The Chief Executive Officer


The chief executive officer (CEO) is the person ultimately responsible for setting organizational strategy and policy. Even though the CEO reports to the chair of the board (who has the most legal authority), in a real sense the CEO is the most powerful person in the corporation because he or she controls the allocation of resources. The board of directors gives the CEO the power to set the organization’s strategy and use its resources to create value. Often the same person is both chief executive officer and chair of the board. A person who occupies both positions wields considerable power and directly links the board to corporate management.

How does a CEO actually affect the way an organization operates? A CEO can influence organizational effectiveness and decision making in five principal ways:

  1. The CEO is responsible foe setting the organization’s goals and designing its structure.
  2. The CEO selects key executives to occupy the topmost levels of the managerial hierarchy.
  3.  The CEO determines top management’s rewards and incentives.
  4. The CEO controls the allocation of scarce resources such as money and decision making power among the organization’s functional areas or business divisions.
  5. The CEO’s actions and reputation have a major impact on inside and outside stakeholders’ views of the organization and affect the organization’s ability to attract resources from its environment.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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The New Corporate Governance Structures


The most significant change in the restructuring is the heightened role of corporate internal auditors. Auditors have traditionally been viewed as performing a necessary but perfunctory function, namely to probe corporate financial records for unintentional or illicit misrepresentations. Although a majority of US corporations have longstanding traditions of reporting that their auditors operated independently of CFO approval and that they had direct access to the board, in practice, the auditors’ work usually traveled through the organization’s hierarchical chain of command.

In the past, internal auditors reviewed financial reports generated by other corporate accountants. The auditors considered professional accounting and financial practices, as well as, relevant aspects of corporate law, and then presented their findings to the chief financial officer (CFO). Historically, the CFO reviewed the audits and determined the financial data and information that was to be presented to top management, directors, and investors of the company.

Because CEOs and audit committees sign-off on financial results, auditors now routinely deal directly with top corporate officials. Approximately 75 percent of senior corporate auditors now report directly to the Board of Directors’ audit committee. Additionally, to eliminate the potential for accounting problems, companies are establishing direct lines of communication between top managers and the board and auditors that inform the CFO but that are not dependent on CFO approval or authorization.

The new structure also provides the CEO information provided directly by the company’s chief compliance and chief accounting officers. Consequently, the CFO, who is responsible for ultimately approving all company payments, is not empowered to be the sole provider of data for financial evaluations by the CEO and board.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Fuse Knowledge to Power


Architects are concerned with flows. When designing a building, their paramount considerations are how occupants will move in it and how light and air will circulate around it. Equally important for organizational architects is how information, know-how, decisions, and careers will flow in the structure being shaped.

When the work of the corporation was primarily the organizing of manual labor, markets were local and slow to change, and the knowledge base upon which competitive success depended was stable, a unitary hierarchy of manager atop manager made a lot of sense. The information needed to run the business was limited and could be easily channeled in one upward or downward flow. Workers did the work, and managers did the thinking.

But this is a reality that has disappeared from most industries. Markets are dimensioned globally, rules change faster than some competitors can master them, and brainpower counts for much more than brawn. Most organizations, though, remain keyed to the old realities. Few hierarchies have even kept up with the need to build in change by linking each of their limited number of levels with the time horizons of greatest importance to the company.

A more serious problem, though, is the lack of rethinking about how a business needs to organize its intellectual capital, its knowledge workers. It is ironic, and wasteful, that while “knowledge workers” (technical professionals and other holders of graduate or postgraduate degrees) are making up an increasing proportion of the work force in many industries, the organization structures in which they work remain more the products of Industrial Revolution than of the information age.

Knowledge, especially which can affect the company’s future competitiveness, used to be confined to the research and development lab or to the strategic planning department. Now, as information systems-driven service industries assume a larger share of many economies, knowledge about the capabilities that provide competitive advantage is much more widely dispersed than was ever necessary in traditional manufacturing companies. No single information channel can contain it all. And even traditional product makers are changing. Fewer manufacturing jobs are directly involved in making something; more are concerned with planning what to make, how to make it, and how to keep customers happy after the product has been purchased. The intellectual demands on front-line workers have increased tremendously. The narrowly skilled assembly jobs have been replaced by the more knowledge-intensive positions of the factory automation technician.

Requirements for more intellectual value added have escalated up many organization hierarchies. Networked data bases, expert systems, and almost never-ending flow of new personal computer software have significantly expanded the scope and the nature of the contribution possible from many mid-level employees. This is not an unmitigated blessing, though. It has also seriously polluted the management role in many companies, making many into high-level doers instead of managers, increasing the role’s fragmentation, and making it brittle rather than strong and load-bearing.

This situation will only worsen as economic pressures lead to increased management delayering. Companies with eight to ten tiers of management will find it necessary to organize around four or five. The number of subordinates per manager will have to sharply increase. Middle managers will find themselves with less and less time to master these new white-collar productivity enhancers and to make the intellectual contribution their businesses increasingly need.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Management by Objectives


To provide a framework within which to evaluate subordinates’ behavior and, in particular, to allow managers to monitor progress toward achieving goals, many organizations implement some version of management by objectives. Management by objectives is a system of evaluating subordinates for their ability to achieve specific organizational goals or performance standards and to meet operating budgets. Most organizations make some use of management by objectives because it is pointless to establish goals and then fail to evaluate whether or not they are being achieved. Management by objectives involves three specific steps:

  1. Specific goals and objectives are established at each level of the organization. Management by objectives starts when top managers establish overall organizational objectives, such as specific financial performance targets. Then objective-setting cascades down throughout the organization as managers at the divisional and functional levels set their objectives to achieve corporate objectives. Finally, first-level managers and workers jointly set objectives that will contribute to achieving functional goals.
  2. Managers and their subordinates together determine the subordinates’ goals. An important characteristic of management by objectives is its participatory nature. Managers at every level sit down with the subordinate managers who report directly to them and together they determine appropriate and feasible goals for the subordinate, and bargain over the budget that the subordinate will need so as to achieve these goals. The participation of subordinates in the objective-setting process is a way of strengthening their commitment to achieving their goals and meeting their budgets. Another reason why it is so important for subordinates (both individuals and teams) to participate in goal setting is so they can tell managers what they think they can realistically achieve.
  3. Managers and their subordinates periodically review the subordinates’ progress toward meeting goals. Once specific objectives have been agreed upon for managers at each level, managers are accountable for meeting those objectives. Periodically, they sit down with their subordinates to evaluate their progress. Normally, salary raises and promotions are linked to the goal-setting process, and managers who achieve their goals receive greater rewards than those who fall short.

In the companies that have decentralized responsibility for the production of goods and services to teams, particularly cross-functional teams, management by objectives works somewhat differently. Managers ask each team to develop a set of goals and performance targets that the team hopes to achieve—goals that are consistent with organizational objectives. Managers then negotiate with each team to establish its final goals and the budget the team will need to achieve them. The reward system is linked to team performance, not to the performance of any one team member.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

An Advice to Change Leaders: Persuade Indirectly


In large organizations, it is not feasible to persuade people through one-on-one communication. Particularly, if the organization is multi-locational, persuasion has to be through indirect means such as memos, speeches and newsletters. Change leaders also need to build capabilities in persuading others indirectly. The following guidelines can help managers be effective in indirect persuasion:

  1. Neutralize the power of informal networks: Change leaders need to develop reliable communication channels to communicate their change agenda directly to employees in the organization. Otherwise people will rely on informal grapevine that can distort the change message either unintentionally or deliberately. In either case, employees may develop unfavorable perceptions of the change agenda leading to opposition and resistance. Communication channels such as employee forums, town meetings and special newsletters can counter the grapevine and informal networks. Change leaders must be particularly careful in not withholding bad news because such news gets out very quickly into the grapevine.
  2. Repeat the message: Focus and repetition are critical for effective communication. This means that the change agenda should consist of only a limited number (two or three, at best) of themes. These themes need to be repeated and reinforced through different communication channels.
  3. Match the medium to the message: Speeches and video-conferences are ideal to communicate vision and values; these media are also appropriate to inspire people to embrace change. On the other hand, data, graphs and charts are best conveyed in the written form—such as memos, newsletters and web pages. Change leaders must think very carefully about appropriate media before communicating their change agenda.
  4. Simplify the message: The change agenda needs to be conveyed through a framework that is conceptually simple and easy to grasp. Yet, change leaders must avoid the trap of oversimplification. Oversimplified messages sound trite and faddish and can significantly reduce the credibility of the communicator. Simple frameworks are easy to remember, and are also powerful in framing the change agenda to mobilize support.
  5. Create a new story about change: Stories constitute a powerful medium to mobilize support. People are more likely to remember stories rather than facts and figures. Stories are also more effective in persuading people to alter their perceptions of change. Therefore change leaders need to be able to craft their change agenda in the form of story.
  6. Build personal credibility: Change leaders who are respected, considered trustworthy and competent are more likely to be effective in persuading their employees to embrace change. Personal credibility is built on the foundation of consistency. Change leaders must demonstrate consistency between their thoughts, words and behavior. Inconsistent, self-serving behavior can severely erode the credibility of a leader.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Elemental Description of Supply Chain


A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as a manufacturer, the supply chain includes all functions involved in receiving and filling a customer request. These functions include, but are not limited to new product development, marketing, operations, distribution, finance, and customer service.

A supply chain is dynamic and involves the constant flow of information, product, and funds between different stages. The customer is an integral part of the supply chain. The primary purpose for the existence of any supply chain is to satisfy customer needs, in the process generating profits for itself. Supply chain activities begin with a customer order and even when a satisfied customer has paid for his or her purchase.

The term supply chain conjures up images of product or supply moving from suppliers to manufacturers to distributors to retailers to customers along a chain. It is important to visualize information, funds, and product flows along both directions of this chain.

The term supply chain may also imply that only one player is involved at each stage. In reality, a manufacturer may receive material from several suppliers and then supply several distributors. Thus, most supply chains are actually networks. It may be more accurate to use the term supply network or supply web to describe the structure of most supply chains.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Measuring Advertising Effectiveness


The business advertiser rarely expects orders to result immediately from advertising. Advertising is designed to create awareness, stimulate loyalty to the company, or create a favorable attitude toward a product. Even though advertising may not directly precipitate a purchase decision, advertising programs must be held accountable. Thus, the business advertiser must be able to measure the results of current advertising in order to improve future advertising and must be able to evaluate the effectiveness of advertising expenditures against expenditures on other elements of marketing strategy.

Measuring advertising effectiveness means assessing advertising’s impact on what “intervenes” between the stimulus (advertising) and the resulting behavior (purchase decision). The theory is that advertising can affect awareness, knowledge, and other dimensions that more readily lend themselves to measurement. In essence, the advertiser attempts to gauge advertising’s ability to move an individual through the purchase decision process. This approach assumes, correctly or not, that enhancement of any one phase of the decision process or movement from one step to the next increases the ultimate probability of purchase.

Business marketers should also measure the indirect communication effects of advertising. Advertising affects word-of-mouth communications (indirect effect), and such communications play an important role in buyer decision making. Similarly, advertising indirectly affects buyers on the basis of its impact on overall company reputation and on the sales force’s belief that advertising facilitates their selling tasks. Advertising effectiveness measurement include a procedure for tracking and measuring the impact of advertising on the indirect communication effects.

Advertising effectiveness will be evaluated against objectives formulated in terms of the elements of the buyer’s decision process as well as some of the indirect communication effects. Advertising efforts will also be judged, in the final analysis, on cost per level of achievement (for example, money spent to achieve a certain level of awareness or recognition).

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

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