Date post: | 19-Jun-2015 |
Category: |
Education |
Upload: | fawadsiddequi |
View: | 733 times |
Download: | 4 times |
AIM
TO ACQUAINT THE BUSINESS STUDENTS ABOUT BUILDING NETWORKED BUSINESSES
GROUP MEMBERS
MAJ TAVEER AHMED MBA-5TH
MAJ FAWAD HUSSAIN MBA-5TH
Ms AMMARAH ISHAQUE MBA-5TH
MS GULNAZ AFZAL MSBA 1ST
MS RABIA KHAN MSBA 1ST
MS SEHRISH ZAMAN MSBA 1ST
M.QAISER MBA-5TH
CAPT AZEEM HAFEEZ MBA-5TH
• (MAJ TAVEER )
INTRODUCTION / NEED FOR NEW CAPABILITIES / HISTORY REPEATING ITSELF
• (RABIA KHAN )
BLUE PRINT FOR A NETWORKED ORGANIZATION
• (GULLNAZ AFZAL)
MANAGING AND LEARNING
• (AMARAH ISHAQUE)
LEADING AND ENGAGING
• (M.QAISER)
BUILING VALUE NETWORKS
• (SHERISH ZAMAN)
HOW SHOULD WE RELATE TO MARKET PERTICIPANTS
• (MAJ FAWAD HUSSAIN)
EVOLVING MARKET STRUCTURE AND RELATIONSHIPS
• (CAPT AZEEM HAFEEZ)
MODELS / EXAMPLES / CONCLUSION
• (ALL)
QUESTION / ANSWER SESSION
SEQUENCE
INTRODUCTION
• “Our dream and our plan well over a decade ago was simple. We set out to shape a global enterprise that preserve the classic big company advantages while eliminating the big company drawbacks. What we wanted to build was a hybrid enterprise with the … body of a big company and … the soul of a small company”
» Jack Welch Former GE CEO
INTRODUCTION
• Dilemma of todays executives.• Being big act small.• Concept of hybrid business organization.• Emergence of entrepreneur and executives.• Role of entrepreneur, executives and networked
organization, its capabilities and requirement.
DIAGRAMATIC LAYOUT
Introduction Is history repeating itself
Need for new cap
Blue print for networked organization
Operatingand innovation
Mng and learningLeading and Engaging
Building value Networked
Where should activities performed
How we relate these activities
Evolving mkt structure
TANVEER
RABIA
GULNAZ
AMMARAQAISAR
SEHRISH /FAWAD
AZEEM
1. The Need for New Capabilities
• 20th century industrial economy designs.• Industrial economy era. (1980 to 1990).• Networked economy era. 1990+• Challenges faced by executives in industrial era:
THE NEED FOR NEW CAPABILITIES• “We saw two challenges ahead of us, one external
and one internal… Externally, we faced a world economy that would be characterized by slower growth, with stronger global competitors going after a small piece of the pie. Internally, our challenge was even bigger. We had to find a way to combine the power, resources, and reach of a large company with the hunger, agility, spirit, and fire of a small one.”
» Jack Welch Former CEO of GE.» Quote from page 228 of Applegate.
NEED FOR NEW CAPABILITIESBUILDING NETWORKED BUSINESSES
• “ABB is an organization with three internal contradictions. We want to be global and local, big and small, radically decentralized with centralized reporting and control. If we resolve those contradictions, we create real competitive advantage”
» Percy Barnevik, CEO Asea Brown Boveri (ABB)
• Sweden / Switzerland based power company.
• Assets over $50 bns.• 850 subsidiary company.• 140 countries over 1,80k employees.
Building the Networked Business
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/I rwin, 2002.
Org
an
iza
tio
n
Simple &Local
Stable & Certain
Dynamic & UncertainEnvironment
Complex &Global
Entrepreneurial Organization
Hierarchy
??
Chapter 3 Figure 3-1
The Organization Design Challenge
Is History Repeating Itself?
• Hybrid Organization design– To improve control and efficiency while
simultaneously enabling flexibility and speed of response
– But, hybrid designs bred conflict, confusion, information overload, and costly duplication of resources
Flattening the Organizational Structure
Matrix Organizational Structure
But, hybrid designs bred conflict, confusion, information overload, and costly duplication of resources
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/I rwin, 2002.
Info
rma
tio
n R
eq
uir
em
en
ts
Simple &Local
Stable & Certain
Dynamic & UncertainBusiness Decision Making Environment
Complex &Global
Local Intelligence
Centralized intelligence Shared intelligence
Hierarchical Organization &Mainframe Technology
Networked Organization &Networked Technology
Entrepreneurial Organization &PC & LAN Technology
+
+ +
Networked Organizational Models are Enabled by Networked Technologies
Chapter 3 Figure 3-2
Is History Repeating Itself?
– Although the networked IT infrastructure can provide important tools, it cannot define the information that needs to be in the system.
– In addition, while the networked infrastructure can enable new organization structures and systems, it cannot motivate people to use the information to make decisions and take actions on behalf of the organization.
– New organization capabilities are required to execute the sophisticated network strategies and business models
RABIA KHAN
BLUEPRINT FOR A NETWORKED ORGANIZATION
• Challenges– Designing, implementing, and constantly evolving the structure
and systems that enable an organization to executes its strategies and accomplish its goals is one of the most formidable tasks facing 21st century executives
– Continuous change is one of the most challenging issues facing the 21st century executives
• Operating and Innovating• Managing and Learning• Leading and Engaging
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/I rwin, 2002.
Sample Organizational Components
Sample Technology Components
• Human Resources Management• Strategic Alliances• Customer Loyalty• Supplier Loyalty• Partnerships
• Planning and Budgeting• Performance Monitoring• Organization Structure and Reporting• Organization Decision Making and
Learning
• Operating Process • New Product Development• Business Venturing
• HR Systems• Customer Relationship Management (CRM)• Personalization• Communication Infrastructure• User Access Devices
• Management Reporting• Decision Support Systems and Tools• Business Intelligence Systems• Data and Knowledge Management
• Enterprise Resource Planning (ERP) • Supply Chain Management• Order Fulfillment• New Product Development• Distributed Information Processing
Infrastructure
Leading & Engaging
Managing & Learning
Operating & Innovating
Chapter 3 Figure 3-3
Blueprint for a “Big-Small” Business
BLUEPRINT FOR A NETWORKED ORGANIZATION
• 1. Operating and Innovating
– The operating processes of a firm include all the activities a firm and its suppliers and partners undertake to design, build, market, sell, and deliver products and services for customers, suppliers, and business partners.
– Ability to flexibly adapt to constantly changing business environment is the key to success.
BLUEPRINT FOR A NETWORKED ORGANIZATION
• 1. Operating and Innovating– Hierarchical Operations
• Define rigid procedures, top down
– Entrepreneurial Operation• Company do not depend on well-defined polices and procedures or
structured jobs.
– Networked Operations• Big-small companies, • Precision execution and fast-cycled innovation• Operation is designed to fully exploit the power of both people and
technology whether this assets are in your firm or in someone else’s.• Technology can ensure precision and people can use the information in
real-time to deal with unforeseen problems
OPERATING AND INNOVATING CAPABILITIES
Precision
Execution
Fast - Cycled
Innovation
Entrepreneurial
Hierarchy
Networked
Precision
Execution
Fast - Cycled
Innovation
Entrepreneurial
Hierarchy
Networked
BUSINESS DESIGN REQUIREMENTS
-
Capabilities Business Design Requirements
Precision execution · Streamlined, integrated, and efficient operations seamlessly link activities performed inside the firm with those performed by customers, partners, and suppliers
· Cost, cycle time and quality levels are benchmarks within the industry andexceed customer/stakeholder requirements.
Fast-cycled innovation · Flexible, modular designs enable customization, personalization, and continuous improvement.
· Change processes are embedded within the company’s day-to-day operations- -
· Employees are rewarded for devising new, innovative ways to serve customers
· Resources for change are available.
· There is a standardized and widely accepted process used to develop and present the “business case” and implementation plan for a potential idea.
Customer and community connected
(Note: All key stakeholders,
including suppliers and partners are
considered “customers” of an e-business.)
· Executives and employees in all parts of the organization have the information required to understand th e lifetime value of customers, suppliers and partners and have the ability and authority to make decisions and take actions to improve satisfaction and loyalty.
· Incentive systems reward success in attracting and retaining profitable customers, suppliers, a nd partners and in increasing the frequency and level of engagement.
GULNAZ AFZAL
MANAGING AND LEARNING
The management processes and structures of a firm include all the activities that a firm and its business community undertake to:
Plan strategy and how it will be executed Allocate resources Organize people into groups and coordinate work Monitor and measure performance Adjust strategies, plans, budgets, and organizations
based on learning
TRADITIONAL MANAGEMENT PROCESS
Driven from top down, incremental goals andallocation of resources to carry them out.
ENTREPRENEURIAL MANAGEMENT PROCESS
• Planning, decision making, action, and performance management are informal and ad-hoc.
• Ability to respond quickly on the basis of what is being learned are fundamental to effective entrepreneurial management
NETWORKED MANAGEMENT PROCESS
Improved access to information enablesemployees, customers, and partners to inventnew ways of working and to respond quickly.
MANAGING AND LEARNING CAPABILITIES
Networked
Efficiency &Integration
Learning byDoing
Entrepreneurial
Hierarchy
Networked
Efficiency &Integration
Learning byDoing
Entrepreneurial
Hierarchy
MANAGING AND LEARNING CAPABILITIES
Capabilities
Control and
Integration
Learning byDoing
Flexible and well-managedboundaries
Business design requirements
• Coordination and control of routine operations is embedded within the digital operating infrastructure.
• Early warning systems enable close monitoring and immediate response to threats and opportunities
• Critical failure factors” have been identified and “disaster recovery” procedures are in place.
• Real-time information and interactive management systems – a mix of face-to-face decision making supplemented by high bandwidth communication systems – enable large dispersed teams of people to make informed decisions, take actions, and receive immediate feedback
• Key operating metrics are directly linked to financial and market results to provide real time feedback.
• Shared, actionable goals provide direction and the framework within which decisions can be made and evaluated.
• Employees and partners have a clear understanding of the role they play and how to work with others to get things done. But, these clearly defined roles must not limit people’s ability to work across boundaries - inside the firm and with suppliers, partners and customers.
• In a networked organization, companies are highly skilled at forming and successfully managing strategic alliances and partnerships.
• If a company is growing by acquisition, companies must be highly skilled at identifying and effectively integrating people, processes, and systems that unite acquired companies.
MANAGING AND LEARNING CAPABILITIES (CONT.)
Business design requirements
• Formal and informal communication systems support frequent two way interactions inside and outside the firm.
• Coordinating mechanism (for example, advisory councils, governing boards, liaison roles, and information systems) enable effective coordination and control of activities that cross internal and external boundaries.
• The information needed to make decisions and take actions is relevant, timely, and readily available to those who need it. It is presented in a form that is immediately actionable.
• People are information literate and have the skills and incentives needed to turn information into action that is consistent with the best interests of the organization and its stakeholders.
• Information and best practices are openly shared.• Politics, bureaucracy, and poorly aligned incentives do not get in the way of
sharing and learning from information.• Processes are in place to ensure that information is accurate and reliable, and
that employees, partners, customers, and suppliers trust the information they receive.
• Privacy and confidentiality are safeguarded and security procedures are strictly enforced.
Capabilities
Flexible and well-managed boundaries
Accessible knowledge assets
-
AMMARA ISHAQ
LEADING AND ENGAGING
While management is all about coping with complexity,leadership
is all about attracting and mobilizing the resources for change
1: Leadership involves defining a clear, compelling vision and ensuring that is translated into a set of actionable strategies and
initiatives.
2: Attracting, motivating, energizing, and retaining top talent inside an organization and within partner, supplier, and customer networks
3: Creates a culture and ensures that values, beliefs and behaviors are deeply ingrained and reflected in the decisions made and actions taken
HIERARCHAL LEADERSHIP
Emphasis managing complexity and minimizingit.Management process overshadowed leadershipRisk were minimized by centralizing decisionmaking, segregating activities and structuringwork rigidly.
ENTREPRENEURIAL LEADERSHIP
“Create or seize an opportunity and pursue itregardless of the resources currently controlled”
Attract, motivate and engage people, partnersand investors in the task of working together tocreate a clear and compelling vision that excites and deeply engaged all involved.
NETWORKED LEADERSHIP
1 :In the Networked Economy, the free flow of information throughout the company enhances the ability of employees, customers, partners, and executives to share in defining both a clear and compelling vision for change and the necessary tactical initiatives required to achieve business goals
2: When aligned with incentives and motivations that foster commitment rather than simply compliance.
3: In complex global organizations senior executives cannot oversee every decision or action taken by empowered teams. So, it more important for them to identify key strategic risks – critical success factors – and ensure that they have effective control systems in place.
LEADING AND ENGAGING
Strategic Focus& Resource Allocation
Shared Culture& Commitment
Entrepreneurial
Hierarchy
Networked
Strategic Focus& Resource Allocation
Shared Culture& Commitment
Entrepreneurial
Hierarchy
Networked
LEADING AND ENGAGING CAPABILITIESCapabilities
Visionary yet pragmaticLeadership
Energized participation
Skilled in conflict resolution, negotiation and consensus
Business Design Requirements
• Credible leaders at all levels of the organization are able to articulate clear direction.• Leadership is trusted and well respected and, as a result, is able to attract and retain
high quality partners and talented employees.• “Visions” are translated into actionable strategies that can be executed and deliver
results while the window of opportunity is still open.• Leaders are able set tangible goals and make focused decisions.• Executives are directly involved in the business; they ensure that barriers are removed,
resources are available, and employees have the skills and motivation to accomplish growth.
• Culture and incentives foster innovation while also ensuring a strong commitment to delivering results. This requires that large projects be broken into smaller, more focused deliverables, and that senior management break down barriers and realign goals.
• Employees, customers, suppliers, and partners believe that managers and other leaders possess the knowledge, skills, and experience needed to run the business.
• “Stretch targets” energize action and motivate everyone to work at peak performance.• Leaders display a strong commitment to career development and learning for all.
• Processes are in place to ensure that conflicting opinions are openly discussed without becoming destructive.
• Employees and partners are skilled at negotiating “win-win” agreements• Despite conflicting opinions, consensus decisions can be quickly reached and
implemented.
QAISER
BUILDING VALUE NETWORKS
• Building the value chain network
– Where Should Activities Be Performed?
– How Should We Relate to Market Participants?
BUILDING VALUE NETWORKS
Options Description Vertical Integration Locate all but the most routine, transaction-oriented activities inside the
firm. Selective Sourcing Source selected activities from the outside. Traditionally, sourced activities
were controlled through short-term contracts. Virtual Integration Become part of a network of highly specialized, independent parties that
work together to perform, coordinate, and control value chain activities.
SEHRISH ZAMAN
BUILDING VALUE NETWORKS• Building the value chain network
– How Should We Relate to Market Participants? Transaction Contract Partnership
Basis of Interaction
Discrete exchange of goods, services, and payments (simple buyer/seller exchange)
Prior agreement governs exchange (e.g., service contract, lease, purchase agreement)
Shared goals and processes for achieving them (e.g., collaborative product development)
Duration of Interaction
Immediate Usually short-term and defined by the contract
Usually long term and defined by the relationship
Level of Business Integration
Low Low to Moderate High
Coordination and Control
Supply and demand (market)
Terms of contract define procedures, monitoring, and reporting
Interorganizational structures, processes, and systems; Mutual adjustment
Information Flow
Primarily one way; Limited in scope and amount; Low level of customization
One or two way; Scope & amount are usually defined in the contract
Two-way (interactive); Extensive exchange of rich, detailed information; Dynamically changing; Customizable
HOW SHOULD WE RELATE TO MARKET PARTICIPANTS
• All firms make choices about the nature of the relationships that they develop with customers, suppliers, and other external industry participants.
• .
• Transactions involve the simple exchange of goods, services, and payments, usually during a specific time period and with limited interaction or information sharing between the parties involved.
HOW SHOULD WE RELATE TO MARKET PARTICIPANTS
• In the contractual relationships, the products or services to be provided by each party and the length of the relationship are well defined
HOW SHOULD WE RELATE TO MARKET PARTICIPANTS
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Impact of Information Technology on Market Evolution
Chapter 3 Figure 3-7
MAJ FAWAD
EVOLVING MARKET STRUCTURE & RELATIONSHIP
In industrial economy organizations were built on
proprietary capabilities & infrastructure
Difficult to integrate operations, share information,
coordinate and control activities
Creation of walls that isolated groups within
organizations and market participants
Firms grew complex, harder to coordinate and control
EVOLVING MARKET STRUCTURES & RELATIONSHIPS
Proprietary Capabilities and Infrastructure Create Walls Inside an Organization and Among Members of a Value Chain Network
Large firms vertically integrated
Specialized infrastructures & capabilities further isolated
functional units
In mid 1900s more staff
Hierarchical reporting structures also expanded
In late 70s industrial economy became multinational and
turned sluggish
EVOLVING MARKET STRUCTURE & RELATIONSHIP
Evolving Market Structure & Relationship
• 80s saw leveraged buyouts ,increased productivity and improved
competencies and selective sourcing
• ERP (enterprise resource planning) systems and enterprise integration
software packages for control, opening of windows within walls
• Impact of IT in 80s and 90s was limited and applied only to most critical
processes and strategic relationships.
• IT systems were costly ,difficult to operate, maintain and change and
reuse
EVOLVING MARKET STRUCTURE & RELATIONSHIP
Evolving Market Structure & Relationship
• In 21st century networked technologies provide densely
connected, flexible and robust
• Storing and sharing voice, video and data and shift to
mobile technology
• This has reduced cost and time ,increasing range of
business activities and transactions with ease
EVOLVING MARKET STRUCTURE & RELATIONSHIP
Evolving Market Structure & Relationship
• Use of advanced IT helped in establishing virtually
integrated market connecting sellers and buyers in
virtually integrated C2C internet markets.
• After dot-com demise Business-to-business
activities.
• With increased use of IT new business ways have
been evolved
EVOLVING MARKET STRUCTURE & RELATIONSHIP
AOL -TIME WARNER’S VIRTUAL INTEGRATION IN VERTICALLY INTEGRATED INDUSTRY
In 2000, AOL purchased Time Warner for US$164 billion
Merger in January 2001 to become vertically integrated mega
corporation
Owned content, packaging, distribution, publishing , films , sports ,
music, cable , internet and TV
Each AOL – Time Warner business was able to focus resources and
energy towards building best in class products and services
AOL -TIME WARNER’S VIRTUAL INTEGRATION IN VERTICALLY INTEGRATED INDUSTRY
• Each unit continued to distribute via traditional
channels and gained synergies from them
• Company developed new unit AOL – Time Warner
Interactive for integrating content and media channel
• Independent channel facilitators role by providing
services in Vertically integrated market
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/I rwin, 2002. Chapter 3 Figure 3-10
AOL Time Warner’s Virtually-Integrated Organization within a Vertically-Integrated Market
CAPT AZEEM HAFEEZ
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/I rwin, 2002. Chapter 3 Figure 3-11
Four Networked Market Models
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Impact of Information Technology on Market Evolution
Chapter 3 Figure 3-7
FOUR NETWORKED MARKET MODELS
Evolution of four networked market models took place in 2002 Virtual peer-to-peer networks
Composed of individual teams & small businesses related through market driven transactions on publicly owned networks operated by neutral third party channels (eg : e-Bay and Yahoo)
Virtual Coalition networks Composed of businesses of varying size related through
combination of market driven transactions, contracts & partnerships on public and privately owned networks operated by joint equity coalitions (eg : GHX)
FOUR NETWORKED MARKET MODELS
Virtually integrated organizations within vertically integrated markets Composed of independent , focused businesses and units
within an organization related through combination of internal market driven transactions, contracts and partnerships across privately owned networks operated by corporate headquarters or one of its unit (eg ; AOL)
Selective Sourcing Networks Composed of company’s key suppliers, customers or
partners related through combination of internal and external market driven transactions, contracts and partnerships across privately owned networks often maintained by one of the parties
(eg : Wal Mart)
FOUR NETWORKED MARKET MODELS
All four network models develop shared infrastructures and capabilities
These network models unite the three levels of a business blueprint Operating and innovating Managing and learning Leading and engaging
Done across a network of entrepreneurial units inside and outside a firm
A STEP BY STEP APPROACH TO ANALYZING MARKETS & CAPABILITIES
Define the stream of value creating activities required to execute strategy. Determine which activities will be performed inside organization and which can be performed outside
Determine the nature of relationship with customers, suppliers, partners and others
Define network market model most appropriate for the business and industry
Conduct a high level audit of the capabilities required at the three levels of business:- Asses ability to operate with precision while innovating and personalizing to
ensure best experience for customers, suppliers and partners Asses ability to manage routine operations with control and efficiency Asses ability to develop visionary yet pragmatic leaders
Review findings and identify strength and weaknesses, findings should be discussed with employees, customers , suppliers and partners
Develop a set of initiatives and prioritize, define an agenda for change
A Step by Step Approach to Analyzing Markets & Capabilities
CONCLUSION
CONCLUSION
INTRODUCTION IS HISTORY REPEATING ITSELF
NEED FOR NEW CAP
BLUE PRINT FOR NETWORKED
ORGANIZATION
OPERATINGAND INNOVATION
MNG AND LEARNING LEADING
AND ENGAGING
BUILDING VALUE
NETWORKED
WHERE SHOULD ACTIVITIES BE PERFORMED
HOW WE RELATE THESE ACTIVITIES
EVOLVING MKT
STRUCTUREMARKET MODELS
?QUESTIONS IF ANY
THANKS