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(Level 7) Analysing the Competition
Learning outcomes
- Describe the various types of market and explain their affects on companies operating in them.
- Identify the current strengths and competitiveness of a company.
- Explain how analysing the competition can help an organisation to select a suitable strategy for the future.
- Carry out research to investigate your company’s and your competitors’ performance, products and services.
Introduction
Every business operates in unique market conditions. To compete successfully, managers need to collect detailed information about the market and the competition. Only then can they plan strategies that they hope will increase profits or sales levels perhaps by reducing costs, by entering new market segments, or by increasing their share of their existing market.
The first section of this module looks at the different market structures that exist, from a perfectly competitive market to a perfect monopoly. We then look at what is likely to happen if a business takes a particular action in each of the types of market. For example, what would happen if a business in a perfectly competitive market reduced its prices? What would customers do? What would the competitors do? And what long-term outcomes would be likely for the business?
The section continues by looking at how governments react to different types of markets. How will the existence of a monopoly affect their citizens? What can governments do? How can they support their own companies if a market is rapidly developing or if it is declining?
The second section then considers the individual company. What are its strengths and weaknesses? How do customers view its products or services? Is it possible to identify a unique selling point that makes a specific product particularly attractive to customers? Only once managers have analysed their own company’s current performance can they usefully compare that with the performance, products and services of its competitors.
Section three looks at ways of analysing the company’s competitors. Based on this analysis of the company and its competitors, managers can then go on to select a suitable positioning strategy that will create competitive advantage.
The final section briefly surveys the various tools that can help managers to analyse the strengths and weaknesses of their competitors, and then assess their own company’s performance. You’ll see that there is an enormous amount of information publicly available, and that businesses can also purchase specific research findings. You will also find descriptions of the many research methods that can be carried out by the organisation itself.
This module emphasises three key messages. First, managers must collect information about their own company and their competitors if they are to plan a successful strategy for the future. Second, there are many ways of collecting relevant information. Third, managers need to carefully select ways of collecting the most relevant information, and so avoid the problem of information overload.
Your Lessons
- Types of Competition
- Looking at Your Own Strengths
- Looking at the Competition
- Researching the Competition
- Summary
(Level 7) Creativity and Problem Solving
Learning outcomes
- Describe theories about creativity and apply them to individuals and teams that you manage
- Describe the stages of a systematic creative process, and explain how this process can encourage creativity
- Identify and clarify problems and look creatively for possible solutions
- Compare possible solutions to problems and identify the solution that will give the required benefits
Introduction
The world of business moves rapidly, and organisations need to respond quickly and flexibly to ever-changing conditions. Competitors bring out new products, new suppliers become available from countries around the world, customers quickly reject last year’s products and demand new ones, organisations continually search for improved ways of working, seeking ever greater efficiency and quality, the list is endless.
This module looks at ways in which managers can think creatively and solve the problems that they encounter in a rapidly changing environment.
You’ll see that thinking creatively is not generally about having a sudden spark of inspiration. It’s just as much about working with colleagues to search for new ideas, letting your imagination roam freely. You’ll see that a number of techniques are available: they all encourage creativity but the challenge is to find the ones that are most useful to you and your team.
You’ll also see that problem solving involves working through a systematic process. You may, of course, have a sudden insight and immediately find a solution to your problem. Finding the best solution, however, usually takes longer. You’ll see that it is often most effective to work through a systematic process of carefully analysing the problem, creatively finding a number of possible solutions, carefully assessing each of those options, and finally selecting the one that best satisfies your requirements.
The four sections of this module relate closely to each of the four learning outcomes. Section 1 looks at theories about how individual and teams think creatively. Section 2 builds on that theory, describes the stages of a systematic creative process, and considers ways of encouraging creativity.
The next two sections then look at problem solving. Section 3 focuses on the early stages of the problem solving process: identifying exactly what the problem is and looking creatively for possible solutions. Section 4 then describes ways of comparing the options and identifying which solution will create the benefits for the individual team or organisation.
Your Lessons
- Creativity
- The Creative Process
- Identifying and Clarifying a Problem
- Comparing the Options
- Summary
(Level 7) Culture and Ethics
Learning outcomes
- Describe organisational culture and analyse aspects of it in the workplace.
- Identify your organisation’s stakeholders, and analyse their expectations and influence.
- Compare different ethical perspectives and discuss how they may all be used when making decisions.
- Explain the relevance of corporate social responsibility for today’s organisations in relation to social, environmental and governance issues.
This module looks at three ideas that have a huge impact on organisations. However, each of them acts in a rather subtle way, and it’s not easy for managers to have an effect on any one of them.
The first idea is Culture, which is often defined as “The way we do things around here.” You’ll have noticed that you get a very different feel when you enter different workplaces: some are friendly, others feel very unwelcoming; some are noisy, others are filled with a quiet hum of activity; some seem to be based completely on strict rules and authority, others appear more like a happy family.
How have those various cultures developed? What is their effect on the quality of work, output levels, attitudes to innovation, and so on? To what extent can managers change culture and try to create improvements in some planned way?
The second of our ideas is Ethics. When making a decision or creating a plan, do you think about whether the effects will be fair, whether you comments will be honest, or whether your actions will break some kind of moral rule?
The last two decades have seen many examples of immoral, unethical behaviour that has, in the long term, caused major damage to the organisations concerned. You might think of the banking crisis, oil spills, or the use of sweatshop labour in the clothing or sports industries.
By their nature, many management decisions are complex and you have to consider them from a number of perspectives. For example, you might ask whether a decision will affect someone’s rights, whether the outcome will create overall benefits for society, or whether your decision will be seen as ‘fair’. As you work through this section you’ll see many examples where taking ethical decisions actually creates benefits for the manager and the organisation.
Our final idea is that of Corporate Social Responsibility. This is rather a grand term for ensuring that an organisation acts ethically in relation to the physical environment, to the social environment, and in the way that it is governed.
Overall, the aims are that the environment that we leave to our children will be no worse than we inherited; that our organisation should act ethically towards its employees and everyone else in our society; and that the various stakeholders should all be treated fairly and in an open and transparent manner.
As we said at the start: all three of those ideas have a major impact on organisations. Your challenge in this module is to assess their impacts, and then to see how you can use the ideas to create further improvements in your own organisation and your work as a manager.
Your Lessons
- Organisational Culture
- Stakeholders
- Acting Ethically
- Corporate Social Responsibility
- Summary
(Level 7) Customers and Their Needs
Learning outcomes
- Explain the need to build relationships with customers and to satisfy their needs and wishes.
- Discuss the ways in which quality contributes to customers’ satisfaction with the organisation’s products and services.
- Categorise customers into various market segments to aid effective communication.
Introduction
Without a clear idea of who its customers are, and what they want and need, no business is likely to be successful.
In the 1920s, Henry Ford could famously say:
“Any customer can have a car painted any colour that he wants so long as it is black.”
In the 21st Century such an approach is no longer possible. Customers buying a new car are likely to be offered a number of paint colours, a range of model types, different seat covers, a range of engines, and so on.
The aim of modern marketing is to identify and then satisfy each customer’s needs and wants. This is often done by building relationships with customers and using these relationships to create a two-way communication between the two parties. The customer communicates his or her preferences, and the business communicates information about products that will satisfy the customer’s needs and wishes.
As examples, think of websites from which you have bought products recently. From the way in which you search the site, and from your purchasing choices, the retailer will have a clear picture of you and your preferences. When you next visit the site, you may well find that you are directed to particular areas that relate to your previous purchases.
Of course, marketing is not just about trying to make a sale. As the customer you will then use the product and make decisions about whether you are satisfied with your purchase. Your level of satisfaction will often be based on a feeling for the ‘quality’ of the product. Does it do what the adverts claim, and, most importantly, does it do what you want it to do? Your future purchases will often depend on your perception of that products quality: if it does what you want, you may buy another product from the same company. You may even upgrade and spend more money next time.
The final section of the module looks at ways in which the potential customers in a market can be grouped into segments and micro-segments. This is done so that marketing communications (such as advertisements) can be focused effectively onto the most likely targets. Rather than advertising new trainers to everyone in the country, the producer will want to advertise them to a micro-segment that is most likely to use that particular design.
As you can see, this module looks in turn at a number of topics relating to marketing. Don’t forget, however, that the key is to ensure that the focus is on the customer.
We stared this introduction with a quote from Henry Ford. Another of his quotes is less well known, but perhaps more relevant today:
“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.”
Your Lessons
- Putting the Customer First
- Quality and Customers
- Grouping Customers
- Summary
(Level 7) Developing High Performance Teams
Learning outcomes
- Examine and evaluate the organization at intra-personal and individual levels
- Analyse the characteristics of teams and evaluate why they are the most effective organizational unit for high performance
- Assess the marks of high performance at the organizational, team and individual level
- Understand the characteristics of successful teams and assess how teams can be developed for high performance
- Explore how a measurable framework can be put in place for individual development in support of individual and team development goals
- Examine and evaluate social aspects of team working and the benefits for the well-being of the individual
Introduction
Today, high performance in an organization requires a blend of diverse skills, multiple perspectives, judgements and experiences. This is especially so in a world of increasing change, uncertainty and complexity. Organizations recognise that this blend is best achieved through team working.
Effective and well-functioning teams have been shown to be flexible and responsive to changing events and demands. Teams are small enough to adjust their approach to new information, technology and challenges with greater speed, accuracy and effectiveness than can large business units or divisions. The diversity arising from people with very different skills, experiences and personalities enriches the team and it is this mix of people working collaboratively that seems to make the difference. It releases creativity and energy, unlocks the potential for discovery and innovation and focuses people on achieving common goals.
Teams have clear benefits for organizational performance but they also have benefits for the individual. There is much evidence to suggest that individuals actually prefer working in teams rather than on their own. They value the social interactions, the collective learning, the opportunity to bounce ideas off others and the sense of belonging that arises from teams. This leads to increased motivation and work satisfaction and this, in turn, leads to higher performance by the individual.
Teams outperform even the smartest of individuals acting alone. Buzzwords such as ‘networked’, ‘clustered’, ‘connecting the dots' have all arisen from the recognition that cross-functional teams perform far better than individuals working solo. There is energy, dynamism, collaboration in well functioning teams - people build on the contributions of others and come up with innovative ways of doing things.
Figure 1.1 High Performance Teams; networked, dynamic, and collaborative
Overwhelming evidence in support of teams as a vehicle for high performance has led to flatter organizations with teams being the primary performance unit within the organization.
Teams, however, do not simply happen. They must be planned, developed and supported to become successful. Leadership is crucial. Achieving team cohesion and commitment requires special leadership qualities such as motivating and inspiring people, setting clear direction, aligning people, encouraging people and celebrating successes. Leadership must be situational - the leader must know when to be directive, when to be coaching and when to be delegating. Just as teams are empowered, individuals within the team must be empowered in their sphere of expertise. The leader must be aware of the optimal mix of team roles and must recognise the phases in team development.
High performance teams call for special qualities. High-performance teams often practice shared leadership. They encourage constructive interactions and thrive on group learning. They are resilient to setbacks, using these as learning experiences to perform better the next time. They set themselves challenging and inspiring performance goals - they take pride in achieving high performance.
Developing teams goes hand in hand with developing individuals. Leaders must be able to spot talent and potential. They must provide opportunities to develop individuals so that they can achieve their potential. The team culture must be such that personal initiative is encouraged and individuals actively aided in learning from experiences. Individuals must be supported in compiling personal development plans so that they can continually better their performance.
In this unit, we look at the role of leadership and examine how teams and individuals can be developed for high-performance. But first we pose the question - what is high-performance and how is it measured?
Your Lessons
- What is High Performance?
- Leadership for High Performance Teams
- Developing Teams
- Developing Individuals
- Summary
(Level 7) Developing Your Interpersonal Skills
Learning outcomes
- Describe the interpersonal skills that you need in your current and future managerial work.
- Describe specific professional tasks that involve significant levels of interpersonal skills.
- Carry out an audit of your current skills levels and plan how you can improve in future.
- Assess learning approaches and styles and identify those that will best help to achieve your aims.
Introduction
Senior managers spend most of their time with other people.
That’s the main conclusion of a study by Kotter of the most senior managers in large American organisations.
Now think about a young manager who has just been appointed to manage a small supermarket in your local town. That manager will, of course, spend some time checking people’s wages, filling in reports and perhaps ordering new items of equipment. However, most of the time will be taken up with talking to customers, dealing with staff problems, passing on information, and so on. In other words, with tasks that need interpersonal skills.
Those interpersonal skills will typically involve listening carefully, explaining, telling, asking questions, trying to understand other people’s points of view, negotiating, and encouraging group work.
If the manager does the tasks well, it may be that the employees will feel motivated and will work hard to achieve the organisation’s goals. Some leaders have what is called ‘charisma’ and seem to be able to inspire their team. If you analyse that inspiration, you’ll probably find that much of it results from quite simple interpersonal skills.
Can the skills be learned? This module shows you how you can follow a systematic process of comparing what skills you have with the skills that you need in your current and future work. You can then plan how you will fill any gaps in your skills.
This process may not make you a great, charismatic leader like Apple’s Steve Jobs or Body Shop’s founder Anita Roddick, but it will contribute greatly to your future success with your team, and your chances of promotion to more senior positions.
Your Lessons
- What Interpersonal Skills Does a Manager Need?
- Professional Skills
- Career Development and Future Planning
- Learning New Behaviours
- Summary
(Level 7) E-Marketing Communications
Learning outcomes
- Identifying e-marketing communication characteristics
- Understanding the use of traditional e-marketing techniques
- Assessing the role of emerging e-marketing techniques
- Measuring effectiveness of e-marketing communication
- Forecasting future developments in e-marketing communication
Introduction
The success of marketing efforts depends on a range of factors, as we must consider how customers can be reached and the fact that they make their purchasing decisions according to different criteria. The marketing efforts could be based on the traditional marketing mix which includes:
- Product – and how it satisfies the needs of its intended market.
- Place – and how each market requires the product to be available in a way that it does not affect current purchasing patterns.
- Promotion – and the ways used to ensure that customers are aware of the product and that demand increases.
- Price – and the way the value of the product in terms of specific benefits is aligned with a price that potential customers are prepared to pay for it.
- People – and the stakeholders of the product, including customers who are the most important ones.
- Physical appearance – and the way each product can be easily recognised by its shape and look, as well as the characteristics distinguishing the product from competitors’ alternative products.
- Process – and the steps that must be followed for the product to satisfy the relevant demand.
The elements of the marketing mix (also known as the 7Ps) can be classified according to their focus. More specifically, we can have two main categories of marketing mix components, based on whether these can be subjected to a shift change or whether they take more time to adapt to new needs and new products being introduced. Therefore, we have:
- Strategic marketing mix elements – which cannot be changed overnight and include:
- Product
- Place
- People
- Tactical marketing mix elements – which can adapt to change in a more straightforward and prompt manner and include:
- Promotion
- Price
- Process
- Physical appearance
The way products are promoted depends on the nature of each product, the capacity of the organisation and the specific markets. However, the most common ways for promoting products include:
- Advertising – focusing on informing customers about a product’s existence but also about the features and characteristics that may suit specific needs.
- Public Relations – focusing on establishing brand names and perceived quality for organisations and their products.
- Selling – focusing on persuading the customers to buy the specific products.
- Sales promotions – focusing on convincing customers about the product’s value and transforming customer interest into a perceived need.
As mentioned earlier, the role of technology has affected organisations in the sense that they have to integrate technological solutions to their marketing strategies and operations. We must consider how organisations can use technology to boost the success of their marketing efforts. Some of the key issues that must be addressed include:
- Technology – organisations must identify suitable solutions that provide technological support in promoting their products.
- Marketing mix – the seven elements of the marketing mix must be reconsidered to ensure that they take advantage of technological solutions.
- Budget – the financial element of marketing strategy needs to consider how technology can increase costs but also how marketing efforts may become more cost effective.
- Resources – there are several additional resources needed to support technology enabled marketing strategies including software, hardware, staff, training, etc.
- Skills – marketing teams may include technical staff, could hire external help and expertise but also introduce training for new technologies and the use of the Internet in marketing practices.
- Support – the Internet-based marketing techniques are likely to require continuous support either from within the organisation or by experts who are experienced in the way marketing is affected by advanced technologies.
- Media used – there are several different types of media used for modern marketing approaches, ranging from email and informative websites to directed adverts through cookies and social media applications.
- Infrastructure – each organisation must have in place the necessary infrastructure for supporting Internet-based marketing practices, such as servers, databases, email lists, skilled personnel, relevant hardware and software including servers, cookies, and websites.
So far we have provided the foundation for understanding how the transition from traditional marketing approaches to modern, Internet-based practices may take place. The term e-marketing is used to describe how technology can be used to support the application of marketing principles and techniques. The term is also used to describe both direct response and indirect marketing elements supported by the use of Internet technologies.
One of the most important reasons for introducing e-marketing to an organisation is the fact that the Return on Investment (ROI) is far higher compared to traditional marketing techniques. This is expected as it is much more affordable to employ Internet-based techniques, and the fact that the vast majority of customers in modern markets have access to the Internet allows higher penetration.
The reason for so many organisations shifting to e-marketing is that this new approach provides numerous benefits and clear improvements for a range of marketing techniques. For example, e-marketing brings the following benefits:
- Market reach – traditionally businesses were limited to their local, regional or national boarders in terms of the market size and customer reach. However, the Internet allows organisations to reach global markets as there are no longer boundaries which restrict marketing attempts. This allows organisations to reach out to new markets and expand their operations.
- Marketing scope – as Internet technologies can be used in several ways, organisations can increase their marketing audience and attempt to support a wider range of products. This allows not only increasing marketing efforts but also opportunities to consider a broader business scope and support a bigger range of products and services.
- Interactivity – the available marketing tools in traditional markets would be based on one-way communication, attempting to increase awareness for certain products and services within a specific market. Internet technologies support two-way communication, allowing customers to interact with organisations and provide various types of feedback. This can help organisations to assess the success of their marketing campaigns but also to gain more information about how the existing products and services are perceived.
- Immediacy – most e-marketing techniques provide the means for customers to proceed with immediate purchase of goods and orders of services following marketing messages. This means that there is no longer an idle period between marketing messages and customer reaction. There is a seamless process that integrates marketing messages with links to products and services, and functionalities supporting orders and purchases.
- Targeting – Internet technologies provide the means to collect a wealth of customer data, which can be used to target marketing efforts more effectively, but also to react to customer feedback and changes in the market.
- Demographics – the Internet-based market seems to have formulated sub-groups of customers with certain user behaviour, purchasing patterns and customer needs. The use of technology to segment the market, identify market needs and better serve these needs is critical for the success of e-marketing.
- Closed loop marketing – finally, the plethora of data gathering tools can support organisations to perform closed loop marketing, which can be described as an approach based on continuous analysis of market reactions to existing offerings and the performance of certain adjustments based on feedback received as well as analysis findings.
The following sections will cover a range of topics associated with e-marketing and the impact of technology in marketing communications. Initially, we will discover how e-marketing communications provide additional pathways for information exchange between organisations and their customers. Emphasis is placed on the way technology affects communications taking place as part of marketing practices and techniques.
Next, a number of e-marketing techniques are discussed in relation to the way they support an organisation’s marketing strategies. It is necessary to consider that since the mid-1990s e-marketing, also referred to as web marketing, has offered several techniques and tools to organisations. The discussion is focused on the use of well-established e-marketing techniques that have been used for the past decade.
Further discussion is focused on the role of emergent technologies, such as Web 2.0 and social networks, with emphasis on alternative communication approaches and innovative marketing practices. The role of emerging technologies and techniques is explained in relation to an organisation’s marketing strategies.
The module also discusses how certain measures can be used for assessing the effectiveness of e-marketing communication. Emphasis is placed on the criteria that can be used for examining the success of e-marketing practices.
Finally, the module discovers possible future development in e-marketing, and discusses how e-marketing communication will be affected by emerging technologies, and new markets.
Your Lessons
- e-Marketing Communication Characteristics
- The Use of Traditional e-Marketing Techniques
- The Role of Emerging e-Marketing Techniques
- Measuring Effectiveness of e-Marketing Communication
- Future Developments in e-Marketing Communication
- Summary
(Level 7) Exercises In Quantitative Techniques
Learning outcomes
- Apply appropriate techniques to solve management problems
- Develop short and long term forecasts based on historical data
- Assess relationships between variables
- Demonstrate simple scheduling techniques and apply them to problems
- Develop an understanding of inventory control
- Monitor variations over time using appropriate indexes
Introduction
Most areas of modern management involve the regular use of statistics for administration and decision making. Whether information is provided about production and sales levels or available for scheduling and planning, a number of different techniques have been developed to help managers understand the importance of statistical procedures and quantitative skills.
This module discusses the meaning and nature of statistics and describes how such data can be analysed and interpreted. The key concepts of location and dispersion form the basis of the discussion, along with the validity and relevance of statistical sources. Of particular importance is the need to understand that statistics should only provide the information to support decision making, not indicate solutions on their own.
Specific techniques for making forecasts of future performance are introduced with a range of appropriate examples. These allow managers to consider the nature of existing statistics and seek out trends. The mathematical concepts of correlation and regression provide a numeric approach to making forecasts.
Linear programming is demonstrated as an important method for establishing optimum conditions in production, and networks are used to provide an efficient and effective means of project scheduling, with critical path analysis forming the backbone of this valuable technique.
Inventory control is shown to be a valuable mathematical model for stock management and the module concludes with a discussion of the use of indices as an objective way of demonstrating change over a period of time.
Your Lessons
- Introduction to Statistical Techniques
- Forecasting Procedures
- Linear Programming
- Networks and Scheduling
- Other Quantitative Techniques
- Summary
(Level 7) Governance and Directorships
Learning outcomes
- Understand the concept of governance
- Identify issues relating to employment law and legal aspects of governance
- Determine roles and responsibilities of directors
- Distinguish business ownership from business control
- Assess governance and directorship for different business structures
Introduction
This module provides a framework for understanding the area of corporate governance and directorships. The module discusses various issues associated with the two concepts. The module begins with a detailed discussion of the governance concept in a corporate context. Then, the various aspects of corporate governance are explained before discussing, in-depth, legal aspects of governance. A detailed description of employment law is also included in an attempt to discuss various relevant Acts. The module continues with an in-depth analysis of directorships and, more specifically, the issues associated with a director’s role as well as specific responsibilities of such roles. The module also provides a detailed discussion on how to distinguish between business ownership and business control. Finally, the module discusses various means for assessing governance.
Your Lessons
- The Concept of Governance
- Employment Law and Legal Aspects of Governance
- Roles and Responsibilities of Directors
- Distinguishing Business Ownership from Business Control
- Assessing Governance and Directorship for Different Business Structures
- Summary
(Level 7) High Performance Sales
Learning outcomes
- Distinguishing between sales and marketing
- Identifying key aspects of the art of sales
- Understanding the role of peripheral sales elements
- Assessing the characteristics of different sales types
- Measuring sales performance
Introduction
An organisation’s success depends on a number of factors including its operations, its marketing strategy, its human resource management and its sales. One of the most common criteria used for assessing the organisation’s success is sales growth. This is an indication that the organisation manages to maintain its existing customers but also attract interest followed by sales from new markets.
The organisation’s sales team is the core of its sales operations and sales performance depends a lot on the capabilities and motivation of the sales team. Obviously, the organisation’s success depends on the quality and attractiveness of its products for the relevant markets.
The sales team is responsible for following up on the way an organisation’s products and services are presented to the market. There is quite often confusion between the role of the marketing and the sales team. This is understandable as both areas focus on presenting a promise to potential customers with respect to products and services. In other words both marketing and sales teams try to persuade customers that specific products will meet the needs of those who have expressed an interest.
The following pages will try to determine the differences between the sales and marketing operations of an organisation and emphasise the role that the sales team plays towards the overall success of a business. Emphasis is also given to the identification of those factors which affect sales performance.
Initially, this module is concerned with those aspects of sales and marketing that can be used to distinguish between the two interrelated concepts. The focus of the discussion is on identifying the key characteristics of related operations and providing meaningful ways of describing how marketing and sales take place. It is necessary for businesses to decide on performance indicators to be used for both their sales and marketing teams.
Next, the module covers what is known as the art of sales, which can be described as the range of activities taking place when an organisation attempts to complete the transformation of interested individuals to loyal customers. The main practices, techniques, activities and methods associated with sales are discussed in detail.
The process followed for performing business sales includes a number of aspects, with most of them being core activities that must take place in order to confirm a sale. However, there exists a sales environment which we must understand and in particular we must be aware of the ways it may affect the outcome of certain sales operations.
It is obvious that the ways that sales are performed by different organisations are affected by a range of factors. We must consider those aspects that are likely to impose constraints on the sales team (or even support them). The module presents a variety of sales types and explains how these are likely to be supported by various activities.
Finally, the module describes a number of ways for measuring sales performance. The criteria used for selecting the most appropriate method are identified and explained in detail. The impact of sales performance to the overall business success is also discussed and suggestions are made for the way businesses should work on improving their current performance.
Your Lessons
- Distinguishing between Sales and Marketing
- Identifying Key Aspects of the Art of Sales
- Understanding the Role of Peripheral Sales Elements
- Assessing the Characteristics of Different Sales Types
- Measuring Sales Performance
- Summary
(Level 7) Impact of Technology on Business
Learning outcomes
- Define the role of technology in product lifecycles
- Suggest solutions for technology obsolescence issues
- Assess legal issues associated with the use of technology
- Evaluate the impact of e-business on various sectors
- Investigate the role of the Internet in business
- Perform a competitor analysis in e-business
- Analyse threats and opportunities involving the use of technology
Introduction
The way organisations conduct their business is affected by the sector within which they operate, as well as several other factors. Various models attempt to explain how a range of factors may affect the success of a business. Such models take under consideration aspects associated with politics, economical factors, social context, immediate environment, competitors, product specific issues, customer needs and infrastructure. It is quite difficult to agree on a definitive list of factors affecting business.
However, most of the business models measuring impact on success and performance seem to have a common element that is strongly associated with the way technology is used and exploited. It is evident that over the past few decades, the role of technology has become very important in the way organisations perform their operations and support their processes.
There are organisations that are dependent on technology to such an extent that any technological failures are likely to dramatically affect business. The role of technology is critical for organisations that may be involved in sectors such as e-commerce, service provision, online transactions, banking, learning, healthcare and customer care.
Over the past few years we tend to focus on computer-related areas of technology enhancement and improvement. The use of Information and Communication Technologies (ICT) seems to be core for business. The support such technologies provide for processes, operations and transactions helps organisations to improve their performance and increase their revenues and profits.
It is necessary to consider that technology is a concept that may cover software, hardware, networks, and other areas where technological improvement may take place. Organisations must consider how investment in technological evolution may help them to conduct their business in a more effective way.
The investment in technology may take several forms, as organisations may seek ways to integrate technological support in their operations, while businesses may invest resources in the investigation of how business operations may be enhanced by the use of technology. Certain business sectors may require investment in research and development for the creation of new products, the deployment of enhanced services and the mapping of technology support to business offerings.
The following sections discuss in more detail the impact of technology on business by covering a range of important topics and explaining how business concerns may relate to the use of technology.
A very important topic relates to the need for organisations to define their product offerings and provide a detailed description of how the lifecycle of a product may be affected by the use of technology.
The topic of obsolescence is also discussed as it is critical to be able to assess how the evolution of technology requires organisations to review frequently the need for further investment and possibly the replacement of any technology that no longer serves its originally identified purpose in an efficient way.
Furthermore, organisations need to consider how their use of technology must be protected against industrial espionage and, in general, from competitors that wish to replicate successful business models based on technology use. An area of concern is the use of patents as a mechanism for the protection of innovative and creative solutions. Awareness of legal issues associated with the use of technology is also essential for organisations as it is increasingly difficult to forecast and control the impact of technology.
It is also important for organisations to assess the impact of technology on various sectors. As technology is used for transforming business operations to e-business transactions, we must be aware of any issues relating to the way e-business solutions are deployed in different sectors.
Organisations must perform a feasibility study in order to assess their capacity and resources with respect to their ability to invest in the use of the Internet as part of the business. It is critical to assess both the macro- and micro-environment of organisations and examine whether the Internet is likely to pose a threat or an opportunity for the business.
Organisations must also consider the fact that they will not be the only ones capitalising on the use of the Internet, as well as the deployment of solutions that utilise information and communication technologies. It is necessary to identify how other organisations in the same business sector use technology and to investigate the ways organisations may gain a competitive advantage.
Finally, organisations must be able to foresee any threats and opportunities associated with the use of technology in business. It is necessary to evaluate technologies before they become part of a business solution and investigate potential threats and opportunities for the organisation.
Your Lessons
- The Role of Technology in Product Lifecycles
- Technology Obsolescence Issues
- Legal Issues Associated with the Use of Technology
- The Impact of e-Business on Various Sectors
- The Role of the Internet in Business
- Competitor Analysis in e-Business
- Threats and Opportunities within Technology
- Summary
(Level 7) Implementing and Managing Quality Systems
Learning outcomes
- Analyse the evolution of quality thinking and the shift from inspection to prevention.
- Evaluate the business case for quality and the management concept that 'quality is free'.
- Describe the role of standards and regulations as well as quality processes in the Quality Plan (Quality System).
- Contrast Quality Assurance with Quality Control.
- Evaluate Quality Assurance models for change and quality improvement.
- Critically assess the role of quality control in the modern organization, highlighting the role of statistical process control.
Introduction
The word quality is used in a wide variety of contexts in organizations. We refer to a quality product, a quality company, a quality procedure or a service that was of high-quality. So what exactly does quality mean? Does it mean conformance to specifications? Does it mean a product or service without flaws? Does it mean excellence?
What do you associate with quality?
Here are some definitions...
“Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs”
ISO 9000 definition
"Quality denotes an excellence in goods and services, especially as it relates to the degree they conform to requirements and satisfy customers"
American Society for Quality (ASQ)
"Good quality means a predictable degree of uniformity and dependability with a quality standard suited to the customer"
Edward Deming
“Quality is conformance to requirements …”
Philip Crosby
"Quality is getting it right first time"
Philip Crosby
"Quality does not only mean the quality of the product, but also of after sales service, quality of management, the company itself and human life"
Kaoru Ishikawa
The modern view of quality comes from Juran's definition:
"Quality means those features of products which meet customer needs and thereby provide customer satisfaction."
Today quality is inextricably linked with customer satisfaction - the customer's view of quality is the only one that matters. We explore what this means in practice and what is required of organizations to satisfy stated or implied needs and gain customer satisfaction.
We define the framework for managing quality and examine what quality planning, quality assurance and quality control entail.
It is important to distinguish the requirement for quality in two aspects. Firstly, there is the requirement for quality in the processes used to produce products/services. Secondly, there is the clear requirement for quality in the product/service itself. Failure to meet quality in either dimension will result in customer dissatisfaction either directly or indirectly. Of course, the two dimensions of quality are related. Quality in development/production processes is likely to lead to a better quality product/service.
Quality is not an optional activity - it is at the heart of business performance because it is linked with customer satisfaction. Management with foresight know that quality is not an optional extra, it impacts the bottom line.
The approach we take to quality management is that put forward by quality gurus such as Deming, Juran and Crosby. A culture of "doing things right first time" is advocated. This mindset must pervade the organization. In this respect, we also examine approaches undertaken to improve quality such as Kaizen (continuous improvement) and Total Quality Management (TQM).
Your Lessons
- Quality Concepts and Quality Management Defined
- Quality Planning
- Quality Assurance
- Quality Control
- Summary
(Level 7) Innovation and R&D
Learning outcomes
- Describe and assess the factors that are most likely to drive innovation in your organisation
- Develop an innovation process from the original idea to planning implementation
- Assess different ways of identifying and evaluating opportunities
- Describe ways in which organisations can encourage and facilitate innovation
Introduction
Figure 1.1 What’s the next big step in the mobile phone market?
In the last week it’s very likely that you, or a colleague, has used a mobile phone, used the web to make a purchase or found a new route using their satellite navigation system. Within your organisation you may have looked for financial information on a spreadsheet or used the internal computer system to track the progress of a product or service. All of these innovations are relatively recent and have had a major impact on our social and work life.
On a smaller scale, organisations increasingly adopt systems such as Total Quality Management and Quality Circles. These encourage employees to continually look for ways of improving quality, output and processes. The idea here is not to search for the next major innovation but instead to create continuous improvement through a series of minor innovations.
This first section of the module will introduce the idea of innovation. You’ll see that having new ideas can include inventing new products, creating changes to existing models, changing the services that a company provides, changing the processes by which they manufacture products, or indeed all of those. Innovation is clearly a very wide ranging idea, relating to a range of activities from the invention of a brand-new technological invention through to the smallest change in how a single department in a small company might change its processes or procedure.
Once you have seen what we mean by innovation, and seen that the term covers a very wide range of activities, Section 2 goes on to look at how innovation actually occurs.
Whatever your job role, or your organisation, as an innovator your key aims are to identify, pursue and capture value from business opportunities. Section 3 looks at possible sources of new ideas and some factors that may help you to spot suitable opportunities. You then need to assess which of those opportunities are most likely to create growth for the company. Finally, you need to be able to present a business plan that will persuade decision makers to provide you with the funds for your new development.
Section 4 then stands back a little and looks at the place of innovation within an organisation. It helps you to think about questions such as how the company can encourage all employees to come up with innovative ideas, and how the company can be innovative in relation to its business model.
Your Lessons
- The Key Ideas
- The Innovation Process
- Identifying and evaluating opportunities
- Innovation and the Organisation
- Summary
(Level 7) Interpreting Business Accounts
Learning outcomes
- Analyse the different methods commonly used to report financial information
- Develop an understanding of the techniques used to gather financial information.
- Investigate the use of each of the key financial statements for decision making
- Evaluate the financial stability and performance of an organisation using appropriate financial ratio calculations
- Understand the role played by international accounting standards as a means of producing uniform accounting methods
Introduction
Every business organisation is required to collect data on all its financial transactions and report this on a regular basis in the form of company accounts. The ability to interpret the contents of company accounts is essential for financial managers, investors and other stakeholders.
In this module, we look at the process of bookkeeping and show how it is used to gather information for the preparation of formal accounts. The overview provided will allow you to see how each individual transaction is recorded and how, in turn, each one influences the overall financial picture provided by the accounts.
The preparation of the three key financial statements is described in detail and a number of examples are suggested for study. The interpretation of these statements is explained, mainly through the use of a range of ratios which indicate the effectiveness of the financial management of the business and its stability. With reference to these statements, the effects that budgets have on operations are described, along with the topics of depreciation and the importance of working capital management.
The final section of the module discusses the importance of a set of globally adopted accounting standards, without which it would be almost impossible to make useful comparisons between companies operating in different countries or markets.
Your Lessons
- Bookkeeping – an overview
- Introduction to Financial Statements
- The Balance Sheet
- The Profit and Loss Account
- Role of Accounting Standards
- Summary
(Level 7) Making Decisions
Learning outcomes
- Explain the importance of making good decisions.
- Describe and compare a range of ways of collecting the information needed for decision-making.
- Describe and compare a range of ways of generating options.
- Discuss the different techniques that can be used to select the most suitable option.
Introduction
Decision-making is a key task for every manager. Many senior managers are paid high salaries simply because they are able to analyse large quantities of information and reach a good decision. Middle managers will have to make decisions about how their team or department will carry out particular tasks, and will need to decide on a suitable work plan. Even the most junior manager will be expected to make a decision when a team member asks questions such as “What do you want me to do next?”
Many decisions at work need to be made in a systematic, logical way. This module focuses largely on that systematic approach.
The manager needs to start by deciding exactly what aspects of work they need to think about - what problem of opportunity are we considering?
The next stage is to identify the possible ways of overcoming the problem of benefiting from the opportunity - what options have we got?
He or she can then go on to collect information about the situation and each of the options. What do we know, and (often just as important) what don’t we know?
Finally, the manager (perhaps in consultation with other people) needs to make a decision. You’ll see that there are a number of techniques that can help here, but you’ll also see that this stage involves considering a range of factors and thinking about the options from many perspectives. One of the key points is to beware of unintended consequences: you don’t want to adopt what you think is a good policy and find that it causes you problems that you had not even thought about.
As you work though this module, you will also meet a range of decisions that may affect any manager. Inevitably these will not relate to the specific situations that affect your particular company, industry and country. Try always to expand the ideas here to apply to your own work situation, perhaps discussing them with colleagues or friends.
We will encourage you to think about ways of making the best decision and selecting the best option. However, you should also remember the risks of making a poor decision. You would not want to be remembered for selecting the design for the 2001 PontiacAztek, the 1987 Yugo, or the 1958 Edsel Corsair: all on the lists of the worst ten cars. And you certainly would not want to be remembered as the manager who made health and safety decisions before Union Carbide’s disastrous explosion at their Bhopal factory, killing 2,500 people overnight.
Your Lessons
- The Importance of Making Decisions
- Collecting Information
- Identifying the Options
- Making the Decision
- Summary
(Level 7) Managing Cash and Working Capital
Learning outcomes
After completing the module the student should be able to:
- Understand the importance of cash flow and working capital
- Assess the role played by the management of stock
- Identify key issues in financial management
- Evaluate financial performance through the use of key financial ratios
- Understand the use of budgets in financial control
- Identify appropriate methods for raising finance
Introduction
To be able to operate in any way, all businesses rely on the availability of cash to fund their operations and activities. Without the necessary flow of cash, it would be impossible to procure the materials necessary to support production, which in turn would not enable the business to hold appropriate stock levels to satisfy customer demand. Furthermore, without available cash it would not be possible to settle the accounts of suppliers, causing the stream of raw materials to dry up and thus ceasing the production of future goods. All in all, a very gloomy prospect!
However, this need not be the case if appropriate steps are taken to ensure that sufficient cash is available to deal with the day-to-day demands placed on the finances of the business. Working capital provides the buffer necessary to maintain the steady operation for a business.
In this module, we assess the importance of cash and examine the processes involved in the working capital cycle. The need for efficient financial management is described and the importance of the financial statements of a business is stressed. We also discuss the key role played by effective stock control in ensuring that customer demand can be fulfilled but without the need to hold excessive costly levels of both raw materials and completed goods.
The final sections of the module look at the sources of finance that are available to a variety of businesses and examine the value of using budgets as a means of controlling expenditure.
Your Lessons
- The Importance of Cash
- Introduction to Financial Statements
- Raising Cash and Financing a Business
- Using Budgets
- Summary
(Level 7) Managing Projects
Learning outcomes
- Explain what is meant by a project, and describe the key components and processes
- Describe the stages of a project from identifying a business case through to planning the work breakdown structure
- Use a variety of techniques and tools to create an efficient and effective project plan for implementation
- Monitor project progress, take action to identify and correct problems, and close the project.
Introduction
Figure 1.1: China’s Three Gorges Dam
The Three Gorges Dam in China is one of the world’s largest recent projects. With an estimated cost of US$22.5 billion (€17.0 billion), construction involved moving 1.3 million people and took 10 years.
On a much smaller scale, you can think of preparing a meal as a project. It has specific aims, it needs to be carried out using certain resources and must be finished on time.
Very few of us will ever work on a project as big as the Three Gorges Dam, but many managers use project management techniques on a regular basis at work and in their personal lives.
Managers in many roles will also need to plan the running of a team, use systems for planning, allocating and controlling of resources to achieve objectives, and ensure that the work fits into tight deadlines and limited timescales. In your personal life, you may need to plan and implement a holiday or a major decorating project, or complete specific tasks relating to a hobby such as restoring cars or researching the family history. All these tasks use techniques similar to those used in formal project management.
This module starts by looking at the basics of project management. The first section emphasises the importance of defining exactly what the project is designed to achieve, on the need to satisfy a specific business need, and then focusing all the planning on creating the required output.
The later sections then look in turn at the various stages of the project. Section 2 describes the key planning stages. These are perhaps even more important in a project than they are in day-to-day work: after all in a project you only get one chance to get things right.
Section 3 then looks at implementing the plan. How can the project manager ensure that all the many elements of the project contribute effectively to the whole project? How can you ensure that a delay in one team’s work does not have a knock-on effect on the whole timetable? Perhaps most important of all, how can you plan all of the various activities so that you achieve the project deadline?
Finally, Section 4 starts by describing the processes of monitoring performance and output by individual teams and across the whole project. You’ll then see a brief description of how the project team can assess the problem and plan changes that will bring the project back on track. Finally, we’ll consider what actions must be taken before the project can be handed over to the internal or external customer. How does the project manager assess whether the final output satisfies the original requirements, and what can the project team learn so that they can improve their performance on future projects.
This module looks at specific skills, tasks and procedures used in project management. However, do note throughout that all of them will be relevant to other work as a manager. This module is not only relevant to managers who are asked to manage projects.
Your Lessons
- Projects: The Basics
- Initiation, Definition and Planning
- Implementation
- Monitoring, Control and Closure
- Summary
(Level 7) Marketing Strategy
Learning outcomes
- Critically evaluate the contribution of market segmentation and market research in international marketing
- Assess the role of scanning the market environment in identifying opportunities and threats in the marketplace
- Research and evaluate marketing information to assess an organization's marketing strategy
- Compare and contrast market entry strategies
- Assess how the marketing mix can be configured to achieve market strategy objectives
Introduction
In the 21st century, the marketing environment is one of complexity and organizations face many challenges in developing marketing strategy. The external environment of an organization is increasingly characterised by change and uncertainty. Customers, the critical assets of companies, have higher and higher expectations for quality, service and value. In certain business markets, customers view suppliers as strategic partners looking to them to provide thoughtful leadership, creativity and innovation. Developing distinct capabilities that are hard for competitors to imitate therefore becomes a priority for competitive advantage. For many organizations, in a recessionary climate, the search for increased market share and growth means expansion beyond home markets into international markets. These are just some of the challenges.
How then do organizations develop strategies in a complex marketing environment? How do they assess opportunities and threats? Which markets and segments do they target and why? Which market positions play to an organization's strengths? What product portfolio should be maintained for long-term value? These are some of the questions we shall address.
We commence by examining what is meant by markets, products and market segments, and then go on to examine how the marketing environment can be assessed. The marketing environment consists of an organization's external environment as we well as its internal environment. The external environment can be sub-divided into macro and micro environment. By macro environment we mean the broader national and global influences that have the potential to impact a business - political changes, socio-cultural changes, technological innovations, economic cycles, taxation changes and demographic changes. The micro environment, on the other hand, is the environment of the industry or business sphere within which the organization operates - customers, suppliers, competitors, possible new entrants to the industry and strategic partners. The internal environment of an organization consists of all factors that are within it - factors such as organizational structure, leadership and management style, organizational culture, the skills of its people and organizational capabilities. An assessment of the marketing environment gives a view on the opportunities as well as the threats to the organization.
Following an assessment of the marketing environment, an organization can begin to develop its optimal market strategy for competitive advantage. Questions for an organization to address in developing strategy include:
- Which markets, and specifically market segments, is it profitable to enter or continue in?
- What market positioning is it advantageous for the organization to adopt in each segment - leader, follower and so on?
- How can the organization best leverage its internal capabilities?
- How can a corporate portfolio be maintained for long-term value?
- What market entry strategies can be adopted, especially when entering foreign markets?
- How can the organization support market strategy by exploiting every available lever in the marketing mix, the 5Ps - product, price, place, promotion and people?
Strategies must then be turned into actions to achieve market objectives. We examine how to create a marketing plan and manage the marketing strategy on an on-going basis.
Your Lessons
- Markets, Market Segmentation and Products
- Scanning the Marketing Environment
- Developing Market Strategies
- Market Entry Strategies and Routes to Market
- Marketing Mix, Marketing Plan and Market Management
- Summary
(Level 7) Measuring and Rewarding Performance
Learning outcomes
- To understand the concept of performance management
- To evaluate the different approaches to performance appraisal
- To explore the skill of carrying out an effective interview
- To evaluate what makes an effective objective
- To determine when it is appropriate to use disciplinary issues
- To explore the link between performance and reward
Introduction
If you study the business pages of any newspaper, you will read about the ‘performance of an organisation’. You might read about an organisation that has performed better than expected, or an organisation that has experienced a downturn in performance. This is likely to refer to the profits that an organisation has achieved, or the sales that have been made.
There will be a number of reasons for the perceived success or failure in performance. For example, an organisation might be operating in a market that has been contracting or where external factors such as the global financial crisis might have affected the performance. However, there is one factor that will definitely have had an impact on the performance of the organisation – its people.
If the people in the organisation are not motivated, and have not been working as hard as they can, then it is almost inevitable that the performance of the overall organisation will have suffered. It is certainly true that an organisation can do little about a global financial crisis, such as the one which started in 2008, but it is also true that the organisation can take steps to ensure that the employees are performing effectively.
In this module, we are focusing on performance. We are going to start by understanding performance management, and the ‘performance management cycle’. We are going to look at the process that we follow to measure employee performance, focusing specifically on the appraisal process. We will then look at objective setting, and how it can be successfully achieved.
Moving on from this, we will take some time to think about how under-performing employees should be managed. We will consider the process of managing capability, and also consider the role of disciplinary warnings.
We will then think about rewarding performance, looking at a number of different approaches to reward strengths and consider weaknesses. We will also ponder on the issue of motivation, and discuss whether the different approaches to reward really lead to higher performance.
Finally, we will return to the idea of performance management as a cycle, with the belief that it is a never-ending process. Hence, we will think about the importance of personal development plans.
Your Lessons
- Performance Management
- Performance Appraisals
- The Skills Required to Carry Out an Effective Appraisal Interview
- Setting Objectives
- Disciplinary Issues
- Rewarding Performance
- Motivation
- Summary
(Level 7) Motivating and Influencing People
Learning outcomes
- Assess which factors might motivate a particular person
- Plan ways of motivating people and teams
- Plan ways of influencing people and teams
- Assess and improve your own performance in motivating and influencing people
Introduction
What is it that leads some people at work to do certain tasks really well?
This module tries to answer that question. If you think about, it really involves two questions:
- What motivates people to behave in certain ways?
- How can organizations and managers motivate individuals and groups to work towards the organization’s goals?
Think about two teams carrying out the same activity. Their manager may ask how a series of tasks will be completed to create a product or service. The manager can plan how the work will be done, make sure that the teams have all the right materials, explain everyone’s tasks and deadlines, and measure progress once they get started. However, the two teams will almost certainly not work at the same speed, not create output of the same quality, nor show the same attitude to their work.
What’s different about the two teams?
One of the key factors is motivation. What makes one team (or one individual) work much better than another? Are they motivated by getting a bonus if they do good work? Do they simply enjoy working well? Do they want their company to do well? Is there some team spirit that encourages good teamwork?
Another key factor is influence. It may be that one team works well because they have been influenced by their manager or someone from inside the team. The influence may occur because someone explains how important this team’s work is. It may involve getting praise every time someone works well. It may be as simple as always smiling and being cheerful.
The first two sections of this module look at motivation. We’ll look first at the things that might motivate us: do we simply want the money, are we looking for praise or promotion, or do we have some need to achieve success in some way? We’ll then look at the processes that people and teams go through: I certainly will not be motivated by the promise of a bonus for extra work if I was not actually given that bonus last time I worked hard. I might not work hard if I think that my company has not behaved fairly towards me in the past.
The third section looks in a similar way at influencing people. First, what factors might affect how much influence a manager has; does influence depend on their job title, something about their personality, the knowledge, or some combination of all of those factors? Second, how should the manager try to influence people; how important is listening, communicating well, or leading by example?
The last section then focuses on you and your performance. How can you assess you own performance as a motivator and influencer? If you find gaps in your skills and knowledge, what can you do to fill those gaps?
Finally, before you start your study of this fascinating subject, a word of warning. We all know what motivates and influences us in our own work, but everyone is different. Do not make the mistake of assuming that all the members of your team are motivated and influenced by the same things. One of the key aims of this module is to show that each of us will be motivated and influenced by very different forces.
Your Lessons
- What Motivates People?
- How can managers motivate people?
- Influencing people
- Assessing your own performance
- Summary
(Level 7) Qualities of Effective Leadership
Learning outcomes
- Explore established models of leadership practices in the workplace.
- Examine examples of leadership practice in different fields.
- Determine the nature of your own leadership style.
- Identify your own leadership strengths and weaknesses.
- Develop skills to improve the effectiveness of your leadership.
Introduction
The ability to lead within an organisation has become an essential skill in the modern business world. This is the result of the need for organisations to adapt and change their operations in order to keep pace with fluctuations and developments within markets. Increased competition and innovations in technology, combined with rapidly changing economic conditions, have led to the realisation that leadership is a skill to be studied and developed.
If we pause for a while and think about the role played by leaders it will not take us long to establish that it is the way they behave that determines how effective they are. We would need to think about the tasks and duties that they carry out and how they achieve their results. We must consider leaders to demonstrate specific styles, possess a range of skills and have certain personal qualities which enable them to get results from those that act on their decisions and commands.
However, we need also to think about why we need leaders in the first place. Would it be reasonable to think that every member of a group or team should be able to know what is expected of them and when they should carry out a task, as well as having sufficient understanding of the processes involved in an activity? In this way, in a business environment we could expect each and every employee to be capable of making effective decisions at all times. In effect, the business would run itself!
Obviously, human nature does not always allow us to turn such a dream into reality. Instead we are faced with a need for a select few to take up the reins and provide direction, inspiration and motivation for the majority of the employees. Good leadership and effective management are the vital elements needed to achieve a motivated workforce and, ultimately, will lead to a successful organisation.
Leadership and management are terms that are often confused. Whilst they may be closely related, there are significant differences between them. In this unit we will examine some of the differences and show the elements that are required to be a successful team leader.
To be a good leader within an organisation, it might be thought that a manager must know the desired direction of the business and be capable of planning appropriate steps towards this. Leaders should also be able to persuade others that decisions that they make are the ones most likely to achieve successful outcomes. They might be thought of as charismatic people who have certain skills or charm that makes them stand out from the rest. They may also be seen to gain the respect of their co-workers to the extent that instructions and commands are easier to pass on. Whilst these are ideals, they certainly are not essential prerequisites for every leader. It is the variation within leaders that makes them stand out. If all leaders came from the same mould it would be highly unlikely that many of them would be successful in their positions.
"A leader takes people where they want to go. A great leader takes people where they don't necessarily want to go, but ought to be"
Rosalynn Carter, US First Lady from 1977-1981
In contemporary business, the pressure to deliver results has never been greater. Leaders must provide direction on a complex portfolio of market offerings in response to ever-changing markets and new opportunities. This calls for strategic change agendas and transformational leadership. The need for agility, with the workforce adapting to be where it ought to be, has never been greater. So how can leaders gain commitment and enthusiasm to embrace change? Firstly, leaders must model exemplary leadership practices. They must inspire people with the vision, modelling the way, empowering and enabling people to act. High performance is associated with collaboration and the incorporation of multiple perspectives must be encouraged. Outstanding leaders are those that are able to reflect on the insights of others and formulate innovative strategies and decisions based on cross-functional input.
Achieving high-performance is hard work, and a good leader recognises and rewards the contributions of teams and people. Nothing is more motivating than this. Good leaders are also "intelligent" leaders - leaders who don't just adopt one leadership style, but are able to modify their leadership behaviour depending on the situational context. Indeed in a global world, where many organizations are geographically distributed, cross-cultural leadership and adaptation is essential.
Perhaps the most important characteristic of good leadership today is reflective practice and experiential learning. Disappointments and mistakes are inevitable, but leaders who are able to use these experiences to learn and modify their leadership behaviours and practice are those who lead for high-performance.
In this unit we will examine a range of well-established theories of leadership and compare their models. These will provide the basis for an understanding of how leaders become effective and we will discuss a number of case studies to appreciate the wide diversity in individual styles and how these can be influenced by the environment in which they operate.
Your Lessons
- What is Leadership?
- Why is it so important?
- Theories of Leadership Great Leaders and Leadership Models
- What Type of Leader are You?
- Developing Your Skills Summary
(Level 7) Recruitment and CPD
Learning outcomes
- To develop the skills to analyse the external and internal factors impacting on the labour market
- To develop the skills to write a job description and person specification
- To evaluate the different approaches to attracting people to the organisation
- To analyse the construction of the contract of employment
- To understand the importance of personal development
Introduction
An organisation consists of people. If you think of any organisation, whether it is in retail, service, manufacturing or any other sector, there are people involved. It is certainly true that there may be fewer people in some organisations than there were some years ago, due to technology replacing jobs, but I cannot think of any organisation that has no people.
People are key to the success of the organisation. Have you ever been to a shop, a restaurant or a hotel and been frustrated by the poor level of customer service? Maybe you have even decided that you will not return due to the poor level of customer service received. By making such a decision you are actually deciding that you are not going to give your business to that organisation because of the people that you have dealt with. One poor performing employee could impact on the decision about your future custom with that organisation. People, therefore, are very important to an organisation and we need to be certain that we recruit the very best people to work in it. We could decide that the organisation cannot be blamed for the one poor employee who has made us decide that we never want to go to a particular hotel, restaurant or shop ever again. However, someone decided to recruit that individual.
The organisation is responsible for the people working in it and for ensuring that only the very best people are there. In this module we are going to look at the process of identifying the very best people to work in an organisation. We are going to start by thinking about how we decide which jobs need to be recruited. We are then going to move on to think about the external and internal factors that can impact on our recruitment decisions and how we might be able to address them. We will then think about how we specify the jobs that we want, and in doing this we will consider the processes of writing job descriptions and person specifications. We will then look at selection techniques and what should be included in a contract that we eventually offer to a successful applicant. Finally, we will look briefly at the process of continuing professional development. To summarise, the process that we are going to study looks like this:
Your Lessons
- HR Planning
- Understanding the Labour Market
- Job Descriptions and Person Specifications
- Recruitment
- Selection
- Contract of Employment
- Keeping Good People
- Summary
(Level 7) Strategic and Systems Management
Learning outcomes
- Describe the various types of market and explain their affects on companies operating in them.
- Identify the current strengths and competitiveness of a company.
- Explain how analysing the competition can help an organisation to select a suitable strategy for the future.
- Carry out research to investigate your company’s and your competitors’ performance, products and services.
Introduction
Every business operates in unique market conditions. To compete successfully, managers need to collect detailed information about the market and the competition. Only then can they plan strategies that they hope will increase profits or sales levels perhaps by reducing costs, by entering new market segments, or by increasing their share of their existing market.
The first section of this module looks at the different market structures that exist, from a perfectly competitive market to a perfect monopoly. We then look at what is likely to happen if a business takes a particular action in each of the types of market. For example, what would happen if a business in a perfectly competitive market reduced its prices? What would customers do? What would the competitors do? And what long-term outcomes would be likely for the business?
The section continues by looking at how governments react to different types of markets. How will the existence of a monopoly affect their citizens? What can governments do? How can they support their own companies if a market is rapidly developing or if it is declining?
The second section then considers the individual company. What are its strengths and weaknesses? How do customers view its products or services? Is it possible to identify a unique selling point that makes a specific product particularly attractive to customers? Only once managers have analysed their own company’s current performance can they usefully compare that with the performance, products and services of its competitors.
Section three looks at ways of analysing the company’s competitors. Based on this analysis of the company and its competitors, managers can then go on to select a suitable positioning strategy that will create competitive advantage.
The final section briefly surveys the various tools that can help managers to analyse the strengths and weaknesses of their competitors, and then assess their own company’s performance. You’ll see that there is an enormous amount of information publicly available, and that businesses can also purchase specific research findings. You will also find descriptions of the many research methods that can be carried out by the organisation itself.
This module emphasises three key messages. First, managers must collect information about their own company and their competitors if they are to plan a successful strategy for the future. Second, there are many ways of collecting relevant information. Third, managers need to carefully select ways of collecting the most relevant information, and so avoid the problem of information overload.
Your Lessons
- Types of Competition
- Looking at Your Own Strengths
- Looking at the Competition
- Researching the Competition
- Summary
(Level 7) Strategic Human Resource Management
Learning outcomes
- To understand the legal definition of an employee
- To evaluate what types of employment contract an organisation might want to use
- To evaluate the obligations on the employer in relation to working time
- To analyse the difference between a fair and unfair dismissal
- To explore the different forms of discrimination
- To gain a full understanding of areas covered by employment legislation
Introduction
When managing people it is essential that we treat them well and treat them fairly. As we study different aspects of management it becomes clear that it is important to motivate people, to invest in their development and learning, and to support them as they develop in their careers. These are all important matters that should take up a considerable amount of management time.
However, there is also the need to operate within the law. Doing something that breaches the law is likely to de-motivate employees because they will perceive that they are not been treated correctly. It is also likely to take up a lot of management time whilst related grievances are addressed and even, perhaps, attending court to respond to a claim.
In the UK the law relating to employment has been one of the fastest growing areas of law. This has led to the current coalition government becoming concerned that employment law is too onerous for employers and so there are certain changes being made that will reduce some of the burdens on employers.
Despite the changes that are planned (which we will address as we work through this module) there are still a lot of legal issues relating to the employment of people. Managers need to know about this law. Even if an organisation has a company solicitor, managers still need to be aware of the parameters within which they can operate.
As employment law is such a vast topic it is not possible to cover every aspect in one module. In this module we are going to focus on the issues that managers need to consider most often. We are going to start by thinking about employment status. We are going to consider the different types of status and what managers might want to recruit into an organisation. We will then think about the specific issue of working time.
We are then going to look at the process followed in the Employment Tribunal. This is the place that legal claims relating to employment are heard, and hence it is very important that managers understand how the process works.
After that we will look in depth at the two areas which result in the most claims being brought before the Employment Tribunal, and hence the areas that managers really do need to understand – dismissal and discrimination.
Finally, we will take a brief overview of other areas covered by employment law.
Your Lessons
- Employment Status
- Working Time
- Dismissal
- Discrimination
- Other Areas Covered by Employment law
- The Employment Tribunal
- Summary
(Level 7) Strategic Planning Tools
Learning outcomes
- Compare and contrast vision, mission, strategy, strategic plans and actions
- Identify the strategic planning tools used to assess the macro- and micro-environments of an organization, highlighting any limitations
- Discuss the range of tools available for competitor analysis and for the evaluation of alternative market strategies
- Critically assess the metrics used by organizations to gauge performance within their internal environments
- Discuss how strategic frameworks can be used to determine core competences for sustainable competitive advantage
- Demonstrate how the outputs from internal and external analysis can be integrated for purposes of strategy development and strategic planning
Introduction
Strategy concerns the decisions made by an organization on how it will achieve its vision and corporate objectives. The strategic plan defines the route to be followed to get to the future state the organization has aspired to in its vision. Strategic planning decisions define the product lines and services offered by the company, the markets and market segments targeted, market positioning and avenues for growth. They also define decisions on developing internal capabilities to build sustainable competitive advantage.
In a complex marketing environment which is both dynamic and volatile, how are these strategic decisions made? How are opportunities and threats assessed? Which markets and segments are targeted, and why? How can internal capabilities be leveraged to match market opportunities? What new competencies should be developed to achieve a distinctive capability that positions the organization for long-term competitive advantage? These are complex questions and there are no simple answers. However, there are a number of strategic planning tools which, together with management experience and judgement, can help organizations assess alternative strategies and make a strategic choice.
To develop strategy, an organization must first know where it currently is in its competitive environment. It must also know its internal capabilities and limitations. It must then decide where it wants to be in the future. The organization must address the strategy questions:
- Where are we now?
- Where do we want to be?
- How do we get there?
Organizations take different approaches to strategy development and planning. Deliberate, emergent or incremental are all alternative approaches. Deliberate strategy is the result of a classical planning approach where strategic analysis leads strategic choice, which then defines the implementation of the strategy. In the complex, global and ever changing environment of contemporary business, fewer and fewer organizations are adopting a deliberate approach. Emergent and incremental approaches are more common today. In emergent strategies, patterns of strategic choice evolve over time, influenced by insights gained from implementation and day-to-day market interactions - these patterns are unintended (in contrast to deliberate strategy). Thus, in emergent strategies implementation actually leads to strategic analysis and choice. The emergent approach is more suited to uncertainty where there are risks involved and the competitive landscape is continually changing, and flexibility is required. A deliberate strategy would be flawed in these circumstances.
In some cases, strategic analysis, strategic choice and implementation proceed together in small incremental steps - this is known as incremental strategy and is often adopted by innovative companies. One or two simple improvements can deliver game changers and keep the company ahead of the competition.
Whatever the approach to strategy, strategic planning tools are invaluable in assessing the external and internal environments, integrating the insights gained and guiding organizations in decision making. We shall examine a wide range of strategic planning tools that are at the disposal of management.
Your Lessons
- Strategy, Vision, Planning and Actions
- Tools for Macro and Industry Analysis
- Tools for Competitor Analysis and Market Strategies
- Tools for Internal Analysis and Integration with External Analysis
- Summary
(Level 7) Strategies for Growth
Learning outcomes
- Identify the various influences from the internal and external environment.
- Use a variety of techniques for assessing the impact of those environmental influences
- Identify a range of different strategic options, such as developing new products, outsourcing, mergers etc
- Analyse and compare the different options and to select the one that best suits the organisation
Introduction
Figure 1.1 What can you see in the crystal ball?
“Where does this organisation want to be in 5 years time?”
That sentence explains the focus of this module. Think of just three examples:
- Nokia has moved gradually from mobile phones to mobile computing.
- Disney has moved from cartoons to diversified entertainment, for example setting up five Disneyland venues around the world, and buying ABC Television in the US.
- Other companies “stick to their guns” and decide to focus on the business they know best.
How do senior managers in the various companies choose those aims? You can get an idea of the questions they need to consider by studying this definition of strategy:
Strategy is the long-term direction and scope of an organisation, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
Looking at that definition, you’ll see that managers need to ask questions like:
- What are our long-term aims?
- What business or market segments do we want to be in?
- How can we do better than our competitors?
- How do we react to changes in our environment?
- What skills and other resources do we have?
- How can we best satisfy the needs and wishes of our shareholders, employees, suppliers, neighbours and the wider community?
Your Lessons
- Assessing the Organisation
- Tools for Analyzing the Environment
- Strategic Options
- Assessing the Options
- Summary
(Level 7) Studying and Using Management Theories
Learning outcomes
- To understand and compare the various approaches to research on business, management and organisation
- To discuss the advantages and disadvantages of the various research methods
- To compare, contrast and assess the relevance of the contributions of key management thinkers
Introduction
Figure 1.1 “If I have seen a little further it is by standing on the shoulders of Giants."
In your study of management and organisations, you will have met many theories and models suggested by some of the key researchers and theorists working over the last century. Like the great physicist Isaac Newton, the various researchers have built on the ideas suggested by Giants in the past. This module is designed to encourage you to look at what some of the ‘Giants’ actually said.
This module has two main aims. The first involves looking more closely at particular theories and models, and assessing whether they really apply to your own work. The second involves standing back to see how the various theories and models may relate to each other.
In the first two sections of the module, we look from the viewpoint of the researcher. What are the key factors that the researcher must consider? How is the researcher’s original perspective on organisations likely to influence their conclusions? How does the method of collecting data affect the conclusions? It’s only by considering questions like this that the manager can accurately assess the value and relevance of a theory or model for their own work.
In the third section of the module, we’ve gathered some of the most important of the theories and models into groups. This will enable you to stand back and consider how all of them together may affect your work and your organisation.
For example, you may in the past have studied one module on motivation and another on human resources. This module encourages you to reflect on how you can get a clearer picture of the theories and models in those two modules, and see how they relate to each other. You may find some unexpected links; for example, clarifying how your recruitment plans should be affected by your organisation’s structure, culture, human resource policies, leadership styles, and so on.
Throughout this module, you will see references to managers and researchers. You will find the module most useful if you can use the various Involve me activities to plan the best ways of investigating a problem in your own work. As the manager, you will be carrying out your own research, hopefully collecting ideas from other researchers who have already looked at the topic. Carrying out your own research, even if this is a very small-scale investigation, is a particularly useful way of finding out more about the challenges and problems that researchers have to deal with.
In summary, the first two sections of this module give you tools that you can use to assess and compare management theories. The final section groups management theories and models, and encourages you to make your own investigation into their relevance for your own work.
Your Lessons
- Approaches to Management Research
- Assessing the research methods
- Compare and contrast the theories
- Summary
(Level 7) The Business Plan
Learning outcomes
- To explore the purpose of a business plan
- To define the vision, mission, values and objectives of an organisation
- To understand the process for analysing the internal and external environment
- To analyse a range of tools that can be used in the analysis process
- To evaluate the process of benchmarking
- To understand the importance of accountability in relation to the business plan
Introduction
‘Plans are nothing; planning is everything’. (Dwight D Eisenhower)
‘When defeat comes, accept it as a signal that your plans are not sound, rebuild those plans, and set sail once more toward your coveted goal.’ (Napoleon Hill)
‘You can always amend a big plan, but you can never expand a little one. I don't believe in little plans. I believe in plans big enough to meet a situation which we can't possibly foresee now.’ (Harry S Truman)
These three quotes give differing views on the approach to making plans. Eisenhower emphasises the importance of the actual planning approach. Hill suggests that good plans will mean that goals are achieved. Truman suggests that we should always aim high.
In a business, as in many other areas of life, we need to have plans. A business without a plan has no clear direction. A business without a clear direction is likely to drift, and lose competitive edge as other businesses steam ahead towards a clear goal.
In this unit we are going to look at the business plan. We are going to start by thinking about what should be in that plan, and the purpose of the plan. We are then going to move on to look at some specific elements of the plan – the vision, mission, values and objectives. We will then consider the environment within which the business is operating – it is crucial to understand that environment before making any firm plans.
Having understood the content and context of the plan we are then going to move on to think about the process of creating the actual plan. We are going to look at a number of different tools that can be used in the analysis. We are going to look at ways of comparing one business with another, and we are going to think about how these analyses can be used to put in place measures that can be evaluated and monitored. Finally, we are going to think about some management attributes that are required to ensure successful achievement of the business plan.
Your Lessons
- What is a Business Plan?
- Vision, Mission, Values and Objectives
- Understanding the Internal and External Environment
- Tools to use in the Analytical Process
- Making Comparisons with Other Organisations
- Measures and Evaluation
- Responsibility for the Business Plan
- Innovation and Creativity
- Summary
(Level 7) The External Operating Environment of Business
Learning outcomes
- Analyse the macro environment in which an organization resides
- Analyse the competitive forces in the micro environment
- Examine the role of scenario planning in envisaging different models of the future and enabling organizations to be better prepared for uncertainty
- Explore how internal strategies can be developed to respond to the external environment
- Apply learning to strategic problem definition
Introduction
An organization's strategy must take into account both its internal and external environment. An analysis of both is necessary to understand the competitive environment and respond to it in a way that exploits the strengths and capabilities of the organization for competitive advantage.
So how does the external environment differ from the internal environment?
The internal environment of an organization consists of all factors that are within it - factors such as organizational structure, leadership and management style, organizational culture and business philosophy (e.g. market orientation, product orientation, services orientation). The external environment, on the other hand, is the environment outside of the business over which the organization has little or no control. The external environment surrounding the business can be subdivided into the macro environment and micro environment. The macro environment consists of the broader national and global influences that have the potential to impact the business. These factors include such things as political changes, technological innovations, economic cycles, taxation changes, socio-cultural changes and demographic changes. The micro environment, on the other hand, are factors closer to the organization - factors within the industry or business sphere in which the organization operates. An analysis of the micro environment would encompass a study of customers, suppliers, competitors, possible new entrants to the industry and strategic partners.
Figure 1.1 The External Environment Surrounding the Business
Why scan the external environment?
The simple answer is that an organization needs to understand the big picture to detect changes and identify opportunities as well as to detect risks or threats to the business. The 21st century external environment is one characterised by continual change and uncertainty. The success of an organization in meeting challenges caused by change will depend on its skills in monitoring the environment and anticipating changes ahead, and then responding to it.
Reflect on some of the key changes in the external environment impacting your own organization. You will probably agree that the external environment is a rapidly evolving landscape, often with fundamental changes in the macro as well as micro environment. Shifting market conditions, innovations in technology, new economic and political realities, globalization and increased environmental consciousness for sustainability are just a few of the factors that add to the complexity of understanding the external environment. Then there are other important effects from strategic alliances and de-regulation that must be recognised in the micro environment for an organization to be successful.
Regular auditing of the external environment enables an organization to address questions such as:
- What changes are there in regulatory frameworks that impact our operations?
- How do changes in income levels and inflation impact the buying power of consumers in the markets in which we operate?
- What changes are occurring in consumption patterns and tastes?
- What is the impact of political instability in certain countries on our operations and sale of market offerings?
- What opportunities can be exploited in emerging markets and from the rising middle classes in China and India?
- What technological innovations can be exploited in the market?
- What is the market strength of our competitors? What is their value proposition to the customer?
- What is the threat of new rivals in the marketplace?
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
Charles Darwin
As with the survival of species, understanding the external environment and adapting to change is essential for the mere survival of organizations. However, to outperform competitors and achieve sustainable competitive advantage, an organization not only requires an understanding of the current environment, it must also build a picture (or even alternative pictures) of what the future environment might look like and have a plan to compete in the new world. It requires proactive and innovative responses to the challenges and changes ahead - gaining insights to engage customers in creative ways, adopting global perspectives in entering emerging markets, leveraging new technologies and developing competencies and organizational capabilities for the future world.
After evaluating opportunities and threats in the external environment, some organizations may well decide that they should continue to operate and develop opportunities in existing markets; markets that play to their current strengths. Others may decide to enter completely new markets and acquire new resources and capabilities. Others may even decide to reinvent themselves. The greatest risk is to do nothing or lose the window of opportunity whilst competitors commit and leap ahead with the times.
The focus of this unit is the external environment and we shall explore the frameworks that enable organizations to assess the external environment and make sense of it. Noting that the 21st century environment is characterised by rapid change and uncertainty, scenario planning by asking "what if" questions and envisaging different possible futures is also examined.
Any analysis of the external environment, however rigorous, is pointless unless the organization responds to changes to gain competitive advantage. How then can an organization respond to its external environment? How can it pursue opportunities and avoid threats in the external environment? The answer to this, in large part, depends on its internal environment. An analysis of the internal environment must ultimately lead to an assessment of an organization's assets (tangible and intangible). Core competencies are a focus in many sectors today. Core competencies are the unique combination of skills, knowledge and systems that combine to provide the organization with unique and distinctive capability; capability that offers unique value to the customer, capability that is difficult for rivals to imitate. Sustainable competitive advantage is often gained by leveraging and matching these core competencies and capabilities to opportunities in the external environment. In the final part of this unit, we consider internal strategies for responding to changes in the external environment.
Your Lessons
- Assessing the Macro Environment
- 2 Assessing the Micro Environment
- 3 Uncertainty in the External Environment and Scenario Planning
- 4 Internal Strategies to Respond to the External Environment
- 5 Summary
(Level 7) Tools of Financial Analysis
Learning outcomes
- Understand the importance of measuring financial performance
- Explore the financial position of organisations through the use of financial ratios
- Use key groups of financial ratios to assess financial performance
- Determine the financial stability of an organisation
Introduction
Measuring the financial performance of a business is an essential task for those either directly involved in its operations or those, such as investors, who have a specific interest in the business. By doing so, it is possible to monitor the progress of the business over a period of time and identify how successfully the business is performing. It provides a method to determine how well things are going, as well as keeping a close eye on areas which may be cause for potential concern. However, such analysis can also be used to monitor specific areas of operation and find out where funds are being leaked away and thus steps can be taken to reduce costs.
In this module, we are going to look at the prime sources of financial information – the financial statements – and then see how the figures contained within them can be used to calculate a range of commonly accepted ratios. It is the interpretation of these ratios that provides an indication of the financial health and performance of any business – whether large or small. We will also use calculated ratios to present us with information about other aspects of the business so that we can establish just how well the business is actually doing. Important areas for discussion are solvency, profitability, efficiency and debt repayment capacity. A further example of the use of ratios is provided by the appraisal of investments, which will be examined briefly.
Your Lessons
- Measuring Financial Performance
- Financial Ratios and Liquidity
- Solvency and Gearing
- Profitability
- Repayment Capacity
- Financial Efficiency
- Investment Ratios
- Summary