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  5 Top management —  planning and strategy 2 What should he do now?3 What advice would you give him about how to run the company in the future?4 What problems can arise when someone starts up a high-technology enterprise?  Read the following case study and then answer the questions below Richard Thomas, a brilliant electronics engineer, left the company he had wored with for ten years in order to set up his own business! e felt there was a gap in the maret for low-priced computer components!Richard#s ban manager was impressed by his e$perience and by the  business plan he presented! %n overdraft facility of &2',((( was )uicly arranged! This, together with Richard#s savings of &*'!(((!  provided the start-up capital for the firm, +ompute$! e began by hiring another person to help him develop the components! The two of them spent the ne$t si$ months producing the type of products they felt the maret needed! When they had built up a good supply of components, they set about trying to sell them! To Richard#s surprise, however, this proved very difficult! any potential customers seemed to be suspicious of the low prices of the products! Why were they so much cheaper than those of more famous, well-established competitors, they wanted to now! ther customers clearly saw Richard#s company as a newcomer not to be trusted - a cowboy outfit who would be here today and gone tomorrow!.t was over a year before Richard got his first order! /y that time, he had an overdraft of &4(!((( and no more money to mae further supplies of components! e was spending all his time advertising the  products, running round to meet customers and trying to persuade them to buy!Three months later, a few large orders were received, but Richard realised that he would have to wait two months or so before being  paid!%t that point, the ban manager lost confidence in the business! e informed Richard that he was calling in the overdraft! 0ive me some time to loo around for more capital, Richard said! #%ll right! .#ll give you a month, but no more,# was the ban manager#s reply%fter rushing around and taling to a lot of people, Richard received firm offers from two venture capital companies! The first was prepared to invest &2((!((( in return for an 1( share of Richard#s business thesecond was willing to put up &2'(,((( for a ( share!This was the situation facing Richard Thomas fifteen months after he-had set up his high-technology enterprise!* +ould Richard have avoided the situation he now finds himself in! .f so, how? The top management of a company have certain uni)ue.responsibilities! ne of their ey tass is to mae ma5or decisions affecting the future of the organisation! Thesestrategic decisions determine where the company is going andhow it will get there! 6or e$ample, top managers must decidewhich marets to enter and which to pull out of7 how e$pansionis to be financed7 whether new products will be developedwithin the organisation or a)uired by buying other companies!These and other such decisions shape a company#s future!*( /efore doing any ind of strategic planning, the management must  be sure of one thing! They must decide what is the mission and  purpose of their business! They also need to # decide what it should be in the future! .n other words, they must now why the business e$ists and what its main purpose is! 8eciding the mission and  purpose is the foundation of any planning e$ercise!Two e$amples will mae this point clear - one /ritish, theother %merican! ost people have heard of ars and9pencer, one of the biggest and most successful retailers in the2( world! ichael ars opened his first penny ba2aar in *114, in:eeds, ;ngland! Ten years later there were nine maretstores, and ars had taen into partnership Tom 9pencer, thecashier of one of his suppliers! .n *2< ars and 9pencer  DISCUSSION 52 53     Understanding the main points *  Number the following ideas 1-8, depending on the order in which they appear in the text. a The %merican Telephone and Telegraph +ompanydecided that its principal ob5ective was to providecustomers with an efficient service! b The first step in  planning the =long-term> future of acompany is to decide on its overall ob5ective, c %fter analysing its strengths, weanesses, opportunitiesand threats, an organisation may re-consider itsob5ectives! d The purpose of a corporate plan is to state howmanagement intends to achieve the ob5ectives! e The second planning stage is to establish more specific=medium-term> ob5ectives! f 6inally, management needs todecide what actions itshould tae in order to achieve its ob5ectives! g .t isnecessary for management to analyse the company#scurrent performance as well as e$ternal factors affectingits future before they can draw up a corporate plan! h ars and 9pencer#s aim to provide e$cellent valuefor money has led to their becoming one of the world#smost successful retailers!2 Consider Computex, the high-technology company mentioned in the discussion on page !. Note down some of its strengths, wea nesses, opportunities and threats. 9TR;?0T 9W;%@?;99;9 AARTB.T.;9 T R;%T9 * !!!!!!!!!!!!!!!* !!!!!!!!!!!!!!!* !!!!!!!!!!!!!!!* !!!!!!!!!!!!!!!2 !!!!!!!!!!!!!!!2 !!!!!!!!!!!!!!!2 !!!!!!!!!!!!!!! 2! !!!!!!!!!!!!!!! 3 !!!!!!!!!!!!!!!3 !!!!!!!!!!!!!!3 !!!!!!!!!!!!! 3 !!!!!!!!!!!!!!! 4 !!!!!!!!!!!!!!!4 !!!!!!!!!!!!!!! 4 !!!!!!!!!!!!!!!4 !!!!!!!!!!!!!!   5455  became a public company! %t that point, they could have rested on their laurelsC owever, before deciding strategies, the planners have to loo at the companyDs present performance, and at any e$ternal factors, which might affect its future! To do this, it carries out an analysis, sometimes called a 9WT analysis =9trengths, Weanesses, pportunities and Threats>! 6irst, theorganiEation e$amines its current performance, assessing its strengths and weanesses! .t loos as performance indicators and maret share, sales revenue, outputs and productivity! .t also e$amines its resources F financial, human, products and facilities! 6or e$ample a department store chain may have stores in good locations F a strength F but sales revenue per employee may be low F a weaness! e$t, the company loos at e$ternal factors from the point of view of opportunities and threats! .tDs trying to assess technological, social, economic and political trends in the marets, where it is competing! .t also e$amines the activity of the competitors! The department store chain, for e$ample, may see an opportunity to increase profits by  providing financial services to customers! n the other hand, increasing competition may be a threat to its very e$istence! aving completed the 9W%T analysis, the company and now revaluates its ob5ectives and perhaps wor out new ones! They will as themselves )uestions such as %re we producing the right products? What growth rate should we aim at in the ne$t ' years? Which new marets should we brea into?The remaining tas is to develop appropriate strategies to achieve the ob5ectives! The organiEation decides, what actions it will tae and how it will  provide the resources to support those actions! ne strategy may be to build a new factory to increase production capacity! To finance this, the company maydevelop another strategy, the issuing of a new shares to the public!+ompany planning and strategic decision-maing a ey activities of top management! nce they have been carried out ob5ectives and targets can be set at lower levels of the organiEation!   #nswer the following questions, then, in groups of two or three, compare your answers. * What sort of things motivate people to do their 5ob well?  $ist all the things you can thin of. 2 .f you won a great deal of money, for e$ample in a lottery, would youcontinue woring? .f not, do you thin you would lose anything by giving up wor? The wor of managers is to ensure that staff wor efficiently inan organisation! To achieve this, it is clear that managers mustnow what motivates people! /y understanding the factorsinfluencing motivation, they can create the conditions in whichemployees will perform to their ma$imum!potential,Gne of the best nown theories of motivation was put forward by an %merican psychologist, %braham aslow, in a boo entitled  %oti&ation and 'ersonality =*'4>! .n his theory, he presents a hierarchy of needs! e identified certain basic human needs and classified them in an ascending order of importance! /asic needs were at the bottom of the hierarchy, higher needs at the top! is classification is shown below 8 Motivation DISCUSSIONREADING *(


Jul 23, 2017

4 Introduction

Jul 23, 2017
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