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Importance of Business

Strategy and its Critical


Beginnings
And
Management Information
System

Reporters:

Dexter Leoligao

Joko Suaz

Ana Marie Diaz

Carolina Pangan

Archie Calusor

V3
CHAPTER 4:

Importance
of Business
Strategy and
its Critical
Beginnings
Reporter: Leoligao, Dexter P.

4.1 INTRODUCTION

All things being equal, the organization that plans the best will perform the best.
Strategic planning is an ongoing process. The strategic plan may look ahead five, te, or
even twenty years but it should be revisited yearly.

4.2 THE DEFINITION AND IMPORTANCE OF STRATEGIC PLANNING

Strategic planning is the development of a competitive strategy or the planning


that sets the long term direction of the organization. Its purpose to guide the
organization to attain its mission and to organize the allocation of resources.

The importance of Strategic Planning are the following:

1. Strategy is an ongoing process.


2. It seeks to maintain a feasible fit between the business organization and its ever-
changing environment.
3. It assists business organizations to adapt to the ever-changing environment, thus
increasing the stability relational fit between the business organization and its
environment.
4. It assists business organizations to identify resource allocation and relocation
needs.
5. It is long term, with planning horizons among western firms usually ranging from
5-15 years
6. A good strategy is one that capitalizes on organizational strengths and minimizes
internal weaknesses.

Fiction vs Fact

Myths and misconceptions usually reign in the realm of strategic planning.

4.3 APPROACHES TO STRATEGIC ANALYSIS AND PLANNING

Top business organizations use guidelines to streamline the strategic planning


process and produce an effective tool for better decision making.

The most effective strategic plans are:


(1) Readable
(2) Clear
(3) Well written
(4) Well Communicated
4.4 THE SWOT ANALYSIS
Study undertaken by an organization to identify its internal strengths and weaknesses,
as well as its external opportunities and threats.

STRENGTHS WEAKNESSES
Strong Academic Programs Old building in poor
& Enrollment decorative condition
Enthusiastic management High average age of staff
team Inadequate budget
Excellent examination Lack of facilities and
results equipments
Strong sport, music, art & Inadequate plant and
drama programs facilities
Strong students
organizations
Good personnel morale
Supportive government
agencies
OPPORTUNITIES THREATS
Merger with local agencies Loss of identity, strengths,
with an excellent size but mediocre and reputation
reputation Risk of losing experienced
Develop reputaion in sport, teachers who may take early retirement
culture and arts That the ethos of the other
The excitement of institution may become dominant
establishing a new branch Possible loss of some
The opportunity to enlarge supportive local officials
staff expertise in order to increase the
range of offerings
The merged institution may
attract additional fundings

Reporter: Suaz, Joko D.


4.5 MANAGERIAL STRATEGIC DECISION MAKING

Decision making is a fundamental skill for any successful executive. But


decisions at strategic level are hard to make. They require large amounts of resources
and commitments which may be irreversible. They involve long-term consequences that
are hard to predict. And, they require considering multiple, often conflicting, strategic
objectives which are difficult to balance, particularly in the presence of risk and
uncertainty.

There are many benefits of strategic management and they include identification,
prioritization, and exploration of opportunities. For instance, newer products, newer
markets, and newer forays into business lines are only possible if firms indulge in
strategic planning. Next, strategic management allows firms to take an objective view of
the activities being done by it and do a cost benefit analysis as to whether the firm is
profitable.

Financial Benefits
It has been shown in many studies that firms that engage in strategic
management are more profitable and successful than those that do not have the benefit
of strategic planning and strategic management.

It has been estimated that more than 100,000 businesses fail in the US every
year and most of these failures are to do with a lack of strategic focus and strategic
direction. Further, high performing firms tend to make more informed decisions because
they have considered both the short term and long-term consequences and hence,
have oriented their strategies accordingly. In contrast, firms that do not engage
themselves in meaningful strategic planning are often bogged down by internal
problems and lack of focus that leads to failure.

Non-Financial Benefits
The section above discussed some of the tangible benefits of strategic
management. Apart from these benefits, firms that engage in strategic management are
more aware of the external threats, an improved understanding of competitor strengths
and weaknesses and increased employee productivity. They also have lesser resistance
to change and a clear understanding of the link between performance and rewards.

The key aspect of strategic management is that the problem solving and problem
preventing capabilities of the firms are enhanced through strategic management.
Strategic management is essential as it helps firms to rationalize change and actualize
change and communicate the need to change better to its employees. Finally, strategic
management helps in bringing order and discipline to the activities of the firm in its both
internal processes and external activities.

4.6 WHAT'S IN A VISION STATEMENT?

A vision statement tells people what you want to accomplish over time and how
your business can make things different through its purpose and activities. It provides
the outside world with some insight about your goals and and how you want to be
perceived. Vision statements are typically aspirational and inspirational in nature. They
encourage your stakeholders, employees and customers to think in terms of what you're
doing and where the company is headed.

Some vision statements may be simple and modest, while others may be more lofty or
complex. For example 'We want to be A leader' versus 'We want to be THE leader.' All
vision statements should help an organization focus on the most important points of
their business, like:

Where you want to be in five or 10 years


What the business's dreams and goals are
What motivates your business activities
How you're creating value for customers
Reporter: Diaz, Ana Marie C.
4.7 GUIDING PRINCIPLES AND ORGANIZATION VALUES

Purpose and Goals

An organizations values should become the ethical guide that determines how
business shall be conducted. It determines the organizations mission, in that the
values must be congruent and supportive of the organizations mission.
Values are the principles that determine how an organization operates and earns
a profit. These principles determine the strategies that will be developed and the
methods of strategy implementation employed to achieve success.
According to S. Shellenbarger (1999), values, or deeply held principles and
beliefs, can be powerful motivators that, when shared, form a foundation for
corporate culture.

Identification of Guiding Principles and Organizational Values

1. Value Statements should be short and clear.


2. Organizational values closely reflect the personal values of upper management.
3. When conflict exists between stated values and an organizations actions,
believe the action.
4. Values must be operationalized.
5. A problem many organizations encounter is that they do not consider the
customers needs as standards.
6. Values that are operational determine to a large extent how well the organization
will do.
7. It is best if organizational values are not directly linked to religious values.

Identification of Values

Three common methods used to develop organizational value statements

1. Open listing approach- uses nominal groups and brainstorming to help identify
values usually with the aid of a facilitator over several meetings.
2. Stakeholder listing approach- values are characterized by those who have
special interest in the success of organization including owners, customers,
employee, the community, suppliers and creditors.
3. Business-function listing approach- requires that values be sorted and
determined by individual business functions.

Recommendations for writing a good statement include:

1. Involve everyone.
2. Allow customization.
3. Expect and accept resistance.
4. Keep it short.
5. Avoid religious references.
6. Challenge it.
7. Observe the values.

Examples of Typical Values

1. We require adherence to a strict ethical code, which ensures that we operate


above reproach.
2. We acquire businesses that only support our strategic plan.
3. We will make training opportunities available to all employees.
4. We will meet our customer expectations.
5. Our business organizations visions, values, and mission will drive our business
decisions.

4.8 MISSION STATEMENT

The mission statements focus on the present, whereas a vision statement


focuses on the future.
Mission statement is typically about two to four sentences long and describes
what the organization does and the reason for organizations existence.
The key point is that an effective mission statement specifies guidance for
strategic plans. It is often the most visible part of a strategic plan.
The mission statement should be very specific that it applies only to the
concerned organization.
Mission Statement Development

1. Who are the appropriate stakeholders involved?


2. Where does the organization want to place its focus?
3. What development process is used?
4. What measurement techniques should be utilized to ultimately determine its
effectiveness?

The mission development should be seen as a collaborative process that


includes all stakeholders and not as a top down, autocratic exercise.
It should reflect the existing direction of the organization, as well as lay the
foundation for the future.
A successful mission process should allow for creativity.
It is the stakeholders interpretation of the mission and their ability to
communicate it to others that make it effective.
The mission statement is a tool that can get everyone in the organization moving
in the same direction.
Mission statements are usually communicated through posters, employee
manuals, the annual report, and plaques. Other communication methods include
newsletter, company seminars, workshops, training sessions and word-of-mouth.

Focus of the Mission Statement

1. Who are the customers of the organization?


2. Where does the organization compete geographically?
3. What are the major products or services?
4. What is the organizations basic technology?
5. What is the organizations attitude toward growth and profitability?
6. What are the organizations strengths and competitive advantage?
7. What public image is desired?
8. What are the fundamental beliefs and values?
9. Does the mission statement address the wishes of key stakeholders?
10. Does the statement motivate people?
Answering these questions will help make the mission statement a viable tool to
enable the organization to achieve its objectives.
Mission statements should be reflective of the organizations business
environment as well as its internal processes.

Mission Statement measurement

An effective mission statement clearly states why an organization exists.


Using the analogy that the mission statement is the road map for the business
organization, the measurable objectives are the mill markers. For an organization
to know where it is going, it needs these landmarks.
Mission statements should include a measurement objective based on some
financial aspect such as profitability or the bottom line.
Mission statements must be comprehensible; they must be simple, clear, and
concise. All stakeholders should be able to comprehend the mission statement
message.
Mission performance metrics are relevant only if the management receives timely
feedback that allows adjustments of operations.
Mission measurements also need to be reliable.

EXAMPLE: JOLLIBEE CORPORATIONS MISSION, VISION AND VALUES

Vision

Jollibee Foundation envisions that every Filipino is able to access basic community
services and live a life defined by dignity, purpose and active participation in nation-
building.

Mission

Together with our partners, we help our communities through:

Improved access to Education for the youth


Leadership development for local organizations
Livelihood programs for small farmers
Environment-friendly initiatives
Decent Housing and Disaster Relief for calamity-stricken regions.
Values

Our work is guided by the JFC corporate values, namely, excellence, honesty and
integrity, frugality, teamwork, humility to listen and learn, respect for the individual, spirit
of family and fun, and customer-focus. We partner with communities and find synergy
with other institutions to ensure that our programs are strategic and sustainable. Jollibee
Foundations projects are mainly in the categories of Education, Leadership
Development, Livelihood, Environment-friendly initiatives and Housing and Disaster
Relief.

CHAPTER 11:

Management
Information
System
Reporter: Pangan, Carolina F.

11.1INTRODUCTION

Business organizations rely heavily upon the effective and efficient exchange and
use of information to create and maintain their core competencies and competitive
advantage. In this chapter, we shall evaluation the various components of the
organizations information systems and the strategic and tactical roles that these
component performs, as stated by William A. Sodeman (2007).

11.2FOUR PRIMARY COMPONENTS

1. People The most vital part of an information system includes the people who
use the system or rely upon the systems input and results.

2. Information Managers and users must decide what information should be


entered into the system and how it should be stored.

3. Infrastructure This includes the various resources devices and storage media
that are used to actually operate the system.

4. Processes The actual operations performed by the information system


represent the final item in our model.

11.3TYPES OF INFORMATION SYSTEMS


1. Transaction Processing This is a core function of many information systems,
and this model encompasses far more than financial exchanges. Users make
requests to remote servers for information, files and resources.

2. Functional Systems Organizations may also choose to identify, design and


implement information systems that are specific to a business function.

3. Enterprise Resource Planning This can help provide integration by supporting


common suite of business application that share the same companys data.

4. Communications It conveys messages and basic information that is included in


a message.

5. File Management This type of system helps manage files, which are bundles of
more specific digital information that are stored on a computer or network.

EXAMPLE:

INFORMATION SYSTEM USED OF JOLLIBEE CORPORATION

At Jollibee Food Corp., information technology plays a significant role in


increasing savings and improving productivity. In fact, the country's leading fast-food
chain has invested P115 million (US$2 million) since 2002 to build a shared services
center where key IT-enabled support functions of Jollibee, Greenwich, Chowking and
Delifrance are co-located.

FOUR PRIMARY COMPONENTS


TYPES OF INFORMATION SYSTEMS
TRANSACTION E-mail Messages
PROCESSING

FUNCTIONAL Human Resource


SYSTEMS

ENTERPRISE
RESOURCES -none- (2014)
PLANNING Cloud ERP

COMMUNICATIONS
Website
Telephone

FILE Storage
MANAGEMENT

BEFORE THE IMPLEMENTATION OF ERP


Jollibee was using multiple IT solutions to address their business requirements.
Because of this, integrity of the reports became difficult to validate and
management had hard time tracking down their stocks.
They became burdened by multiple data sources that didnt integrate. Lots of
time and money was lost from duplication of order entries and business
processes throughout the outlets. Numerous hours were being spent each month
manually creating reports, tracking invoices and handling payroll to provide the
Head Office with their month end financial reports.
Forced closing 72 stores in the year 2014.
The reason behind these problems was evident the systems could not
communicate with one another.

OVERALL USE OF MIS IN JOLLIBEE

MIS systems let the Jollibee Corporation:


To capture information and store it, whenever they are making bills it helps them
to count sales per day, per week and per month because a copy of the bill is
stored in the computer.
Access stored information easily and manipulate it for the needs of their clients
while billing or taking order they just enter the code of the product requested at
that time and the quantity demanded.

BENEFITS OF USING MIS


Control flow of information into, around and out of the systems.
Work within legislation such as the Data protection Act.
Manage resources this is a very important function as every day inventory is
recorded and therefore resources could be managed.
Produce reports for themselves so that they can compare their own
performances with their own and other.
Maintain records needed for quality control so that the success story of all the
employees can be appraised.
Respond confidently to the demands of the Common Inspection Framework MIS
help them because they now easily check when the last stocking was done.
Manage and track employee records of work, achievement and progression for
promotions.
Record and track outcomes.
Manage marketing information to further improve sales.
And a host of other information related functions.