Employee Rights


This issue actually spans a wide range of controversies. For example, issues have surfaced regarding the individual’s right to smoke in the workplace. As more and more organizations limit or ban smoking, this issue will continue to be somewhat controversial. Broader controversies involve issues associated with job ownership and individual rights while at work. A popular (albeit not entirely correct) assumption about Japanese organizations is that their employees have lifetime job security/ to the extent that US firms adopt this practice, the question becomes one of due process and the right to appeal in instances of dismissal or reassignment.

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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Span of Control


The number of people reporting to any one manager represents that manager’s span of control. A manager should not have too many subordinates. An acceptable span of control is often set at four to eight people. More people can be supervised effectively if their jobs are routine ones.

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.

Basic Organizational Structures


Although there is an almost infinite variety of structural forms, certain basic types predominate in modern complex organizations. There are three basic organizational structures. The conglomerate structure is a variant of divisional structure and is thus not depicted as a fourth structure. Generally speaking, each structure tends to support some corporate strategies over others.

  • Simple Structure has no functional or product categories and is appropriate for a small, entrepreneur-dominated company with one or two product lines that operates in a reasonably small, easily identifiable market niche. Employees tend to be generalists and jacks of all trades.
  • Functional structure is appropriate for a medium-sized firm with several related product lines in one industry. Employees tend to be specialists in the business functions important to that industry, such as manufacturing, marketing, finance, and human resources.
  • Divisional structure is appropriate for a large corporation with many product lines in several related industries. Employees tend to be functional specialists organized.
  • Strategic business units (SBU)are a recent modification to the divisional structure. Strategic business units are divisions or groups of divisions composed of independent product-market segments that are given primary responsibility and authority for the management of their own functional areas. An SBU may be of any size or level, but it must have 1) a unique mission, 2) identifiable competitors, 3)an external market focus, and 4) control of its business functions. The idea is to decentralize on the basis of strategic elements rather than on the basis of size, product characteristics, or span of control and to create horizontal linkages among units previously kept separate.
  • Conglomerate structure is appropriate for a large corporation with many product lines in several unrelated industries. A variant of the divisional structure, the conglomerate structure (sometimes called a holding company) is typically an assemblage of legally independent firms (subsidiaries) operating under one corporate umbrella but controlled through the subsidiaries’ boards of directors. The unrelated nature of the subsidiaries prevents any attempt at gaining synergy among them.

If the current basic structure of corporation does not easily support a strategy under consideration, top management must decide if the proposed strategy is feasible or if the structure should be changed to a more advanced structure.

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.

 

Calculating Market Share


Market share is the ratio of the competitor’s annual sales to the total annual sales of competitive products in the market being served by the competitors. It is usually measured by dividing the  competitor’s sales in dollars by the total sales volume in dollars for the industry. Dollars are used in the calculation because monetary value is usually easy to obtain.

As may be seen from the dimensions describing the horizontal axis of the economic experience curve. It would make more sense to measure the market share in units sold during the year. Dollar volume does not double when volume in units shipped doubles if price decreases with experience.

The dimensions of the experience curve are fully allocated unit expense in constant dollars and cumulative number of units produced. The reference to doubling sales is measured in units shipped. Because this kind of measure could be counted off on the horizontal axis of the curve, it is possible to relate the growth in shipments to fully allocated expense in constant dollards, a reasonable profit margin, and the resulting dollar volume of sales.

The difficulty in obtaining the information needed to calculate market shares in terms of units shipped is often resolved by trade association data, which reports in both units and dollars. Still the associations may not include every possible competitor among their membership. In almost all cases, however, the non-members are not big enough to be significant. Even without the non-member data, the trade association information is a good approximation to the actual figures.

Given that sufficient data is available, it is not entirely necessary to know a competitor’s exact market share. The information most meaningful to a manager is market share compared to that of the nearest competitor. This gives rise to the concept of a market share ratio.

A proposed ratio that has special meaning when used in conjunction with the economic experience curve. The ratio may be best understood as:

Market Share Ratio =   Your Market Share __________

Market Share of Your Biggest Competitor

The interesting result of defining the ratio this way is that only one competitor has a ratio greater than one. All the others have functional ratios, less than one. For instance, if you the largest market share your biggest competitor will have a smaller share than you, and your ratio will be a number greater than one. If your biggest competitor has a market share larger than yours, your ratio will be less than one.

Because only one competitor has market share ratio greater than unity, the dominant competitor is identified by a number greater than one. Also, the degree of the biggest competitor’s dominance is indicated by the size of the number.

Typically, when a new business concept arises that can be represented by an economic experience curve, several competitors enter the marketplace within a very short span of time. There is an initial market penetratiuon in which market shares are established. Managers have learned how difficult it is to change the market share of the competitors once they have been established. Market shares among suppliers who are competing forcefully tend to remain reasonably constant. Cummulative experience relative to other competitors tends to be aligned with the market share ratios.

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, Lectures, Line of Sight

Flatten your Organization


Flattening the organization means that each manager becomes responsible for more people. There is a limit to the number of people that one person can supervise, but this span of authority varies widely between jobs. Most people imagine that a manager can only handle a few subordinates. In reality, proper delegation allows you a surprisingly wide span, allowing a much flatter and leaner organization.

Your organization should have the best structure for achieving its goals. This structure shows the internal divisions of the organization; and the relationships between them. The structure is not fixed, but evolves to meet changing conditions. Unfortunately, this generally means a drift towards more complex structures, with more divisions, extra layers of management, longer chains of command, less delegation and more centralization. Endless levels of management can be used for minor rewards and recognition.

The proliferation of management layers is hopelessly inefficient. It forms an army of people whose only job is to force information to travel through a long and convoluted route before it is used, and makes sure that decision makers become hopelessly remote from the operations.

Delegation has clear advantages and empowerment allows you to reduce the layers of management. So the best type of organization is as flat as possible, with only a few layers of management. The organization must be flat, so that the top is connected to the people who actually make the money.

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

Tall or Flat Organizations


“Tall” organization structures are characterized by more levels of managers and supervisors than are comparably sized organizations having “flat” structures. The spans of authority are narrower in tall structures than a flat ones. From the organization’s point of view, tall structures provide more control and direction than do flat ones; from the employee’s point of view, they are more restrictive and offer fewer opportuities to make decisions and exert initiative. The organizations make it possible for managers to keep in touch with their area and people more closely, because they have fewer subordinates and a narrower area to supervise. Centralized or decentralized structures also influence the degree of freedom the managers and employees have in various organizational divisions.

 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

Marketing as an Information Function


Good information is a facilitator of successful marketing and indeed, seen in this light marketing management becomes first and foremost an information processing activity. The argument that information processing should be seen as the fifth ‘P’ in the marketing mix is based on a view of marketing as a ‘boundary-spanning’ activity, i.e., acting as the interface between the core of the organization and the marketing environment. Indeed, it has been argued that it is a largely through carrying out this boundary-spanning role, i.e., absorbing environmental uncertainty and interpretting the market environment for the rest of the organization, that market gains influence in strategic decision making. This involves, in essence, creating from the pool of information that the marketing environment represents a picture of the world which enables others in the organization to forecast, plan and make decisions. At its simplest, if the marketing department (or, it should be noted, some other subunit in the organization) does not convert the uncertainty of the marketing environment into a sales forecast, there is no basis for planning production, personnel requirements or the financing of operations.

 In this sense, the management of critical types of marketing information is at the very center of the status of marketing management and the implementation of the marketing concept in an organization.

 In these terms, the challenge to marketing executives is not simply to adopt the latest information technology but to actively manage the process of ‘environmental enactment’ in their organizations. The practical side of this argument is that marketing information is concerned with creating a picture of the marketplace for people in the organization which they will use in making the decisions. This picture is likely to be highly imperfect, but it provides a frame of reference for decision making. In this sense there are few imperatives more urgent for marketing executives, when for most organizations so much depends on their ability to understand and respond to demands for service, quality and responsiveness to the market.

 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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