. Basically organizational growth means more sales and earnings. Organizations grow in the term of revenue, clients, wider distribution network etc. the major growth strategies are concentration, vertical integration and diversification. Concentration focuses on growth of single product or service. Concentration occurs through market development, product development or horizontal integration (adding one more similar business). Vertical integration – this approach involves the growth through production of inputs previously provided by supplier or trough replacement of a customer role by disposing of its own output (Kumpech & Bolwijn, 1998). Diversification – this approach involves in the growth through development of new areas clearly distinct from current business (Bartol et al., 2001).

As an example Failte Ireland’s Cultural Diversity Strategy.

The implementation of a Cultural Diversity Strategy for the industry was one of the recommendations of the Tourism Policy Review Group which has set challenging targets for tourism development by 2012. The strategy was prepared by an industry working group including members from Failte Ireland, the Irish Hotels Federation, Restaurants Association of Ireland, Vintners Federation of Ireland, Licensed Vintners Association and the Irish Hotel and Catering Institute.

“Workers from non-national backgrounds are vital to the future success and sustainability of the Irish tourism industry, and must be valued developed and integrated accordingly. Our industry is likely to need another 6,000 workers per annum to 2010 and a significant number of these will come from overseas”, said Failte Ireland Chief Executive Shaun Quinn. There are currently around 25,000 non-national workers out of 145,000 working in the Irish tourism industry.

Stability strategies – this strategy involves maintaining the status for growth of the organisation slowly or methodically. Organizations select stability for many reasons. When a company is doing well the managers don’t want the risk and disturb of aggressive growth. This happens in case of small private owned businesses which are the larger group to adopt a stability strategy. Another reason is that it provides a chance for recovery (Bartol et al., 2001).

Defensive strategy – this strategy focus on reducing organizational operations through cost reduction or asset reduction. Defensive strategy includes harvest, turnaround, divesture and liquidation (Bartol et al., 2001).

Strategic analysis focuses on stabilizing the current environment, and it also support the organization’s business plans and goals. Strategic analysis helps to grip, new projects, new technology, consolidation of data centers, data warehouses, exponential data growth, cost of ownership, and resource available in an organization to assess the future requirements. Strategic Analysis, reviews the business plan, potential blockage or other issues in the current architecture, processes and their implementation in new initiatives, and processes . Strategic analysis gives the idea about the key factors that are affecting the present and future development of the organization and the opportunities offered by the environment and the competence of the organization. These factors are environment, resources and capabilities etc.

Environment

Mostly the organizations are existing in the background commercial, economic, political, technological and social world. These environments are changing continuously and this change is affecting the organizations. Sometimes these changes are creating new opportunities for organizations and some times it exerting some threats to organization. So every organization should do environmental analysis on a regular basis. The environmental analysis will drive the organization to maximize its outputs through implementing the opportunities and eliminating the threats (Johnson & Scholes, 2001).

Macro environmental analysis

Macro environmental analysis influences the organizations development and performance. Micro environment includes the relevant forces that impact the organization strategy. So macro environmental analysis helps to change the strategy according to the change in the environment. The forces of microenvironment are government action and restructuring, demographics, socio cultural, capital market, technology, labor market, competition, economic condition, supplier, ecology etc. (Lewis et al., 1999).

Process of macro environmental analysis – PEST analysis is the one of the process of environmental analysis. A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an short form for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm’s control and sometimes present themselves as threats. However, changes in the external environment also create new opportunities and the letters sometimes are rearranged to construct the more optimistic term of STEP analysis. These factors are explained below.

Political Factors – The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some other political factors are government policy which influences laws that regulate or tax on business, government’s position on marketing ethics, the government’s policy on the economy, and governments view on culture and religion. It is other wise known as political and legal factor((Johnson & Scholes, 2001).

Economic Factor – Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. The economic factors that affect the organization are Interest rates, level of inflation, Employment level per capita, Long-term prospects for the economy Gross Domestic Product (GDP) per capita, economic growth, exchange rate, business cycle, GNP trend, money supply, disposable income, energy available and cost , etc(Johnson & Scholes, 2001).

Socio cultural Factors – The social and cultural influences on business vary from country to country. Social factors include the demographic and cultural aspects of the external micro environment. These factors affect customer needs and the size of potential markets. Factors include: population demographic, the dominant religion, attitudes to foreign products and services, language impact upon the diffusion of products into markets, roles of men and women within society, populations strong/weak opinion on green issues , income distribution, life style changes, levels of education attitude to work and leisure, consumerism etc(Johnson & Scholes, 2001).

Technological Factors – Technology is vital for competitive advantage, and is a major driver of globalization. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Technology allows the products and services to be made more cheaply and to a better standard of quality. Technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones. Technological factor includes government spending on research, new discoveries and development, research and development, government and industry focus of technological effort etc(Johnson & Scholes, 2001).

PEST analysis helps to examine the differential impact of external influences on organizations. After the external environment analysis industry analysis is required. Industry Analysis is the basis of intelligent strategic planning. It’s a systematic process of gathering and analyzing, information about the industry on a global and domestic basis. Factors include economics, trends, social and political factors, and changes in technology, and the rate of change. An industry may be thought of as a collective of firms who sell like products to a like group of customers with similar needs.

Industry Analysis helps to determine the true areas in which the firm competes. It defines Industry Analysis provides a basis upon which we evaluate and decide about our corporate goals and it helps us develop insight into developing appropriate strategies. Industry Analysis helps us identify and recognize forces that shape our industry. We need look at the dynamics of the industry and envision how the industry will look in the future. For industry analysis Porters Five Forces is the appropriate tool for industry analysis which is explained below.

Porter’s Five Forces

The competitive environment combines the process, which are influencing the firm strategy. Porter’s five forces model is a most commonly used analytical tool, which is used for examining the competitive environment. These five forces are:

Threat to new entrant

Bargaining power of firm’s suppliers

Bargaining power of firm’s customers

Thereat of substitute product

Competitive rivalry (Mitter & Dess, 1996).

Threat to new entrant

When a business begins its operations in a new market as a new entrant, it faces competitive threat from established firm. Mostly the established firms set barriers by which it is not easy for new entrant to enter into the industry. Major entry barriers factors include.

Economic of scale: Mostly the established firms produce goods with higher volume and lower cost per unit. So it discourages the new firms with lower volume and higher production cost to enter into the industry.

Capital requirement of entry: If the amount of investment in plants, equipment, working capital etc. is high than it is very difficult for new entrant to entry into the industry.

Cost advantages independent of size: Existing firms may have cost and resource advantage, which is not available to new entrants. This advantage includes good and long relationship with cheapest supplier of raw material and component possession of patents and Proprietary technology, favorable location, and lower labor cost. So the new entrant will find to compete with the existing firm.

Product differentiation: Strategy of differentiation provides real barrier for new entrants into the competitive industry.

Access to distribution channel: If the existing company has good distribution channel then it is very difficult for the new entrant to enter and compete with existing firms in the industry. Example: for decades brewing companies, in Germany, the UK and France have invested in the financing of bars and bubs, which has guaranteed the distribution of their products and it difficult for competitors (Thompson & Strickland, 2003).

Bargaining power of supplier

In many industries the cost of purchased suppliers’ accounts for 60 to 80% of total on an industry is profit margin. Following are the condition that makes a supplier group powerful. Dominance by few suppliers and a lack of substitute products is limiting customers’ buying option and increasing the supplier’s power.

Relative lack of importance of the buyer to supplier group: Among the customers some customers are important than other due to their size of purchase. Example – McDonald is an important customer for soft drink than small dinner would be.

Importance of the supplier’s product to the buyer: This is the apposite case of above point. McDonald finds that it is important to carry the most popular line of soft drink, which increases cokes bargaining power.

High differentiation of supplier and high switching cost of supplier.

The factor discourages customer’s process of shopping around and playing one supplies against another. Automobile manufactures are using credit cards in an attempt to establish switching costs. General motors gold card offers a 5 % rebate that allows the card user to gain as much as $7000 towards a new car. If a GM gold cardholder will buy a new car from GM’s competitor the buyer will loose the discount offered by GM on the use of gold card (Mitter & Dess, 1996).

Bargaining power of customer

Buyer can exert bargaining power on supplier industry. The buyers always want product with lower price and good quality. So this characteristic of buyer forces prices down. The big three U.S automobile manufacturer traditionally been able to extract significance price concession from their supplier because of their high volume of purchase. It is a credible threat of backward integration and high buyer concentration. Factors that lead to greater buyer power includes:

Undifferentiated or standard supplies – if the supply products are commodity, goods and services, and basically it is commonly available to customer then the customer can more easily shop around for the most favorable items.

Credible threat of backward integration by buyers – backward integration would involves a buyer’s moving into one earlier stage of manufacturing or distribution that is moving into the supplies business.

Accurate information of the cost structure of the supplier – if the customer knows the actual cost structure of supplier’s product then he can negotiate with the price of the customer. We know. For example, one large consumer products firm that insist on having the same cost data as do the manager of the firms that make its product for just this reason. When its suppliers cost come down it insist on similar decrease in price.

Price sensitivity of the buyer – mostly price sensitive buyers more interested to buy goods with lower price and better quality. Buyer’s are likely to be more price sensitivity if, the supplier supplies in question represents a significant fraction of the buyer’s total cost, the supplier’s product is unimportant to the overall quality and cost of the buyer’s final product. And the buyer already earns low profit (Mitter & Dess, 1996).

The threat of substitute product

The threat to substitute may be in different form. There are few products for product substitution such as fax for the postal service and then e-mail for the fax is the example. Generic substitution occurs where products or services compete for need: for example, furniture manufactures and retailer compete for available household expenditure with supplier of televisions of televisions, videos, cookers, cars and holidays (Johnson & Scholes, 2001).

Competitive rivalry

Many industries in free market economies have a high level of competition that is usually characterized intense price competition, product differentiation and product innovation. So these forms of competition may not always be mutually exclusive and may occur at the same time. In recent years the soft drink industry was caught in the “cola wars” which is characterized by frequent price discount, massive advertising budgets and the constant proliferation of new products. There are some other factors of competitive rivalry which are explained below:

Equally balanced competitors – when competition occurs among well-matched rivals, it does not allow one particular firm to dominate.

Slow industry growth – when slow growth of markets occur then sales growth will come from taking market share away from rivals, which indicates reattribute and escalates rivalry.

High fixed costs – the additional sales volume will have off setting high fixed cost, thus competitors are willing to fight for any possible sales.

Lack of differentiation – when there is not much differentiation between products, customer can easily defect rivals product which force them to continuously struggle in the industry.

Large increase in manufacturing capacity – minimum efficient skill requirements in many industries are such that increase in a firm’s overall capacities are possible only in large increments, for example, an entire plant. At least in the short run, this usually leads to period of excess supply and heightened price competition whenever a rival expands.

High strategic stakes – the market is well worth fighting for because of its profit potential or the opportunities it creates elsewhere.

High exist barrier – for economy, strategy or emotional reasons rivals find it difficult to leave the industry, thus becoming competitor in a fight to the finish (Mitter & Dess, 1996).

Organizational Resources and Capabilities:

Organizational resources and capabilities allow a company to achieve superior quality, innovation, customer responsiveness, which creates superior value change and helps to get competitive advantage upon their competitors. The resources and capabilities allow differentiate product with substantially lower cost than its competitors. It allows earning a profit rate substantially above the Industry’s average rate. Example, Toyota has distinctive competencies in the development and operation of manufacturing process. Toyota has employed a whole range of manufacturing Techniques, such as Just in time (JIT) inventory system. Self-managing teams and reduced set up times for complex equipments. This complexity helps Toyota to attain superior efficiency and product quality which are the main factors of its competitive advantage in the global automobile industry (Hill & Jones, 1998).

Resources: There are two types of organization resources. One is tangible resources such as land, buildings, plant and equipment and other is intangible resources such as brand name, reputations, patents, technology, and marketing Knowledge. To get distinctive competency company’s resources should be both valuable and unique. Distinctive competence is defined as the unique strength that allows organization to achieve superior efficiency as well as competitive advantage. Example, Polaroid (Photography Company) able to get competitive advantage upon its competitor by using its higher technological efficiency (Hill & Jones, 1998).

Another example can be brought in from banking companies.

Hoping to reverse a long slump in revenue, banking companies are rolling out a variety of new or upgraded online cash management systems.

Though many of the new systems and features are aimed at different target markets and offer different benefits, they are all designed to distinguish the companies from the competition.

The combination of intense competion and slowly improving revlenue is probably driving the current spurl of innovation, Mr. Forman said:

“There is something about the current environment that makes bankers a little bit harder and that’s going to see more differentiation. You are going to see some banks do creative things.”(Bills,2006, pp 3-5,7)

Capabilities: It is the organization’s skill to use the resources and putting them to productive use. Using these skills company makes decision and manages its internal process in order to achieve organizational objectives. Basically company’s capabilities are product of its structure and control system. Organizational capabilities are basically intangible. They reside not so munch in individuals as in the way individuals interact, cooperate and make decision with in the context of an organization. Successful strategies are also depends upon strategic capabilities to perform the level of success required for organizations. Thus analysis of strategic capability is important for an organization because it gives the clear understanding of resources and competencies to fit into the environment (Hill & Jones, 1998)t.

Analysis of strategic capability and resources is required to get competitive advantage upon competitors .

Resources and capabilities both are interdependence, so these required a better analysis for an organization. A company may have unique and valuable resources but it has not the capabilities for well use of it , then it will be not easy for organization to achieve or sustain distinctive competence or vice versa. Company’s may able to superior in the form of efficiency, quality production of goods, innovation and customer responsiveness by using its resources and capabilities. By using the capabilities company’s able to differentiate and able to produce low cost product. This finally gives higher profit than their competitors. So from the above discussion analysis of resources and capabilities are important for an organization (Hill & Jones, 1998).

Benefits of strategic analysis:

Strategic analysis helps organization to go parallel with changing environment. The environment is changing continuously. So by analysis the organization will able to follow the mission statement in right way. Mission is defined as what the company is doing today. In other words mission is the company’s present products and services, technological and business capabilities etc. By strategic analysis organization will able to adopt new strategy to fit the organization into the environment. The major benefit of strategic analysis is that, it helps organization to implement the best appropriate strategy. It provides better guidance to the entire organization. It alerts managers and organizational member to implement the opportunities to get competitive advantage upon their competitor and tackle the threats afford by the environment safely. It helps management to create a proactive management posture. Macro environmental analysis helps organization to change the strategy according to change in environment such as Government rules and regulation, economic condition of the country, crucial and quick technological change. Also Industry analysis helps organizations to make appropriate strategy to overtake the competitive rivals in the industry.

Conclusion

Every organization requires strategic analysis to tackle the changes in the environment, to find out the resources and capabilities of the organization. But it does not necessary that all organization would follow same process of analysis, so different organization may use different process for analysis. Strategic analysis begins with the identification of operating and financial strengths and weaknesses and environmental opportunities and threats.

Companies can use strategic analysis to work out where they have been and where they are currently in the business environment. An analysis of a firm’s history completes an analytical assessment of a firm. A firm establishes its competitive building by investing scarce resources again and again in its value-added activities. By doing this the organizations will be able to give rise superior products and services that the buyer’s desire. In addition, the firm’s product and services (via resource allocations) should be difficult to imitate by competitors.

The best way that firms can understand themselves is through a close examination of their past decisions, resource allocations, and behaviors. These, in turn, must be correlated with their competitive successes and failures. What are sought are enduring patterns of decisions, behaviors, thought processes, and resource allocations. Firms’ identities are wound up in what and how they have made decisions, implemented their resource allocations, and undertaken their actions. Finally strategic analysis helps organizations to see the changes in the environment and adopt the strategy accordingly to the change to fit in the industry.

References

Kumpech, T. & Bolwijn, P.T. (1998), Manufacturing the new case for vertical integration, Havard Business Review, pp.75-81. cited in Bartol et al., 2001.

Bartol, K., Tein, M., Matthews, G. & Martin, D.(2001), Management: A pacific rim focus,3rd edition, published by McGraw-Hill Pty limited, Austrlia.

Johnson, G. & Scholes, K. (2001), Exploring Corporate Strategy, 4th edition, published by Prentice Hall of India Private Limited. New Delhi.

Lewis, G.,Morkel, A., Hubbard, G., Davenport, S., Stockport, G.(1999), Australian and New Zealand Strategic Management, 2nd edition, Published by Prentice Hall Australia Pte Ltd.

Thompson, A, A. & Strickland, A, J. (2003), Strategic Management: Concepts and Cases, 13th edition, Published by Tata McGraw Hill Company Limited, New Delhi

Pettigrew, R. (1996), Strategic and Environment analysis, Introduction to Corporate Strategy, McMillan Press Ltd., PP.58-80

Hubbard, G. (2000), What is Strategy? Strategic Management: Thinking, Analysis and Action, Prentice Hall, French forest ch,1, p.2.

Browne, M.,Steane, P., & Foster, J.(1998), An introduction to case analysis: Cases in Strategic Management, McMillan Education Australia pty. Ltd. P-34.

Bills, S (2006) Fims Seek More From Cash Management, American Banker, Vol.171 Issue 64, pp 3-5,7)

Failte Ireland Launches Cultural Divercity Strategy And Action Plan For Tourism Employment (2005)Available from: wwwfailteireland.ie [Accessed on 1st April 2006]

Strategy

Strategy is a broad based formula for how business is going to compete, what its goals should be, and what policies will be needed to carry out these goals. The essence of formulating competitive strategy is relating a company to its environment.

Porter (1980), Competitive Strategy

The definitions of strategy change from scholar to scholar. There is no agreed way to define strategy as the interpretations of each writer are based on methodological preference (Robson, 1997). The above definition is an example of Porters stance on what a strategy is.

Strategic planning

Strategic management is concerned with deciding on strategy and planning on how that strategy is to be put in to effect via:

*Strategic Analysis

*Strategic Choice

*Strategic execution

The above definition of strategic management is by Johnson and Scholes(1993) and essentially outlines that strategies are formulated and concern all organisations, large or small.

Strategic planning is a continual process within an organisation, the people responsible for the success of strategic planning outline the desired future, then devise a strategy for making it happen. Strategic planning by its very nature is adaptive and the devisor is always developing it to be relevant for the future. Key environmental factors are predicted and their influence on the organisation looked at and then optimum measures are taken so the organisation can benefit from these environmental factors.

Business planning and strategic planning are two different things. Business plans are usually for an outside audience where the strategic plans are developed for internal purposes. Also strategic plans look at the ‘bigger picture’ where business planning looks at certain elements of an organisation.

The Composition of a Strategic Plan

Strategic plans are generally made up of one or more interconnected elements; Vision, mission, Values, assessment, goals/objectives, strategy and outcomes. They also incorporate strategic management principles and models. A possible example of a strategic plan follows:

The Vision shows the dreams of the organisation and broadly capture future services, markets and structures but do not go in to great detail. The Mission outlines customers, competitors and markets. It shows “a desired position in a predicted future world” and a “bulls eye or target of the strategy”(Yavitz & Newman, 1982). “A mission should not commit a firm to what it must do in order to survive but what it chooses to do in order to thrive” (Ackoff, 1986). Values are what the company believes to be true; values offer guides for staff on how to act within the company and ethical standards for all the stakeholders. Values set the company apart from its competitors and show the integrity of the organisation. Assessments of the organisation are the outside and inside forces, which will affect the company in making its mission and vision successful.

These can be carried out in an environmental scan, which includes the following components:

*Internal analysis of the firm

*Analysis of the firm’s industry (task environment)

*External macro environment (PEST analysis)

A SWOT (Strengths/Weaknesses/ Opportunities/Threats) task can also capture the overviews of a business. Outside factors can range from economic condition to changing technology and competition and are shown as threats and weaknesses. Inside factors can be anything from assets to liabilities and are usually shown as threats and weaknesses. Then the transition to the future is assessed with regard to industry and competitive environment, general and organisation specific environment. PEST stands for political, economic, environmental and technological. The PEST analysis and shows the components of a macro environment within the organisation and these can also be translated to fir in with a SWOT analysis.

Goals are defined next; these are broad aims that the organisation is always working towards. They are qualitative and directional where objectives are quantitative and specific. Objectives are subtle aims to complete within certain time scales. Next strategy is defined; a strategy is “the framework which guides those choices that determine the nature and direction of an organisation”(Tregoe & Zimmerman, 1980). Strategy looks at long-term direction and guides short term plans. It is understood at the top and middle levels of the organisation (Yavitz & Newman, 1982). A strategy is very clear and is in no way subtle. Finally outcomes are defined; this is involved with the translation of strategies in to realities of the organisational structure, operations, policies and products. This in essence closes the gap between the companies’ current position and where it would like to be. Finally critical issues are identified and prioritised. Outcomes are positive statements of the changes the company needs to make to itself and the results that it must carry out in its environment to fulfil strategic necessities. Outcomes are the steps for an organisation towards strategic closure.

Strategies for Management of Organisations

Between the late seventies and early nineties strategic planning for IS was introduced in to organisations. This came about because executives within organisation were looking at linking business objectives with systems (Somogyi and Galliers, 1999).

Michael Earl

Michael Earl’s stance on IS methodology is not on internal but external or outward looking so business objectives can be met fully. Earl pioneered a multiple methodology with three approaches for corporate strategy, top down, bottom up and inside out. Top down considers the organisation from a structural perspective aligning IS with the business strategy of the organisation through looking at Critical Success Factors (CSF). CSF’s are identified through existing policies, interviews and debates. A bottom up approach considers the current system, then analyses it for potential gaps, which can be done using a SWOT analysis, which will be considered later. This approach shows the current state of the company and what it wants to achieve in the future. An inside out approach analyses different ways to do business and research in to new technologies is carried out by looking at the organisation to gain competitive advantage.

Michael Porter

Porter’s five forces model looks at the forces that play upon an organisation and shows how IS can build barriers and give competitive edge. The forces are depicted in the diagram below:

(Robson, 1997)

Porter defines the rivalry of the organisation in relation to the industry where high rivalry leads to low profits. The threats from new entrants are heights of the barriers in place to stop them and define the profitability of the industry. Threats from substitutes is the threat by others to copy the product so the margin for guaranteed profit goes low and customers are more prone to change. The bargaining power of buyers depends on the price of the product and the leverage the customer possesses. Similarly the power of the suppliers is determined by how much the buyer needs the product and how much they are willing to pay.

Porter’s Generic strategies

To create competitive advantage for an organisation Porter identified three strategies, Cost Leadership, Differentiation and Focus or Niche. The proper generic strategy will position the firm to leverage its strengths and defend against the adverse effects of the five forces.

Cost Leadership involves having low profit margins and selling lots of units of a product this way, essentially undercutting the competition. Supermarkets do this on certain brand labels so customers will come in to their store and potentially buy other higher priced goods, this can be known as a loss leader. Differentiation is when organisations make products or services different from everyone else, an example of this was the door-to-door selling by Avon in the past. This was not the ordinary way to provide products for housewives but was different and seemed to work. The focus or niche strategy was to target a gap in the market where an exclusive product or service would fit in and succeed. An example is Brabus, a German company specialising in the customising of Mercedes Benz Motor cars. They essentially customise the car down to the exact specification of the engine to the shade of leather and the way the car drives to the customer’s exact specifications. The cars are hand crafted and meticulous detail is added at every stage of reproduction. This makes the product unique and therefore creates a niche for high class, big spending customers.

Analysis of Strategic Management Approaches

There is disagreement between the theories in which corporate strategy is developed. This is apparent within the strategic planning process, as it is a diverse and complicated subject. This has meant that there have become two approaches to strategic planning; prescriptive and emergent approach. They both have similar elements but have dissimilar models within the strategic planning process.

The prescriptive approach views the analysis, strategy development and implementation within the planning process as rational and linear. This fundamentally means that prescriptive strategy is one whose objective has been defined in advance and whose main elements have been developed before the strategy begins (Lynch, 1997). In relation to this an emergent strategy is fuzzier and it has been stated by theorists that the strategy evolves or emerges to adapt to human needs. Over the last ten years developments in strategic planning and management have not emphasised heavily on planning and have concentrated more on adaptability and learning, an example of this is systems thinking (Senge, 1990) and chaos theory (Stacey, 1993).

Schools of Thought: Design School

There are differing schools of thought related to strategic management. Firstly the design school which assumes that the strategic process is logical, rational and capable of giving true insight in to the company. It makes the assumption that the users can learn to anticipate and respond to complexity in a controlled manner (Robson, 1997), using a range of models based upon principles. An example of this is Porter (1985), other examples include the boston matrix and portfolio analysis. The disadvantage with this school has been that they assume predictablity in an environment and do not take in to account interdependence of activities within an organisation. More importantly they do not take in to account the politics, culture, and leadership of an organisation and are too simple. Mintzberg (1990) identifies a number of major difficulties with the prescriptive strategic process, processes are invalidated when there are major changes in competitors and government. He also concludes the following:

*It may not be possible to determine the long-term good and, even if it were, those involved may not be willing to make the sacrifice, such as jobs or investment. This is particularly relevant within local government, that are dictated at local levels by the public.

*The strategies proposed are logical and capable of being managed in the way proposed. Due to political realities of many organisations, there may be many difficulties in practice.

*Chief executives have knowledge and power to choose between options. They does not need to persuade or compromise on thier decisions. This may be naive in many organisations where the culture and leadership seek discussion as a matter of normal practice.

*After careful analysis, strategy decisions can be clearly specified, summarised, and presented; they do not require further development, nor do they need to be altered because circumstances outside the organisation have changed. This point may have some validity but is not always valid.

(Mintzberg, 1990)

Schools of Thought: Evolutionary School

Within these schools commentators such as Pettigrew (1985) and Mintzberg (1990) talk about strategy that incorporate everything rarely exist. They say strategies are borne about compromise between power groups and involve a process of trial-and-error to determine the best strategy. However, there is the danger that recent history will be used to justify or rationalise decisions and mistakes (Robson, 1997).

Mintzberg (1990) makes an important point here about both approaches – the design school and the evolutionary school. He conlcudes that both have a contribution to make and are not mutually exclusive. He also reiterates that while the three elements of strategic management interact and that strategic planning is not linear, it is still valuable to have some model of the planning process.

Criticisms of Michael Porter

There have been suggestions by many scholars that strategy emerges (Rouleau & Sequin, 1995) and these scholars critique Porters methods. Most of the strategic literature shows the ideology that ‘what is good for the higher management is good for everyone’. Most of this literature shows there should or is no conflict with this (Harfield, 1997) or the industry, organization and market. Granovetter (1985) suggests, the social and cultural aspects of all human endeavours. The five forces model of Porter (1980) is criticised by Shrivastava (1986) as not taking in to account stakeholders well-being. He contests that it only attempts to maximise profits of the firm and is narrow in formulating success factors for senior managers.

The view of Knights (1992) is that strategy is a form of imperialism located within a discourse, which cloaks the power of managers as a class in culturally acceptable clothing of science and objectivity. His interpretation is that Porters generic strategies are difficult to implement but remain the most popular choice for senior managers within the financial sector. He says that the conditions needed to carry out the generic strategies is the ‘reality’ by the management to forget, neglect or deny subjectivity. The inherent problem with Porters strategy seems to be that if all businesses adopted his strategy then there would be no competitive advantage. However the whole world still uses the method to this day simply because it promises ‘unequal power’ brought about from ‘specialist knowledge’ to the senior management. Knight contests that management find Porter attractive as this expert knowledge provides an illusion of control, legitimacy and security amidst all the uncertainty. These ideas appear to support the view that ‘strategic management’ could be considered a myth as suggested by Beeby (1992)

Strategic planning for information systems

The exploitation of IT for strategic advantage began in the early 1970s largely as a response to changing global economic and social conditions and rapid advances in technology. Likewise, IS and IT became the key enablers of truly global trading systems (Drucker, 1993). Strategic planning has been defined as ‘the process of identifying a portfolio of computer-based applications that will assist an organisation executing its business plans and realising its business goals’ (Lederer and Gardiner, 1992). It is the means of identifying application systems which support and enhance organisation strategy. It also provides a framework for the effective implementation of these systems (fiddler and Rogerson, 1996). It has been claimed that strategic IS planning can help an organisation visualise the potential contribution of IS (Lederer & Gardiner, 1992).

Gaining Advantage Through Applying Information Systems

American Airlines – SABRE

One of the most commonly used examples of gaining strategic advantage through the application of IS has to be the SABRE reservation system by American Airlines (AA). It was the first electronic reservation system in the US that was highly successful. It came about to counter the threat of travel agents who were developing their own booking system and its sophistication was a major breakthrough. The competitive value SABRE provided is being felt thirty years later. In 1988 American Airlines was making more money from SABRE than from flying planes, this proves the impact of IS on a real company and the success. It has been said that the information provided by SABRE has been beneficial to the success as it is used in a variety of ways.

Merrill Lynch

A different example of strategic success, which proves that competitive advantage can be short lived, is the diversification of Merrill Lynch in the mid seventies. A strategic option was created to integrate cash management for customers who were tired of getting different account to get credit from different places. The Cash Management Account (CMA) combined separate banking services in to one all encompassing statement. It was automated and technically complex. This radically new service was very different from traditional banking giving Merrill Lynch ninety percent of the market for five years. Even though it was a success the company did not update and enhance the system so competitive advantage eventually slipped away. This proved that to integrate IS for strategic advantage it has to be continually reviewed and updated.

Difficulties in Planning for Information Systems

Technology officers have the opinion that Information system planning fails because the technology in question matures and evolves too quickly. They believe that users will have no way of knowing what they need in the future. Greg Jackson, Associate provost for Information Technology at the university of Chicago concludes that “it is critical to remember that a plan is a statement about priorities and their implementation, given our best knowledge at planning time, and that all kinds of events will cause the unfolding of history to differ from the plan”. This is obviously true as plans within organisations rarely come to fruition, but are fought with problems and issues outside our control. IT managers can take some of the blame for the IS strategies failing, this is particularly the case when they reduce complex social, political and cultural problems to simper technical specifications. This satisfies the IT managers, as they are following classical methodologies but does not reflect the newer complex organisations. Classical strategic information systems planning is based on the rational, economic man (Whittington, 1993) making decisions based on analysing the situation scientifically not socially.

As advantageous as it seems from the studies and theories about IS planning models, there is no track record for their success. Commentators have argued that IS planning may not even give competitive advantage at all (Galliers, 1993). There is obvious advantages to IS planning such as a defined way rather than just improvising, but there are also losses using strategic IS planning. IS planning can be duplicated with relative ease by rivals who then gain the same competitive advantage the organization once had exclusively. Another issue is that IS environments mature very quickly so any advantage gained is lost relatively quickly which was proved previously with Merrill Lynch. Galliers, (1993) makes the point that sustainable competitive advantage is possible only if additional features, desired by customers or created by new IS possibilities, can arise continuously. So an organization has to continually update there IS strategy in line with customer requirements for success. Inkpen and Choudhury (1995) conclude that in some organisations a business strategy is hard to define or even non existent and this shades the usefulness of strategic IS planning approaches, which mostly assume that there is an existing business strategy. Observations made by Pruijm (1990) have shown that where competitive advantage has been enabled by IS, the success has been due to incremental evolution of an existing application. This views is reflected in traditional evolving business strategies by Mintzberg (1989) and Quinn and Paquette (1990) They suggest that the strategic application of IS is more the result of a process of continuous evolution of IS in organizations (Senn, 1997). Evolution can therefore be said to evolve as organisations change. Lee and Bai (2003) conclude that traditional IS planning theories fail to take in to account ‘dynamic environmental requirements’. `

Incremental Approaches for Information Systems Strategy

Due to the adverse, rapid condition of technology advances traditional IS approaches are not so suitable, so incremental evolutionary approaches are being introduced. These approaches rely on specific staff and key mangers to do the required analysis. This allows flexibility rather than the traditional rigidity of older methods. It has to be noted though that Salmela and Spil (2002) have stressed not to rely completely on an informal incremental process as the solutions to e business can be very complex. Four cycles has been introduced by Salmela and Spil (2002) to take in to account e business strategy and enables important IS planning issues to be addressed. The method is evolutionary and is open to management change. This allows the method to be formal yet flexible. IS organisations evolve over time and therefore change paths, this method takes in to account the changes. It has to be also noted that emphasis has to be placed on group interaction, knowledge, change and organisational management (Lee and Bai, 2003). Even the early strategies of Earl (1990) take in to account group interaction so it has to have important relevance in IS management also.

Conclusion

It is been concluded that traditional strategic planning is a good foundation for organisations but commentators argue that the older strategies lack flexibility for IS planning and do not take in to account enough external factors, in essence they say the older methods are for perfect organisations that never have any economic, political or ethical problems. Theorists have concluded that IS strategies do not work for all organisations, as some don’t have business plans, which are the requirements of most business strategies. IS in relation to this is hard to strategise for in current organisations due to the frequency of change in markets and external issues beyond the control of organisations. New, more evolutionary approaches are being developed which are iterative and flexible and these allow users, inherently IT managers to continually change perspectives along the planning lifecycle continuously adapting to changes.

References

Ansoff, H. I. (1969) Business Strategy, Penguin.

Applegate, L. M., McFaran, F. W., McKenney J. L. (1996), Corporate Information Systems.

Drucker, P. F. (1993) Post Capitalist Society, Butterworth-Heinemann.

Earl, M. J. (1989) Management Strategies for IT, Prentice Hall.

Earl, M. J. (1996) Information Management – The Organisational Dimension, Oxford University Press.

Flynn, N. (1993) Public Sector Management (2nd ed.), Harvester-Wheatsheaf.

Galliers R.D (1994) Strategic Information Management, Butterworth Heinemann.

Lee, G, Bai, R. (2003) Organizational mechanisms for successful IS/IT strategic planning in the digital era. Management Decision [2003] 32-42. Emerald Journal.

Lynch, R. (1997) Corporate Strategy, Pitman Publishing.

Mintzberg, H. (1990) The Design School: reconsidering the basic premises of strategic management, Strategic Management Journal, 11, pp. 176-95.

Pettigrew, A. (1985) The awakening giant: continuity and change at ICI, Blackwell.

Porter, M. E. (1985) Competitive Advantage, The Free Press.

Porter, M. E. (1980) Competitive Strategy, The Free Press.

Robson, W. (1998) Strategic Management and Information Systems, 2nd ed., Pitman Publishing.

Salmela, H, Spil, T,(2002) Dynamic and emergent information systems strategy formulation and implementation. International Journal of Information Management 22 [2002] 441-460

Senge, P. M. (1990) The Fifth Discipline, Century Business.

Stacey, R. D. (1993) Strategic Management and Organisational Dynamics, Pitman Publishing.

Strassman, P. A. (1990) The Business Value of Computers: An Executive’s Guide,

Information Economics Press.

Ward J, Griffiths, P. (1996) Strategic Planning for Information Systems, John Wiley.

Willcocks, L., Feeny, D., Islei, G. (1997) Managing IT as a Strategic Resource,

McGraw Hill.

“Strategy formulation includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue. Strategy formulation issues include deciding what new businesses to enter, what businesses to abandon, how to allocate resources, whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover. Strategy implementation often is called the action stage of strategic management. Implementing strategy means mobilizing employees and managers to put formulated strategies into action. Often considered to be the most difficult stage in strategic management, strategy implementation requires personal discipline, commitment, and sacrifice.”

Introduction

“Strategic management is the process of decision making which have high medium term to long term impact on activities of the organization including the implementation of those decisions to create value for customers and key stakeholders and to outperform the competitors”(Hubbard, G., 2000, p-2).

Strategic management has three elements such as strategic analysis, strategic choice and strategic implementation. Strategic analysis gives the idea to understand the strategic position of the organization. It is an ongoing activity of organization. Strategic analysis gives the clear picture of the changes in the environment and how these changes affecting the organization and its activities. It gives idea about the resources and competencies present and their contribution to competitive advantage and development of new opportunities. Also it produces the idea about the people and groups such as manager, shareholders, union, stakeholder etc. associated with organization and their contribution for the development of organization.

Basically strategic analysis develops the relationship between different forces influencing the organization and its choice of strategies. These forces are environment, resource and competences etc.

Corporate level strategy

It is an overall strategy that the organizations are follow. Its development involves a grand strategy and using portfolio strategy approaches to determine the various businesses making up organizations. A grand strategy provides basic strategic direction at corporate level. There are several three basic categories: growth, stability and defensive. Growth strategy – these are the grand strategy which says organizational expansion as a major element. Basically organisation growth means more sales and earnings. Organizations grow in the term of revenue, clients, wider distribution network etc. the major growth strategies are concentration, vertical integration and diversification. Concentration focuses on growth of single product or service. Concentration occurs through market development, product development or horizontal integration (adding one more similar business). Vertical integration – this approach involves the growth through production of inputs previously provided by supplier or trough replacement of a customer role by disposing of its own output (Kumpech & Bolwijn, 1998). Diversification – this approach involves in the growth through development of new areas clearly distinct from current business (Bartol et al., 2001).

Stability strategies – this strategy involves maintaining the status for growth of the organisation slowly or methodically. Organizations select stability for many reasons. When a company is doing well the managers don’t want the risk and disturb of aggressive growth. This happens in case of small private owned businesses which are the larger group to adopt a stability strategy. Another reason is that it provides a chance for recovery (Bartol et al., 2001).

Defensive strategy – this strategy focus on reducing organizational operations through cost reduction or asset reduction. Defensive strategy includes harvest, turnaround, divesture and liquidation (Bartol et al., 2001).

Strategic analysis focuses on stabilizing the current environment, and it also support the organization’s business plans and goals. Strategic analysis helps to grip, new projects, new technology, consolidation of data centers, data warehouses, exponential data growth, cost of ownership, and resource available in an organization to assess the future requirements. Strategic Analysis, reviews the business plan, potential blockage or other issues in the current architecture, processes and their implementation in new initiatives, and processes. Strategic analysis gives the idea about the key factors that are affecting the present and future development of the organization and the opportunities offered by the environment and the competence of the organization. These factors are environment, resources and capabilities etc.

Environment

Mostly the organizations are existing in the background commercial, economic, political, technological and social world. These environments are changing continuously and this change is affecting the organizations. Sometimes these changes are creating new opportunities for organizations and some times it exerting some threats to organization. So every organization should do environmental analysis on a regular basis. The environmental analysis will drive the organization to maximize its outputs through implementing the opportunities and eliminating the threats (Johnson & Scholes, 2001) .

Macro environmental analysis

Macro environmental analysis influences the organizations development and performance. Microenvironment includes the relevant forces that impact the organization strategy. So macro environmental analysis helps to change the strategy according to the change in the environment. The forces of microenvironment are government action and restructuring, demographics, socio cultural, capital market, technology, labor market, competition, economic condition, supplier, ecology etc. (Lewis et al., 1999).

Process of macro environmental analysis – PEST analysis is the one of the process of environmental analysis. A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an short form for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm’s control and sometimes present themselves as threats. However, changes in the external environment also create new opportunities and the letters sometimes are rearranged to construct the more optimistic term of STEP analysis. These factors are explained below.

Political factors – The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some other political factors are government policy which influences laws that regulate or tax on business, government’s position on marketing ethics, the government’s policy on the economy, and governments view on culture and religion. It is other wise known as political and legal factor((Johnson & Scholes, 2001).

Economic factor – Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. The economic factors that affect the organization are Interest rates, level of inflation, Employment level per capita, Long-term prospects for the economy Gross Domestic Product (GDP) per capita, economic growth, exchange rate, business cycle, GNP trend, money supply, disposable income, energy available and cost , etc(Johnson & Scholes, 2001).

Socio cultural Factors – The social and cultural influences on business vary from country to country. Social factors include the demographic and cultural aspects of the external microenvironment. These factors affect customer needs and the size of potential markets. Factors include: population demographic, the dominant religion, attitudes to foreign products and services, language impact upon the diffusion of products into markets, roles of men and women within society, populations strong/weak opinion on green issues , income distribution, life style changes, levels of education attitude to work and leisure, consumerism etc(Johnson & Scholes, 2001).

Technological Factors – Technology is vital for competitive advantage, and is a major driver of globalization. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Technology allows the products and services to be made more cheaply and to a better standard of quality. Technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones. Technological factor includes government spending on research, new discoveries and development, research and development, government and industry focus of technological effort etc(Johnson & Scholes, 2001).

PEST analysis helps to examine the differential impact of external influences on organizations. After the external environment analysis industry analysis is required. Industry Analysis is the basis of intelligent strategic planning. It’s a systematic process of gathering and analyzing, information about the industry on a global and domestic basis. Factors include economics, trends, social and political factors, and changes in technology, and the rate of change. An industry may be thought of as a collective of firms who sell like products to a like group of customers with similar needs.

Industry Analysis helps to determine the true areas in which the firm competes. It defines Industry Analysis provides a basis upon which we evaluate and decide about our corporate goals and it helps us develop insight into developing appropriate strategies. Industry Analysis helps us identify and recognize forces that shape our industry. We need look at the dynamics of the industry and envision how the industry will look in the future. For industry analysis Porters Five Forces is the appropriate tool for industry analysis which is explained below.

Porter’s Five Forces

The competitive environment combines the process, which are influencing the firm strategy. Porter’s five forces model is a most commonly used analytical tool, which is used for examining the competitive environment. These five forces are:

Threat to new entrant

Bargaining power of firm’s suppliers

Bargaining power of firm’s customers

Thereat of substitute product

Competitive rivalry (miller & Dess, 1996).

The diagrammatic representation of porters five process is given below.

Fig – 2, Porter’s five process model of industry analysis.

Source – Porter (1998) in Browne et al. (1998), p- 34.

Threat to new entrant

When a business begins its operations in a new market as a new entrant, it faces competitive threat from established firm. Mostly the established firms set barriers by which it is not easy for new entrant to enter into the industry. Major entry barriers factors include.

Economic of scale: Mostly the established firms produce goods with higher volume and lower cost per unit. So it discourages the new firms with lower volume and higher production cost to enter into the industry.

Capital requirement of entry: If the amount of investment in plants, equipment, working capital etc. is high than it is very difficult for new entrant to entry into the industry.

Cost advantages independent of size: Existing firms may have cost and resource advantage, which is not available to new entrants. This advantage includes good and long relationship with cheapest supplier of raw material and component possession of patents and Proprietary technology, favorable location, and lower labor cost. So the new entrant will find to compete with the existing firm.

Product differentiation: Strategy of differentiation provides real barrier for new entrants into the competitive industry.

Access to distribution channel: If the existing company has good distribution channel then it is very difficult for the new entrant to enter and compete with existing firms in the industry. Example: for decades brewing companies, in Germany, the UK and France have invested in the financing of bars and bubs, which has guaranteed the distribution of their products and it difficult for competitors (Thompson & Strickland, 2003).

Bargaining power of supplier

In many industries the cost of purchased suppliers’ accounts for 60 to 80% of total on an industry is profit margin. Following are the condition that makes a supplier group powerful. Dominance by few suppliers and a lack of substitute products is limiting customers’ buying option and increasing the supplier’s power.

Relative lack of importance of the buyer to supplier group: Among the customers some customers are important than other due to their size of purchase. Example – McDonald is an important customer for soft drink than small dinner would be.

Importance of the supplier’s product to the buyer: This is the apposite case of above point. McDonald finds that it is important to carry the most popular line of soft drink, which increases cokes bargaining power.

High differentiation of supplier and high switching cost of supplier.

The factor discourages customer’s process of shopping around and playing one supplies against another. Automobile manufactures are using credit cards in an attempt to establish switching costs. General motors gold card offers a 5 % rebate that allows the card user to gain as much as $7000 towards a new car. If a GM gold cardholder will buy a new car from GM’s competitor the buyer will loose the discount offered by GM on the use of gold card (Mitter & Dess, 1996).

Bargaining power of customer

Buyer can exert bargaining power on supplier industry. The buyers always want product with lower price and good quality. So this characteristic of buyer forces prices down. The big three U.S automobile manufacturer traditionally been able to extract significance price concession from their supplier because of their high volume of purchase. It is a credible threat of backward integration and high buyer concentration. Factors that lead to greater buyer power includes:

Undifferentiated or standard supplies – if the supply products are commodity, goods and services, and basically it is commonly available to customer then the customer can more easily shop around for the most favorable items.

Credible threat of backward integration by buyers – backward integration would involves a buyer’s moving into one earlier stage of manufacturing or distribution that is moving into the supplies business.

Accurate information of the cost structure of the supplier – if the customer knows the actual cost structure of supplier’s product then he can negotiate with the price of the customer. We know. For example, one large consumer products firm that insist on having the same cost data as do the manager of the firms that make its product for just this reason. When its suppliers cost come down it insist on similar decrease in price.

Price sensitivity of the buyer – mostly price sensitive buyers more interested to buy goods with lower price and better quality. Buyer’s are likely to be more price sensitivity if, the supplier supplies in question represents a significant fraction of the buyer’s total cost, the supplier’s product is unimportant to the overall quality and cost of the buyer’s final product. And the buyer already earns low profit (Mitter & Dess, 1996).

The threat of substitute product

The threat to substitute may be in different form. There are few products for product substitution such as fax for the postal service and then e-mail for the fax is the example. Generic substitution occurs where products or services compete for need: for example, furniture manufactures and retailer compete for available household expenditure with supplier of televisions of televisions, videos, cookers, cars and holidays (Johnson & Scholes, 2001).

Competitive rivalry

Many industries in free market economies have a high level of competition that is usually characterized intense price competition, product differentiation and product innovation. So these forms of competition may not always be mutually exclusive and may occur at the same time. In recent years the soft drink industry was caught in the “cola wars” which is characterized by frequent price discount, massive advertising budgets and the constant proliferation of new products. There are some other factors of competitive rivalry which are explained below:

Equally balanced competitors – when competition occurs among well-matched rivals, it does not allow one particular firm to dominate.

Slow industry growth – when slow growth of markets occur then sales growth will come from taking market share away from rivals, which indicates reattribute and escalates rivalry.

High fixed costs – the additional sales volume will have off setting high fixed cost, thus competitors are willing to fight for any possible sales.

Lack of differentiation – when there is not much differentiation between products, customer can easily defect rivals product which force them to continuously struggle in the industry.

Large increase in manufacturing capacity – minimum efficient skill requirements in many industries are such that increase in a firm’s overall capacities are possible only in large increments, for example, an entire plant. At least in the short run, this usually leads to period of excess supply and heightened price competition whenever a rival expands.

High strategic stakes – the market is well worth fighting for because of its profit potential or the opportunities it creates elsewhere.

High exist barrier – for economy, strategy or emotional reasons rivals find it difficult to leave the industry, thus becoming competitor in a fight to the finish (Mitter & Dess, 1996).

Organizational Resources and Capabilities:

Organizational resources and capabilities allow a company to achieve superior quality, innovation, customer responsiveness, which creates superior value change and helps to get competitive advantage upon their competitors. The resources and capabilities allow differentiate product with substantially lower cost than its competitors. It allows earning a profit rate substantially above the Industry’s average rate. Example, Toyota has distinctive competencies in the development and operation of manufacturing process. Toyota has employed a whole range of manufacturing Techniques, such as Just in time (JIT) inventory system. Self-managing teams and reduced set up times for complex equipments. This complexity helps Toyota to attain superior efficiency and product quality which are the main factors of its competitive advantage in the global automobile industry (Hill & Jones, 1998).

Resources: There are two types of organization resources. One is tangible resources such as land, buildings, plant and equipment and other is intangible resources such as brand name, reputations, patents, technology, and marketing Knowledge. To get distinctive competency company’s resources should be both valuable and unique. Distinctive competence is defined as the unique strength that allows organization to achieve superior efficiency as well as competitive advantage. Example, Polaroid (Photography Company) able to get competitive advantage upon its competitor by using its higher technological efficiency (Hill & Jones, 1998).

Capabilities: It is the organization’s skill to use the resources and putting them to productive use. Using these skills company makes decision and manages its internal process in order to achieve organizational objectives. Basically company’s capabilities are product of its structure and control system. Organizational capabilities are basically intangible. They reside not so munch in individuals as in the way individuals interact, cooperate and make decision with in the context of an organization. Successful strategies are also depends upon strategic capabilities to perform the level of success required for organizations. Thus analysis of strategic capability is important for an organization because it gives the clear understanding of resources and competencies to fit into the environment (Hill & Jones, 1998)t.

Analysis of strategic capability and resources is required to get competitive advantage upon competitors, which is shown in the diagram below,

Fig -1, The roots of Competitive Advantage.

Source: Hill & Jones, 1998, p – 124.

Resources and capabilities both are interdependence, so these required a better analysis for an organization. A company may have unique and valuable resources but it has not the capabilities for well use of it , then it will be not easy for organization to achieve or sustain distinctive competence or vice versa. Company’s may able to superior in the form of efficiency, quality production of goods, innovation and customer responsiveness by using its resources and capabilities. By using the capabilities company’s able to differentiate and able to produce low cost product. This finally gives higher profit than their competitors. So from the above discussion analysis of resources and capabilities are important for an organization (Hill & Jones, 1998).

Benefits of strategic analysis:

Strategic analysis helps organization to go parallel with changing environment. The environment is changing continuously. So by analysis the organization will able to follow the mission statement in right way. Mission is defined as what the company is doing today. In other words mission is the company’s present products and services, technological and business capabilities etc. By strategic analysis organization will able to adopt new strategy to fit the organization into the environment. The major benefit of strategic analysis is that, it helps organization to implement the best appropriate strategy. It provides better guidance to the entire organization. It alerts managers and organizational member to implement the opportunities to get competitive advantage upon their competitor and tackle the threats afford by the environment safely. It helps management to create a proactive management posture. Macro environmental analysis helps organization to change the strategy according to change in environment such as Government rules and regulation, economic condition of the country, crucial and quick technological change. Also Industry analysis helps organizations to make appropriate strategy to overtake the competitive rivals in the industry.

Limitation of strategic analysis:

The environment is full of uncertainty and no one can predict accurately what will happen in the future. Environmental change is the major threat for strategic analysis. After analysis when the organization tries to implement the strategy, then if there is some change in environment organization required to change their strategy. Let us take an example: In current scenario the strikes by Trucker’s association country wide in India is forcing organization to change their strategy. Due to trucker’s strike in whole India the update products are laying in the warehouses. Companies try to deliver it but they are unable to do it due to the strike. So they are canceling the orders and some companies stop producing goods. So this change in the environment forces organization to change their strategy. Strategic analysis consumers more finance and resources. Due to changing nature of environment organizations should have to analyze the environment continuously so it consumes more money and resources. Strategic analysis can only suggest what firms cannot do by nature of their limited resources and capabilities. Every firm has a limited amount of time, talent, or money, and these limited resources prevent a firm from making any investment it wants. A lack of capabilities also limits its opportunities.

Conclusion

Every organization requires strategic analysis to tackle the changes in the environment, to find out the resources and capabilities of the organization. But it does not necessary that all organization would follow same process of analysis, so different organization may use different process for analysis. Strategic analysis begins with the identification of operating and financial strengths and weaknesses and environmental opportunities and threats.

Companies can use strategic analysis to work out where they have been and where they are currently in the business environment. An analysis of a firm’s history completes an analytical assessment of a firm. A firm establishes its competitive building by investing scarce resources again and again in its value-added activities. By doing this the organizations will be able to give rise superior products and services that the buyer’s desire. In addition, the firm’s product and services (via resource allocations) should be difficult to imitate by competitors.

The best way that firms can understand themselves is through a close examination of their past decisions, resource allocations, and behaviors. These, in turn, must be correlated with their competitive successes and failures. What are sought are enduring patterns of decisions, behaviors, thought processes, and resource allocations. Firms’ identities are wound up in what and how they have made decisions, implemented their resource allocations, and undertaken their actions. Finally strategic analysis helps organizations to see the changes in the environment and adopt the strategy accordingly to the change to fit in the industry.

Reference

Kumpech, T. & Bolwijn, P.T. (1998), Manufacturing the new case for vertical integration, Havard Business Review, pp.75-81. cited in Bartol et al., 2001.

Bartol, K., Tein, M., Matthews, G. & Martin, D.(2001), Management: A pacific rim focus,3rd edition, published by McGraw-Hill Pty limited, Austrlia.

Johnson, G. & Scholes, K. (2001), Exploring Corporate Strategy, 4th edition, published by Prentice Hall of India Private Limited. New Delhi.

Lewis, G.,Morkel, A., Hubbard, G., Davenport, S., Stockport, G.(1999), Australian and New Zealand Strategic Management, 2nd edition, Published by Prentice Hall Australia Pte Ltd.

Thompson, A, A. & Strickland, A, J. (2003), Strategic Management: Concepts and Cases, 13th edition, Published by Tata McGraw Hill Company Limited, New Delhi

Pettigrew, R. (1996), Strategic and Environment analysis, Introduction to Corporate Strategy, McMillan Press Ltd., PP.58-80

Hubbard, G. (2000), What is Strategy? Strategic Management: Thinking, Analysis and Action, Prentice Hall, French forest ch,1, p.2.

Browne, M.,Steane, P., & Foster, J.(1998), An introduction to case analysis: Cases in Strategic Management, McMillan Education Australia pty. Ltd. P-34.

Service Product Marketing

1. INTRODUCTIONOver the past decade, customers are becoming harder and harder to be pleased with what were delivered to them in exchange of the customer’s disposable income (Parasuraman et al. 1985) (Reichheld & Sasser 1990). Nowadays, customers are more critical to product / service they purchase. Enterprises are trying to offer something innovative to differentiate them selves among the ever increasing competition.

Prior to any purchasing decision, according to Kotler (1973), one of the four P’s – the place can be more influential than the product itself. Later developed by Mehrabian & Russel (1974) that publish the Mehrabian-Russell Model that draw situational factor such as mood & expectation. Servicescape later popularized by Bitner (1992), the physical environment surrounding customers & employees is termed servicescape. Ever since, this has been the subject of many scholars and practitioners.

As an influential factor for customers to make purchasing decision, it clearly a very important subject for any marketers as an effort to increase revenue and to stay competitive in the marketplace (Hightower et al. 2000).

Marketers from any type of industry can really integrate servicescape into marketing plans. The industry can be sport such as softball (Robinson 1997) (King 2000); hospitality such as nightclubs, hotels, restaurants (Jones et al. 2003) (Clarke et al. 1998) (Skinner et al. 2005); and many more.

This paper tries to describe the importance of the main elements (i.e. ambient condition, spatial layout / functionality, signs / symbols / artefacts) (Bitner 1992). A few additional elements later developed that found can be influential to consumer behaviour are music (Jacob 2006), aesthetic design of virtual servicescape on the companies’ websites (Rafaeli & Vilnal-Yavetz 2006); the sex of service provider (Fischer et al. 1997). In order to give better understanding about the servicescape and its application in real-world companies, three firms from three different service sectors are chosen.

The three different firms in three different services are a luxurious upscale fashion chain store – Louis Vuitton, one of the top consumer banks in Indonesia – BCA Bank, and one of the upscale restaurants in Indonesia – The Angus House. These three firms are chosen because they are creating special servicescape to allow themselves to be stay in the edge of competition. An analysis of each firm shall be supported with literature review from various journals and theories.

2. SERVICESCAPEDEFINITIONServicescape of a company is the tangible asset that represents the company to its clients and has been showing strong influential affect between customer purchasing behaviour, satisfaction and loyalty (Bitner 1992) (Mummalaneni 2005) (Stone & English 1998) (Wirtz and Bateson 1999) (Yun et al. 2001).

MAIN ELEMENTSAccording to Bitner (1992), there are three main elements of servicescape, they are:(1)Ambient ConditionThis refers to a condition surrounding employees and customers that can be sensed through a human’s five senses (i.e. eyes, ears, nose, tongue, and skin).

Music plays an important role in creating the required atmosphere (Kotler 1973), and it is believed that the music tempo can make the consumers to stay longer (Milliman 1982 1986) and establishing a style (Yalch & Spangeberg 1990) (Areni & Kim 1993).

According to Dube & Morin (1999), music also can help employees to feel more relax and enjoy their working. Also, theOften music as servicescape is chosen by employees’ or managers’ personal preference type of music (Dube & Morin 1999). In most cases, wrong type of music will deliver wrong kind of atmosphere that will have negative effects on customers and other employees.

(2)Spatial Layout / FunctionalitySpatial Layout refers to the seamless layout of furnishing to achieve maximum productivity in the most efficient and effective manners. Functionality refers to the items to provide better service and higher productivity to customers (Barker 1968) (Wicker 1984) (Fox & Bender 1986)McCormick (1976) suggested three principles in spatial layout arrangement: features that frequently used should be strategically placed to where the equipments can be used optimally; equipments that have interrelated activities should be clustered together; and environmental features that might interfere or disturb another activities should be placed in different place.

(3)Signs, Symbols & ArtefactsThis refers to icons or signals that amplify the message from the buyer to the intended customers.

There are a few more elements that found from variety of literatures believe to be additional elements that would eventually affect consumers buying behaviours, they are:(4)Virtual ServicescapeUndoubtedly, the Internet has been experiencing a rapid growth in number of usage and applications for both personal and business use (Browne et al. 2004) (Thompson 2002). The virtual servicescape (Rafaeli & Vilnal-Yavetz 2006) is where the employees or the customers are not in the same physical area, but they are interacting via an electronic media – the Internet.

According to (Rafaeli & Vilnal-Yavetz 2006), virtual Servicescape is about aesthetics and professionalism. Aesthetic is found to influence feelings of comfort, easy, and service interaction. The more aesthetic the company website’s design, the more satisfied is the customer (Hall & Hanna 2004) (Nasar 1998).

(5)Sex of service providerAccording to Fischer et al. (1997), the sex of the service provider is also one of the elements that need to be considered in creating an optimum serviscape for the employees and customers.

Fischer et al. (1997) argued a certain sex of the service provider of a certain type of industry will be dominated by a certain sex. For example: a male employee would be seen more dominant in a hardware store or an auto-repair shop compared to lingerie store (Basow 1992) (Gordon 1991) (Mackie et al. 1996) (Sacks 1989).

Usually, people would tend to interact with the others who are similar / like themselves (Brown & Reingen 1987) (Rogers & Bhowmik 1971).

HOLISTIC COMPOSITIONA person will shape a perceived image in his / her mind towards a product or service holistically (Ittelson et al. 1974) (Bell et al. 1978) (Holahan 1982). Although a person discretely analysed serviscape elements (i.e. ambient conditions, spatial layout and signage), the mind will perceive holistically.

GOAL OF SERVICESCAPEThe basic goal of the servicescape is to create a good, nice and positive feeling of a product / service that can lead a customer to conduct transaction for the first time patron and hope to re-patron (refers to Approach). However, wrong doing in servicescape can lead to negative feeling that make customer distressed and make them no longer wish to do business with that company (refers to Avoidance) (Bitner 1992) (Donovan & Rossiter 1982).

There are two outcomes of emotional responses in servicescape – Pleasure and Arousal (Mehrabian & Russell 1974) (Russell & Pratt 1980) (Russell & Lanius 1984) (Russell and Snodgrass (1987). Respectively, pleasure is when someone has nice feelings towards to a situation, whereas Arousal is the degree when someone feels excited in a certain situation (Donovan & Rossiter 1982)PROGRESSAccording to Lin (2004) the progress of servicescape is argued whether cognition precedes or vice versa. The Gestalt approach should be used as a guide to better understand about a perceptual image is created in someone’s mind from the physical surrounding (Schiffman 2001). According to Kotler (1973), servicescape provides immediate perceptual image in customers’ mind. Levitt (1981) believed that in service sector where customers more often received intangible product, customers will be use more tangible products to make judgement and evaluations.

BRANDINGThe third element of Bitner (1992) – Signs, Symbols & Artefacts involving branding. A brand of a product or service is a bond (positive or negative) between the buyer and seller (Lassar et al. 1995). Brand is also seen by customers as to perceive risk, value, and signal the quality of the product / service (Janiszewski & van Osselaer 2000). Branding and servicescape are inseparable. Branding is something that let the product / service stayed in customers’ minds.

3. THE THREE FIRMSThe chosen three firms as mentioned earlier are Louis Vuitton, BCA Bank – Priority account, and Angus House. Each of the three firms shares few similarities and differences in applying servicescapes at their premises. Each has its own way to stands out among the crowds.

This section will explain the similarities and the differences in general while the in-depth explanation will be given in the next section of analysis and justification of its servicescape.

IDENTIFIED SIMILARITIESBased on Bitner’s physical environmental dimensions (1992), the three firms have similarities as below:-Ambient ConditionsFrom the five senses of a human being (i.e. eyes, ears, skin, nose, and mouth), consumers will be able to sense that the premises are luxurious and offering premium quality of product and service in super-premium prices. These firms are positioning themselves at a level where consumers consider prices come second after quality of product or service.

Colour of both exterior and interior setting is recognized as one of the most appealing visual cues in a servicescape (Eiseman 1998). Research has proven that different colours stimulate different sense in individual level including their moods and emotions. Bitner (1992) believe that well placed colours that blend to the place will create a vibrating sense to whoever patronizing the place. These three firms are using warm and dark colours to give luxurious and warm feelings to customers. Only those who can afford to pay premium price can enter such places. This gives a sense of prestigious to those who consume the product or service provided by these three firms.

Baker (1987) recognizes that people or “human component” to be part of the physical environment that will affect one’s perception of a firm. These three firms must their employees to look nicely dressed with uniforms, clean, smell nicely, friendly smile, and welcoming gesture. Kubacki et al. (2007) believes that security is also one of the elements for high-class people who prefer to have a sense of security when entering premises. These three firms place male security guards in front of main entrances. The security guards act as simple welcoming committee who welcome and greet customers. This gives feeling of security in doing transaction within the guarded area.

According to Lin (2004), auditory cues can be categorized into two parts – music and non-musical sound. Hui et al. (1997) believes that music is an effective tool to enhance positive feeling toward the premise and when waiting in any service operation. These three firms are playing slow tempo instrumental music that many researchers found to help shaping the mood and emotion of the patrons (Hui et al. 1997). Also, this type of music is seen by most people as high-class and prestigious.

All three firms are fully air conditioned-Spatial Layout and FunctionalitySpatial layout is a matter of placing the items (i.e. machineries, equipment, and furnishings) at the right place to ensure smooth flow from the time customer enters a premise (Bitner 1992).

The main entrance of the premises of these three firms made from clear tampered glass to provide spaciousness and a sense of welcome to any who want to enter. A professional reception desk is located near to the main entrance so that customers who seeking service can immediately approach the table to find out how and where to get their specific problems solved (Darley & Gilbert 1985) (Russell & Snodgraass 1987).

Each reception desk has a thin wall to prevent people passing by to see the people inside. Believed by many Chinese ethnics, this wall in front of the entrance will prevent luck to leave the place so quickly. Behind this wall, all the three premises prioritize in spacious area with modern furnishings that prioritize minimum usage of space yet still comfortable.

These three firms offer exclusive and limited people who can enjoy what the firms have to offer. Thus, there will be no customers shall feel crowded that will create feelings of stress Harrell & Hutt (1976). Seider (1983) warned about the consequence of poor layout that could lead to feelings of being neglected, embarrassment, and avoidance among customers. These three firms will give a tailored and a personalized attention to a customer. This gives a strong feeling being taken care of and the problems are addressed seriously (Ang & Leong 1989).

-Signs, Symbols and ArtefactsThis dimension is believed to be the most complex one compared to the other. The signs can be used to signal the service setting to the customer (Davis 1984) (Wener 1985). The three premises are using simple yet elegant signs that promise warm, welcome, luxurious service and premium quality of what the firms have to offer to their customers.

The message conveyed to the customers is clear and simple by showing the logo of their companies (i.e. Louis Vuitton – LV, Bank Central Asia – BCA, Angus House – idem).

Based on the additional elements, the three firms have no similarity on an of the element.

IDENTIFIED DIFFERENCESBased on Bitner’s physical environmental dimensions (1992), the three firms have differences as below:-Ambient ConditionsScents are believed to have strong influence in consumer’s mood, purchasing decision, and consumer desire to purchase (Bone & Ellen 1999) (Hirsch 1991). These three firms are not operating in different sector where scents are used differently. A Louis Vuitton store use light and neutral fragrance that gives aroma therapy to feel relax and stay longer. Many believe the longer a customer stay the more he / she will make a purchase. BCA bank uses a fragrance to neutralize the smell of money so that the customers don’t smell the money. As for Angus House, this is an upper class restaurant that primarily sells steaks, so the scent used is the wine fragrance to intrigue consumers to purchase wines in addition to the steaks.

Lightning influences directly the individual perception towards a firm. The perception of the physical emotional, psychological, spiritual aspects, forms, colours, textures and enclosures (Kurtich & Eakin 1993) (Ching 1996). The three firms use different kind of lightning where the BCA Bank uses a very bright lamp to brighten the room. Louis Vuitton store use a soft and yellowish colour lamp that gives aesthetic feel and presence of their super-premium products. Angus House’s lightning is rather dim and dark to create a romantic and luxurious dinner experience with candle light on every table.

-Spatial Layout and FunctionalityAccording to Ching (1996), the ceilings also play an important role in servicescape where high ceilings create senses of spaciousness and low ceilings are conveyed as coziness and intimacy. Louis Vuitton use high ceiling to give a feeling to the customers of a spacious room where they can take their time without having the feeling of suppressed due to tight room. BCA Bank also uses a high ceiling to create openness in the premise as many believes people are more nervous when they deal with money. Angus House use low ceiling with dimmed light to create a feeling of romantic and coziness.

Based on the additional elements, the three firms have similarities as below:-Virtual ServicescapeEach firm has its own website in exception for Angus House where they haven’t launched the website as yet. Virtual Servicescape on company’s official website gives perceived value and image of a firm’s product and service. Nowadays, the Internet users have been growing exponentially in number of users thanks to the rapid development in technology.

Louis Vuitton use modern design and warm colours to give sense and feeling of luxurious, premium and exclusive. The website is made to be user-friendly with easy and clear interface yet still very elegant with the usage of lines and colours. The models in the website is all beautiful and handsome to give feeling of looking good when use LV products.

BCA bank is more on simple yet functional. The firm to simulate the easiness to work with BCA compared to other bank with only a few clicks away from doing a specific task. The website also filled with picture of a beautiful woman that acts as an operator that will help us when needed. There is no real-time operator, but this gives the feeling that all of the operators or the employees are all customers friendly and nicely look.

-Sex of Service ProviderFischer et al. (1997) argued that there’s a clear connection between the expectation of service from the provider and the sex of the providers. In other words, the service setting and perceived service outcomes are determined from the sex of the service provider.

The three firms have different portion of sex of employees. Louis Vuitton has equal numbers of male and female staffs to address the people who come to the store. The male staff will immediately approach the female customer and vice versa. Should the customer prefer to communicate with the same gender, then the store can provide it accordingly.

BCA bank employs more female staff as women are seen to be more careful and friendlier compared to male staff. There is only about 30% out of the total employees of BCA Bank who are male in front line service. The managerial levels are equally distributed between female and male staffs.

3.1. LOUIS VUITTONThis super-premium fashion store is targeting the high-income customers who perceived quality of service and product above the prices.

-Ambient ConditionFrom all of the five senses of a human being, Louis Vuitton tries to give the best premium shopping experience to the customer. Visually, the store is designed aesthetic and professional with high ceiling to create a sense of openness and spaciousness. Tampered glass walls also to give sense of welcoming and to show the products available inside.

The scent sprayed in the store is soft and giving aroma therapy effect to make customers to stay longer and hope to buy more. Aroma therapy also can make people feel happy and relax so the experience in buying is not just buying the product but also during the transaction.

The products are allowed to be tried to make sure that the customers get what they want. This will reduce the perceived risk for purchasing something that hasn’t been felt yet.

The staffs are wearing uniforms, well dressed, well mannered, professional, look smart, wearing tie, and tidy hair (tied for female staffs and short hair for male staffs).

The security in front of the entrance gives a sense of security so the customers can shop and browse the products without any worry of any thievery (i.e. pickpocket, robbery, etc).

-Spatial Layout and FunctionalityComfortable sofas are provided for the customers to rest. The stronger shoppers have been known for many years are the female compared to the male. Sofas are located in the middle for easy access. Should the customer has an infant(s), she / he can monitor the children easily from the place where he standing checking the products.

The products are placed nicely without any boxes or scrap papers in eyesight to give pleasant and luxurious view of the store and products. Small products such as wallets, small bags, or scarfs are put inside a glass display shelves to give sense that the product are keep clean from dust. This also give sense of the product is luxurious. Each display rack are given lights to enhance the product appeal – the skin quality,The layout of the shelves is encircling the room and display of a certain product is clustered in one area and separated from the shoes and bags. This to ease the customer to make a comparison between products to another.

Mannequins are well placed so that the customers can imagine themselves wearing the products. These mannequins also placed by the window glasses to attract customers and to show new product lines being offered.

The ceilings are made high to promote well air circulation within the room and also to promote openness.

Should the store is in peak hour, the customers will not feel being overcrowded that could lead to stress and early leave to avoid the crowd.

-Signs, Symbols and ArtefactsLouis Vuitton or more known with overlapping two of first letters of the brand “LV” has been worldwide known as products that comes best quality, excellence service, and super premium pricing.

LV symbols on its products also give prestigious and self esteem in social life when worn. Thus, every single of the product is labelled with this signs.

-Virtual ServicescapeThe company website provides the running and upcoming clothing lines in store. The design of the website is made in such a way that when a customer visit its website will immediately feel that LV provides high quality product, excellence service and super premium pricing.

-Sex of Service ProviderThe staffs are equally distributed among male and female staffs to accommodate the variety of patrons. The customers of LV are not limited to female only (although admitted that more than half of the buyers are female. Some consumers will have better feeling to consult with the same gender compared to the opposite sex and vice versa.

3.2. BCA (BANK CENTRAL ASIA) – Priority AccountThis bank is one of the oldest banks in Indonesia. To stand out among the crowds, this bank launched a product for the premium customers who have bigger incomes with bigger administration fee and compensated with prioritized service.

Many people are growing tired waiting in queue just to do a small bank transaction. By opening a Priority Account, the account holders have special privilege on special que that is often much shorter (if not empty) compared to the normal account holders.

-Ambient ConditionPriority account holders have a special dedicated level to provide the best and quickest service compared to the normal account holders. This level only has few comfortable chairs and dedicated customer officers that ready to serve the customers as they come without have to que standing.

To overcome the smell of money, that often despised by many people, the bank install automatic spray to neutralize any unpleasant odour, especially from money.

In the entrance to the special level there’s an extra security guard to give higher sense of security when waiting or when doing transaction. Priority accounts must have minimum money in the accounts more than USD 10,000.- thus better sense of security is needed by the customers.

The staffs have gone through special training including English courses so they can communicate better with foreign people. The staffs wearing uniforms that are clean, tidy, and look professional. The hair also tidy to give more professional perception.

-Spatial Layout and FunctionalityThe receptionist is right in front of the main entrance door to address the newly come customers. After being addressed by the receptionist, the customers can immediately go to the specific desk to get their specific problem solved.

Special booths are provided to address the need of the priority account holders, so it it is a tailored service that can be adjusted and customized to meet the variety needs of the patrons.

There is a special machine that provides numbers, later this number will be called by the customer service. With this, the customers don’t have to stand and wait in the agonizing queue.

Sofas are placed adjacent to the special booths, there are magazines and product info near the sofas for the customers to kill the waiting time. Plants are nicely located to give green and fresh feeling around the room.

The ceiling is made high to give spacious feeling and also to have better air circulation.

-Signs, Symbols and ArtefactsBCA logo is a very well known logo in Indonesia as this is one of the oldest banks in Indonesia. This logo is simple with dominating colour blue that gives cool and inviting sense.

-Virtual ServicescapeThe company’s website is emphasizing on lightness, security and easiness of operating. This is to represent the level service – quick, secured, and easy can be expected when coming to the actual bank.

The website is dominated with colour blue that also sync with the company logo. There are pictures that show an operator that is beautiful and smiling to give feeling that the employees of the actual bank are as nice and as beautiful as the woman in the website.

-Sex of Service ProviderMost of the staffs are dominated by women, where it is locally believed that women are more careful in doing their works and also provide nice and more patient service compared to men.

3.3. ANGUS HOUSE RestaurantThis restaurant is one of the most expensive steak restaurants in Jakarta – Indonesia that provides different ambience as it is located in one of the tallest building in Jakarta.

This restaurant is heavily influenced by Japanese management because the original owner is Japanese and they sell some Japanese mini-cow steaks with premium price that cannot be found anywhere else in Jakarta.

-Ambient ConditionThe restaurant is decorated accordingly to give romantic and luxurious ambience. The lightning is dim and each table is brightened with a candle light supporting the romantic atmosphere.

Steaks have been known to be well partner with wines, thus the restaurant install an automatic sprayer that emits wine fragrance. This is to intrigue customers to purchase more wines during the event.

The staffs are properly dressed as a butler with formal wear, and butterfly tie. They all well mannered and looked to be professional to what they are doing. The chef is wearing white formal chef wear with high hat. This give different impression to customers where not often seen in other places.

-Spatial Layout and FunctionalityThe restaurant offers a private room should the patrons prefer to be left alone with his / her partner during the event. The butler and servant will come from time to time to check. Should the customer don’t prefer this special private room, they can use the normal table and chairs for couples or family.

Furnishings are comfortable with classic look to boost the luxurious look of the restaurant. The floors are carpeted also to give more elegant impression.

The restroom is special as is big and private with big glasses, and with expensive soaps and clean towel. This gives special impression to customer as they don’t feel sharing the toilet with others.

-Signs, Symbols and ArtefactsAngus House has been in the market for many years, but due to the premium pricing, only a handful of people know this place. However, the sign doesn’t really represent that it is luxurious place, only those who has experienced dining in this place would know.

Otherwise, the sign is only a cartoon-like cow face with wording around it “Angus house”. This sign should be modified in order to give better sense of luxury and prestigious for experiencing dining in this fine restaurant.

-Virtual ServicescapeThis company doesn’t have the company website as yet, they should have one to better promote their product in this ever increasing competition from other luxurious restaurants. However, Angus house should modify and carefully plan the more proper signs / symbols / artefacts that represent more of their luxurious.

-Sex of Service ProviderThe staffs are dominated by men, and only a handful of women that work as the servants. The male are working as the butlers that cater the need of the customers. Males servants or can be referred as butlers are seen as more experienced and more professional then female butler. This impression might be coming from British influence that the head of servants must be men.

REFERENCESAng, Swee Hoon and Siew Meng Leong (1989) ‘Search, interaction, and evaluation in customized versus standardized services: a propositional inventory’ in Bitner, M J and Crosby, L A (eds) Designing a Winning Service Strategy American Marketing Association, Chicago, IL, pp 52-57Barker, R G (1968) Ecological Psychology Stanford University Press, Stanford, CABasow, S. (1992). Gender Stereotypes and Roles, Third Edition. Pacific Grove, CA: Brooks/Cole Publishing Co.

Bitner, M.J., 1992. Servicescapes: the impact of physical surroundings on customers and employees. Journal of Marketing 56, 57–71.

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Browne, Glenn J., John R. Durrett, and James C.Wetherbe (2004), “Consumer Reactions toward Clicks and Bricks: Investigating Buying Behaviour On-line and at Stores,” Behaviour&InformationTechnology, 23 (4), 237-45.

Ching, F., 1996. Architecture: Form, Space, and Order. Van Nostrand, New York.

Clarke, I., Kell, I., Schmidt, R., Vignali, C., 1998. Thinking the thoughts they do: symbolism and meaning in the consumer experience of the British pub. Qualitative Market Research 1 (3), 132–144.

Davis, T R V (1984) ‘The influence of the physical environment in offices’ Academy of Management Review 9 (2) 271-283Donovan, R and Rossiter, J (1982) ‘Store atmosphere: an environmental psychological approach’ Journal of Retailing 58Eileen Fischer, Brenda Gainer, Julia Bristor – the sex of the service provider – does it influence perceptions of service quality? Journal of Retailing, Volume 73(3), pp. 361-382, 1997Eiseman, L., 1998. Colors For Your Every Mood. Capital Books, Virginia.

Fox, K F and Bender, S G D F (1986) ‘Behaviour-setting analysis to improve bank service delivery’ in Venkatesen, M, Schmalensee, D M and Marshall, C (eds) Creativity in Services Marketing American Marketing Association, Chicago, IL, pp 104-105Gordon, S. (1991). Prisoners of Men’s Dreams: Striking Out for a New Feminine Future. Boston, MA: Little, Brown.

Hall, Richard H. and Patrick Hanna (2004), “The Impact of Web Page Text-Background Colour Combinations on Readability, Retention, Aesthetics and Behavioural Intention,” Behaviour & Information Technology, 23 (3), 183-95.

Harrell, G D and Hutt, M D (1976) ‘Crowding in retail stores'; MSU Business Topics (Winter) 33-39Hirsch, A.R., 1991. Nostalgia: a neuropsychiatric understanding. Paper Presented at the Annual Meeting of the Association for Consumer Research Conference, Chicago, IL.

Hui, M.K., Dube, L., Chebat, J., 1997. The impact of music on consumers’ reactions to waiting for services. Journal of Retailing 73 (1), 87–104.

Ingrid Y. Lin; 2004; Hospitality Management 23 163–178 Evaluating a servicescape: the effect of cognition and emotionIris Vilnai-Yavetz and Anat Rafaeli; Aesthetics and Professionalism of Virtual Servicescapes; Journal of Service Research 2006; 8; 245Jacob, C., 2006. Styles of background music and consumption in a bar: an empirical evaluation. International; Journal of Hospitality Management 25 (4), 716–720.

Janiszewski, C., van Osselaer, S.M.J., 2000. A connectionist model of brand-quality associations. Journal of Marketing Research XXXVII, 331–350.

Jones, P., Charlesworth, A., Simms, V., Hillier, D., Comfort, D., 2003. The management challenges of the evening and late night economy within town and city centers. Management Research News 26 (10), 96–104.

King B. Extra billion won’t save basketball. Street Smith’s Sports Bus J 2; 2000Kotler P. Atmospherics as a marketing tool. J Retailing 1973;49:48 – 64Krzysztof Kubackia,[1], Heather Skinnerb, Scott Parfittb, Gloria Mossb; 2007; Comparing nightclub customers’ preferences in existing and emerging markets; Hospitality Managemen 2007Kurtich, J., Eakin, G., 1993. Interior Architecture. Van Nostrand Reinhold, New York.

Lassar, W., Mittal, B., Sharma, A., 1995. Measuring customerbased brand equity. Journal of Consumer Marketing 12 (4), 11–19Laurette Dube, Sylvie Morin; 1999; Background music pleasure and store evaluation Intensity effects and psychological mechanisms Faculty of Management, McGill University 1001, Sherbrooke St. (W.), Montreal, Quebec, Canada H3A 1G5 Journal of Business Research 54 (2001) 107– 113Lazarus, R.S., 1999. Emotions and Adaptation. Oxford University Press, New York, Oxford.

Levitt, T., 1981. Marketing intangible products and product intangibles. Harvard Business Review 59 (3), 94–102.

Mackie, D., D. Hamilton, J. Susskind, and F. Rosselli. (1996). “Social Psychological Foundations of Stereotype Formation,” Pp. 41-78 in Stereotypes and Stereotyping, edited by C.N. Macrae, C. Stangor, and M. Hewstone. New York: The Guilford Press.

McCormick, E J (1976) Human Factors in Engineering and Design McGraw-Hill, New YorkMehrabian, A and Russell, J A (1974) An Approach to Environmental Psychology Massachusetts Institute of Technology, Cambridge, MAMilliman RE. The influence of background music on the behavior of restaurant patrons. J Consum Res (September) 1986;13:286– 9Milliman RE. Using background music to affect the behavior of supermarkets shoppers. J Mark (Summer) 1982;46:86– 91.

Mummalaneni, Venkatapparao (2005), “An Empirical Investigation of Web Site Characteristics, Consumer Emotional States and On-line ShoppingBehaviors,” Journal of Business Research, 58 (4), 526-32.

Nasar, Jack L., ed. (1988), Environmental Aesthetics: Theory, Research and Applications. Cambridge, UK: Cambridge University Press.

Oliver, R.L., 1980. A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research17, 460–469.

Oliver, R.L., 1981. Measurement and evaluation of satisfaction processes in retail settings. Journal of Retailing 57, 34–57.

Parasuraman A, Zeithaml VA, Berry LL. A conceptual model of service quality and its implications for future research. J Mark 1985;49:41 – 50Rafaeli, Anat and Iris Vilnai-Yavetz (2004), “Emotion as a Connection of Physical Artifacts and Organizations,” Organization Science, 15 (6), 671-86.

Reichheld F, Sasser Jr WE. Zero defections: quality comes to services.Harvard Bus Rev 1990;68:105–11Robinson E. It’s where you play that counts. Fortune 1997;136(2):54– 7.

Rogers, E.M. and D.K. Bhowmik. (1971). “Homophily-Heterophily: Relational Concepts for Communication Research, Public Opinion Quarterly, 34,523-538.

Roscoe Hightowera,*, Michael K. Bradyb, Thomas L. Bakerc; Investigating the role of the physical environment in hedonic service consumption: an exploratory study of sporting events; Journal of Business Research 55 (2002) 697– 707Russell, J A and Pratt, G (1980) ‘A description of the affective quality attributed to environments’ Journal of Personality and Social Psychology 38 (2) 311-322Russell, J A and Snodgrass, J (1987) ‘Emotion and the environment’ in Stokols, D and Altman, I (eds) Handbook of Environmental Psychology Vol 1, John Wiley, New York, pp 245-281Sacks, R. (1989). “Women at Work,” In View, November-December: 16.

Schiffman, H.R., 2001. Sensation and Perception, 5th Edition. Wiley, New York.

Seidel, A (1983) ‘Way finding in public space: the Dallas-Fort Worth, USA airport’ in Anesco, D, Griffen, J and Potter, J (eds) Proceedings of the Fourteenth International Conference of the Environmental Design Research Association Environmental Design Research Association, Lincoln, NBSkinner, H., Moss, G., Parfitt, S., 2005. Nightclubs and bars: what do customers really want? International Journal of Contemporary Hospitality Management 17 (2), 114–124.

Stone, Nancy J. and Anthony J. English (1998), “Task Type, Posters, and Workspace Color on Mood, Satisfaction, and Performance,” Journal of Environmental Psychology, 18, 175-85.

Thompson, S. H. Teo (2002), “Attitudes toward Online Shopping and the Internet,” Behaviour & Information Technology, 21 (4), 259-71.

Wener, R E (1985) ‘The environmental psychology of service encounters’ inCzepiel, J, Solomon, M and Surprenant, C (eds) The Service EncounterLexington Books, Lexington, MA, pp 101-112Wicker, A W (1984) An lmroduction to Environmental Psychology Cambridge University Press, New YorkWirtz, Jochen and John E. G. Bateson, (1999), “Consumer Satisfaction with Services: Integrating the Environment Perspective in Services Marketing into the Traditional Disconfirmation Paradigm,” Journal of Business Research, 44, 55-66.

Yun, Myung Hwan, H. Sung Han, Kwang-Jae Kim, Jiyoung Kwahk, W. Sang Hong, and Seo Jong Kim (2001), “Incorporating User Satisfaction into the Look-and-Feel of Wireless Phones,” in The International Conference on Affective HumanFactors Design(CAHD 2001), Martin G. Helander, Khalid M. Halimahtun, and Ming Po Tham, eds. Singapore: ASEAN Academic Press.

Sales Management

The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner

The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages.

The geographic sales organization structure is where “sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function” (Ingram et al. 2004, pp. 81) The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication. Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time.

The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, “the objective is for salespeople to become experts in the assigned product categories” (Ingram et al. 2004, pp. 82). This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the selling of home contents insurance. An advantage of this is the salespeople become experts in a particular product increasing sales confidence and customer satisfaction. The disadvantage is the two teams are likely to “cross over” on each other territories, resulting in geographic and customer duplication. Customer dissatisfaction is also likely as the customer needs and wants were not able to be satisfied on the one visit, as the sales representative specialization is limited to one product only. Another disadvantage of the product sales organization is the high cost as more staff and training is required.

The market sales organization is becoming increasingly popular amongst today’s organizations. “The basic objective of market specialization is to ensure that salespeople understand how customers use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customers needs better”. (Ingram et al. 2004, pp. 83). An advantage of this type of organization structure is that staff become specialized in a number of tasks and is able to meet all needs of the customer. They have a better understanding of the product. Disadvantages of the market sales organization are high costs and possible geographic duplication.

The final organization structure is the functional sales organization, this is a two-tiered sales organization with separate functions. This organization is mostly used for products that require considerable service after the sale and different skills for the selling of the product. The advantage of this is specialization leading to efficiency in performing selling activities. Disadvantages include geographic and customer duplication. Customer dissatisfaction may also take place as the customer may dislike the change in salespeople and sales people sometimes dislike the change in customers.

As you can see the structure of the sales organization has both its advantages and disadvantage in helping salespeople and sales managers perform required tasks in an efficient and effective manner. Not one organization is suited completely to a sales organization, therefore most organizations tend to use a mixture of each structure to maximise the advantages and minimise the disadvantages.

Sales organization structures are the vehicle through which strategic plans are translated into selling operations in the market place

For the successful implementation of organizational strategies, sales management must adapt a sales organization structure, in tune with its particular selling situation. There are many pros and cons of the sales organization being the vehicle through which strategic plans are translated into selling operations in the market place.

The sales organization is extremely complex and a firm is not often suited to one organization sales structure alone, it is not uncommon for firms to combine several characteristics of each sales organization structure, otherwise known as a hybrid sales organization. The sales organization must complement the selling situation for strategies to succeed. The complexity of the sales organization structure can have a negative impact by leading firms into developing an inappropriate sales organization structure to the selling situation, and therefore organizational strategies are not met or attained in the most effective and efficient manner. As a selling situation changes so must the sales organization, the complexity of the sales structure makes this a very difficult task for firms, however, if implemented correctly the firm will reap the benefits as strategic plans will be met in an efficient and effective manner.

An important advantage of the sales organization being a vehicle through which strategic plans are translated into selling operations in the market place, is that management has direct control of strategic plans through the structure. For example as outlined in “sales management can balance the skew between the selling effort or selling skill by employing a generalised or specialized salesforce” (Ingram et al. 2004, pp. 80). Therefore controlling the organization structure in order to meet strategic plans.

Strategic changes almost always necessitate adjustments in sales organization structure

Strategic strategies must be consistent at all levels of the sales organization structure, and therefore a change at one level will almost always necessitate in changes to the sales organization at other levels. This can act as an advantage to a firm as it ensures all levels of the organization are aligned and working towards the same organizational goal, promoting consistency and efficiency.

The sales organization structure is extremely complex so continually reworking this structure to align with strategic strategies can prove disfavorable. Staff can loose momemuntum and lack motivation the sales organization is restructed on a frequent basis. Specialization will not occur and selling tasks will not be carried out in an efficient and effective manner. As you can see there are many disadvantages in strategic changes almost always necessitating in adjustments to the sales organization.

Sales organization structures can be extremely complex with many boxes and arrows

The sales organization structure must ensure that all required selling and management activities are performed and therefore can be extremely complex with many boxes and arrows

A complex sales organization structure can result by incorporating several structure types into one, resulting as an advantage by maximising the advantages and minimising the disadvantages in the selling effort. Combining several elements of the sales organization structures acts as another advantage to complex sales organization structure in that it ensures all selling and management activities are performed.

A disadvantage of having an extremely complex sales organization, with may boxes and arrows, is the difficulty in designing and the maintenance of such a structure. Strategic changes at one level require changes at other organizational levels, as all levels must be consistent and interrelated to become effective.

The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner

The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages.

The geographic sales organization structure is where “sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function” (Ingram et al. 2004, pp. 81) The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication. Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time.

The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, “the objective is for salespeople to become experts in the assigned product categories” (Ingram et al. 2004, pp. 82). This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the selling of home contents insurance. An advantage of this is the salespeople become experts in a particular product increasing sales confidence and customer satisfaction. The disadvantage is the two teams are likely to “cross over” on each other territories, resulting in geographic and customer duplication. Customer dissatisfaction is also likely as the customer needs and wants were not able to be satisfied on the one visit, as the sales representative specialization is limited to one product only. Another disadvantage of the product sales organization is the high cost as more staff and training is required.

The market sales organization is becoming increasingly popular amongst today’s organizations. “The basic objective of market specialization is to ensure that salespeople understand how customers use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customers needs better”. (Ingram et al. 2004, pp. 83). An advantage of this type of organization structure is that staff become specialized in a number of tasks and is able to meet all needs of the customer. They have a better understanding of the product. Disadvantages of the market sales organization are high costs and possible geographic duplication.

The final organization structure is the functional sales organization, this is a two-tiered sales organization with separate functions. This organization is mostly used for products that require considerable service after the sale and different skills for the selling of the product. The advantage of this is specialization leading to efficiency in performing selling activities. Disadvantages include geographic and customer duplication. Customer dissatisfaction may also take place as the customer may dislike the change in salespeople and sales people sometimes dislike the change in customers.

As you can see the structure of the sales organization has both its advantages and disadvantage in helping salespeople and sales managers perform required tasks in an efficient and effective manner. Not one organization is suited completely to a sales organization, therefore most organizations tend to use a mixture of each structure to maximise the advantages and minimise the disadvantages.

Sales organization structures are the vehicle through which strategic plans are translated into selling operations in the market place

For the successful implementation of organizational strategies, sales management must adapt a sales organization structure, in tune with its particular selling situation. There are many pros and cons of the sales organization being the vehicle through which strategic plans are translated into selling operations in the market place.

The sales organization is extremely complex and a firm is not often suited to one organization sales structure alone, it is not uncommon for firms to combine several characteristics of each sales organization structure, otherwise known as a hybrid sales organization. The sales organization must complement the selling situation for strategies to succeed. The complexity of the sales organization structure can have a negative impact by leading firms into developing an inappropriate sales organization structure to the selling situation, and therefore organizational strategies are not met or attained in the most effective and efficient manner. As a selling situation changes so must the sales organization, the complexity of the sales structure makes this a very difficult task for firms, however, if implemented correctly the firm will reap the benefits as strategic plans will be met in an efficient and effective manner.

An important advantage of the sales organization being a vehicle through which strategic plans are translated into selling operations in the market place, is that management has direct control of strategic plans through the structure. For example as outlined in “sales management can balance the skew between the selling effort or selling skill by employing a generalised or specialized salesforce” (Ingram et al. 2004, pp. 80). Therefore controlling the organization structure in order to meet strategic plans.

Strategic changes almost always necessitate adjustments in sales organization structure

Strategic strategies must be consistent at all levels of the sales organization structure, and therefore a change at one level will almost always necessitate in changes to the sales organization at other levels. This can act as an advantage to a firm as it ensures all levels of the organization are aligned and working towards the same organizational goal, promoting consistency and efficiency.

The sales organization structure is extremely complex so continually reworking this structure to align with strategic strategies can prove disfavorable. Staff can loose momemuntum and lack motivation the sales organization is restructed on a frequent basis. Specialization will not occur and selling tasks will not be carried out in an efficient and effective manner. As you can see there are many disadvantages in strategic changes almost always necessitating in adjustments to the sales organization.

Sales organization structures can be extremely complex with many boxes and arrows

The sales organization structure must ensure that all required selling and management activities are performed and therefore can be extremely complex with many boxes and arrows

A complex sales organization structure can result by incorporating several structure types into one, resulting as an advantage by maximising the advantages and minimising the disadvantages in the selling effort. Combining several elements of the sales organization structures acts as another advantage to complex sales organization structure in that it ensures all selling and management activities are performed.

A disadvantage of having an extremely complex sales organization, with may boxes and arrows, is the difficulty in designing and the maintenance of such a structure. Strategic changes at one level require changes at other organizational levels, as all levels must be consistent and interrelated to become effective.

The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner

The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages.

The geographic sales organization structure is where “sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function” (Ingram et al. 2004, pp. 81) The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication. Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time.

The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, “the objective is for salespeople to become experts in the assigned product categories” (Ingram et al. 2004, pp. 82). This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the selling of home contents insurance. An advantage of this is the salespeople become experts in a particular product increasing sales confidence and customer satisfaction. The disadvantage is the two teams are likely to “cross over” on each other territories, resulting in geographic and customer duplication. Customer dissatisfaction is also likely as the customer needs and wants were not able to be satisfied on the one visit, as the sales representative specialization is limited to one product only. Another disadvantage of the product sales organization is the high cost as more staff and training is required.

The market sales organization is becoming increasingly popular amongst today’s organizations. “The basic objective of market specialization is to ensure that salespeople understand how customers use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customers needs better”. (Ingram et al. 2004, pp. 83). An advantage of this type of organization structure is that staff become specialized in a number of tasks and is able to meet all needs of the customer. They have a better understanding of the product. Disadvantages of the market sales organization are high costs and possible geographic duplication.

The final organization structure is the functional sales organization, this is a two-tiered sales organization with separate functions. This organization is mostly used for products that require considerable service after the sale and different skills for the selling of the product. The advantage of this is specialization leading to efficiency in performing selling activities. Disadvantages include geographic and customer duplication. Customer dissatisfaction may also take place as the customer may dislike the change in salespeople and sales people sometimes dislike the change in customers.

As you can see the structure of the sales organization has both its advantages and disadvantage in helping salespeople and sales managers perform required tasks in an efficient and effective manner. Not one organization is suited completely to a sales organization, therefore most organizations tend to use a mixture of each structure to maximise the advantages and minimise the disadvantages.

Sales organization structures are the vehicle through which strategic plans are translated into selling operations in the market place

For the successful implementation of organizational strategies, sales management must adapt a sales organization structure, in tune with its particular selling situation. There are many pros and cons of the sales organization being the vehicle through which strategic plans are translated into selling operations in the market place.

The sales organization is extremely complex and a firm is not often suited to one organization sales structure alone, it is not uncommon for firms to combine several characteristics of each sales organization structure, otherwise known as a hybrid sales organization. The sales organization must complement the selling situation for strategies to succeed. The complexity of the sales organization structure can have a negative impact by leading firms into developing an inappropriate sales organization structure to the selling situation, and therefore organizational strategies are not met or attained in the most effective and efficient manner. As a selling situation changes so must the sales organization, the complexity of the sales structure makes this a very difficult task for firms, however, if implemented correctly the firm will reap the benefits as strategic plans will be met in an efficient and effective manner.

An important advantage of the sales organization being a vehicle through which strategic plans are translated into selling operations in the market place, is that management has direct control of strategic plans through the structure. For example as outlined in “sales management can balance the skew between the selling effort or selling skill by employing a generalised or specialized salesforce” (Ingram et al. 2004, pp. 80). Therefore controlling the organization structure in order to meet strategic plans.

Strategic changes almost always necessitate adjustments in sales organization structure

Strategic strategies must be consistent at all levels of the sales organization structure, and therefore a change at one level will almost always necessitate in changes to the sales organization at other levels. This can act as an advantage to a firm as it ensures all levels of the organization are aligned and working towards the same organizational goal, promoting consistency and efficiency.

The sales organization structure is extremely complex so continually reworking this structure to align with strategic strategies can prove disfavorable. Staff can loose momemuntum and lack motivation the sales organization is restructed on a frequent basis. Specialization will not occur and selling tasks will not be carried out in an efficient and effective manner. As you can see there are many disadvantages in strategic changes almost always necessitating in adjustments to the sales organization.

Sales organization structures can be extremely complex with many boxes and arrows

The sales organization structure must ensure that all required selling and management activities are performed and therefore can be extremely complex with many boxes and arrows

A complex sales organization structure can result by incorporating several structure types into one, resulting as an advantage by maximising the advantages and minimising the disadvantages in the selling effort. Combining several elements of the sales organization structures acts as another advantage to complex sales organization structure in that it ensures all selling and management activities are performed.

A disadvantage of having an extremely complex sales organization, with may boxes and arrows, is the difficulty in designing and the maintenance of such a structure. Strategic changes at one level require changes at other organizational levels, as all levels must be consistent and interrelated to become effective.

The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner

The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages.

The geographic sales organization structure is where “sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function” (Ingram et al. 2004, pp. 81) The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication. Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time.

The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, “the objective is for salespeople to become experts in the assigned product categories” (Ingram et al. 2004, pp. 82). This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the selling of home contents insurance. An advantage of this is the salespeople become experts in a particular product increasing sales confidence and customer satisfaction. The disadvantage is the two teams are likely to “cross over” on each other territories, resulting in geographic and customer duplication. Customer dissatisfaction is also likely as the customer needs and wants were not able to be satisfied on the one visit, as the sales representative specialization is limited to one product only. Another disadvantage of the product sales organization is the high cost as more staff and training is required.

The market sales organization is becoming increasingly popular amongst today’s organizations. “The basic objective of market specialization is to ensure that salespeople understand how customers use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customers needs better”. (Ingram et al. 2004, pp. 83). An advantage of this type of organization structure is that staff become specialized in a number of tasks and is able to meet all needs of the customer. They have a better understanding of the product. Disadvantages of the market sales organization are high costs and possible geographic duplication.

The final organization structure is the functional sales organization, this is a two-tiered sales organization with separate functions. This organization is mostly used for products that require considerable service after the sale and different skills for the selling of the product. The advantage of this is specialization leading to efficiency in performing selling activities. Disadvantages include geographic and customer duplication. Customer dissatisfaction may also take place as the customer may dislike the change in salespeople and sales people sometimes dislike the change in customers.

As you can see the structure of the sales organization has both its advantages and disadvantage in helping salespeople and sales managers perform required tasks in an efficient and effective manner. Not one organization is suited completely to a sales organization, therefore most organizations tend to use a mixture of each structure to maximise the advantages and minimise the disadvantages.

Sales organization structures are the vehicle through which strategic plans are translated into selling operations in the market place

For the successful implementation of organizational strategies, sales management must adapt a sales organization structure, in tune with its particular selling situation. There are many pros and cons of the sales organization being the vehicle through which strategic plans are translated into selling operations in the market place.

The sales organization is extremely complex and a firm is not often suited to one organization sales structure alone, it is not uncommon for firms to combine several characteristics of each sales organization structure, otherwise known as a hybrid sales organization. The sales organization must complement the selling situation for strategies to succeed. The complexity of the sales organization structure can have a negative impact by leading firms into developing an inappropriate sales organization structure to the selling situation, and therefore organizational strategies are not met or attained in the most effective and efficient manner. As a selling situation changes so must the sales organization, the complexity of the sales structure makes this a very difficult task for firms, however, if implemented correctly the firm will reap the benefits as strategic plans will be met in an efficient and effective manner.

An important advantage of the sales organization being a vehicle through which strategic plans are translated into selling operations in the market place, is that management has direct control of strategic plans through the structure. For example as outlined in “sales management can balance the skew between the selling effort or selling skill by employing a generalised or specialized salesforce” (Ingram et al. 2004, pp. 80). Therefore controlling the organization structure in order to meet strategic plans.

Strategic changes almost always necessitate adjustments in sales organization structure

Strategic strategies must be consistent at all levels of the sales organization structure, and therefore a change at one level will almost always necessitate in changes to the sales organization at other levels. This can act as an advantage to a firm as it ensures all levels of the organization are aligned and working towards the same organizational goal, promoting consistency and efficiency.

The sales organization structure is extremely complex so continually reworking this structure to align with strategic strategies can prove disfavorable. Staff can loose momemuntum and lack motivation the sales organization is restructed on a frequent basis. Specialization will not occur and selling tasks will not be carried out in an efficient and effective manner. As you can see there are many disadvantages in strategic changes almost always necessitating in adjustments to the sales organization.

Sales organization structures can be extremely complex with many boxes and arrows

The sales organization structure must ensure that all required selling and management activities are performed and therefore can be extremely complex with many boxes and arrows

A complex sales organization structure can result by incorporating several structure types into one, resulting as an advantage by maximising the advantages and minimising the disadvantages in the selling effort. Combining several elements of the sales organization structures acts as another advantage to complex sales organization structure in that it ensures all selling and management activities are performed.

A disadvantage of having an extremely complex sales organization, with may boxes and arrows, is the difficulty in designing and the maintenance of such a structure. Strategic changes at one level require changes at other organizational levels, as all levels must be consistent and interrelated to become effective.

The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner

The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages.

The geographic sales organization structure is where “sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function” (Ingram et al. 2004, pp. 81) The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication. Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time.

The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, “the objective is for salespeople to become experts in the assigned product categories” (Ingram et al. 2004, pp. 82). This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the selling of home contents insurance. An advantage of this is the salespeople become experts in a particular product increasing sales confidence and customer satisfaction. The disadvantage is the two teams are likely to “cross over” on each other territories, resulting in geographic and customer duplication. Customer dissatisfaction is also likely as the customer needs and wants were not able to be satisfied on the one visit, as the sales representative specialization is limited to one product only. Another disadvantage of the product sales organization is the high cost as more staff and training is required.

The market sales organization is becoming increasingly popular amongst today’s organizations. “The basic objective of market specialization is to ensure that salespeople understand how customers use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customers needs better”. (Ingram et al. 2004, pp. 83). An advantage of this type of organization structure is that staff become specialized in a number of tasks and is able to meet all needs of the customer. They have a better understanding of the product. Disadvantages of the market sales organization are high costs and possible geographic duplication.

The final organization structure is the functional sales organization, this is a two-tiered sales organization with separate functions. This organization is mostly used for products that require considerable service after the sale and different skills for the selling of the product. The advantage of this is specialization leading to efficiency in performing selling activities. Disadvantages include geographic and customer duplication. Customer dissatisfaction may also take place as the customer may dislike the change in salespeople and sales people sometimes dislike the change in customers.

As you can see the structure of the sales organization has both its advantages and disadvantage in helping salespeople and sales managers perform required tasks in an efficient and effective manner. Not one organization is suited completely to a sales organization, therefore most organizations tend to use a mixture of each structure to maximise the advantages and minimise the disadvantages.

Sales organization structures are the vehicle through which strategic plans are translated into selling operations in the market place

For the successful implementation of organizational strategies, sales management must adapt a sales organization structure, in tune with its particular selling situation. There are many pros and cons of the sales organization being the vehicle through which strategic plans are translated into selling operations in the market place.

The sales organization is extremely complex and a firm is not often suited to one organization sales structure alone, it is not uncommon for firms to combine several characteristics of each sales organization structure, otherwise known as a hybrid sales organization. The sales organization must complement the selling situation for strategies to succeed. The complexity of the sales organization structure can have a negative impact by leading firms into developing an inappropriate sales organization structure to the selling situation, and therefore organizational strategies are not met or attained in the most effective and efficient manner. As a selling situation changes so must the sales organization, the complexity of the sales structure makes this a very difficult task for firms, however, if implemented correctly the firm will reap the benefits as strategic plans will be met in an efficient and effective manner.

An important advantage of the sales organization being a vehicle through which strategic plans are translated into selling operations in the market place, is that management has direct control of strategic plans through the structure. For example as outlined in “sales management can balance the skew between the selling effort or selling skill by employing a generalised or specialized salesforce” (Ingram et al. 2004, pp. 80). Therefore controlling the organization structure in order to meet strategic plans.

Strategic changes almost always necessitate adjustments in sales organization structure

Strategic strategies must be consistent at all levels of the sales organization structure, and therefore a change at one level will almost always necessitate in changes to the sales organization at other levels. This can act as an advantage to a firm as it ensures all levels of the organization are aligned and working towards the same organizational goal, promoting consistency and efficiency.

The sales organization structure is extremely complex so continually reworking this structure to align with strategic strategies can prove disfavorable. Staff can loose momemuntum and lack motivation the sales organization is restructed on a frequent basis. Specialization will not occur and selling tasks will not be carried out in an efficient and effective manner. As you can see there are many disadvantages in strategic changes almost always necessitating in adjustments to the sales organization.

Sales organization structures can be extremely complex with many boxes and arrows

The sales organization structure must ensure that all required selling and management activities are performed and therefore can be extremely complex with many boxes and arrows

A complex sales organization structure can result by incorporating several structure types into one, resulting as an advantage by maximising the advantages and minimising the disadvantages in the selling effort. Combining several elements of the sales organization structures acts as another advantage to complex sales organization structure in that it ensures all selling and management activities are performed.

A disadvantage of having an extremely complex sales organization, with may boxes and arrows, is the difficulty in designing and the maintenance of such a structure. Strategic changes at one level require changes at other organizational levels, as all levels must be consistent and interrelated to become effective.