Rob's story was based on a new study by Deloitte and Touche that shows that while roughly one third of retailers with a Web presence consider their online store to be  "strategic," a majority have set up  Web operations with no clearly articulated strategy and are merely "testing the waters  to gauge Internet demand." 
 http://www.ecommercetimes.com/news/articles2000/000126-1.shtml
 

Components of a good strategy
First, understand how Strategy fits into the overall corporate planning framework

• Goal
• Objective(s)
• Plan(s)
• Strategy(ies)
• Tactics

Goals-- Goals are the ultimate thing you want to achieve. They are the statements that a company uses to motivate employees and statements used to judge and measure challenges that you face. Excellently worded goals should include measurable statements.
WTGR

Examples: 

• To be the largest on-line cosmetics retail site on the planet

.

Examples: 

• To have the largest on-line product offering of cosmetics

(theoretically if you have the largest product offering, you have the potential to make the largest sales, which helps fulfill the goal)
• To have the most competitive prices for cosmetics sold on-line
• To carry  the largest brand selection of cosmetics sold on-line

• generating leads, 
• increasing sales, 
• increasing store traffic, 
• reducing customer service costs or 
• improving brand awareness.

Examples: 

• Develop online giveaways to drive consumers to our product.
• By having on-line contests with prizes given away by other companies, you associate your brand with other circumstances, thereby increasing your brand depth
• Build links from the web sites of famous cosmetics brands and have reciprocal links.

• Strengths
• Weaknesses
• Opportunities
• Threats. 
  (SWOT is explained in the text in Chpt 7, page 188-189)

Examples: 

• Establish ongoing monthly contests giving away sample product to 10 lucky winners. 
• To enter, consumers must complete a data sheet, providing demographic information.
• Winners will be announced in the product category of the Web site to ensure consumers see our product line.

Historical
Perspective

Historical
Perspective

The
jobs
of top managers
and executives
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The
jobs
of top managers
and executives

• Nature of Work
• Working Conditions
• Employment
• Education and Training
• Job Outlook
• Earnings
• "Nature of the Work 
• All organizations have specific goals and objectives that they strive to meet. General managers and top executives devise strategies and formulate policies to ensure that these objectives are met. Although they have a wide range of titles—such as chief executive officer, president, executive vice president, owner, partner, brokerage office manager, school superintendent, and police chief—all formulate policies and direct the operations of businesses and corporations, nonprofit institutions, and other organizations." 
•  Working Conditions 
• Top executives are usually provided with spacious offices and support  staff. General managers in large firms or nonprofit organizations usually have comfortable offices close to the top executives to whom they report. Long hours, including evenings and weekends, are standard for most top executives and general managers, though their schedules may  be flexible." 

• Employment 
• General managers and top executives held over 3.3 million jobs in 1998. They are found in every industry, but wholesale, retail, and services industries employ over 6 out of 10.  
•  Education, Training, Other Qualifications, and  Advancement 
• The educational background of managers and top executives varies as  widely as the nature of their responsibilities. Many general managers and  top executives have a bachelor’s degree or higher in liberal arts or  business administration. Their major often is related to the departments  they direct—for example, a manager of finance may have a degree in  accounting and a manager of information systems might have a degree in computer science. Graduate and professional degrees are common 
• Job Outlook
• Employment of general managers and top executives is expected to  grow about as fast as the average for all occupations through 2008.  These high level managers are essential employees because they plan, organize, direct, control, and coordinate the operations of an organization and its major departments or programs. Therefore, top managers should be more immune to automation and corporate  restructuring

(Meaning, if you don't want to laid off, be a boss ! ! )
• Earnings
• General managers and top executives are among the highest paid workers. However, salary levels vary substantially depending upon the level of managerial responsibility, length of service, and type, size, and  location of the firm.
• three variables of executive pay 
• compensation
• stock price and 
• company profit performance 

The
jobs
of top managers
and executives

Time
Management

"To be an effective manager you must be a good time manager."
- says the web site for the publisher of the textbook
 

Thejobs
of top managers & executives

Time
Management

This screen capture links to a site (suggested by the textbook) which contains some online self-evaluation tests which can help youa ppreciate your own time management skills.

Thejobs
of top managers & executives

Earnings
 
 
 
 
 
 

Earnings

Thejobs
of top managers & executives

Earnings
 
 
 
 
 

Earnings

Thejobs
of top managers & executives

Earnings

In this screen capture above, we have a story written by the well known journalist Terence Corcoran, talking about the fact that many companies have done poorly in the economy in early 2001, yet those companies are still paying extremely high salaries to their top managers.

A couple of glaring points from this story

• stock investors losing 12% on an average portfolio 
• yet, executives receive a 22% increase in compensation

Sometimes good intentions don't work out.

Corcoran explains that "Ontario's NDP government opened the floodgates of compensation envy back in 1993 when it forced Canadian companies to disclose executive salaries. So far, the only impact of the disclosure has been to drive compensation higher as companies now compete more  aggressively for talent."

It is possible to find many web sites with information about contingency planning & business continuity solutions.

There are

• business associations dealing with contingency planning
• conferences, seminars, speeches
• professional development courses
• consulting companies
• newspaper and magazine articles

contingency 
planning 
& 
business 
continuity 
solutions

web
sites

contingency 
planning 
& 
business 
continuity 
solutions

Government
Resources
 
 
 
 
 
 
 
 
 

Government
Resources

contingency 
planning 
& 
business 
continuity 
solutions

Government
Resources
 
 
 
 
 

Government
Resources

contingency 
planning 
& 
business 
continuity 
solutions

Government
Resources

The screen capture above is from the web site of  CanadExport of the Dept. of Foreign Affairs.
It features an article written by Prof Richardson, for Dept. of Foreign Affairs publication, in 1998

In this article, Prof. Richardson says

"One consequence of government–private sector alliances’ stimulating exporting is that many Canadian  companies are doing business in farther reaches of the globe. However, some of the newer areas that are  being opened to international business are not as safe and free from risk as are more familiar markets and regions. Canadian companies should therefore plan for overseas security."

"...these newer areas can be rewarding for exporters, but Canadian companies need to exercise caution. ...Contingency plan one way to address risks"

Contingency plans can cover such situations as: 

• medical trauma in remote areas and the subsequent evacuation and treatment; 
• theft of expensive equipment and recovery of important corporate data; 
• kidnapping situations; 
• violent robbery and assault of executives; 
• extortion and threats against company operations, offices and facilities; 
• security of communications and electronic countermeasures; 
• natural disasters, evacuation of personnel and recovery of equipment and property. 

• Register with the local Canadian embassy or consulate in the region. 
• Ensure that all at-risk personnel, and their support staff and team members, understand the action items they need to follow in contingency plans. 
• Invest in access to international security consultants and treat their services as part of your core resources. 
• Incorporate security considerations into your initial plans. 
• Identify security resources within your existing staff, including medical and first aid knowledge, language abilities, logistical and transportation expertise and so on. 
• Develop security strategies with other Canadian companies operating in similar regions and situations of risk, including strategies for joint evacuation, medical assistance, terrorism incidents and perimeter security. 

contingency 
planning 
& 
business 
continuity 
solutions

Security
Services
Companies
 
 
 
 
 
 
 
 

Security
Services
Companies

contingency 
planning 
& 
business 
continuity 
solutions

Security
Services
Companies

Globe Risk, "There are many questions when it comes to contingency planning and crisis  management. Similar to an insurance policy, it prepares your company for any disasters it may encounter. Even more like an insurance policy, it can either be money wasted or well spent. When a crisis strikes your firm, it will be too late to find out. Then it will be up to legal teams representing damaged parties, injured employees and government  regulators to determine your liabilities. "

Class 4

Chapter 6
 

text page 176-177

Guidelines for making Objective Setting and Planning effectively

• Understand the purposes of the Objectives and Plans
• Communication and Participation
• Consistency
• Revision and Updating
• Effective Reward System

 
• Understand the purposes of the Objectives and Plans
• the best way to have people understand the Objectives and Plans is to have them be part of the process in developing these
• additionally, senior management can, through small departmental speeches, explain what are the Objectives and why they are important
• Communication and Participation
• sometimes companies broadcast the information throughout the company in newsletters and banners
• they can also hold meetings in small groups to discuss how they can do thinsg differently to achieve the Objectives
• in Japanese companies, this is one of the dynamics of QCs - Quality Control Circles
• Consistency
• in large organizations, objectives should be consistent from one part of the organization to another, what is measurable according to the Engineering School, should be the same for the Business School 
• Revision and Updating
• the stresses caused by the competitive, economic, political and legal envirionments require that objectives be continually changed in accordance with how the environment changes
• you have to change and adapt, or the competition will beat you
• if you are really smart, you will have people monitoring certain business and economic information, and, if this changes, then your SOP is to make new plans
• Effective Reward System
• If people know they will be rewarded for achieving corporate objectives, then they will be motivated to strive hard in the face of challenges

Class 4

Chapter 6

MBO
 

You can find web sites which are devoted to complete courses that just focus on MBO, such as
 http://web.stargate.net/asme/courses/mbo.html

MBO is a collaborative process whereby the Leader and team members can jointly determine objectives for each team members. MBO begins when the Team Leader explains the goals for his group. The team members take the goals and propose objective for his / her particular job. In case of any modification of individual’s objectives, it is accomplished through negotiation since the Team Leader has resources to help the team member commit to the achievement of the objective. Thus, a set of verifiable objectives for each team member are jointly determined, prioritized and formalised.
from ABVP Karnataka
 

Class 4

Chapter 6

MBO
 
 
 
 
 
 
 

MBO

Class 4

Chapter 6

MBO
 
 
 
 
 
 
 
 
 

MBO

Class 4

Chapter 6

MBO
 

1. Development of role & mission statement. 
2. Establishing strategic goals/strategic plan. 
3. Defining key results areas. 
4. Establishing indicators or effectiveness, goals, or organizational objectives. 
5. Establishing, or negotiating individual employee objectives. 
6. Establishing performance standards for each objective.
7. Action planning for each employee.
8. Periodic measurement and assessment of status of each objective
9. Coaching/training to helpwith problems
lO. Some form of evaluation or assessment done formally and included in an employee's record.

from Robert Bacal  http://members.nbci.com/_XMCM/cooperate/pmch1.htm

another example of a list of MBO principles can be found at
 http://choo.fis.utoronto.ca/FIS/Courses/LIS1230/LIS1230sharma/plan4.htm

What Is Performance Management Supposed To Accomplish?

Robert Bacal says "The literature regarding MBO and performance management suggests a plethora of benefits and purposes that are designed to make organizations more effective. We can summarize them as follows:
(this is not from the text, this is from a web site)

1. Increases management control over work and results.
2. Increases management ability to identify or "red-flag" problems early.
3. Links employee objectives and functions to overall organization obj ectives, thereby creating a sense of contribution for the employee.
4. Motivates employees by allowing them input into and ownership of their obj ectives and standards of performance.
5. Enhances communication by ensuring there is clear understanding of management expectations about results.
6. Supports remedial action or disciplinary action because a breach of standards can be defined  objectively and in a measurable way.
7. Provides a system where feedback can be given to employees on a more objective basis, and not on management's subjective criterion.
8. Provides objective criterion that management can use to make decisions regarding pay scale, and promotion.
9. Provides a centralized record of performance for each employee"

Some people, like Robert Bacal says that "while performance management can be described as absolutely logical, the assumptions underlying it that relate to organization effectiveness are somewhat flawed... traditional performance management contains many excellent notions, but that  the positive things about it are lost in a morass of conflicting purposes that usually guarantee that it will not work."

Downside to Performance Management?

Robert Bacal says " Is it possible that traditional performance management programs cause problems for an organization? The answer is a resounding yes. The performance management system conveys to people in an organization how work is to be performed, and communicates, often unintentionally, values and organizational culture. More specifically traditional performance management systems can foster a lack of collective responsibility for the achievement of organizational goals, encourage competition  rather than cooperation, and can impede the development of effective teamwork."

MBO
and
"Objectives"
 

"Most supervisors set objectives, but not with equal skill. Few, who do not correctly write objectives, will reap MBO's full benefits. An objective is simply a statement of what is to done and should be stated in terms of [measurable] results."
 http://ollie.dcccd.edu/mgmt1374/book_contents/2planning/perf_objectives/perf_obj.htm

Professor Gemmy Allen'smnemonic aid to write objectives is SMART

• Specific
• Measurable
• Attainable
• Result-oriented
• Time-limited

An objective must be specific with a single key result. If more than one result is to be accomplished, more than one objective should be written. 

An objective must be measurable. Only an objective that affects behavior in a measurable way can be optimally effective. If possible, state the objective as a quantity - example, the number one company, by passenger car sales, in Toronto.

An objective must be attainable with the resources that are available. It must be realistic. Many objectives are realistic. Yet, the time it takes to achieve them may be  unrealistic. It would not be realistic for a truck dealership to switch to cars, and then say its objective is to be the number one seller of cars because competition would be too tough in the short run.

The objective should be central to the goal of the organization. The successful completion of the objective should make a difference - If it is not, then the statement is not important enough to be an objective.

The objective should be something that can be achieved in a resonable period of time, so that the goal can be met, without problems. Specific objectives enable time priorities to be set and time to be used on objectives that really matter. Are the time lines you have established realistic? Will other competing demands cause delay?

These points on S.M.A.R.T. comes from the web site of Professor Gemmy Allen who teaches at Mountain View College of the Dallas County Community College  http://ollie.dcccd.edu/mgmt1374/Default.htm
 

.	MBO is not just a concept for business students in North American schools, it is widely understood around the world and applied at all levels. You can even find examples of where MBO is applied to the running of an entire country.

 

A story at  http://mafhoum.com/syr/articles/salama/abstract.htm describes how Management by Objectives was announced in 1999 by a decision from the Prime Minister of Syria