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									       Module 4:
Management of Organizations




       Professor Cristina Banks
       banks@haas.berkeley.edu
Office Hours: Mondays 2-3:30 @ F526
    The Conceptual Framework

• Status Report: The Current State of the U.S.
  Workforce
• Implications for Business
• Fundamental Building Blocks for a
  Company
• Fast Food Wars—How to win?
• Developing the Management Team
         Workforce Generations

• Baby Boomers (b. 1946 – 1964)
• Baby Busters (b. 1965 – 1983)
• Baby Boomlets (b. 1984 – 2002)
           Status Report:
  The context for managing people.

• The workforce is getting older.
    More Boomers in current workforce than other two
     generations.
    Average age of workforce around 45.
    Boomers nearing retirement.
    Large wave of retirements expected starting in 2010
              Status Report

• The workforce is getting smaller—fewer people
  entering the workforce than those leaving the
  workforce.
  77 million Boomers will be replaced by 66
   million Busters 11 million person gap
  By 2008, the number of young adult workers
   entering the labor force (25-40) will shrink by
   1.7 million.
                  Status Report

• The workforce is becoming more ethnically diverse.
    By 2020, US population will be 63% White, 13%
     African American, 7% Asian, 16% Hispanic.
    In CA, population will be 40% White, 60% minorities
     and immigrants speaking over 80 languages.
    In CA, Hispanic population growth rate is the highest in
     absolute numbers
    Asian population is most rapidly growing minority
     group in US
             Status Report

• The workforce is becoming less well-
  educated.
   High school graduation rates are
    declining.
   High school drop-out rate up to 25% for
    minorities.
   25% of high school graduates cannot
    read at 8th grade level.
                  Status Report
• More jobs available that require skills; fewer jobs available
  for unskilled workers.
    52% of high school graduates lack the basic skills
      required to do their jobs adequately.
    80% all jobs will require some sort of post-secondary
      education.
    97% of youth hope to go to college, 63% enroll, 30%
      receive bachelors degrees.
    By 2010, 167 million skilled jobs will be filled by only
      157 million skilled workers.
              The Problem

• Too few workers coming into workforce.
• Widening skill gap: more skilled jobs, fewer
  skilled workers.
• Greater ethnic diversity, and more complex
  management .
• Greater competition for skilled workers
  globally.
     Implications for Business

• Job vacancies in areas we can least afford.
• Greater need for cultural awareness and
  ways of managing diverse cultures
  sensitively.
• Growing segment of US workforce that
  cannot qualify for higher paying jobs.
• Increasingly difficult to retain talented
  people in a company.
                       Solutions
• Develop the personal and professional skills of your
  employees—to increase the overall skill level of the workforce.
• Manage employees’ performance to maximize the talent we
  have.
• Increase satisfaction of workers to build loyalty and
  commitment.
• Utilize talent wherever it is found.
      Where To Start


 What are the fundamental
building blocks of a company?
 Building Blocks Of A Company

• Mission: The company’s purpose and how it will
  achieve its purpose.
• Business Goals: The company’s performance
  targets—how it measures success.
• Business Strategy: Overarching plans and
  programs that outline how the company will meet
  its goals.
• Organizational Culture: Norms and values that
  guide how employees behave in the company.
Strategy Formulation




                       Figure 5–2
The Fast Food Wars: Who’s
  Winning in this Space?
        McDonalds
            Vs.
         In-N-Out
                   The Mission

McDonalds:                      In-N-Out:
“To be the world’s best quick   “To give customers the
  service restaurant               freshest, highest quality
  experience. Being the best       foods you can buy and
  means providing                  provide them with friendly
  outstanding quality,             service in a sparkling
  service, cleanliness and         clean environment.”
  value, so that we make
  every customer in every
  restaurant smile.”
               The Mission

• McDonald’s
   Customer experience
• In-N-Out
   Fresh food

  Who they want to be to the customer dictates how
   the organization is built and operates.
       Environmental Analysis:
  Things They Might Be Concerned About

• Customer food tastes
• What customers spend their money on
• General economy and how much money
  people have to spend
• How many people in the workforce are
  available to work in the restaurants,
  especially managers
       Organizational Analysis:
   Things They Might Be Concerned About


• How much money they have to spend each month
  (cash flow)
• How much turnover they have among managers
• How resistant managers are to change efforts
• How many talented employees intend to be
  managers
• Operational (in)efficiencies
             Corporate Strategy:
    Overall Way the Company will Grow and
             Manage its Business
•   Open new stores
•   Grow customer base
•   Improve efficiencies (cut costs)
•   Acquire competitors
           Business Strategy:
  Plans for Improving Competitive Position

• McDonald’s “Plan to   • In-N-Out
  Win”                     Fresh, best-tasting
  People                    products
  Products                Loyal, highly
  Place                     effective
  Price                     management and
                             staff
  Promotion
             Functional Strategies:
            Plans at the Restaurant Level
McDonald’s:                    In-N-Out:
• Offer new products that      • Make the best-tasting
  customers want.
• Batch cook product.             hamburger at a reasonable
• Improve recruitment of          price.
  employees by offering        • Cook orders one at a time.
  attractive training and      • Employ friendly, hard-
  benefits
• Improve retention of mgrs       working, and loyal people.
• Reduce costs through waste   • Pay above market and
  control, operating              promote from within
  efficiencies.
  Building the Management Team:
    What should managers be focused on?

• Planning: Determining what is best to do and how
  best to get it done.
• Organizing: Determining how best to arrange an
  organization’s resources and activities.
• Directing/Leading: Guiding and motivating
  employees to meet objectives.
• Controlling: Monitoring performance to ensure
  goals are being met.

								
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