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Strategic Business Management and Ethics
Strategic Business Management and Ethics
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Introduction
The scenario requires Betty King to take some leadership roles. Leadership is the practice of renovating businesses from what they are to what the leaders would have them develop into. Doing what is ethically right thing is becoming more paramount in contemporary complex global world of business. This signifies that there is a necessity to act in a situations that we think are unethical for example, the situation that Betty King finds her self. Leaders are viewed as driving forces that bring about change and whose success are determined by how effectively they strategically put themselves at the helm of the tough situation to see that change occurs (Hitt, Ireland, & Hoskisson, 2009 ).
There are three important mutually dependent actions in which all triumphant leaders must be persistently engaged into. First Betty needs to set directions. Secondly, she needs to design the organization to appear or be like how see wants to see it, and lastly she needs to nurture and sustain a tradition that is devoted to excellence, principles and ethical behavior.
Setting direction requires that managers to have a deeper understanding of the nature of the organizations, its stakeholders and shareholders, and the environment in which the business operates. Thus, in this scenario, Betty needs to have a deeper understanding of the nature and operations of EZ as well as its shareholders and the possible effects of her boss holding the customers checks and the implication of misusing the float. Only with this understanding will she be in a position to setting directions and determine her next course of action regarding the situation at hand (Henry, 2008).
The second step that she needs to undertake is designing the organization; which is a premeditated leadership movement of making arrangements, teams, systems and managerial processes that facilitates the implementation of her vision. This is important because the situation that prevails in the company requires more than her sole effort. Therefore, the contributions of others, as well, are important.
Lastly, she needs to nurture and sustain a culture of dedication to excellence and ethics. This can be a daunting task, however, it is possible to change the organization to what she wants it to be, and that is leadership. It seems that previous leadership and even present leaders of the organization are yet to act in solving the situation although amid some laxity (Hitt, Ireland, & Hoskisson, 2009).
Effective leadership skills are necessary so that she can salvage the company as well as the newly acquired from collapsing. She needs to be an integrative thinker; that is she needs to talk to her boss regarding the issues besides other bank employees to make them understand the implications of the situation in the company. The aim is to provide better alternatives that can help salvage this company from ruins plus the newly acquired one.
This move might meet some challenges; bearing in mind that she is new into the company as well as some employees might have some vested interest in the status quo. The latter therefore, may pose resistance to change she is intending to bring in. Having in mind what to expect, she needs some emotional intelligences to amicably go about the circumstances at hand. The key characteristics of an emotional leader are honesty, maturity, inspiration, judgment, enthusiasm, know-how, acumen among others. All these are important factors to bear in mind as she goes about the predicament. She needs to explain to Ryan what she thinks, also listen to him so that he may explain why he thinks there is nothing wrong with what he is doing. She needs also to talk with other concerned parties so that they brainstorm together and find solutions (Henry, 2008).
In conclusion, the whole process should therefore be governed with integrity, maturity, understanding and a willingness to act ethically and to make sacrifices so that the company can be salvaged from falling.
References
Henry, A. (2008). Understanding strategic management. Oxford ; New York: Oxford University
Press.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2009). Strategic management: competitiveness
and globalization: concepts & cases. Mason, OH: Cengage Learning.
Strategic Audit and its benefits to a company
Strategic Audit
Student’s Name
Institution
Strategic Audit
Businesses operate in external environments which can create opportunities which a business can exploit. The environment can also create threats which are capable of damaging a business. It is therefore very important for a business that is willing to exploit the opportunities to have the right resources and capabilities in place. A business strategy should therefore have a part that is concerned with ensuring that resources and competencies are understood and properly evaluated. This process is known as strategic audit CITATION Whe11 l 1033 (Wheelen, 2011).
The following is the summarized process of conducting a strategic audit: Resource Audit- his stage aims at identification of resources available to a business. Resources can be from different sources –some are owned by the company for example machinery, plant, outlets and trademarks. Other resources are obtained from partnerships, joint ventures among others. Value Chain Analysis – this stage seeks to identify and describe the activities taking place in a business relating them to the analysis of competitive strengths of the business. There are primary and supportive activities in any given organization. Core Competence Analysis – these are the activities that are critical to a business achieving its critical advantage. The role of this audit is to identify possible competitors to the business and define strategies to deal with competition. Performance Analysis- all the above mentioned analysis helps in identification of the strategic capabilities of the business. The questions to be asked when undertaking performance analysis are, “how have the resources that were deployed in the business changed over time?” this is known as historical analysis, “how do the resources and capabilities of the business compare with others in the industry?” industrial norm analysis, “how do we compare with our close competitors and how has the financial performance of the business changed with time. This is known as Ratio Analysis. Portfolio Analysis must also be undertaken as it seeks to strengthen business portfolio and identifies and highlights units that require appraisal. SWOT analysis will also be useful towards identification of Strengths, Weaknesses, Opportunities and Threats. It is a very important tool for auditing the overall strategic position of any firm and its environments.
Tiger direct is a retail electronics stores dealing with sales of electronics, tablets, phones, office supplies, video games and more. The bulk of the business performed by the company is based on web and catalog computer electronic sales. The company has put emphasis on rebate marketing in order to lower its prices. Tiger direct also operates business to business channels and retail stores and it has distribution centers, corporate sales offices and retail stores in different states in USA and others cities in the world. The following is the company’s SWOT analysis CITATION Shu10 l 1033 (Shultz, 2010).
Strengths: the company is a publisher of titles for Microsoft Windows and Apple Macintosh which are some of the world’s famous and outstanding brands. The company has also collaborated with IBM, HP eMachines among other brands. The company has multiple websites making accessibility for its products and services flexible. The online purchasing makes the products easily available for consumers and businesses. It is one of the leading electronic retailers in the world with more than 100 outlets.
Weaknesses: tiger direct has limited room for expansion and too few services. The cost of employment for maintenance of equipment is high and the company’s structure is very complicated making operation costs to be high. The company’s websites are also too busy and has too many catalogs to choose from.
Opportunities: the company is in a position to explore other opportunities to grow strong financially. It is also promoting more discounts through online purchasing and has adapted the current theories of management to match the technological marketing world. The company is capable of upgrading its customer’s computers leading to increment in revenue. There is high growth potential as a result of newer services.
Threats: the cost of products development is becoming high every day and there is bad product design from different producers. There is cut throat competition from companies like Best Buys and Wall-mart and this might lead the company to go out of business.
Best buy is the largest multi-channel consumer electronic retailer in the world. It has brunches and stores in North and South America and it among the top ten retail websites in the US. The company is enjoying a high percentage of customer loyalty of its kind in the world. The vision of the company is to make life fun and easy for the customers. Its mission is to treat each and every customer as unique individuals by meeting their needs and energizing the employees and at the same time maximizing profitability.
Strengths: Best buy company has is focused on customer service and variety and this has led into increment of profits. It has pricing power over its customers and suppliers and it is blessed with wide portfolio of store brands and regional banners strengthened by knowledge of distribution and logistics. The national and international distribution points make the company familiar with international and national markets. The company also has a wide customer base, nationwide supply chain capability, and customer loyalty.
Weaknesses: there is short labor supply to the company and the marketing expertise is also underdeveloped. The company has been forced to reduce prices in order to match competitors and this has put negative pressure on prices and revenue. The name of the company is also associated with the company’s initial positioning statements as sale to liquidate merchandise.
Opportunities: acquisition of other successful companies for example the leverage acquisition of Albertson. The company also focuses on higher margin retail business and this is as a result of efficiencies from centralized operations. It has a well-coordinated national supply chain and it enjoys long term relationships with suppliers. The business market is also bigger than the consumer market.
Threats: there is high competition from other companies like Tiger direct and Wall-mart. The company is at a high risk of losing customers as a result of whole sale business. The company had also been forced to standardize its stores as a result of centralization of operations. There is also much pressure to reduce the company’s prices.
Both organizations are retailers in electronics and they use internet to gather information and sell their products and services. The organizations are constantly trying to gain more and more customers.
Businesses strategic audits are used to assess the internal processes and move towards the strategic goal. Establishment of strategic audits and plans helps the auditors by giving them baseline for their work. In order to identify strategic risks and assess the current strategy, a company must undertake a strategic audit. It also helps in identification in implementation of formulated strategies CITATION Whe12 l 1033 (Wheelen, 2012).
Reference
Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.Schultz Jr, J. J., Bierstaker, J. L., & O’Donnell, E. (2010). Integrating business risk into auditor judgment about the risk of material misstatement: The influence of a strategic-systems-audit approach. Accounting, Organizations and Society, 35(2), 238-251.
Wheelen, T., & Hunger, D. (2012). Strategic Management & Business Policy Achieving Sustainability. Corporate Governance, 1, 17.
Strategic Audit Questions
Strategic Audit Questions
Student’s Name
Institution
Strategic Audit Questions
A strategy can be a plan or methods taken by an organization to bring about desired future. These can be methods taken towards achievement of goal or solutions to a problem. Strategy as an art and science involves planning and marshaling resources towards their most effective and efficient use. Organizations usually have limited resources towards achieving of their goals. Strategic management helps in setting of business goals and determining the necessary actions required to achieve these goals. A strategy taken will also define the mobilization of resources to execute these goals. A strategy will set priorities, strengthen operations, focus energy on resources, give guidelines and policies to the employees and stakeholders to work towards the common goals of an organization. All strategies aim at generating successful outcome in an organization and they should and are always in line with missions and visions of organizations.
Strategies aim at obtaining an advantage over adversaries and exploitation of emerging possibilities. For a business to grow and increase its share of the competitive market, marketing plan starts with overall strategic plan of a company. A good strategy will also help in strengthening the financial resources of an organization and lead an organization towards reduction of waste, production time, and making better products that will increase customer satisfaction and loyalty. A strategy is like an action plan which helps an organization to identify its top objectives and then develop corporate goals that are specific, achievable, measurable, realistic and timely. With this an organization can meet its business specific objectives along the way. A well-defined strategy will help a business have an end state of success. CITATION Fre102 l 1033 (Freeman, 2010)There are ideas that are always implemented by military organizations to pursue desired strategic goals. These set of ideas are the military strategies. Military strategy deals with disposition and movement of forces, planning and conduct of campaigns and deception of the enemy. Military strategy is divided into offensive and defensive strategies. Offensive strategies include Air Superiority, Attrition warfare, Bait and Bleed, Battle of Annihilation among others. Defensive strategies include Choke Point, Defense in Depth, Fortification, Withdrawal, Turtling, among others. Strategy is derived from a Greek word Strategos meaning military leaders with political authority. Strategy is the relationship between means and ends and it goes beyond war. However much it is rooted in war it has been used with reference to business. The principal similarity between business and military strategy is that they are both concerned with tactical maneuvers that establish positions of advantage. CITATION Gus13 l 1033 (Gustavsson, 2013)As a manager of a business entity you are tasked with looking at financial statements on a monthly, quarterly, and yearly basis. You should have good understanding of economic and accounting profits of your entity. The revenue of a company minus the explicit cost of a company is known as the Accounting Profit. Operating expenses that are easily identified and accounted for are the explicit costs. Economic profit measures the effectiveness of the firm’s decision making strategies and the financial status of the firm. If the total income of a company is subtracted together with the total monetary cost of all business activities and the opportunity costs of alternative business activities, the amount remaining is known as Economic profit. It compares the net operating profit to the total cost of capital. Economic profit includes things like opportunity costs which are the source of profit that is lost when pursuing other courses of action and is always known as implicit costs. The major difference between economic profit and accounting profit is that economic profit consists of revenue collected deducted from explicit costs (monetary) and implicit cost (opportunity), while accounting profit is revenue minus explicit costs, and therefore the principal difference between accounting profit and economic profit is that Economic profit is pure surplus and accounting profit includes normal return to the providers of equity CITATION Bie12 l 1033 (Biermman, 2012).
Employee performance management includes planning work and setting objectives, continually monitoring performance, developing the capacity to perform, rewarding good performance, and periodically rating performance in a summary fashion. Performance management is a continuous and systematic process by which an organization involves its employees in improving organizational effectiveness towards accomplishment of its missions and goals. The major purpose of performance management is improvement of quality. Many organizations look upon their performance management systems as existing in the background and are not expected to add value. Performance management if well designed and implemented can have positive impact on financial results and individual performance. Performance management systems have faced opposition from some managers claiming that communication between the employees and getting people to talk to one another is all that is required. This is not realistic as it enables managers to avoid confronting incompetence and leads to people escaping accountability. Performance appraisal has been opposed by quality movement. Performance management systems have been criticized to be of poor quality; however this is not an indictment of the concept of performance management itself CITATION Gri11 l 1033 (Griffin, 2011). The fundamental problem of any type of performance management system is the tendency of performance management system to be based entirely on financial targets.
Forecasting profitability and sales especially on a short term basis is very essential to planning business success. This involves estimation of future business performance according to the actual results of prior performance CITATION Aud12 l 1033 (Audzeyeva, 2012). This process enables the owners of businesses to modify operation on a timely basis. Forecasts can from income statements and pro forma invoices can provide persuasive management tools for loan application and lead to attracting of investor money. To forecast industry profitability consistently accurately, professionals have to look at the link between the industry and structure performance and then use the information on major trends in industry structure in order to predict their effects on the forces of competition.
A key or critical success factor is an element that is important and considered necessary by a project or an organization towards achieving its mission and plan. These are activities that are very critical to an organization towards achievement of success. They are few things that must be well defined and planned, should go well to ensure success for an organization or a manager. They can be functions that are viewed by the customer and defined by the market, that are critical to the customer/vendor relationship. It is important to view a business from a market and customer perspective. A business should put into much consideration the practices that are valued and demanded by the market and the overall need of the customers. Therefore analyzing key success factors leads one to ask the following two questions; what do customers want and what type of operation changes should a firm implement to survive competition? CITATION Mcl10 l 1033 (Mclvor, 2010)Competitive intelligence has deep roots in business history and it has been around as long as the business. It is based on critical analysis and directed by managers as it is a process of reviewing and making sense from the information. Competitive analysis also helps a business to see outside itself into the larger/broader market and competitive landscape. It can be viewed as legitimate tactical and strategic research and analysis designed identify threats and opportunities to a business entity CITATION Whr13 l 1033 (Whright, 2013). So what is competitive intelligence? It means learning and understanding the environment outside your business in order to remain as competitive as possible. It is the process of gathering information on your business competitive environment. It involves definition, gathering, analyzing, distribution of intelligence about a product’s competitors, customers and the necessary aspects needed to make strategic decisions for an organization. Therefore competitive intelligence, the systematic collection and analysis of information about rival firms is a useful activity that forms an important element of firm’s environmental scanning and strategic analysis.
Many companies strive towards increasing sales volume by utilization of products, place, promotion, and price, the 4 components of marketing mix. This leads to competition as firms try to outdo each other ideologically CITATION Whi12 l 1033 (Whish, 2012). Competition therefore can be defined as the rivalry between companies that produces and sells products and services of similar nature and form and that are used for the same purpose with the goal of achieving market share growth, revenue and profit. When a company has weaknesses relative to competitors among strategic important resources and capabilities, the appropriate strategic response to take is to diversify in order to find new areas of business where these resources and capabilities are unimportant to competitive advantage.
Strategic planning is used to determine vision, mission, objectives, goals, values, responsibilities and roles of an organization. It is management tool periods used for helping an organization do a better job, that is, ensuring that members of the organization are working towards the same goal, to check, access and adjust organization’s course in response to changing environment. Strategic planning aims at producing fundamental actions and decisions which shapes and gives guidelines to an organization in accordance to what an organization is, what business it does and why it does it with a focus on the future. The most valuable contribution of strategic planning process to the success of companies is introducing the tools and techniques of strategic analysis into company’s decision making process CITATION Bry11 l 1033 (Bryson, 2011).
Causal ambiguity is a situation where the exact cause of a certain effect or situation is not known. It is a situation where the cause cannot be related to the effect. In business casual ambiguity can be defined as a tool used to determine the strategic resource that a company might have readily available. It seeks to identify if these resources are valuable, in-imitable, rare, and non-substitutable. Causal ambiguity allows a firm’s competitive advantage to be sustained because potential rivals are; deterred from competing with the advantaged firm, unable to identify the resources of the advantaged firm’s superior performance, and unable to acquire the resources needed to compete against the advantaged firm CITATION Bar12 l 1033 (Barney, 2012).
Reference
Barney, J. B. (2012). How a firm’s capabilities affect boundary decisions. Sloan Manage.
Bryson, J. M. (2011). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement (Vol. 1). John Wiley & Sons.Whish, R. (2012). Competition law. Oxford University Press.Wright, S. (2013). Competitive intelligence, analysis and strategy: creating organisational agility. Routledge.McIvor, R., Humphreys, P., & McKittrick, A. (2010). Integrating the critical success factor method into the business process outsourcing decision. Technology Analysis & Strategic Management, 22(3), 339-360.
Audzeyeva, A., Summers, B., & Schenk-Hoppé, K. R. (2012). Forecasting customer behaviour in a multi-service financial organisation: A profitability perspective. International Journal of Forecasting, 28(2), 507-518.
Griffin, R., & Moorhead, G. (2011). Organizational behavior. Cengage Learning.
Bierman Jr, H., & Smidt, S. (2012). The capital budgeting decision: economic analysis of investment projects. Routledge.Gustavsson, P. M., de Oliveira, L. R., Lindergårdh, L., & Karlsson, L. (2013). Learning Priorities and the Role of Computer-Based Training and Simulation on Military Supply Chain Logistics.Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.