Post Week 6

During week 6 we looked at Porter’s five forces. To start off we looked at what an environment is in as a business concept. What is an environment? This is basically the surrounding or conditions in which an organisation operates.  There are three types of environment when it comes to an organisation, which are internal, competitive and external. Firstly, the internal environment of a firm basically looks at its structure, objectives, authority, finances etc. It basically covers the internal workings of the organisation. The competitive and external environment of an organisation then looks at porter’s 5 forces. Professor Michael Porter looks at the five forces of that shape the strategy of an organisation.

To help analyse an organisations competitive environment, the first of his forces looks at the threat of a substitute to an organisation, most organisations have competitors and with these competitors comes with the threat of a substitute product. The second force looks at the amount of strength the organisations supplier could have which basically just illustrates the amount of bargaining power could have over the organisation. The third force looks at the power the organisations buyers have, which basically analyses the power the customers have over the organisation. The fourth force then looks at how large the threat of new entrants is to the industry the organisation is in. Finally all these four other forces lead to the fifth force which is the intensity of the rivalry of firms in the industry. The outcome of these four forces would help determine how fierce the competition in an industry is.

Porter’s 5 forces just analyses the factors regarding competition and the factors to be considered under the surface of an organisation. For example if buyers hold a lot of power or there is high threat of substitute a firm would not be able to keep their prices high therefore causing price wars leading to high intensity of competition in the industry or in a scenario where the suppliers have low bargaining power and there are high barriers to entry such as start-up costs. The organisation would be able to keep their prices low therefore allowing them to make good profits.

There are some good examples of firms in intense rivalry, for example Samsung and apple who have been battling for customer loyalty for a while now.

Porter’s 5 Forces - http://www.youtube.com/watch?v=mYF2_FBCvXw

Post for Week 5

During week 5 we looked at Management Theory and how it affects productivity. Firstly, what is management? Management is the process of coordinating people and resources in order to achieve the goals of an organisation. Management includes planning, organising, leading and controlling. We then looked at classical management theory, which shows that there are many different management theories and they may only apply to certain types of businesses, some may be based on moral and ethical values while others could depend on the stakeholder’s interests.

The first management theory we looked at was that of Frederick Winslow Taylor’s ‘Scientific Management’ which was mainly based on efficiency and productivity. He believed that the best candidate should be selected to do a job, there should be little waste of resources and that rewards were the greatest incentive for productivity.  This was more of a traditional method of management, as if we looked at the modern methods of management we can see that other factors come into place with regards to efficiency. Nowadays employers have to consider staff morale, work environment and other personal factors. This method of management may have been effective back then but they would not be able to produce maximum efficiency in modern times.

The next theorist we looked at was Henri Fayol who looked at a more centralised version of management which had more of a disciplinary effect. His theories included division of labour and believed that giving authority and responsibility to employees provided good motivation. This is also more of a classical method of management as some of it may not be as effective today, however this sort of management could still be seen in nations such as China where in some firms employee welfare is not a concern.  The next theorist we looked at was Webber whose theory of bureaucracy was mainly related to the functionalism of large organisations and the hierarchy of command needed to create maximum efficiency http://www.businessmate.org/Article.php?ArtikelId=30 .

Webber’s theories are still being used today by many large organisations, however with some input of the Hawthorne effect created by Elton Mayo (a more modern management theory), which recognised the importance of human relations. He believed in the importance of human relations and also believed in the effect of team work. Team work today plays a large part in a company’s efficiency and this can be referred back to Elton Mayo who conducted a number of experiments with six females to see the effect of human relations.

We then looked at Fordism created by Henry Ford which is also a more modern method of management.  Fordism, named after Henry Ford, is a notion of a modern economic and social system based on an industrialized and standardized form of mass production for maximum efficiency. Finally we looked at Eric Trist who also believed in the social system. He developed the socio-technical system which states that Management needs to be aware that while technical advancement is key to business success - its acceptance by a work force may result in damage to social interaction at work. 
A good example of a firm using the modern way of management today is Google who have tried to create a conducive environment for their employees in order to enhance creativity, as they are a type of firm that requires their staff to be creative.  

Ford and Taylor Scientific Management - http://www.youtube.com/watch?v=8PdmNbqtDdI

Post for week 4

This week we continued to look at management structures and how they might affect the productivity of a company. We continued to look at what an organisational structure is, which according to Charles Handy is the allocation of formal responsibilities and the linking mechanisms of roles and also the co-ordinating structures of the organisation. However, we also learnt that some small firms may not need an organisational structure to run as the number of employees may be too small but as the business continues to grow the organisation would need one.
The reading for the week included chapter 10 of the David Boddy textbook. The reading dwelled on 'The Developing Organisation' which looked at how companies could implement structure to help improve their strategy it also looked at how external changes in the society could the internal structure of a business. The reading also included chapter 13 from the J Mullins management and organisational behaviour  textbook. The reading basically covered managerial behaviour and effectiveness.
During the week we also looked at the division of work in a company. This is basically dividing the jobs in a company into different departments in order to make productivity easier. This could include a finance department, a human resources department etc. We basically learnt that work could be divided by different intentions, work could be divided by function, work could be divided by product or service, it could be divided by location or it could be divided by customer. Most large companies would tend to try and put all these sorts of work divisions into practice.

We also learnt that work could be centralised or decentralised. When work is centralised this means that the company is run by the main directors of the company. Decentralised management is when lower level employees are llowed to make decisions which may help because they are directly linked to the customers. We also looked at spans of control which refer to employees that report directly to a given manager. A chain of command which is linked to a span of control also refers to the levels of the organisational structure in a company.

Finally we looked at matrix structures which just show how an employee could be working directly for more than one person.

Post for Week 3

This week really gave us a proper introduction to the Business and Management course at the ISC. This week we learnt that we will be studying two main modules this term which would be business law and business and management, but the entries in this blog would be focusing mainly on what we learn in business and management.

At the start of the week we were introduced to business and management with two main topics, which were 'What is an organisation?' and 'the functions of management'.
What is an organisation? A social unit of people that is structured and managed to meet a need or to pursue collective goals. Most organisations need an organisational  structure to be fully functional and to achieve their maximum potential. According to Charles Handy, organisational structure refers to the allocation of formal responsibilities, the linking mechanisms between the roles and the co-ordinating structures of the organisation.  Mintzberg also stated that the structure of an organisation is the sum total of ways in which it divides its labour into distinct tasks and then achieves co-ordination among them.

What are the functions of management? Firstly what is management, management is the activity of getting things done with the aid of people and other resources. According to Henry Fayol there are five principles of management, which are planning, organising, commanding, coordinating, and controlling. These are the five principles that need to be followed in order for an organisation to be managed properly.

I really learnt a lot in this weeks lectures, mainly that every organisation needs a good structure and should have good management in order to progress and achieve growth.