Acute Corporate Stress


Acute corporate stress is the most easily diagnosed. Something is clearly wrong and this will be evident in its financial performance. In the worst cases, a type of organizational schizophrenia takes hold, with conflicting decision making criteria and behavior very much in evidence.

Many small organizations are run by two partners that hardly converse despite spitting distance of each other, both ordering the same people to do different things. There are also giant PLCs and governments where supposed colleagues direct whole divisions as if they were private armies in pursuit of incongruent goals.

The good news in these situations is that this type of crisis is hard to ignore, that there is little alternative to taking action and that there are several courses of action that are proven to help.

The bad news is that if action is not taken the organization is on a fast track of failure.

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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Three Steps to the Accounting Process


Step one is to bring all the information about changes in the property owned by the business to one central location. That information is almost always on a little piece of paper. To ensure that it is included in the records it should always be on paper. Examples of the pieces of paper are invoices, bills, checks, payroll time cards, and contracts.

Step two is to put the information into a form that makes it easy to get it. It is hard to use the information when it is in a pile of paper. The little pieces of paper come in many sizes and shapes. It is not unusual to find that you have the fourth carbon copy and can hardly read it. This step is the process of taking the information from those little pieces of paper and making readable, chronological list of the things that have happened to change the property owned by the business.

Step three is to rearrange the chronological list into clusters of information that give management answers to its questions. For instance, management would like to separate out all the things that affected the equipment owned by the business. Or the CEO might like to know what things have happened that affect the cash in the bank.

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

Strategic Decisions


There are three central characteristics of strategic decision making:

  1. Strategic decisions that affect the very survival of the firm;
  2. The effects of a decision last a long time, perhaps five to ten years;
  3. The long range effects of a decision are very hard to forecast.

Actually, the first characteristic is really the definition of a strategic decision. The other two characteristics follow from it. If we could correct a bad decision of any size within a year or two, then it would be less likely to harm the firm permanently. And it should be clear that any decision whose effects last for many years will be extremely difficult to forecast.

Difficulties of long-range forecasting include:

  1. Long-range forecasts are usually ill-structured; that is, it is impossible to make a really good mathematical model of what is being forecasted.
  2. Forecasting accuracy drops off rapidly as one looks further into the future. This is essentially because unforeseeable change accumulate as we peer further and further ahead.
  3. Forecasts need to mix subjective and objective information, since different kinds of information are being captured.
  4. The longer the horizon, the less objective information is available, the worse models will be, and the more we must rely on subjective forecasts.

Given that huge financial stakes are involved and that strategic decisions have a long horizon with poor forecasts available, it is hardly surprising that most Operations Management texts do not delve deeply into this problem. Many methods which are in practical use are not deeply quantitive, and are, in any event, difficult to describe and justify. Nevertheless, manufacturing executives do not have the luxury of ignoring strategic decision making and must be careful consumers of the best available methods.

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

Nodding Acquaintance with Creativity


Creativity is the set of attitudes, abilities, and mental processes that increase the probability of hitting upon solutions that seem to the well informed both novel and appropriate. Thus, whether the outcome of an effort is going to be creative or not is likely to depend upon the personality and attitudes of the person involved, certain distinctive mental abilities that go beyond just IQ, and certain problem solving processes in which what is called convergent thinking is nicely balanced by what is known as divergent or lateral thinking.

 The essence of what we consider creative is the element of freshness, originality, and novelty that is also appropriate to the context. If a manager gives dictation standing on his head, it could be considered novel, but hardly appropriate. Feeding effeminate men rhino horn may be a novel way of infusing virility but there is no evidence that it works. Meditating for 20 minutes a is also a creative act for the manager, for it is known to raise creative ideas to consciousness. It is difficult to satisfy the two relatively contrary properties, namely, that the act must be novel and must be reasonably appropriate to the context. It is easy to think up novel ideas and it is easy to use solutions that have worked in the past. What is difficult is to find solutions that are novel and also effective.

 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

Just about Joint Ventures


Joint ventures (JV) are the waves of the future. There is hardly a Fortune 500 company, active overseas, that does not have at least one JV.

JV represents a higher risk alternative because it requires various levels of direct investment.  A JV involves sharing risks to accomplish mutual enterprise. JVs, incidentally, are the next most common form of entry once a firm moves beyond the exporting stage to a more regular overseas involvement.

JVs provide a mutually beneficial alternative to domestic and foreign businesses to join forces. For both parties, the ventures are a means to share both capital and risk and make use of each other’s technical strength.

JVs, however, are not an unmixed blessing. The major problem in managining joint ventures stems from one cause: there is more than one partner. With patience and flexibility on the part of both partners, JVs can be managed successfully. But one of the partners must play the key, dominant role to steer the business to success.

Widespread interest in JVs is related to:

  1. Seeking market opportunities.
  2. Dealing with rising economic nationalism.
  3. Preempting raw materials.
  4. Risk sharing.
  5. Developing an export base.
  6. Selling technology.

Even a JV with a well-qualified majority foreign partner may provide significant advantages, such as:

  1. Participation in income and growth.
  2. Low cash requirements.
  3. Preferred treatment for the venture.
  4. Easier access to a market and to market information.
  5. Less drain on a company’s managerial resources.

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