August 11, 2016

The Strategic Management Process - Review Notes





The tasks of developing  and executing company strategies are the heart and soul of managing a business enterprise and winning in the marketplace.

A company's strategy is the plan management is using to acquire a market position and  conduct its operations. This involves  attracting and pleasing customers, competing successfully against and the current and future rivals, and achieving organizational objectives.

The central thrust of a company's strategy is undertaking moves to build and strengthen the company's long-term competitive position in its chose target market segments as well as in the overall market and  gain a competitive advantage over rivals that then becomes a company's ticket to above-average profitability and performance. A company's strategy typically evolves over time as a blend of (1) proactive and purposeful actions on the part of company managers and (2) as-needed reactions to unanticipated developments and fresh market conditions.

Closely related to the concept of strategy is the concept of a company's business model.

A company's business model is management's story line for how and why the company's product offerings and competitive approaches will generate a revenue stream and have an associated cost structure that produces attractive earnings and return on investment—in effect, a company's business model sets forth the economic logic for making money in a particular business, given the company's current strategy.  Business model must have a demand model, that explains how the company's product or products sell a particular quantity at a particular price. The model has to satisfy the criterion that as price increases demand decreases for each product. The cost model is also a part of the business model. It tells how a particular quantity of a product is produced and distributed at a particular cost. Thus profit is determined from the demand model and cost model for a specified price. The company then has the option to select a price that maximizes the profit or a price that maximizes the demand given a minimum profit to be achieved.

A winning strategy fits the circumstances of a company's external situation and its internal resource strengths and competitive capabilities, builds competitive advantage, and boosts company performance.

Crafting and executing strategy are core management functions and especially the core top management functions in an organization. Whether a company wins or loses in the marketplace is directly attributable to the potential of that company's strategy and the zeal and controls with which the strategy is executed.

Managerial Process



The managerial process of crafting and executing a company's strategy consists of five interrelated and integrated phases:

Developing a strategic vision of where the company needs to head and what its future product/market/technology focus should be. This managerial step provides long-term direction, infuses the organization with a sense of purposeful action.


Objectives are derived from the  strategic mission and  vision and larger in number and they address the aspirations of all the stakeholders. Goals spell out how much of what kind of performance by when.  Companies need to both financial objectives and goals and strategic objectives and goals. A balanced scorecard approach provides the basis for both.


Crafting a strategy to achieve the objectives and move the company along the strategic course that management has charted. Crafting strategy is concerned principally with forming responses to changes under way in the external environment, devising competitive moves and market approaches aimed at producing sustainable competitive advantage, building competitively valuable competencies and capabilities, and uniting the strategic actions initiated in various parts of the company. The more that a company's operations cut across different products, industries, and geographical areas, the more that strategy making becomes a collaborative effort involving managers and company personnel at many organizational levels. The total strategy that emerges in such companies is really a collection of strategic actions and business approaches initiated partly by senior company executives, partly by the heads of major business divisions, partly by functional-area managers, and partly by operating managers on the frontlines.

The larger and more diverse the operations of an enterprise, the more points of strategic initiative it has and the more managers and employees at more levels of management that have a relevant strategy-making role.

Three Levels of Strategy


A single-business enterprise has three levels of strategy—business strategy for the company as a whole, functional-area strategies for each main area within the business, and operating strategies undertaken by lower-echelon managers to flesh out strategically significant aspects for the company's business and functional area strategies.

Four Levels of Strategy


In diversified, multibusiness companies, the strategy-making task involves four distinct types or levels of strategy: corporate strategy for the company as a whole, business strategy (one for each business the company has diversified into), functional-area strategies within each business, and operating strategies. Typically, the strategy-making task is more top-down than bottom-up, with higher-level strategies serving as the guide for developing lower-level strategies.


Implementing and executing the chosen strategy efficiently and effectively. 


Managing the implementation and execution of strategy is an operations-oriented (Marketing, Production, Sales, Distribution and Service), make-things-happen activity aimed at shaping the performance of core business activities in a strategy-supportive manner. Management's handling of the strategy implementation process can be considered successful if  the company meets or beats its strategic and financial performance targets and shows good progress in achieving management's strategic vision.


Evaluating performance and initiating corrective adjustments in vision, long-term direction, objectives, strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities.

This phase of the strategy management process is the trigger point for deciding whether to continue or change the company's vision, objectives, strategy, and/or strategy execution methods.
A company's strategic vision plus its objectives plus its strategy equals a strategic plan for coping with industry and competitive conditions, outcompeting rivals, and addressing the challenges and issues that stand as obstacles to the company's success.

Activities -  The Managers have to do


Successful managers have to do several things in leading the drive for good strategy execution and operating excellence.

First, they stay on top of things. They keep a finger on the organization's pulse by spending considerable time outside their offices, listening and talking to organization members, coaching, cheerleading, and picking up important information.

Second, they are active and visible in putting constructive pressure on the organization to achieve good results. Generally, this is best accomplished by promoting an esprit de corps that mobilizes and energizes organizational members to execute strategy in a competent fashion and deliver the targeted results.

Third, they keep the organization focused on operating excellence by championing innovative ideas for improvement and promoting the use of best practices to ensure value creating activities are performed in a first-rate fashion.

Fourth, they exert their clout in developing competencies and competitive capabilities that enable better execution.

Fifth, they serve as a role model in displaying high ethical standards, and they insist that company personnel conduct the company's business ethically and in a socially responsible manner. They demonstrate unequivocal and visible commitment to the ethics enforcement process.

Sixth and finally, when a company's strategy execution effort is not delivering good results and the organization is not making measured progress toward operating excellence, it is the leader's responsibility to step forward and push corrective actions.

Role of The Company Board


Boards of directors have a duty to shareholders to play a vigilant role in overseeing management's handling of a company's strategy-making, strategy-executing process. A company's board is obligated to (1) critically appraise and ultimately approve strategic action plans; (2) evaluate the strategic leadership skills of the CEO and others in line to succeed the incumbent CEO; (3) institute a compensation plan for top executives that rewards them for actions and results that serve stakeholder interests, most especially those of shareholders; and (4) ensure that the company issues accurate financial reports and has adequate financial controls.





References
http://highered.mcgraw-hill.com/sites/0073530425/student_view0/chapter1/

http://highered.mcgraw-hill.com/sites/0073530425/student_view0/chapter2/


Updated 13 August 2016,  21 May 2012

July 31, 2016

Supply Chain Management Theory - Research Propositions




Understanding the Concept of Elasticity in Supply Chain Relationships:  An Agency Theory Perspective Maryam Zomorrodi  and  Sajad Fayezi 

ASIAN JOURNAL OF MANAGEMENT RESEARCH
2010
P.1: Relational governance mechanisms based  on  trust, commitment  and information sharing  significantly influence the relationship elasticity of cooperating parties.
P.2: Contractual  governance mechanisms based  on  risk/reward  sharing  and  relationship­ specific investment significantly influence the relationship elasticity of cooperating parties.
http://www.ipublishing.co.in/ajmrvol1no1/EIJMRS1035.pdf

Innovation Generation in Supply Chain Relationships: A Conceptual Model and Research Propositions

Journal of the Academy of Marketing Science.
Volume 32, No. 1, 2004,  pages 61-79.

Proposition 1a:The greater the extent of buyer-seller interaction, the greater the generation of incremental innovations in supply chain relationships
Proposition 1b:The greater the extent of buyer-seller interaction, the greater the generation of radical innovations in supply chain relationships.

Proposition 2a:The greater the IT adoption and integration between the buyer and seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 2b:The greater the IT adoption and integration between the buyer and seller, the lesser the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 3a:The greater the asymmetry in input commitment between the buyer and the seller, the lesser the impact of interaction on the generation of incremental innovations in supply chain relationships.

Proposition 3b:The greater the asymmetry in input commitment between the buyer and the seller, the
greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 4a: The lesser the asymmetry in attitudinal commitment between the buyer and the seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 4b: The lesser the asymmetry in attitudinal commitment between the buyer and the seller, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 5a: The greater the competence trust between the buyer and the seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 5b: The greater the competence trust between the buyer and seller, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 6a: The greater the goodwill trust between the buyer and seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships
Proposition 6b: The greater the goodwill trust between the buyer and the seller, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 7a: The greater the tacitness of technology associated with an innovation, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships
Proposition 7b: The greater the tacitness of technology associated with an innovation, the greater the impact of interaction on the generation of radical innovations in supply chain relationships

Proposition 8a:The greater the stability of the final consumer demand, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.

Proposition 8b:The lesser the stability of final consumer demand, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 9a: The greater the network connections of the buyer and seller within an industry group, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 9b: The greater the network connections of the buyer and the seller across industry groups, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Updated  2 August 2016,  9 Sep 2013

August - Management Knowledge Revision


August Revision Subjects

Product Design and Development

1 August to 5 August

1. Introduction - Product Design and Development
2. Product Development Process

3. Product Planning
4. Identifying Customer Needs for Product Development

Statistics

Operations Research

Business Research Methods








To September - Management Knowledge Revision

One Year MBA Knowledge Revision Plan

January  - February  - March  - April  - May   -   June

July  - August     - September  - October  - November  - December


Economics - Revision Articles - List


Updated 31 July 2016, 31 Aug 2014

July 29, 2016

Cost Reduction Projects

Some projects can suggest expenditures to improve the efficiency of the machines by adding additional items or by improving certain characteristics of the machine. These projects are cost reduction projects and they need to analyzed using engineering economic analysis.

Industrial engineers are expected to come out with number of cost reduction projects using technologies that claim the cost reduction potential as well as ideas that have cost reduction potential. Lean systems is an idea having cost reduction potential. Lean systems designate certain items as non-value added activities and challenge people to reduce these non-value added activities and reduce cost. Cost of quality or profits of quality system improvement is one such idea. According to it, by redesigning the quality management system, companies can increase profits.


Recommended Reading

PhD Thesis: Towards Conceptual Framework for Strategic Cost Management : The Concept, Objectives and Instruments
2006
565 pages
Chemnitz TEchnical University
http://www.qucosa.de/fileadmin/data/qucosa/documents/5228/data/Title_250706.pdf


IT Cost Optimization - Gartner 2009
http://eval.symantec.com/mktginfo/enterprise/other_resources/b-gartner_decision_framework_for_prioritizing_cost_optimization_ideas.en-us.pdf



Three Steps for Sustainable Cost Reduction
Steel companies set their sights on high performance
Accenture
2012
https://www.accenture.com/ph-en/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Industries_10/Accenture-Three-Steps-Sustainable-Cost-Reduction-Steel-Companies-Set-Sights.pdf


Case study: Reducing costs, increasing efficiency for
the Government of Canada
Deloitte entity: Deloitte Canada
Client name: Treasury Board, Government of Canada
Topics: Cost reduction, enterprise service delivery
Country: Canada
Timeframe: August 2011 to March 2012
https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/public-sector/ca-en-dttl-ps-reducing-cost-increasing-efficiency-case-study.PDF

Development of a Cost Effective Supply Chain
Framework for a Construction Equipment
Manufacturer


Updated 1 August 2016, 11 Dec 2011

July 28, 2016

Principles Based Management

Principles of Management were first given by F.W. Taylor in modern management theory. Henri Fayol gave a list of 14 principles as important principles that he followed as CEO and Managing Director of a Mining Organization. Koontz has expanded these principles into function wise principle. He gave first principles related to planning and control. Then he gave principles related to organizing, staffing and directing.

Narayana Rao now advocates that the list of functions of management should be Planning, Organizing, Resourcing,  Executing and Control. The two new functions proposed, resourcing and execution have good support in literature now. Resource based view (RBV) in strategic management literature highlights the need for entrepreneurs and managers to acquire resources as an important activity of them. Similarly in strategy management literature, it is being emphasized that execution is the key to get results. So far execution did not get the emphasis it deserved and planning only got highlighted.

Management has to be undertaken keeping in view the principles of management that are now well established will almost a century of existence. Many of these principles are converted into methods and techniques. Various tools were developed to aid in the use of these methods and techniques. Every management student and industrial engineering student has to know these principles and the methods of applying them in practice.

Principles of Management - Weihrich, Cannice and Koontz (14th edition)

Formerly Koontz and O'Donnell

List of Principles


Principles of Planning


Principle of primacy of planning
Principle of objectives
Principle of contribution to objectives
Principle of efficiency of plans

Principle of planning premises
Principle of strategy and policy framework

Principle of limiting factor
Principle of of commitment
Principle of flexibility
Principle of of navigational change

Principles of Organizing


Principle of unity of objectives
Principle of organizational efficiency

Principle of span of management

Scalar Principle
Principle of delegation by results expected
Principle of absoluteness of responsibility
Principle of parity of authority and responsibility
Principle of unity of command
Authority level principle

Principle of balance
Principle of flexibility
Principle of leadership facilitation

Principles of Staffing


Principle of objective of staffing
Principle of staffing

Principle of job definition
Principle of managerial appraisal
Principle of open competition

Principle of management training and development
Principle of training objectives
Principle of continuous development

Principles of Leading


Principle of harmony of objectives
Principle of motivation
Principle of of Leadership

Principle of communication clarity
Principle of integrity of the leader and communications
Principle of supplemental use of informal organization

Principles of Control


Principle of the purposes of control
Principle of future directed controls
Principle of control responsibility
Principle of efficiency of controls
Principle of preventive control

Principle of reflection of plans
Principle of organizational suitability
Principle of individuality of controls

Principle of standards
Principle of critical point control
The exception principle

Principle of flexibility of controls
Principle of action


More detail on each principle

Page numbers refer to 14th Edition of Heinrich, Cannice and Koontz

Principles of Planning


Principle of primacy of planning

Planning logically precedes all other planning functions.

Principle of objectives

If objectives are to be meaningful to people, they must be clear, (attainable and verifiable).

Goals derived from objectives for various periods have to be clear, attainable and verifiable.

Principle of contribution to objectives

The purpose of every plan and all supporting plans is to  promote the accomplishment of enterprise objectives.

Planning - Principle of alternatives

Planning - Principle of timing

Principle of efficiency of plans

The efficiency of a plan is measured by the amount it contributes to purpose and objectives offset by the costs required to formulate and operate it and by unsought consequences.

Return on investment best captures the principle of efficiency. But if human element of an organization becomes unhappy or the customers becomes unhappy or suppliers become unhappy or any group stakeholders become unhappy, ROI may not be able to capture it. But the negative consequences follow from the unhappiness. Managers have to take that also into account.

Principle of planning premises

The more thoroughly individuals charged with planning understand and agree to utilize consistent planning premises, the more coordinated enterprise planning will be.

Principle of strategy and policy framework

The more strategies and policies are clearly understood and implemented in practice, the more consistent and effective will be the framework of enterprise plans.

Alignment of all persons in the organization to work in favor of the strategy has to be achieved. This issue was highlighted by Harrington Emerson in 1912 in his book, 12 Principles of Efficiency. The first principles, ideals, is concerned with this.

Planning - Principle of competitive strategies
http://nraomtr.blogspot.com/2015/03/planning-principle-of-competitive.html

Principle of limiting factor

In choosing among alternatives, the more accurately individuals recognize and allow for factors that are limiting or critical to the attainment of the desired goals, the more easily and accurately can they select the most favorable alternative.

Critical Success Factors, is the term under which research is being carrried in all important areas of business activities and management activities to identify the variables that determine the success. The The planners have to evaluate their internal environment to judge whether they can provide those critical success factors. If the answer is negative, they have to postpone implementation of plans requiring those CSFs till they acquire physical resources,  competencies and capabilities

Principle of of commitment

Logical planning should cover a period of time in the future necessary to foresee as well as possible, through a series of actions, the fulfillment of commitments involved in a decision made today.

Principle of flexibility

Building flexibility into plans will lessen the danger of losses incurred through unexpected events,but the cost of flexibility should be weighed against its advantages.

Principle of of navigational change

The more that planning decisions commit individuals to a future path, the more important it is to check on events and expectations periodically and redraw plans as necessary to maintain a course toward desired goal.

Principles of Organizing


Principle of unity of objectives

An organization structure is effective if it enables individuals to contribute to enterprise objectives.


Organization - explanation (p.198)
Aim:Achieving Objectives (p.229)

Principle of organizational efficiency


An organization is efficient if it is structured to aid the accomplishment of enterprise objectives with a minimum of unsought consequences or costs.

Principle of span of management

In each managerial position, there is a limit to the number of persons an individual can effectively manage, but the exact number will depend on the impact of underlying variables.

Organizational Levels and Span of Management (pp.200-202)

Scalar Principle

The clearer the line of authority from the ultimate management position in an enterprise to every subordinate position, the clearer will be the responsibility for decision making and the more effective will be organizational communication.

Principle of delegation by results expected

Authority delegated to all individual managers should be adequate to ensure their ability to accomplish expected results.

Delegation of Authority (p.240)
The Art of Delegation (pp. 240-241)

Principle of absoluteness of responsibility


The responsibility of subordinates to their superiors for performance is absolute, and superiors cannot escape responsibility for the organizational activities of their subordinates.

Principle of parity of authority and responsibility

The responsibility for actions should not be greater than thatimplied by the authority delegated, nor should it be less.

Empowerment (p.236)

Principle of unity of command


The more complete an individual's reporting relationships to a single superior, the smaller the problme of conflicting instructions and the greater the feeling of personal responsibility for results.

Authority level principle


Maintenance of intended delegation requires that decision within the authority of individual managers should be made by them and not be referred upward in the organization structure.

Principle of Functional definition


The more a position or a department has a clear definition of the results expected, activities to be undertaken, and organizational authority delegated, as well as an understanding of authority and informational relationships with other positions, the more adequately the individual responsible can contribute toward accomplishing enterprise objectives.

Principle of balance

In every structure, there is need for balance. The application of principles or techniques must be balanced to ensure overall effectiveness of the structure in meeting enterprise objectives.

Need for Balance (p.203)

Principle of flexibility


The more that provisions are made for building flexibility into an organization structure, themore adequately an organization structure can fulfill its purpose.

Principle of leadership facilitation


The more an organization structure and its delegation of authority enables managers to design and maintain an environment for performance, the more they will help the leadership abilities of those managers.

Principles of Staffing


Principle of objective of staffing
The objectives of staffing is to ensure that organizational roles are filled by qualified people who are able and willing to occupy them.

Definition of Staffing (p.275)

Principle of staffing

The clearer the definition of organizational roles and their human resource requirements, and the better the techniques of manager appraisal and training employed, the higher the managerial capacity.


Principle of job definition

The more precisely the results expected of managers are identified, the more the dimensions of their positions can be defined.

Position Descriptions (p.255)
Position Requirements and Job Design (pp.289-290)

Principle of managerial appraisal

The more clearly verifiable objectives and required managerial activities are identified, the more precise can be the appraisal of managers against these criteria.

Choosing Appraisal Criteria (pp.305-306)
Appraising Managers against Verifiable Objectives (pp. 306-311)
A Suggested Program for Appraising Managers (pp. 311-313)

Principle of open competition


The more an enterprise is committed to the assurance of quality management, the more it will encourage open competition among all candidates for management positions.

The Policy of Open Competition (pp. 285 - 286)

Principle of management training and development

The more management training and development is integrated with the management process and enterprise objectives, the more effective the development programs and activities will be.

Manager Development Process and Training (pp. 327 -329)

Principle of training objectives

The more precisely the training objectives are stated, the more likely are the chances of achieving them.

Evaluation and Relevance of Training Programs (pp.336)

Principle of continuous development


The more an enterprise is committed to managerial excellence, the more it requires that managers practice continuous self development.

Principles of Leading



Principle of harmony of objectives

The more managers can harmonize the personal goals of individuals with the goals of the enterprise, the more effective and efficient the enterprise will be.

Principle of motivation

Since motivation is not a simple matter of cause and effect, the more managers carefully assess a reward structure, look upon it from a situational and contingency point of view, and integrate it into the entire system of managing, the more effective, a motivational program will be.

Principle of of Leadership

Since people tend to follow those who, in their view, offer them a means of satisfying their personal goals, the more managers understand what motivates their subordinates and how these motivators operate, and the more they reflect this understanding in carrying out their managerial actions, the more effective they are likely to be as leaders.

Ingredients of Leadership (pp. 387-389)

Principle of communication clarity


Communication tends to be clear when it expressed in a language and transmitted in a way that can be understood by the receiver.

Principle of integrity of the leader and communications


The greater the integrity and consistency of written, oral,or nonverbal messages, as well as of moral behavior of the sender, greater the acceptance of the message by the receiver.

Principle of supplemental use of informal organization


Communication tends to be more effective when managers utilize the informal organization to supplement the communication channels of the formal organization.

Principles of Control


Principle of the purposes of control

The task of control is the ensure the success of plans by detecting deviations from plans and furnishing a basis for taking action to correct potential or actual undesired deviations.

Principle of future directed controls

Because of time lags in the total system of control, the more a control system is based on feedforward rather than simple feedback of information, the more managers have the opportunity to perceive undesirable deviations from plans before they occur and to take action in time to prevent them.

Principle of control responsibility

The primary responsibility for the exercise of control rests in the manager charged with the performance of the particular plans involved.

Principle of efficiency of controls

Control techniques and approaches are efficient if they detect and illuminate the nature and causes of deviations from plans with a minimum of costs or other unsought consequences.

Achieving Economy of Controls (pp. 481)

Principle of preventive control

The higher the quality of managers in a managerial system, the less will be the need for direct controls.

Feed forward or Preventive Control (pp. 473 - 476)

[Remember: Principle of continuous development

The more an enterprise is committed to managerial excellence, the more it requires that managers practice continuous self development.]

Principle of reflection of plans

The more that plans are clear, complete, and integrated, and the more that controls are designed to reflect plans, the more effectively controls will serve the needs of managers.

Tailoring Controls to Plans (pp. 479)

Principle of organizational suitability

The more that an organization structure is clear, complete, and integrated,and the more that controls are designed to reflect the place in the organization structure where responsibility for action lies, the more controls will facilitate correction of deviations from plans.

Fitting the Control System to the Organization Culture (pp. 481)

Principle of individuality of controls

The more that control techniques and information are understandable to individual managers who must utilize them, the more they will actually be used and the more they will result in effective control.

Tailoring Controls to Individual Managers (pp. 479 - 480)

Principle of standards

Effective control requires objective, accurate, and suitable standards.

Establishment of Standards (pp.466)
Critical Control Points, Standards and Benchmarking (pp. 468 - 470)

Principle of critical point control

Effective control requires special attention to (measuring) those factors critical to evaluating performance against plans.

Critical Control Points, Standards and Benchmarking (pp. 468 - 470)

The exception principle

The more that managers concentrate control efforts on significant exceptions from planned performance, the more efficient will be the results of their control.

Designing Controls to Point up Exceptions at Critical Points (pp. 480)

Principle of flexibility of controls

If controls are to remain effective despite failure or unforeseen changes of plans, flexibility is required in their design.

Ensuring Flexibility of Controls (pp. 481)

Principle of action

A control activity is justified only if indicated or actual deviations from plans are corrected through appropriate planning, organizing, staffing and leading based on the output of the control activity.

Establishing Controls that Lead to Corrective Action (pp. 481)





Stephen Covey's Principle-Centered Leadership Model - Summary
http://nraomtr.blogspot.com/2015/03/stephen-coveys-principle-centered.html

Principles Based Leadership
https://library.educause.edu/~/media/files/library/2006/4/erb0608-pdf.pdf

Seven Strategies for Delivering Profits with Principles
https://www.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_7_jackson_nelsonFINAL.pdf


Value Based Management - Shareholder Value Based Management
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/what-is-value-based-management


Results Based Management
http://www.un.cv/files/UNDG%20RBM%20Handbook.pdf



GOLDMAN SACHS BUSINESS PRINCIPLES
http://www.goldmansachs.com/who-we-are/business-standards/business-principles/

Stephen Covey's Principle-Centered Leadership Model - Summary







Natural laws also called principles operate in the nature whether you discover them or not, and whether you use them or not. If you use, natural laws, and act in their direction you will succeed. If want a result contrary to them and act against them you are bound to fail. This is the essence of Covey's Principle-centered leadership model. It is scientific leadership. Develop science, find out or discover natural laws and develop your leadership method based on it. Find the principles and develop practice based on it.

People have to recognize and live in harmony with such basic principles as fairness, equity, justice, integrity, honesty, and trust.

Stephen Covey proposed a wheel of personal life centered on principles. Principles are at the center of the wheel. This center of principles guides us in four dimensions specified by Covey.

1. Security dimension of a person: It represents sense of worth, identity, emotional anchorage, self-esteem and personal strength.

2. Guidance: It is the direction was one receives and absorbs in life. There is an internal monitor that compares the conduct of a person with the standards and principles that he has accepted and he has to accept. Covey gives the name conscience to it.

3. Wisdom: Wisdom refers to a sage perspective on life. It is a keen understanding of how the various parts and principles apply and relate to each other. The development of wisdom involves observation (discernment), comprehension and judgment.

When people are low on wisdom, their maps are inaccurate, and their actions and thinking are based on distorted and discordant principles. A person with high end wisdom dimension has a good life compass that shows him the true north and all the parts of his behavior and the principles he uses in developing his behavior are properly related to each other. Also as we move from low end to high end in wisdom, there is higher commitment to the ideal (things as they should be) in managing the realities (things as they are). Wisdom also provides the ability to identify pure joy (sat-chidananda) from temporary pleasure.

4. Power: Power is the capacity to act and accomplish something. It also includes the strength and courage. It is also the vital energy to observe or identify choices and to take a decision, that is selection of one of them as the right way. At the low end, we have powerless people. At the high end are visionaries who plan and make things happen which seem to be impossible to many in the existing conditions.

These four dimensions or factors are interdependent. When these four factors are developed in a balanced and harmonious manner, a noble personality emerges. A great leader becomes available to the organization.

While principles are the center of a wheel of relationships and a person develops certain dimensions of his personality based on the principles, the relations are with self, spouse, other family members,, money, possessions, work, pleasure, friend, enemy and church. Many more can be named. It is in these relations that principles and the four great personality dimensions come into behavioral manifestations that give effectiveness and efficiency.

In the case of organizations, the relationships are with owner, customer, employee, supplier, programs, policies, competition, image, technology, and profit. Some more can be added.

Real empowerment comes from educating a person in both principles and practices. Principles are the why to do explanations. Practice is how to do explanation.

The challenge for a leader is to be a light. He should not be judge. He has to be a model, not a critic.

In the words of Stephen Covey, "The Challenge is to be a light, not a judge; to be a model, not a critic."


Principle centered leadership is to be practiced from the inside out on four levels.

1. Personal or self level (leading self)
2. Interpersonal (leading others)
3. Managing task (short term with existing people and processes)
4. Managing an organization  (developing it, recruiting people, training them, building teams, solving problems, compensating them, creating alignment etc. strategy and systems development)

There are certain master principles to be used at each level.

At personal level - trustworthiness

At interpersonal level - trust

At task level management - empowerment

At organizational level management - alignment


Chapter 1  Characteristics of Principles-Centered Leaders


1. They are continually learning.
2. They are service oriented.
3. They radiate positive energy
4. They believe in other people
5. They lead balanced lives.
6. They see life as an adventure.
7. They are synergistic: Principles centered leaders practice the principle of synergy. Synergy is a state in which the whole is more than the sum of the parts. The output from the combination of a synergistic leader and a follower is always more than the individual outputs of the leader and the follower. The leader increases his followers and a follower follows a leader for this benefit. Leader who practice this principle are amazingly productive with  new and creative ways and help their followers to increase their output helping them to work smartly. In team endeavors, these leaders strive to complement the weaknesses of some members with the strengths of some others so that team becomes more productive
8. They exercise for self-renewal: This is the practice of the seventh habit. Sharpen the Saw. In a way, it is restatement of first principle. They are continually learning and practicing to increase their productive capability.

Chapter 2 Seven Habits of Highly Effective People


1. Be Proactive

2. Begin with the End in Mind

3. Put First Things First

4. Think Win - Win

5. Seek First to Understand, Then to be Understood.

6. Synergise

7. Sharpen the Saw


More on the 7 Habits

1. Be Proactive
Proactive people feel control of their life is in their hands.

They feel:  "I am not a product of my culture, my conditioning and the conditions of my life; I am a product of my principles, values, attitudes, beliefs and behavior - and those things I control."


7. Sharpen the Saw
Detailed article on Sharpen the Saw
Sharpen the Saw - The Mental Dimension - Stephen Covey's Explanation

A Poem on Sharpening the Saw and Seven Habits


I keep myself fit by exercising and  eating right
I improve my knowledge I read and write
I help my friends and feel delight
I wish in the world all enjoy without a fight

I live my life according to Covey's principles
I  remember them as important values
I try to understand what is said by others
Covey said that gives victories

Let me recount the effective seven
Be proactive, think of end and begin
Do first thing first and think win win
Understand first, synergize, and sharpen

Poem written by Narayana Rao K.V.S.S. on 1 March 2015


Chapter 3. Three Resolutions


1. To overcome the restraining forces of appetites and passions:

I resolve to exercise self-discipline and self-denial.

2. To overcome the restraining forces of pride and pretension:

I resolve to work on character and competence.

3. To overcome the restraining forces of unbridled aspiration and ambition:

I resolve to dedicate my talents and resources to noble purposes and to provide service to others.

Chapter 4. Primary Greatness


Three Essential Character Traits

Integrity: As we clearly identify our values and proactively organize and execute around our priorities on a daily basis, we keep meaningful promises and commitments.

Maturity: Balance between Courage and Consideration
If a person can express his feelings and convictions with courage balanced with consideration for the feelings and convictions of another person, he is mature.

Abundance Mentality: Our thinking that there is plenty out there for everybody.




Eight ways to enrich marriage and family relationships

1. Retain a long-term perspective.
2. Rescript your marriage and family life.
3. Reconsider your roles.
4. Reset your goals.
5. Realign family systems.
6. Refine three vital skills (time management,
communication, and problem-solving).
7. Regain internal security.
8. Develop a family mission statement.


Making Champions of Your Children

1. Build your children’s self-esteem.
2. Encourage primary greatness.
3. Encourage your children to develop their own interests.
4. Try to create an enjoyable family culture.
5. Plan ahead for family events.
6. Try to set an example of excellence.
7. Teach them to visualize so that they can recognize their own potential.
8. Adopt their friends.
9. Teach your children to have faith, to believe and trust others, and to
affirm, build, bless, and serve others.


Chronic Problems of the Organization

The organization has:

1. No shared vision or values.
2. No strategic path.
3. Poor alignment.
4. Wrong style.
5. Poor skills.
6. Low trust.
7. No self-integrity.


Quality leadership values people. It is rooted in the timeless principles of faith and hope, constancy and consistency, and virtue and truth in human relations.


 Principle-centered leadership “embraces the principles of fairness and kindness and makes better use of the talents of people for increased efficiency, but also leads to quantum leaps in personal and organizational effectiveness” (p. 180).


Leader has to empower the followers and trust them. They in turn empower the leader and trust him.



Updated 29 July 2016, 2 March 2015,





July 27, 2016

Planning - Principle of the strategy and policy framework


Principle of the strategy and policy framework

This principle I saw first in the 14th edition.

The more strategies and policies are clearly understood and implemented in practice, the more consistent and effective will be the framework of enterprise plans.




Ninth Edition principle.

Principle of policy framework
          If more policies, appropriate to the organization, are expressed in clear terms and form and if managers understand them, the plans of the enterprise will be more consistent.


Updated  30 July 2016, 11 March 2015,